As I suggested last week, something big was afoot for Barnes & Noble, and that something was the imminent demise of the Nook tablet business.
According to the company’s CEO, the tablet business has been a disaster, one in which it not only has lost a significant amount of money but also one which failed to deliver significant content dollars.
In fact, the company said most ebook sales were not through its tablets but instead on black-and-white e-ink ereaders. For that reason, the company said it would continue selling e-ink readers going forward.
“‘We plan to continue to innovate in the single purpose black-and-white e-reader category,’ CEO William Lynch said in a statement, ‘and the underpinning of our strategy remains the same today as it has since we first entered the digital market, which is to offer customers any digital book, magazine or newspaper, on any device.’
As for tablets, the company will move to a partner model, working closely with tablet OEMs. While it was scant on details, this might involve a hardware OEM using Nook software and Nook branding as well as tight integration with the Nook storefront.
Will that work? Like Mike Cane over at the Digital-Reader, I’m skeptical. Given the recent results, the power of the Nook brand doesn’t appear that strong, particularly beyond ebooks and ereaders. Because of this, I doubt there would be any tablet manufacturer hat would want to build a Nook tablet.
So while I think the company’s decision to get out of designing and building its own tablets makes sense, I’m not optimistic about the company’s digital strategy going forward. I think the value in B&N at this point has probably a lot more to do with the legacy retail network, and while I think it makes sense for a Microsoft to possibly swoop in and buy it in a firesale, I’m not sure anyone is going to going to do any swooping until the vultures start circling and the price drops even further.