Barnes & Noble CEO William Lynch shows off the Nook HD+, left, and the Nook HD. Photo: Reuters
Barnes & Noble's first hi-definition tablets, unveiled on Wednesday, were well received by analysts who said the devices keep the bookseller in the fight with Amazon.com, Apple and Google - for now.
The largest US bookstore chain introduced a $US199 7-inch Nook HD tablet that will go up against similar, recently launched products by Google and Amazon.com this holiday season.
We are playing in the tablet space, but reading is at our core.Â
William Lynch, Barnes & Noble
The company also unveiled a $US269 9-inch Nook HD+ tablet that will compete with Apple's iPad.
HD screen and lighter body ... the Nook HD+.
"The devices are an improvement in important ways over the previous generations of the Nook, and they one-up Amazon in some areas," Forrester Research analyst Sarah Rotman Epps said.
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While the new products, thinner and lighter than their rivals, come a few months after Microsoft said it would invest $US605 million over five years in Barnes & Noble's Nook e-reader and college business, the bookstore chain still faces a daunting task.
"Barnes & Noble is the smallest player trying to do the software and the hardware development, and they don't have the financial means beyond what Microsoft has already fronted them to keep up in the arms race," said Morningstar analyst Peter Wahlstrom.
Barnes & Noble staked its future on success in the growing e-books industry as the face of declining sales of physical books that led to last year's bankruptcy of the Borders bookstore chain.
In many ways, Barnes & Noble, which operates nearly 700 stores, has defied expectations. It beat Amazon to the marketplace with touchscreen devices and a colour reader in recent years, and won plaudits from reviewers this year for its glow-in-the-dark Nook that allows someone to read with the lights off so as not to disturb others.
Since the chain launched its first Nook device, a basic e-reader, in 2009, it has won as much as 30 per cent of the US e-books market. Amazon is the leader with about 60 per cent.
This race has proven expensive and, so far, unprofitable. The battle with Amazon is taking a toll. Barnes & Noble reported lower Nook sales last quarter, after earlier quarters of torrid growth, hurt by price cuts to fight Amazon's aggressive pricing.
"Barnes & Noble must continue to invest to introduce new products with enhanced features at prices that are the same as or lower than older, less-sophisticated devices," Barclays Capital analyst Alan Rifkin wrote in a research note. The problem is that hurts profits and margins, he said.
But the company's chief said the Nook devices are essential to helping it generate sales of digital content.
"We're growing the digital content portion of the business, and that's where we envision making our economics," Barnes & Noble's William Lynch said on Tuesday.
Shares of Barnes & Noble rose 5 per cent to $US12.87 in afternoon New York Stock Exchange trading.
Bruising price wars
The tablet market is among the fastest-growing sectors of the technology industry. Research firm Gartner forecasts that sales will almost double this year, to 118.9 million units.
Barnes & Noble is in some ways at a disadvantage. Amazon can use its Prime shipping service and amazon.com site to draw users to its Kindle tablets, and Apple, which has sold tens of millions of iPads, and has an indisputable "cool" factor.
So Barnes & Noble needs to focus on its natural customer: the reader that comes to its stores to buy books.
"A key growth area is to get their existing customer base onto the digital platform," Forrester's Epps said, adding that the new devices would help.
For these new devices, Barnes & Noble added features that allow each member in a family to share a Nook tablet, becoming the first tablet to let each user create a home page and customize preferences.
There are also parental controls that can prevent kids from adult content or going shopping.
The company hopes a new video-streaming and download service for Nook will help narrow the gap with Amazon and Apple, which offer more content on their devices.
Barnes & Noble emphasised features such as image resolution and page-turning technology given the needs of its basic customers, book and magazine readers.
"We are playing in the tablet space, but reading is at our core," Lynch said.
The 7-inch tablet weighs 11.1 ounces. Its larger sibling is 18.2 ounces, making it lighter than the iPad and making them both more appropriate for reading, he added. The iPad weighs about 23 ounces.
Barnes & Noble's new devices, available for pre-order on Wednesday, will ship in October and be in US stores in November. They will be on sale in Britain beginning in late November at chains including Sainsbury's and Waitrose.
Reuters
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