TechCrunch:NOOK Is Now A $220 Million Business

[kjk]

http://techcrunch.com/2011/12/01/bar...lion-business/

The $249 device was introduced on November 7, 2011. In the first few weeks of launch, the company says the NOOK Tablet has become the fastest selling NOOK product in its history.

Says William Lynch, CEO of Barnes & Noble:

“We expect to sell millions of devices during our third quarter, adding to the millions of current NOOK customers.”

They lost $6 million-but that didn't include the Nook Tablet (which launched after the end of their fiscal quarter)

[rdjack21]

What I would really like to know is the amount or percentage of that 200Mil is content verses Hardware. But still good to see it growing year over year.

[cHex]

As a Kindle user, I just want to take this opportunity to express my appreciation and best wishes for strong competitors such as Nook offers. Competition can only bring more improvements faster and at lower prices. Plus, every time Nook has a special deal on a book, Amazon always matches it; I always thank B&N whenever I purchase such a deal on Amazon.

[SCION]

Originally Posted by rdjack21

What I would really like to know is the amount or percentage of that 200Mil is content verses Hardware. But still good to see it growing year over year.

I hope they can tough it out against Amazon. We need brick and mortar bookstores.

[kjk]

Originally Posted by SCION

I hope they can tough it out against Amazon. We need brick and mortar bookstores.

Reuters thinks it will be a tough fight:

But for all its quick success, Barnes & Noble is up against a formidable, deep-pocketed rival whose strategy often entails undercutting competitors on price. In September, when Amazon launched its Kindle Fire tablet, it also slashed prices on other Kindles.

At the same time it introduced the Nook Tablet last month, Barnes & Noble cut prices on other Nook devices. Interim Chief Financial Officer Allen Lindstrom acknowledged on a call with Wall Street analysts Thursday that the price cuts ate into margins in the second quarter.

[Tony1988]

I hope BN pulls it off. I went into a BN today and for some reason I felt guilty that I had an ereader. All those paper books just sitting there. Not to say that no one is buying because they are. I just felt bad that all those books nicely displayed wil most likely not get bought in the coming year.

BN now have two whole tables with 6 Nook tablets on one and 6 Simple touches on another. So they are really trying hard to push their devices. But to what end?? It will kill thier paper sales if most of the general reader population starts to turn towards ereaders. I guess its a damned f they do or dont situation. Hopefully they can reposition themselves as an ereader name brand and concentrate on those sales and reduce their paper stock.

I could see the stores being cut down half in size. Small coffee shop/reading area, magazine rack, few shelves of paper books/ knickknacks and than the ereader displays.

I would rather see this happen than they have to close shop. BN have such a great atmosphere. Its the last of a dying breed.

[rdjack21]

Originally Posted by SCION

I hope they can tough it out against Amazon. We need brick and mortar bookstores.

You and me both! I enjoy going to my local store and just browsing around. But I should admit that I take my Nook with me and look up the books I find then buy them on my Nook while in the store. I do still spend money at the store as well and generally it is on books that I prefer the paper version of (Cook books, Magazines). Oh and of course I get a cup of tea while I'm there as well.

[emellaich]

Originally Posted by rdjack21

What I would really like to know is the amount or percentage of that 200Mil is content verses Hardware. But still good to see it growing year over year.

Its all devices.

“We expect to sell millions of devices during our third quarter, adding to the millions of current NOOK customers.”

I assume millions is at least 2 million. The minimum nook price is $99, so assuming they only sell the low end model the sales would be $200 million whether you are looking at current Nook customers or looking forward to the 3rd quarter. Frankly, the 200 million appears to be an understatement.

[Andrew H.]

Originally Posted by emellaich

Its all devices.


I assume millions is at least 2 million. The minimum nook price is $99, so assuming they only sell the low end model the sales would be $200 million whether you are looking at current Nook customers or looking forward to the 3rd quarter. Frankly, the 200 million appears to be an understatement.

The $220 million was for last quarter and didn't include the new Nook. But, yeah, if their projections are anything close to being right, they should be way over $200 million in sales for the current quarter.

Profit is a different issue, of course, but any reasonable profit (say 5%) with sales like that should lead to a profitable quarter, even assuming no change in the $6 million loss from last quarter.

[stonetools]

A different take by another Techcruncher:

As we crawl out of the first decade of the 21st century, it seems that big changes in publishing are afoot. Ten years ago the most ereader I did was loading “In The Beginning There Was The Command Line” onto my Palm Pilot. Now I’m reading – and sharing from – Steven Pinker’s excellent The Better Angels of Our Nature on a slab of electronics and e-ink that costs as much as my Palm fold out keyboard cost in 2000.

But what does this move mean? It means the last big book store chain, Barnes & Noble, is toast, at least as a physical presence in our cities and towns. The WSJ writes:

The bookstore chain’s stock sank 16%, to $14.59, after the company reported a worse-than-expected loss of $6.6 million, or 17 cents a share, for the quarter ended Oct. 29, compared with a loss of $12.6 million, or 22 cents a share, a year earlier.

Sales declined 0.6% to $1.89 billion from $1.90 billion in the year-earlier quarter, with the biggest drop occurring at B&N’s college stores.

LINK

[SCION]

Ominous.

...In the end, B&N stores will close. It is an inevitability. When they will close is still unknown. Does this economic data point to the end of B&N stores in the next half decade or in the next year? That, booklovers, is the real question.

[SensualPoet]

B&N's financials are pretty close to hopeless by the normal way one measures a business's potential. It dropped giving shareholders a dividend last year; it was forced to sell 20% new stock to a potential takeover candidate to stay afloat; its chief competitor (Borders) collapsed and literally disappeared during the period (closed mid-Aug, financial reporting through end Oct); it can't seem to build decent retail margins on its main business; and its new sideline, the Nook, is costing it barrels of cash.

But then, this company is not necessarily valued on normal metrics.

The Nook is a bright light to be sure: but it's very hard to replace the billions in revenue the company currently gets from the bricks and mortar stores. It's still possible Liberty will step up and buy them whole (instead of just buying fresh shares).

[monkeyluis]

This is why I can't recommend the Nook Tablet. I worry a out someone losing out. A nice device & I was tempted @ one point to get one. But as I see their sales decline...ugh just not looking good.

[jersysman]

Originally Posted by monkeyluis

This is why I can't recommend the Nook Tablet. I worry a out someone losing out. A nice device & I was tempted @ one point to get one. But as I see their sales decline...ugh just not looking good.

The amount of time that anyone holds onto a device before (especially tablets) is not very long. Barnes & Noble will be around for that period of time. Whether it survives (or it what form) for the unveiling of the Nook Tablet 3 is another story to be told.

Plus, a Nook Tablet really doesn't need B&N around to survive once it is rooted.

[GreenMonkey]

I'm one of the few that consider book stores to not be on their deathbed. Some contraction of the market was going to happen, but NO physical bookstores? That's like saying that Best Buy will go away and be replaced with e-tailing. "Who buys CDs or DVDs in the store any more?" Actually, a lot of people.

I still buy hardcover books for my favorite authors / series. Prefer it that way. More likely to still be useful in 30 years IMO.

Do they need to re-size a little or re-focus? Absolutely. I think with some price tweaking they could certainly sell a lot of DVD and Blu-ray and compete with Best Buy...maybe with more things like boardgames and comics, they can take a little more slice of the comic book shop pie. Etc.