Market Insight

Barnes & Noble unveils a new generation of tablets and announces Nook Video

October 03, 2012  | Subscribers Only

Dan Cryan Dan Cryan Executive Director – Research and Analysis, IHS Markit

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Barnes & Noble, the North American book store giant, is to update its range of Nook tablets with the 7-inch Nook HD starting at $199 (8GB) and the 9-inch Nook HD+ starting at $269 (16GB). The devices will be available in the US and the UK which makes this the first batch of B&N tablets to be available internationally.

The Nook HD weights 315g, is equipped with a dual-core 1.3GHz processor and offers a resolution at 1440 x 900 pixels and is due to be the highest resolution 7" tablet on the market. The device is capable of playing videos at 720p. The larger Nook HD+ weighs 515g, with a 1.5GHz dual-core processor and a screen displaying 1920 x 1280 pixels for up to 1080p video. Both devices run a customized version of Android 4.0 which features a heavily tweaked user interface (which includes the ability to support different profiles for up to six users), connect via WiFi only and do not feature a camera.

Earlier this month B&N announced its plans for an online video service, Nook Video, which is to launch as the new tablets ship. Customers will be able to shop for digital movies and TV shows which will be sold on a transactional basis in both standard and high definition. Nook Video is set to arrive with content from HBO, Sony Pictures, STARZ, Viacom, Warner Bros. and Disney. Like the tablets, the video store is set to be available in both the US and UK.

 

B&N's new tablets concentrate on hardware and software features that the company believes are important (e.g. screen, weight, multiple-users, the ability for a parent to record themselves reading a story and for that to be played for their kids in synch with the pages turning) at the expense of things it regards as non-core (e.g. mobile connectivity, a camera). The result is products that are market-leading in some respects, but lack certain features that other vendors include as standard. As an approach to design, this is reminiscent of the way Apple introduces new hardware (the original iPhone launched without 3G or apps and the iPad launched without a camera and with a relatively small 512MB of RAM). This focus on getting core features right has served the Cupertino company well, as the buying decisions for most consumers on tablets seem to be based on what they think they can use it for, rather than the sort of spec-sheet approach that defines PC buying - Motorola's ill fated Xoom, which won Best in Show at CES 2011, is an example of the limits of spec-sheet product design in the tablet space.

 

However the prospect for the new Nooks is not only tied to the hardware design - there are broader issues afoot: 

 

  • Ecosystem: Nook Video should help to fill a gap in the company's ecosystem, bringing it more in line with Apple, Amazon and Google.  If B&N keep the consumer prices in line with market rates, IHS does not expect video to be a major margin generator for the company in its own right; however a video service has become a prerequisite in the consumer tablet space and not having one would leave the bookseller at a competitive disadvantage. 

 

  • Distribution: B&N has been trying hard to develop its retail relationships both in the US and the UK. In the US a number of major bricks and mortar retailers are beginning to see the strategic challenges inherent in selling Amazon's tablet-as-shopping-cart; while in the UK B&N is relative unknown and has quite rightly seen the need to get retailers onside if it is to penetrate a market where it has no physical presence of its own. 

Geography
UK USA
Organization
B&N
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