New Nooks Quietly One-Up Amazon, But Don’t Change The Game For Barnes & Noble
With a few discreet press and analyst briefings but no song and dance event (ahem, Foo Fighters), Barnes & Noble has unveiled its new Nook Tablets: the 7-inch Nook HD and the 9-inch HD+. The prices of the devices range from $199 to $299, depending on the size and memory configuration, which makes them competitive with the Kindle Fire and far cheaper than the iPad (although a smaller, cheaper iPad could erode some of the price gap). The devices are lightweight, with high-quality displays and fast performance, outdoing the Kindle Fire on several specs. They now come with a video store, with content for rental or purchase from all of the major studios, filling a major gap in the previous generation of Nooks. The Nook software interface has been completely redesigned. My favorite feature of the devices is the "Profiles" feature–when you launch the device, you see profiles that can be customized for adults or children, down to custom content, browser settings, and store recommendations. This is a long-overdue feature in tablets: Forrester's data shows that 49% of US tablet owners regularly share their tablet with at least one other person.
Walmart and Target, having booted out Amazon’s devices, give B&N exposure to customers in 5,200 retail stores where Amazon devices won’t be displayed.
The new Nooks will please B&N customers, but they don’t fundamentally change the game for Barnes & Noble. As it scales back its brick and mortar stores, Barnes & Noble’s biggest challenge is to grow its digital relationships with consumers. A Forrester survey conducted in August 2012 reveals the gap between Amazon and B&N in this arena: 31% of US online consumers say they have a credit card on file with Amazon, compared with only 5% who say the same of B&N. Even with the video store, B&N lags behind Amazon in giving consumers reasons to engage, especially with services like Cloud, Prime, and eCommerce beyond media.
The $605 million Microsoft investment, which closes this fall, will help B&N expand internationally, but my colleague James McQuivey and I agree that B&N needs to do more to take its digital relationships to the next level. Whether that’s a joint venture with a retailer like Target to expand its eCommerce offerings, acquisition of a company like Catalog Spree to beef up its catalog functionality, or a million other possibilities, only time will tell. But until Barnes & Noble is ready to reveal its next move, the new Nooks keep it in the game, and will make fine purchases for consumers this holiday season.