NOOK revenue falls, B&N is “making adjustments but “remains committed” to eReaders, tablets

As expected, Barnes & Noble’s latest financial results show a dip in revenue from the NOOK division. The company brought in $316 million in the last quarter from NOOK eReader, tablet, and digital content sales — but that’s a 26-percent dip from the same period a year earlier.

But while the company says it’s “calibrating its business model” and implementing a “cost reduction program” to bring down expenses, Barnes & Noble isn’t going to stop selling tablets or eReaders anytime soon.

B&N NOOK HD+

The company says it remains committed to the category… which makes sense because:

  1. B&N has invested an awful lot of resources in the NOOK division and pulling out altogether would be like HP spending billions of dollars to acquire Palm and then killing off its webOS hardware at the first sign of trouble (oh right).
  2. While book sales in B&N bricks and mortar stores are actually pretty strong right now, the eBook space is growing while physical book stores… not so much. If the company wants to remain relevant in the book space it kind of has to have a digital presence.

Earlier this week Barnes & Noble launched a promotion allowing customers to get a $50 credit to spend on NOOK content when they buy a NOOK HD+ tablet for $269.

Will that be enough to turn things around for NOOK? Probably not. But it certainly can’t hurt.

The latest NOOK tablets are actually pretty great little devices which sell for pretty great prices. Unfortunately they have to compete with some at-least-equally-great products from Amazon, Asus, Apple, and others.

I wouldn’t be surprised to see B&N focus more on getting customers who own those tablets to install the official NOOK apps on those devices to purchase and read digital books, magazines, and other content. But the best way to lock customers into your ecosystem is undoubtedly to get them to buy your hardware, even if you have to sell it at or near cost.

  • http://twitter.com/mikecane Mike Cane

    >>>B&N has invested an awful lot of
    resources in the NOOK division and pulling out altogether would be like
    HP spending billions of dollars to acquire Palm and then killing off its
    webOS hardware at the first sign of trouble

    Ha! I said something like that on Twitter today. The webOS wound still burns.