Barnes & Noble had high hopes for its Nook line of color tablets, positioning them to compete with Apple’s iPad and Amazon’s Kindle Fire, but continued losses for the bookseller have led to an announcement that it is exiting the color tablet hardware manufacturing business, and will leave future Nook devices in the hands of third-party partners.
As part of the company’s quarterly earnings report on Tuesday, Barnes & Noble revealed that it plans to limit risks associated with manufacturing hardware. While the company will continue designing e-readers, it will transition the manufacturing of that hardware to third-party partners.
Nook revenues were down 34 percent in the company’s just-concluded quarter, at just $108 million. For the full fiscal year, Nook revenues were down 16.8 percent.
The company cited dropping sales of Nook hardware, and sagging content sales in the fourth quarter.
Although the bookseller’s color touchscreen Kindles have struggled against offerings from Apple and Amazon, B&N has had success with their black-and-white e-ink reading devices. The company will continue to develop those in-house.
“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 Barnes & Noble Chief Executive William Lynch. “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.”
Barnes & Noble is currently offering the 16-gigabyte Nook HD+ tablet for just $149, as part of a “limited time” offer. The 7-inch entry-level 8-gigabyte Nook HD has also been discounted to $129, down from $199.