Christmas Nightmare for Nook Sales at Barnes & Noble

By Ed Silverstein January 04, 2013

Nook segment sales this holiday season were reminiscent of Scrooge’s troubling dreams in the classic story “A Christmas Carol.”

It was as if retail “ghosts” haunted Nook-related products at bookseller Barnes & Noble, with recent numbers showing sales dropped during the holiday shopping period between Thanksgiving and the days after Christmas.

Sales of Nook products over the nine-week period were also less than once predicted by an apparently confident company.

Nook products, including readers, digital content and accessories, saw revenue of $311 million, which was a 12.6 percent drop compared to the same period in 2011.

Specific sales numbers were not released – which only added to analyst concerns.

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"We entered the holiday with two great new products, Nook HD and Nook HD+," William Lynch, Barnes & Noble CEO, said in a statement.  "Nook device sales got off to a good start over the Black Friday period, but then fell short of expectations for the balance of holiday.”

He announced the company will look at “the root cause” of the sales “shortfall” and “will adjust our strategies accordingly going forward."

Another reason why there was hope that the Nook would do well this holiday season is that it was being sold for the time at Wal-Mart stores.

Looking at Nook sales and overall company performance, Barnes & Noble appears to be “falling behind in the crucial tablet battle with,” according to a report from The Wall Street Journal.

Barnes & Noble and Amazon were in an intense rivalry over competing tablets during the past couple of months. In addition, to make the climate even more competitive Apple offered a mini version of its iPad on Nov. 2. “Demand for that device was so great that it was sometimes unavailable during the holiday period,” The Journal said.

Google was selling tablets, too, and Samsung recently launched a tablet version of the Galaxy smartphone.

"What concerns us is that as the overall market gravitates toward color tablets, you'd have expected that Barnes & Noble would have been able to maintain its share because it introduced two new color tablets during the quarter," Morningstar analyst Peter Wahlstrom was quoted in news reports.

 "They aren't behind on the tablet front in the sense that their devices compare well with others, but they are behind in terms of marketing, awareness and adoption. And that's critical. … I don't think anybody was expecting a 12.6 percent drop in Nook segment sales.”

“The most intriguing, and troublesome, question is whether the company can stay in the digital device business at all over the long run,” added a report from The New York Times. “Nook has been expensive to develop and market and the company does not have the hefty financial resources of its competitors.”

“The holidays were hellish for the Nook,” continued a report from the New York Post, which described the segment going through a “dismal decline that raises questions about the Nook’s future as it faces increasingly brutal competition with rival tablets.”

TechZone360’s Colleen Lynch additionally reports that the Nook was a “large draw for the bookseller, since it launched in 2009 and took on the only other comparable e-reader on the market at that time,’s Kindle.”

But the current picture and future outlook for the Nook appears very different now as competition intensifies. It’s a time for unsettling dreams at Barnes & Noble.

Edited by Brooke Neuman

TechZone360 Contributor

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