Barnes & Noble May Drop Nook

Yesterday, the New York Times reported that bookseller Barnes & Noble may be re-thinking its strategy with the Nook e-reader and moving away from hardware sales after continued losses in the Nook Media division.

The company isn’t looking to drop electronic books and readers, but is instead thinking that the “build the hardware, sell the content” strategy may have run its course and that the continued losses point towards changing that strategy to a more open platform ideal.

In other words, B&N may be thinking about going more open source to allow other device makers to build Nook-type devices for sale on the open market so the bookseller can go back to concentrating on books instead of gadgets.

Insiders seem to believe, according to the NYT, that when the investor’s call on Thursday comes, Barnes & Noble will be emphasizing partnerships with other tablet makers and content deals and de-emphasizing the Nook strategy and losses.  This would be a complete change in B&N’s marketing emphasis for the past few years and would mean a total change in how the company would move forward in terms of branding.

On the good side, B&N still hold about a quarter of total e-book sales and a higher percentage of digital magazine sales.  Also, unlike Amazon, B&N still maintains profitable brick-and-mortar bookstores, which it has kept that way by weeding out unprofitable stores over time.

Moving forward, if Barnes & Noble decides to drop the Nook in a complete move away from hardware, they would certainly suffer some branding backlash.  If, as is more likely, they begin to de-emphasize the Nook itself and instead create “Nook” as not a device, but a type of device (in the way “Android” is seen), they could continue their branding efforts and incorporate licensing of their reader to other device makers, slowly phasing out or moving aside their own reader in the process.  This would make more sense and could be what would eventually put them on a more competitive footing with tablet rivals Amazon and Apple, who have so far not gone to licensing.

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