Wednesday, October 27, 2010

Barnes and Noble Update The Nook

Just in time for the holidays the Nook e-book reader has been updated with new features. "The new touchscreen Nook Color, priced at $249, costs about half as much as an entry-level Apple Inc. iPad—but almost twice as much as an entry-level Kindle from Inc. and Barnes & Noble's existing monochrome Nook device."

The issue for Barnes and Noble is to identify who its competitors are and what positioning strategy they are impacting. Kindle is seen as the leader in the e-book category and the Apple iPad may compete but may not fit how readers wish to access their books. For them the iPad is too much and too expensive. For the Nook, the question becomes, do these new features and price point drive market share. Should more attention be made on price or should the push be on the exclusivity that B&N can add to the Nook that aren't available from Amazon. Clearly having brick and mortar stores must offer some advantages that they can capitalize on.

Currently the numbers don't look good for the Nook. "Barnes & Noble, which first unveiled the Nook last fall, has had difficulty catching up with market leader Amazon. Forrester Research estimates that by the end of this year there will be 6.1 million Amazon Kindles on the market in the U.S., but just 2.1 million Nooks and 2.2 million Sony Corp." The question to B&N remains, does this new version do enough to capture a bigger piece of the market. To me it is more than offering color. Take a page from the Apple playbook and figure out how to drive more usefulness into your product mix. A device does not run without software and content that is of value to the customer.

It is exciting to watch how far the e-book category is growing. Clearly it is the next physical media being transformed into our digital landscape. Watching the changes in TV, movies, and music, may give some hints to these players in acquiring and retaining customers.

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