Barnes & Noble backtracks, decides to keep designing Nook tablets after all
Barnes & Noble is backtracking on an earlier decision to stop designing its own tablets, and says it will produce at least one new Nook device in time for the holiday shopping season.
The bookseller had never intended to stop making Nook tablets entirely. But in June, Barnes & Noble said it would outsource its tablet design and manufacturing to third parties, while continuing to design its own e-readers.
Barnes & Noble announced its change of heart in an earnings statement, which also carried news of holiday hardware. “At least one new NOOK device will be released for the coming holiday season and further products are in development,” Michael Huseby, President of Barnes & Noble and CEO of Nook Media, said in the statement. Huseby didn't say whether this device would be an e-reader or a tablet.
Huseby became CEO of Nook Media after last month's resignation of Barnes & Noble CEO William Lynch. In an earnings call, Huseby was openly critical of the previous management, and how the company produced far more Nook tablets than it could sell. Barnes & Noble is now selling those devices on the cheap.
"We overestimated demand for the products that we put out, and as a result of that, had to discount those products … and we don't want to be in that position again,” Huseby said.
As for future products, Huseby said that “wholesale outsourcing of our color device business is neither appropriate nor is it smart for the company.” Barnes & Noble needs to stay competitive in devices if it wants to keep selling e-books and other content, Huseby said, and he believes the Nook design team can do a better job than an outside partner.
It's unclear, however, how Barnes & Noble will get back in the game while its competitors keep gaining more market traction. Although the company's app partnership with Google gives Nook an edge over rival Amazon, Google itself is seeing rapid growth its own Nexus 7 tablets, produced in partnership with Asus. By wavering on whether to design its own Nook tablets, Barnes & Noble may have cost itself precious time—especially if the company doesn't have a new tablet ready for the holidays.