New Nooks Quietly One-Up Amazon, But Don't Change The Game For Barnes & Noble

With a few discreet press and analyst briefings but no song and dance event (ahem, Foo Fighters), Barnes & Noble has unveiled its new Nook Tablets: the 7-inch Nook HD and the 9-inch HD+. The prices of the devices range from $199 to $299, depending on the size and memory configuration, which makes them competitive with the Kindle Fire and far cheaper than the iPad (although a smaller, cheaper iPad could erode some of the price gap). The devices are lightweight, with high-quality displays and fast performance, outdoing the Kindle Fire on several specs. They now come with a video store, with content for rental or purchase from all of the major studios, filling a major gap in the previous generation of Nooks. The Nook software interface has been completely redesigned. My favorite feature of the devices is the "Profiles" feature--when you launch the device, you see profiles that can be customized for adults or children, down to custom content, browser settings, and store recommendations. This is a long-overdue feature in tablets: Forrester's data shows that 49% of US tablet owners regularly share their tablet with at least one other person.

Walmart and Target, having booted out Amazon’s devices, give B&N exposure to customers in 5,200 retail stores where Amazon devices won’t be displayed.

The new Nooks will please B&N customers, but they don’t fundamentally change the game for Barnes & Noble. As it scales back its brick and mortar stores, Barnes & Noble’s biggest challenge is to grow its digital relationships with consumers. A Forrester survey conducted in August 2012 reveals the gap between Amazon and B&N in this arena: 31% of US online consumers say they have a credit card on file with Amazon, compared with only 5% who say the same of B&N. Even with the video store, B&N lags behind Amazon in giving consumers reasons to engage, especially with services like Cloud, Prime, and eCommerce beyond media.

The $605 million Microsoft investment, which closes this fall, will help B&N expand internationally, but my colleague James McQuivey and I agree that B&N needs to do more to take its digital relationships to the next level. Whether that’s a joint venture with a retailer like Target to expand its eCommerce offerings, acquisition of a company like Catalog Spree to beef up its catalog functionality, or a million other possibilities, only time will tell. But until Barnes & Noble is ready to reveal its next move, the new Nooks keep it in the game, and will make fine purchases for consumers this holiday season.

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a company like Catalog Spree

a company like Catalog Spree to beef up its catalog functionality, or a million other possibilities, only time will tell. But until Barnes & Noble is ready to reveal its next move, the new Nooks keep it in the game, and will make fine purchases for consumers this holiday season.
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