From Business Insider:
Barnes & Noble got a lot of buzz a few days ago when it released a big new software update for its Nook HD tablet.
The software update adds the Google Play store, which is the online shop for Android phones where Google sells apps, music, movies, magazines, etc. That makes the Nook update a great deal for Nook owners. They now have access to much more content than they did through Barnes & Noble’s own limited app and content store.
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But it’s also a bad sign for Barnes & Noble, which is still working through the uneasy transition from physical bookstore to hardware manufacturer and seller of online goods and services.
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[At first], instead of using Google’s services and apps, Barnes & Noble tried to create its own Nook-branded ecosystem.
It didn’t really work. The first Nook tablet didn’t have an online store for buying music, movies, TV shows, etc. You could load content from other sources using a SD card or plugging the Nook into your computer, but that was hardly as convenient as directly downloading stuff like you could with the Kindle Fire. The Nook HD, which launched last fall, was Barnes & Noble’s first device to finally include a way to directly download some of that content, but the selection wasn’t nearly as good as Amazon’s.
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Barnes & Noble’s Nook division continued to collapse, with digital content and device sales down 26%, according to the company’s last earnings report.
Like Amazon, Barnes & Noble’s strategy was to sell its devices for super cheap –– the Nook HD now starts at $149 –– and lock users into an app and content ecosystem. The new Nook update essentially turns the Nook into just another bargain Android tablet packed with Google’s services and content, and that’s really bad news for Barnes & Noble if it wants to continue selling its own digital content on its own hardware.
Barnes & Noble won’t make a penny off stuff people buy through Google Play; all that revenue goes through Google instead.
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It’s a major Catch 22 for the Nook business. Either offer the best stuff through Google Play and miss out on revenue from digital content, or risk losing customers to Amazon because the Kindle Fire offers more content and apps for about the same price.
Link to the rest at Business Insider
PG recently read another article about Nook which stated Nook has about 25% of the ebook market. As PG recalls, this is a number that Barnes & Noble puts out. He believes this vastly overstates Nook’s real market share.