Barnes & Noble, the largest bookstore chain in America, is struggling in a competitive market despite a deal with Microsoft intended to help it expand its share of the e-book market.
With annual sales over $7 billion and market capitalization of $740 million, Barnes & Noble aims to protect its hold on 25% of the US e-book market, but e-book sales are slowing. At the same time, sales of print books have also fallen.
The Microsoft deal should help the book seller, but won’t be finalized before 2013 and few details about the partnership have been revealed.
Windows 8 Widens Distribution
Another boost for Barnes & Noble might come from the launch of Windows 8, which debuts in October and will be available in 10 countries, expanding the overall distribution network and possible total market share for e-books.
Windows 8 is a Microsoft operating system that features a Barnes & Noble Nook e-reader app, and is expected to power an estimated 6.7 million tablets by 2014.
However, competitors Amazon and Rakuten offer e-books in 100 countries, and they, too, will have a Windows 8 app. Competition is stiffest outside the US, where reading e-books is not yet common.
Nook Tablet Challenges
Launched in 2010, Barnes & Noble Nook color e-reader tablets are sold at a loss with the hope that Nook owners will buy many e-books. Nook also faces strong competition from Amazon’s Kindle Fire, Google’s Nexus 7 and the Apple iPad.
In the future, Barnes & Nobel will focus less on hardware and more on selling e-books through devices sold by Microsoft, Google and Apple. It remains to be seen whether the Windows 8 app will keep Nook customers loyal, while bringing in new customers.
Nook Hits The UK
Meanwhile, Barnes & Noble will start selling a black-and-white screen version of the Nook e-reader in the UK as of October. Nook will complete with Amazon for the growing British market.
William Lynch, chief executive of Barnes & Noble, told the New York Times: “We are confident our award-winning technology, combined with our expansive content – including books, children’s books, magazines, apps, movies and more – will bring UK customers the option they’ve been waiting for.”
UK retailers that will carry the e-reader have yet to be announced, but some 2.5 million newspapers, magazines and book titles will be offered on the e-reader.
Key Statistics - Global E-Reader Market
- By 2017, the e-reader market should hit a volume of close to 54 million units worldwide. (source: Global Industry Analysts)
- Over the time period 2011-2015, the e-reader market is expected to grow at a CAGR of 21% globally. (source: TechNavio)
- The US leads the world e–reader industry, with about 60% market share. China has the second-largest market, and as sales are steadily increasing, China is expected to catch up to the US by 2014. (source: Renub Research)