Jun 27, 2013

    Barnes & Noble backs off from e-reader fight

    BARNES & Noble conceded on Tuesday that it cannot compete head-to-head with Apple's iPad and's Kindle Fire.

    Reporting a big loss at its Nook e-reader division that dragged down the company's fourth-quarter results, Barnes & Noble said that it would no longer make its own Color tablets.

    Instead, it will work with third parties, which will make the devices in exchange for co-branding opportunities.

    The announcement is essentially Barnes & Noble's white flag, signalling that it cannot compete in a market dominated by Apple, and Samsung.

    It will still make and sell the black and white versions of the Nook, which generate the majority of the company's digital-book sales.

    The company plans to discount its remaining Nook tablets through the holidays.

    "Our aim is to sell great tablets connected to our best content catalogue and high-quality bookstore services, but do so without the sizeable upfront risk," Mr William Lynch Jr, Barnes & Noble's chief executive, told analysts.

    The development raises questions about what lies ahead for the embattled bookseller, which remains under pressure from better-financed digital rivals like Amazon.

    The company's loss of US$2.11 a share exceeded the average analyst estimate of 99 cents, according to data from Capital IQ. Revenue decreased 7.4 per cent to US$1.28 billion (S$1.6 billion), with a net loss of US$118.6 million.