Barnes & Noble backtracks, decides to keep designing Nook tablets after all

Barnes & Noble is backtracking on an earlier decision to stop designing its own tablets, and says it will produce at least one new Nook device in time for the holiday shopping season.

The bookseller had never intended to stop making Nook tablets entirely. But in June, Barnes & Noble said it would outsource its tablet design and manufacturing to third parties, while continuing to design its own e-readers.

Barnes & Noble announced its change of heart in an earnings statement, which also carried news of holiday hardware. “At least one new NOOK device will be released for the coming holiday season and further products are in development,” Michael Huseby, President of Barnes & Noble and CEO of Nook Media, said in the statement. Huseby didn't say whether this device would be an e-reader or a tablet.

Huseby became CEO of Nook Media after last month's resignation of Barnes & Noble CEO William Lynch. In an earnings call, Huseby was openly critical of the previous management, and how the company produced far more Nook tablets than it could sell. Barnes & Noble is now selling those devices on the cheap.

"We overestimated demand for the products that we put out, and as a result of that, had to discount those products … and we don't want to be in that position again,” Huseby said.

As for future products, Huseby said that “wholesale outsourcing of our color device business is neither appropriate nor is it smart for the company.” Barnes & Noble needs to stay competitive in devices if it wants to keep selling e-books and other content, Huseby said, and he believes the Nook design team can do a better job than an outside partner.

It's unclear, however, how Barnes & Noble will get back in the game while its competitors keep gaining more market traction. Although the company's app partnership with Google gives Nook an edge over rival Amazon, Google itself is seeing rapid growth its own Nexus 7 tablets, produced in partnership with Asus. By wavering on whether to design its own Nook tablets, Barnes & Noble may have cost itself precious time—especially if the company doesn't have a new tablet ready for the holidays.

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Barnes & Noble continues slashing prices, reduces backlit Nook e-reader to $100

Barnes & Noble has dropped the price of its backlit Nook e-reader just in time to catch up on some summer reading around the campfire.

Available right now, you can pick up the Nook Simple Touch with GlowLight for $99, a $20 savings from its previous $119 price tag, and a full $400 less than its original debut price in early 2012.

The last time Barnes & Noble cut the price of the GlowLight Nook was to meet the price of Amazon’s Kindle Paperwhite, a similar e-reader that debuted for $119 last September. This time around, however, Barnes & Noble’s move doesn’t appear to be in direct response to a single competitor—though its new sub-$100 price makes the Nook Simple Touch with Glowlight the cheapest backlit e-reader around.

The latest price cut could simply be the fact that 16 months after its first debut, the GlowLight Nook is now cheaper to make thanks to a tuned up supply chain.

Summertime price cuts also aren’t unusual for the bookseller. In June, Barnes & Noble announced it would extends its Father’s Day price cuts indefinitely for the Nook HD and Nook HD+ tablets. Last August, it also cut the prices of its Nook tablets.

But Barnes & Noble’s GlowLight price cut also comes at a time when the e-reader market is hurting. Taiwan-based E Ink Holdings—the display supplier for major e-reader brands, including Amazon and Barnes & Noble—reported a 46 percent dip in revenue for its second financial quarter of 2013 compared to the year previous. Pouring on the bad news, E Ink expects global e-reader shipments to be flat compared to 2012, at around 10-15 million units, according to Taiwanese daily Taipei Times.

In March, market research firm IDC said it expected e-reader shipments to grow modestly in 2013 and 2014 after peaking at 26.4 million shipments in 2011 ( IDC and TechHive are both owned by International Data Group).

Barnes & Noble also reported bad news for the Nook during its financial 2013 year-end announcement. The bookseller announced a 34 percent dip in revenue year-over-year for its Nook division during the fourth quarter and reported a nearly 17 percent slide for the year. Barnes & Noble blamed the poor performance on declining Nook device sales.

B&N's new strategy revolves around digital content and e-readers, rather than full-fledged tablets.

To help tighten things up for the Nook division, Barnes & Noble plans on farming out its tablet manufacturing to third parties, rather than creating Nook slates in-house. (E-readers will continue to be built by Barnes & Noble.) The company has yet to announce any tablet manufacturing partners.

A Nook cutback has been long expected after rumors surfaced in February that Barnes & Noble might stop producing Nook devices altogether to focus on licensing its digital catalog.

Despite the bad news, Barnes & Noble is still expanding the Nook’s offerings as it tries to compete with the likes of Amazon, Apple, and a slew of e-reader manufacturers such as Sony. In addition to price cuts on devices, the company recently added the Google Play Store to its Android-based Nook color tablets.

One bright spot in Barnes & Noble’s Nook division was its digital content sales, which were up 16.2 percent for the year. But you don’t have to buy your books from Barnes & Noble to load up your new e-reader. Instead, check out our new tutorial on how to find free e-books.

Ian is an independent writer based in Tel Aviv, Israel. His current focus is on all things tech including mobile devices, desktop and laptop computers, software, social networks, Web apps, tech-related legislation and corporate tech news.
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