Microsoft gives up on the NOOK: a tipping point for B&N?

Microsoft gives up on the NOOK: a tipping point for B&N?

“To B&N or not to B&N…that is the question.”😉

Barnes & Noble released their 2015 second financial quarter information

press release

and while things could have been worse (the college store segment actually had increased sales), reaction to it has not been good.

Revenue overall was down (year over year) by 2.7%, and that included a drop in the retail segment by 3.6%.

However, the NOOK segment (which includes NOOKs, accessories, and e-books and other applicable digital content) was down 41.3%, which is huge.

The devices were especially down, and as this short excerpt shows, B&N thinks that dragged down the content part:

“The NOOK segment (including digital content, devices and accessories) had revenues of $64 million for the quarter, decreasing 41.3% from a year ago.  Device and accessories sales were $18.7 million for the quarter, a decrease of 63.7% from a year ago, due to lower unit selling volume.  Digital content sales were $45.2 million for the quarter, a decline of 21.2% compared to a year ago, due primarily to lower device unit sales. “

The Microsoft/Barnes & Noble relationship has been interesting, to say the least.

In 2011, Microsoft sued B&N over the NOOK.

In 2012, Microsoft pumped $300 million into B&N’s NOOK business…which some people saw as possibly the lifesaver a sinking B&N needed.

Now, Microsoft is out of there…freed of obligations regarding the NOOK.

While B&N has tried to make that into a good thing, I don’t see how it really can be.

Seeking Alpha has

four articles today about Barnes & Noble

and none of them are positive takes on the report (although one of them is a transcript of B&N’s web call about the financials).

Competition is a good thing, so I’m not pleased to see B&N weakening.

Sony, which used to be one of Amazon’s major competitors in the EBR (E-Book Reader) market, is gone for the USA for those devices.

For EBRs, I’d say that Kobo is Amazon’s one really big competitor (if the NOOK fails).

Amazon has competitors on the tablet front, of course, and definitely on the phone front.

They are battling Chromecast and Roku for streaming devices. The Echo seems to be distinctively different from other Bluetooth speakers, although I suppose one could argue that it competes with other (relatively) high end wireless speakers.

Overall, today’s information doesn’t make me optimistic for B&Ns future…

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This post by Bufo Calvin originally appeared in the I Love My Kindle blog. To support this or other blogs/organizations, buy  Amazon Gift Cards from a link on the site, then use those to buy your items. There will be no cost to you, and a benefit to them.

2 Responses to “Microsoft gives up on the NOOK: a tipping point for B&N?”

  1. Tom Semple Says:

    Judging from their job listings, Nook appears to be planning to stick around:

    http://www.nook.com/careers/browse-jobs

    • Bufo Calvin Says:

      Thanks for writing, Tom!

      I don’t think that hiring indicates that. I was hired for a job once, and basically on my first day, they shut the division down! That was quite awkward. The other thing is that the NOOK could continue to exist…spun off from B&N, and even completely sold to someone else. If B&N has suitors, they may have bought Microsoft’s stake back just to up their value…and continuing to hire does that as well.

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