Is Nook leaving PC and Mac to Kindle?

Courtesy of The Digital Reader (also covered by TechCrunch), we get the surprising news that B&N has stopped supporting its Nook for PC and Nook for Mac Reading Apps.

  1. B&N has ended support for Nook for PC and instead expects users to use Nook for Windows 8 and Nook for Web.
  2. B&N has ended support for Nook for Mac and instead expects users to use iPhone and iPad Apps and Nook for Web.

There are a few problems with this approach.

Nook for Windows 8 doesn’t cover Nook for PC, neither does Nook for Web

Windows 8 penetration is in single digits. The overwhelming majority of PC users are on Windows 7, Windows Vista, and Windows XP. All those Windows 8 licenses sold are mostly just that – licenses. They aren’t yet actual machines running Windows 8.

This means that B&N has told the 90% or so of PC users using Windows 7, Windows Vista, and Windows XP to forget Nook.

What about Nook for Web?

Well, Nook for Web doesn’t support all books. It doesn’t even support most books. This means that users who are on Windows 7, Vista, or XP simply can’t read their books any more – unless they have a Nook device or have a smart phone that has a Nook reading app.

What are all these users going to do?

Switch to Kindle. Perhaps stop buying books from Nook. Perhaps go to Kobo.

Nook for Web doesn’t cover for Nook for Mac, nor do the iPhone Apps

B&N’s decision to end support for Nook for Mac is similarly strange.

Nook for Web doesn’t support a lot of books – so Nook for Mac users can’t just switch to that.

Mac users who don’t have, or don’t want to read on, an iPhone or iPad are stuck.

Again, all these users will switch to Kindle or Kobo.

Is B&N giving up?

That’s the first thing that comes to mind.

Combine all the signs -

  1. Heavy losses from Nook devices for B&N last quarter.
  2. Massive fire sales for Nook HD and HD+ this year.
  3. Ending Nook for PC and Nook for Mac Reading Apps.

It seems that B&N is giving up.

Well, there is one other possibility.

Is B&N cutting off poor performing Apps & Devices?

Perhaps B&N decided to focus on the devices and reading apps that are doing well.

  1. Perhaps that means focusing on Nook for iPhone and Nook for Android and Nook Study. And to cut off Nook for PC and Nook for Mac.
  2. Perhaps it means focusing on Nook eInk eReaders or the next generation of Nook Tablets (perhaps built using Windows 8). Which would mean clearing out stock of Nook HD and Nook HD+.

That is a possibility. It’s certainly better than the alternative i.e. B&N leaving the ebook space completely, or perhaps just giving up.

Strange that B&N is ending Nook for PC and Nook for Mac

There were strong rumors earlier this year that B&N was ending Nook Tablets and would focus on reading apps instead. Those rumors seemed to be validated by the fire sales going on for Nook HD and Nook HD+.

However, the end of the Nook for PC and Nook for Mac reading apps puts us in a quandary.

If B&N is ending Tablets and focusing on reading apps, then why is it ending Nook for PC and Nook for Mac?

  1. Were these performing badly?
  2. Were users on these not buying books?
  3. Were these leading to piracy?
  4. Are there not enough resources to run these well?
  5. Is B&N just leaving ebooks entirely?

It’s hard to say what the reality is.

Why is Nook leaving PC and Mac to Kindle?

The crux is that B&N is leaving all these users to Kindle and Kobo.

Perhaps it’s just 5% or 10% of the market. However, it’s very strange to not even contest it.

Perhaps it’s just 1% or 2% of the market. Perhaps people just don’t read books on desktops and laptops. In that case, it’s understandable.

Would love to know the actual figures for both Kindle for PC/Mac and Nook for PC/Mac. Is it that there just isn’t a market there? Or is B&N running out of resources and/or the will to fight?

Kindle Paperwhite vs Nook Glowlight

Kindle vs Nook has been the definitive eReader comparison for the last 4 years. In 2013, Kindle Paperwhite vs Nook Glowlight represent the Kindle vs Nook comparison in eReaders.

These are both good eReaders. Both have good eInk screens, a built-in reading light, and both are light and compact. You can’t really go wrong with either. This Kindle Paperwhite vs Nook Glowlight comparison will go into details and help you find which out of Kindle Paperwhite and Nook Glowlight is better for you.

Please Note: B&N’s official name for Nook Glowlight is ‘Nook Simple Touch with Glowlight’. We’ll stick with the shorter and sweeter name.

Kindle Paperwhite vs Nook Glowlight – Nook Glowlight Advantages

Nook Glowlight brings some strong advantages to the table -

  1. Nook Simple Touch with Glowlight supports ePub. This means that you can buy ebooks from B&N or from Kobo or from Sony or from any other store selling Adobe DRM ePub books.
  2. [To Be Confirmed] Since B&N books use Adobe DRM they will, at some point of time in the future, be readable on other eReaders that support ePub. The problem is that B&N uses a special variant of DRM that includes the last 4 digits of your credit card. Most non-Nook eReaders don’t support this yet. However, this is an official Adobe DRM variant and should be supported on all/most ePub eReaders in the future. Why is this important? If you decide to switch to another eReader, you can take your library with you. With Kindle Paperwhite, you can’t switch to another eReader as they don’t support Kindle format (it’s proprietary).
  3. Nook Glowlight has a microUSB card slot. This allows you to add microSD cards up to 32 GB and greatly expand the existing 2 GB capacity (only 1.25 GB of which is available). Kindle Paperwhite has 2 GB memory (again, only 1.25 GB is available for users to use). However, there’s no way to add more memory capacity to Kindle Paperwhite.
  4. You have B&N stores you can go into. There are some interesting offers periodically like ‘Buy 1 eBook, Get 1 Free’. There are additional benefits like being able to read any book for up to 1 hour per day, and getting free WiFi in B&N stores. You also get store staff that are very helpful. Note: B&N Phone and Email support are very bad.
  5. The Nook Glowlight is $119 and has no ads. Kindle Paperwhite is $119 for the version that has Ads instead of screen savers. Nook Glowlight ships with a charger. Kindle Paperwhite charger is $10 on top of the price. So, for the ad-free versions, and with charger included, the Nook Glowlight is $119 while Kindle Paperwhite would be $149.

Nook Glowlight also has some interesting additional advantages -

  1. With the Nook Glowlight you can turn the light off. With Kindle Paperwhite the reading light is always on – you can only reduce the brightness.
  2. Nook Glowlight is slightly lighter at 6.95 ounces. Kindle Paperwhite is 7.5 ounces.
  3. Nook Glowlight has better construction and build quality. Note: This is somewhat subjective. However, Nook eReaders and Nook Tablets in general are better built and better to look at and more comfortable to hold than Kindles and Kindle Fire Tablets.
  4. Nook Glowlight ships with an anti-glare screen protector already installed.
  5. Kindle Paperwhite and Nook Glowlight both have free WiFi access at AT&T hotspots. However, Nook Glowlight also has free WiFi access at B&N stores.

B&N released Nook Glowlight a few months before Amazon. The upside of that was that B&N could get a lot of sales from readers waiting for eReaders with lighted screens. In fact, they couldn’t meet demand for the Nook Glowlight. The downside was that Amazon got the chance to make Kindle Paperwhite stronger, especially in screen resolution.

Kindle Paperwhite vs Nook Glowlight – Kindle Paperwhite Advantages

Kindle Paperwhite is a really strong offering and has some big advantages of its own -

  1. Kindle Paperwhite has better screen resolution of 1024 by 768 pixels and higher pixel density of 212 pixels per inch. Nook Glowlight has 800 by 600 screen resolution. This is an important advantage for the Kindle Paperwhite as it allows for sharper, clearer text and a better reading experience.
  2. Kindle Store has more range in books and better prices.
  3. Kindle Store offers a lot more free books. Amazon has an exclusive deal with lots of indie authors (indie authors get to promote their books for free 5 days every 3 months). Therefore, there are lots and lots of free and cheap indie books in the Kindle Store.
  4. Amazon has better infrastructure. This allows for better implementation of features like WhisperSync which syncs your place in a book across devices.
  5. Kindle customer service is very good. While you don’t have the option of just walking into a store and getting help, the online and phone support are very solid.
  6. Amazon is probably going to be around longer than B&N and is probably going to be in eReaders for longer than B&N. Those are two relatively safe assumptions to make.

Perhaps the biggest advantage is that the higher screen resolution of the Kindle Paperwhite allows it to offer a better reading experience than the Nook Glowlight. If you visit the Kindle Paperwhite product page it’ll be clear that Amazon realizes this. It’s why Amazon focuses on the Kindle Paperwhite’s screen resolution advantage so much.

Kindle Paperwhite also has the following advantages -

  1. [Unconfirmed] Amazon claims 8 weeks of reading with the reading light at its lowest setting and WiFi off. Reading = Half hour a day. B&N claims 2 months with light off and 1 month with light on. This suggests that Kindle Paperwhite has slightly better battery life than the Nook Glowlight.
  2. Kindle Paperwhite is slightly thinner and narrower. Nook Glowlight is 6.5″ by 5″ by 0.47″ while Kindle Paperwhite is 6.7″ by 4.6″ by 0.36″.
  3. Kindle Paperwhite has features like X-Ray. X-Ray lets you quickly get more information on the characters in a book. Basically, Amazon keeps adding little features like this that help enhance your reading experience.
  4. Kindle Paperwhite has support for Doc and Docx formats.
  5. Kindle Paperwhite has a small app store (a few hundred apps and games). Nook Glowlight does not.
  6. Kindle Paperwhite has a wider range of accessories available.

Kindle Paperwhite made the most of the 3 to 4 month gap between the release of the Nook Glowlight and the Kindle Paperwhite. As a result, it’s stronger.

Kindle Paperwhite vs Nook Glowlight – The Lighted Screen Issues

Both devices have issues with the lighted screens -

  1. Nook Glowlight gets ‘bright holes/spots’ in the lighted screen. These are somewhat common.
  2. Kindle Paperwhite gets ‘leaks’ and ‘shadows’ coming out from the lower edge of the lighted screen. These are also somewhat common.

It’s hard to say which is worse. However, it does make a case to wait for Nook Glowlight 2 and Kindle Paperwhite 2 if you can. Perhaps you get the Kobo Aura HD instead, with the added bonus of getting a higher resolution HD screen.

Kindle Paperwhite vs Nook Glowlight – How long will Nook be around?

There have been strong rumors that B&N is getting out of the Tablet business. There have also been rumors that it will get out of eReaders once the transition of the market from eReaders to Tablets has completed.

I don’t believe the latter (eReaders dying out completely) is ever going to happen. However, if the rumors are true, it seems that B&N MIGHT leave the eReader space in 2014 or 2015. If that happens, thanks to Nooks using ePub, you should be able to switch to another ePub supported eReader. There are some complications since B&N uses a particular type of Adobe DRM and most other eReader companies don’t support it yet. However, some solution will be implemented quickly (if it isn’t already present) since most companies will want former Nook owners to buy their eReaders.

The second problem is that you would be going with a company (B&N) and a device (Nook Glowlight) that might stop getting software updates. Why pick a company that might leave the eReader device market entirely in a year or two? Perhaps its better to go with Kindle or Kobo.

Please Note: This is based on rumors. So, it’s not a given. However, my assessment is that B&N will indeed leave the eReader space in the next few years. You should factor this in when choosing between Kindle Paperwhite and Nook Glowlight.

Kindle Paperwhite vs Nook Glowlight – The White Kobo Elephant in the Room

Kobo, with the Kobo Aura HD, has thrown the Kindle Paperwhite vs Nook Glowlight discussion for a spin. Neither Kindle Paperwhite nor Nook Glowlight have two big things which Kobo Aura HD brings to the table -

  1. A High Definition eInk screen with 1440 by 1080 pixels screen resolution and a whopping 263 pixels per inch pixel density. This is much better than the screen resolutions on Kindle Paperwhite and Nook Glowlight.
  2. A Reading Light that is without glitches. If initial reviews are correct, then Kobo Aura HD suffers neither from the ‘leaks and shadows from the lower edge’ that some Kindle Paperwhite screens suffer from, nor from the ‘bright spots’ that some Nook Glowlight screens suffer from. Additionally, you have a dedicated switch to turn the screen lighting on or off (Nook lets you turn off the light, but has no dedicated switch).

Kobo Aura HD also uses ePub and it uses ePub without any special DRM variant. That means you can very easily take your Kobo bought books to another ePub reader if you decide to switch.

You should definitely consider the Kobo Aura HD before buying either Kindle Paperwhite or Nook Glowlight.

Kindle Paperwhite vs Nook Glowlight – Which is the better eReader FOR YOU?

Please Note: Please read the previous section. Kobo Aura HD might be the better choice for you today.

If you can. you really should wait 4-5 months to see what Nook Glowlight 2 and Kindle Paperwhite 2 are like.

If you can’t wait, there are some cases that are easy -

  1. If you’re an existing B&N customer, or have a library of ePub books from Sony or Kobo, then Nook Glowlight is the better choice.
  2. If screen resolution and overall reading experience are your main criteria then buy a Kindle Paperwhite as its better than Nook Glowlight in those areas. However, Kobo Aura HD is best for the moment.
  3. If you’re an Amazon customer, then Kindle Paperwhite is the natural choice. This is even truer if you are an Amazon Prime member.
  4. If you’re focused on cheaper prices and/or on free books, then Kindle Paperwhite is the better choice.
  5. If you often run into problems with devices and/or if customer support is very important for you, then consider whether you prefer store support or online support. If you prefer store support pick Nook Glowlight. If you prefer online or phone support, then pick Kindle Paperwhite.
  6. If you want to buy a device and keep it for 4-5 years, then it’s a hard choice. Nook devices are better made – however, B&N might get out of eReaders in the next 2-4 years. Have no recommendation here.
  7. If you want a microSD card, get a Nook Glowlight.
  8. If you want the lightest eReader, get a Nook Glowlight. If you want the thinnest or the narrowest eReader, get a Kindle Paperwhite.

In general, the Kindle Paperwhite is a better choice. The only exceptions are – if you want ePub support or want an SD Card slot or have an existing library of ePub books or don’t like Amazon.

Kindle Paperwhite came out 3-4 months after Nook Glowlight. Amazon used that time to deliver a better screen resolution which leads to a better overall reading experience. It also polished the Kindle Paperwhite quite well. That makes for a good, solid reading experience.

For now, Kindle Paperwhite wins the Kindle Paperwhite vs Nook Glowlight comparison. Kobo Aura HD might be better than both. However, the best choice of all would be to wait till October 2013 for Kindle Paperwhite 2 vs Nook Glowlight 2.

Why are so many companies investing in Nook Media (B&N’s Nook spin-off)?

The news that Pearson just invested $89.5 million in Nook Media, giving Nook Media a $1.8 billion valuation (more than B&N itself), means that we now have -

  1. Microsoft having invested $300 million for a 18% stake in Nook Media. It has also promised $300 million more.
  2. Pearson having invested $89.5 million for a 5% stake in Nook Media.

Here is Pearson’s official announcement of its investment in Nook Media. An interesting snippet -

Pearson will invest $89.5 million in cash in NOOK Media, gaining a five per cent equity stake. Following the transaction, Barnes & Noble will own approximately 78.2 percent of NOOK Media and Microsoft will own approximately 16.8 percent. Subject to certain conditions, Pearson will earn the option to purchase up to an additional five percent ownership in NOOK Media.

Pearson’s strategic investment in NOOK Media will help accelerate customer access to digital content by pairing the company’s leading expertise in online learning with NOOK Media’s expertise in online distribution and customer service.

There are two very interesting things here:

  1. Microsoft and Pearson have both invested in Nook Media at a very high valuation. They have both added in provisions to invest more.
  2. Nook Media gets $389.5 million now and another $300 million from Microsoft in future (surely, there must be conditions) and some undisclosed sum from Pearson in future if Pearson decides to get another 5% stake.

Suddenly Nook Media is a $1.8 billion valued company with $389.5 million cash. That’s stunning if you consider that -

  1. ALL of Barnes and Noble currently has a market valuation of $883 million.
  2. B&N just announced that Nook Holiday Sales have been below par and it’s not going to meet its projections for Nook Sales for 2012.

It all makes you wonder.

Why are so many companies investing in Nook Media?

There are a few reasons -

  1. Amazon. Amazon looms over all of books as a very, very dangerous adversary. Sooner or later we are going to see Publishers start to team up against it much more obviously. First, they used Apple and the Agency Model. Now, it’s going to be Nook and some new strategy.
  2. Nook Media actually has a good chance of doing well. It’s almost like a recurring revenue business with high up-front costs and relatively lower costs down the line. Customers that B&N has on Nook are going to stay with B&N until and unless something markedly better comes up.
  3. Transition. The Dinosaurs are figuring out that they have to transition. How do they transition? First, they invest in companies that will let them invest. Second, they start making their own companies. Third, they figure out which works better.
  4. B&N customer base. This might come as a surprise to some people – B&N customers will pick Nook if all other things are equal or close. Time after time we see Amazon customers and B&N customers disregard lots of flaws in the devices and in the closed garden. Why? Because there is trust and a relationship built over years (sometimes over decades).
  5. Nooks are very good devices in physical device terms. B&N tends to ship devices before the software is polished. This time, with Nook HD and Nook HD+, it really stretched things to an extreme – amazing hardware, alpha-level software. If B&N figures out how to make great software for Nooks right from launch (and it’s a big IF) then Nook Media has a bright future.
  6. B&N is still a player in the Tablet Market and it’s still a strong player in the Reading Tablet market.
  7. What other option do companies like Microsoft and Pearson have? Will Apple take an investment? Will Amazon take an investment? Will Google take an investment? What’s left?
  8. B&N Stores. B&N has very good retail footprint. It’s safe to assume Nook Media will enjoy a special relationship with the 700+ B&N Retail Stores and the 660+ B&N College Bookstores.

We are going to see a LOT more of this.

We have the Big Six Publishers merging with each other. We have Publishers and Companies investing in Nook and colluding with Apple.

It might be 4 years too late. But Publishers are finally waking up to the fact that Amazon wants the ENTIRE cake for itself. Perhaps it’s not too late. Perhaps there’s still time to prevent the New Gatekeeper from destroying the Old Gatekeepers.

Lighted Nook leaving Kindle in the dark?

In a nutshell: Yes and No.

Yes, we know that doesn’t help. Let us explain.

Please Note: This post is a collaboration between Rajesh and Switch. Rajesh is one of 4 (yes, 4) new bloggers who’ll be joining Meaghan and Switch in writing for the blog.

Yes, Lighted Nook is leaving Kindle in the Dark

People who clamored about how you can’t read on a Kindle in the dark (while waxing poetic about how paper books are so perfect for reading) fell into three camps -

  1. Those who really did need an eReader with a light.
  2. Those who would never ever buy an eReader (because People magazine is so much better in Color LCD with EyeDeath technology).
  3. Those who had no idea what an eReader was but were inordinately afraid of the dark.

Nook with GlowLight AKA Lighted Nook suits the first group perfectly. The second group will now find something else to complain about (the textured back is not made of crocodile skin and the wireless ebook transfer process isn’t carbon neutral). The third group is trying to decide between a flashlight, a box of matches, a potassium crucifix dipped in garlic oil, and a lighted eReader (Please, go with the crucifix – it can double as a bookmark).

Lighted Nook has a Real, Tangible Benefit

Dark Double Retina Display Technology (Trademarked) lets you see in the Dark. It’s amazing. It’s as if someone went back in the past and invented the lightbulb – except it’s fit into an eReader screen. The technology is so forward-thinking it’s not a backlight. No Sir. It’s a front-light.

You can’t really argue that this isn’t an advantage. Dark Double Retina Display is the best thing since sliced bread and the wheel (except perhaps for fried ice cream).

On a more serious note, we are talking about a very illuminating and clearly thought out feature. Advantages of the GlowLight technology (for the Nook Simple Touch) include:

  1. Soft glow on the screen. Optimized for low-light/no-light reading.
  2. Can be switched on to read e-books during the night and switched off during the day.
  3. Brightness adjustment options.
  4. Even illumination of the screen.
  5. Warm feel to the eyes – Less tiring for the eyes.
  6. Even with GlowLight turned on, the battery is supposed to last for one month (when the Nook is used for half an hour everyday).
  7. Can also be used when there is insufficient light during the day, to improve the reading experience. Note: This is an underrated feature.
  8. The glow is created by using a front light, instead of the back-lit screens used in tablets/LCD monitors. This is better for extended reading sessions.

Of course, true hipsters will frown that there isn’t an actual 1918 light switch fixture on the side of the device and there is no animated lamp shade that flutters up the length of the screen when you turn the front light on. However, we’re sure our friends in Hipster Land are working hard and trying to start a Kickstarter Project for ‘Completely Useless, Perfectly Wonderlicious, Genuinely Vintage Light Switch Fixture for Things You can Pretend to Read Proust On’.

Too much meandering. The crux is that -

  1. Lighted Nook has a good, solid feature.
  2. Kindle does not have the aforementioned good, solid feature.

Amazon Damage Control

Taking a leaf from its last year’s ‘Library Book Support’ announcement i.e. the ‘Announce it Before You Have It’ strategy, Amazon has already announced (via its PR Department at Reuters) -

  1. Lighted Kindle will be arriving.
  2. It will be arriving in July.
  3. A New Kindle Fire Tablet will be arriving.

We’ll see why this is important later.

So, Amazon obviously recognizes this is an important feature. It actually had its extended PR department release a controlled leak to fight off the lighted Nook.

Coming Back to Tangible Benefits

Just think of the possible applications of this technology. You can not only use the Nook during bedtime (without disturbing your family members by switching on the lights), but you can also read your favorite books during power cuts. You can keep reading your books while sitting on the back seat of a car or taxi, even when there is no illumination. You can sit down in your balcony, terrace or garden and read your books while occasionally gazing at the moon. All paranormal romance fans – this is NOT going to turn you into an empath werewolf being courted by Alien Princes and Bodybuilding Shapeshifters who moonlight on General Hospital. Just an FYI.

Amazon’s equivalent is the lighted Kindle Cover. It’s a rather inelegant solution though it works very well if you aren’t fussy.

  1. You have to carry the case around.
  2. The Case costs a bit. $59 or so.
  3. The lighting isn’t even.
  4. There are no animated lamp shades (and no skeuomorphism either).
  5. Kindle+Cover doesn’t sound as cool as – My eReader glows in the dark, like the trees in Prypiat.

Crux: The in-built light is a very cool feature.

It’s a tangible benefit and it gives the Nook an edge over the Kindle.

Please Note: Clip-on lights are just a terrible solution.

Manufactures provide clip on lights for Kindle but there are certain limitations. The clip on lights need to be attached and detached frequently. They add additional weight and cost to the e-reader. They have their own batteries that need to be recharged/replaced and there may be some reflection on the screen and glare on the eyes. Given a choice, people will probably prefer to go with a reader that is optimized to be used during the dark.

No, Lighted Nook is not going to affect Kindle sales very much at all

If the lighted Nook has a clear, tangible advantage, then why will it not affect Kindle sales much?

Quite a few reasons:

  1. Amazon has already leaked news of a lighted Kindle arriving in July.
  2. Amazon has got its customers locked into its ecosystem. Who’s going to leave all those paid and free books behind?
  3. Kindle Lighted Covers and Clip-on lights are a decent workaround until the Glow in the Dark Kindle arrives.
  4. Lack of Awareness – Not very many people know about the lighted Nook. They should have named it Dark Double Retina Technology or something catchy and outrageous. GlowLight? That sounds like something the Care Bears use alongside scented Tibetan candles.
  5. Lack of Awareness of the Benefits – It’s very easy for users to misunderstand the benefits and convenience. Things like ‘even lighting’ and ‘built into the ereader’ are not very easy to explain.
  6. Higher Price. At $139, Nook with GlowLight is quite a bit more expensive than the $79 and $99 Kindles.

The Nook’s GlowLight technology has a few limitations as well. The battery life will be less. Reading in the dark will cause some eye strain (only way to avoid that is to read during the day). Small imperfections on the screen (like fingerprints, dust) will seem like ants and spiders crawling across your screen.

The advantages provided by the lighted Nook easily outweigh the disadvantages. With GlowLight, people can read on their eReaders any time. However, the fact that users know a lighted Kindle is around the corner and the fact that they are locked into the Kindle and/or the Amazon ecosystem means that the impact will not be as strong as it would otherwise have been.

Barnes & Noble has made a good, positive move and yet again Amazon has to counter. My prediction is that Amazon has quite a few tricks up its sleeve with the Kindle Lighted Touch – one of which will be bringing it in at a price much lower than $139.

Dangers of assuming Amazon will destroy B&N

A long time ago I’d joked about the ridiculousness of B&N thinking their new CEO William Lynch could hold a candle to someone like Jeff Bezos who has a very proven track record.

Amazon may very well still destroy B&N – However, B&N has been the more impressive technology company when it comes to eReaders and Tablets. Read on if you find that hard to believe.

I owe William Lynch an apology. He and B&N have done a lot of things that everyone thought Amazon would do first.

B&N’s ability to compete with Amazon

This is some of the stuff B&N pulled off in the last year -

  1. Released a Reading Tablet a year before Amazon.
  2. Released a touch-screen eReader months before Amazon. Almost eliminated the page-turn problem.
  3. Turned Nook Color into the #2 selling Tablet after iPad. You can argue technicalities, but the bottom line is that Nook Color has sold more than any other non-iPad tablet.
  4. Showed that there is a market for non-iPad Tablets. This is a HUGE thing. It has given everyone else hope and will lead to the end of the iPad’s domination in Tablets. The biggest lesson it has taught everyone is – Don’t compete on your enemy’s strengths. A lesson that Amazon has learnt very well.
  5. Released a Nook Tablet that pulls off some impressive things – 1 GHz dual-core processor, 1 GB RAM, HD support, IPS screen, 16 GB memory. That’s a LOT of goodness for $249 – Tablets and smartphones with comparable specifications retail for $400 to $500.
  6. Built up a very interesting Nook Color App Store. 1,100 Apps aimed at Tablets.
  7. Added Email support and lots of other features to Nook Color and morphed it from a Reading Tablet to an almost full-fledged Tablet.

These are all things that no narrow-minded person expects a bookseller to be able to do. Glad to learn from that mistake.

Of course, the two most impressive things are -

  1. It Stayed Alive.
  2. It Built the Nook division into a $2 billion a year business.

B&N could just spin-off Nook into a separate company – Suddenly it’d be a company with a very good chance at surviving and thriving. It could also transform itself into a store that sells everything. It has options and it’s in a position of power.

The Main Stream Press are counting out B&N

Reading through people’s thoughts on Kindle Fire vs Nook Tablet, it’s hard not to notice two interesting assumptions -

  1. Kindle Fire is $50 cheaper and it will destroy the Nook Tablet.
  2. B&N is a bookseller that can’t compete with a software company like Amazon.

The first is an interesting assumption. If it’s the iPad, then the $500 price doesn’t matter because it has better features. If it’s the Nook Tablet, then a $50 higher price will kill it – because price matters so much.

It almost seems that the Press is married to two stories -

  1. iPad’s glory will continue to increase forever – until people use it instead of paper plates and credit cards and kitchen towels.
  2. Kindle’s glory will continue to increase forever – until Amazon is selling Prime subscriptions for pet kittens that come with one free baby mouse a quarter.

The truth is that the Press is constantly wrong – it was wrong about the Kindle, it was wrong about the Nook Color, and it’s likely to be wrong about the death of the Nook Tablet.

$50 is not going to destroy Nook Tablet

Firstly, we have a few million Nook Color owners.

Secondly, we have a few million tech-savvy people who want a powerful Tablet they can hack and run Android on. For them, things like 1 GB RAM mean a lot more than saving $50. They know exactly how valuable that 1 GB is going to be by end 2012.

Thirdly, we have a TON of people for whom $250 is not a big deal but $500 is a big deal. These people will have Kindle Fire and Nook Tablet as options – but not the iPad. Perhaps 75% choose Kindle Fire – that still leaves 25%.

Fourthly, we have lots of small groups that will pick Nook Tablet – people who want/need an SD Card slot, people who prefer the Nook Tablet’s screen, people who love B&N or are B&N members, people who MUST see the device in person, people who prefer the Nook Tablet’s design, and so forth.

There will be millions of Nook Tablets sold.

Nook Color is now at $199

One very important factor is that B&N has now priced Nook Color at $199.

Nook Color is a very solid and compelling device. It’s also battle-tested. While Amazon’s ecosystem gives Kindle Fire an advantage overall (though I haven’t done an in-depth analysis), there are lots of people who will find things like ePub support and expandable memory more compelling.

Neither company is making Space Rockets

There’s a pretty strong bias against B&N. The assumption that because it started off as a bookseller, it couldn’t possibly compete with a company that started off making a website to sell books.

It’s delicious irony.

Tech journalists love to spout nonsense – It’s really, really tough to do hardware. It’s really, really tough to do software.

It’s not. There wouldn’t be 5,000 different companies doing it if it were that difficult.

We aren’t building a rocket or mapping the human genome. We are taking things that have been done thousands of times and refining them a bit. The real problem is that most companies do a shoddy job. They try to provide $10 of value and charge $100.

The tech media says – B&N can’t compete with Amazon.

Let’s add some facts to that statement and see how ridiculous the complete assertion seems:

B&N built a Reading Tablet and shipped it 1 year before Kindle Fire. B&N proved there’s a non-iPad Tablet market. It sold a few million Nook Colors. B&N shipped a touch eReader before Amazon did. B&N has around 20% of the ebook and eReader market.

B&N can’t compete with Amazon.

Dear Tech Journalists,

You are absolutely right. Apart from a few little things like releasing Nook Color last year, building Nook into a $2 billion a year business, and releasing a very impressive Nook Tablet, B&N has shown zero ability to be able to compete with Amazon.

Quite frankly, the tech journalists are just upset that Nook Color was obstinate enough to survive.

There is no purity and there can be no clean endings

What are Amazon’s aims with eReaders and Tablets – expand, sell other things, sell digital products, sell kitchen sinks, sell books, create more Amazon customers, prevent Google from being the middle-man, prevent Apple from becoming the dominant tech religion, profit at some later point of time, grow Amazon, annoy WalMart, beat WalMart with a stick, poke Google in the eye, show Google how to make actual money from Android.

You know what’s missing – purity.

B&N’s aims are pretty convoluted too – survive, offset the decline of brick and mortar stores, compete with Amazon, show Amazon it can compete, evolve, sell books, sell rugs, capture children and families as customers, make fun of Borders, morph into a monster, survive in the digital age.

Again, the purity is missing.

We don’t have any company that is aiming to make the best possible Tablet, with no compromises. If there were, it would wipe out everyone else. Perhaps itself too.

Since there is no purity, there is not going to be a clean-cut winner.

Let’s see why -

  1. Amazon wants to sell other things so it builds a Tablet + mini Amazon Store.
  2. It bundles Prime.
  3. It uses a closed ecosystem.
  4. It focuses on selling other things when it constructs the UI and design. Ratio of Time spent on buying movies UI vs Transferring files to PC UI = 10:1.
  5. It closes off certain formats and certain features. Limited storage has more to do with pushing people to buying Amazon content than saving price. Do we really think Amazon was super concerned about the extra $5 to go from 8 GB to 16 GB?

At every step, it loses a small subset of customers looking to buy a Tablet.

It’s the same with Nook Tablet – However, it is making other cuts. So it’s losing other subsets of Tablet customers.

Because each and every Tablet maker has multiple goals and is lacking purity, we will have a market with multiple winners.

Amazon only knows two directions to attack in

Another factor in B&N’s favor is that Amazon seems to be wedded to two things -

  1. Very Strong Ecosystem.
  2. Very Cheap Device.

There are lots of things it isn’t even attempting i.e.

  1. Aesthetics. It could try to steal away Jonathan Ive – give him a chance to get all the credit and live in England. Let’s admit it – He could design the most magnificent TV ever and people would just say it’s Steve Jobs’ last gift. Jonathan Ive has a chance to show that he was the real genius behind the designs. If he goes to Microsoft or Google or Amazon and designs the next big device, then he becomes the real design genius. Do it in a company other than Apple and everyone will know who’s the man behind the magic. Right now, he’ll be forgotten in all the idol-worship. It’s sad in some ways. All these amazingly talented people like Steve Wozniak and Jonathan Ive and no one will ever remember them because one person will get all the credit.
  2. Validation. Lots and lots of kids who want to show they’re cool. It’s hard to understand that everything you need is inside of you. Let them ease their journey to self-validation by sporting the SuperValidatingKindle_Status++.
  3. Religious stuff. The current crop of technology people seem to be almost feudal in their need to have some Tech Overlord they can bow down to. Provide it.
  4. Social Connections between Readers. Social does not mean Book advertisements on Twitter and Facebook.
  5. Making a Tablet that will be the very best Tablet – even without the ecosystem.

Apart from a golden stretch with the Kindle 3, Amazon has never had the best eReader. It’s always the website and ecosystem that have been the difference makers. It’s the same with Kindle Fire. Silk Browser and Amazon Prime are the difference makers.

It’s as if Amazon has decided to completely ignore Maslow’s Needs Hierarchy and focus only on what it currently knows best – the Cloud and the Website and Scale and Low Prices. Not a bad strategy to focus on its core competencies – but it leaves a lot of opportunities for Amazon’s competitors. Can B&N take advantage of those opportunities?

Well, the solid technology in the Nook Tablet suggests it can.

We have already passed the Inflection Point

We passed the inflection point for B&N’s death with the launch of the Nook Color. Mr. Leonard Riggio must have seen those 700,000 Nook Colors being sold every month and felt Tiger Blood coursing through his veins.

We’re talking about a company that everyone claims is dying and it’s built a completely new business that’s worth $2 billion a year. You know what company would love to be able to do that – Google.

There are very few companies that can build multiple billion dollar businesses. Microsoft, Apple, Amazon, … and a few more. It’s not a long list.

B&N has done it. It’s at around 20% in eReaders and perhaps at 10% to 20% in Tablets. It’s tasted blood. Right now, we are seeing the beginnings of a very long climb up. B&N went through its death rattle and survived. This fact is lost on everyone because people mis-understand inflection points.

If a company has 20% of the eReader market, and has one of only two viable competitors to the iPad – it’s neither dead nor endangered.

Look at the $99 Nook Touch. The $199 Nook Color. The $249 Nook Tablet. These aren’t the product offerings of a company that is on its deathbed. These are products from a company that has survived and is reborn.

Amazon is going to regret not buying B&N. It had a chance to snap up the only credible threat to the Kindle, and it didn’t. Now it is faced with a company that is a threat to both Kindle and Kindle Fire. Amazon is going to have a lot of opportunities to think back to when B&N was almost dead and was available for a billion dollars or so. Instead of buying Zappos and its ‘feel good and sell shoes for no profit’ strategy, Amazon should have bought B&N. You probably couldn’t write a Mother Teresa meets Dalai Lama book about it, but you’d have one heck of a business.


Get every new post delivered to your Inbox.

Join 9,817 other followers