Barnes & Noble No Longer Making Tablets In-House
To reduce costs, an external ODM will make Nook-based tablets.
During Barnes & Noble's fiscal 2013 year-end financial results, the company said that it will discontinue making tablets in-house, and focus on designing eReading devices and reading platforms like the Simple Touch and Glowlight instead. The company's tablet line will be co-branded with yet-to-be-announced third party manufacturers of consumer electronics products.
"The company will continue to offer its existing inventory of its high quality Nook HD and Nook HD+ devices at amazing prices through the holiday," the company said. "As always, Barnes & Noble will provide world-class pre- and post-sales support in its stores for its Nook HD and Nook HD+ customers, as well as ongoing software upgrades and improvements to the digital bookstore service."
The news arrives after Barnes & Noble reported a 34 percent drop in sales of its Nook eReader and tablet lines during the fiscal fourth quarter ending in April. There has also been talk that Microsoft may actually purchase the Nook brand, as the Redmond company that Windows built had already invested a chunk of change in the Nook business, landing a 17.6 percent stake in April 2012.
Barnes & Noble said device sales declined during the fourth quarter due to lower selling volume, thus digital content sales also dropped 8.9 percent for the fourth quarter due in part to the device sales shortfall as well as the comparison to the Hunger Games and Fifty Shades of Grey trilogies a year ago. Overall, the bookseller reported a fourth quarter net loss of $118.6 million, almost double its loss from the same quarter last year. Consolidated revenue fell by 7.4 percent to $1.3 billion.
"We are taking big steps to reduce the losses in the Nook segment, as we move to a partner-centric model in tablets and reduce overhead costs," said William Lynch, Chief Executive Officer of Barnes & Noble. "We plan to continue to innovate in the single purpose black-and-white eReader category, and the underpinning of our strategy remains the same today as it has since we first entered the digital market, which is to offer customers any digital book, magazine or newspaper, on any device."
The company said it intends to continue to build its digital catalog, adding thousands of eBooks every week, and launching new Nook Apps.