Barnes & Noble
(B & N) announced on Monday that it will partner with Microsoft in an
attempt to make its Nook tablet more marketable.
Partnership
Details at a Glance
Microsoft will
invest $605 million over five years and gain a 17.6 percent share in B &
N’s Nook market and its college bookstore. The newly-formed subsidiary is temporarily
named NewCo.
Benefits
The potential benefits tie into gaining market share:
- The move generates buzz for Windows 8, which launches in six months. Microsoft also plans to discontinue its e-reader app in August 2012. NewCo will develop a Nook app for the touch-enabled Windows 8 operating system. While executives from neither side will confirm, it seems likely that future Nook tablets will run on a Windows-based platform, instead of the Android Market. In this sense, B & N is looking to Microsoft to establish itself to truly compete with Amazon just as Nokia has put its future in the hands of Microsoft for smartphones. In turn, Microsoft gets a chance to become part of the ever-growing e-book market.
- The formation of NewCo shows that B & N and Microsoft understand the importance of gaining international market share. The needed cash that Microsoft has provided to B & N means the company has the ability to introduce the Nook bookstore on a larger scale.
Concluding Thoughts
The Nook has yet
to truly rival Amazon’s Kindle Fire, and B & N could easily go the way of
Borders. Partnering with Microsoft may become a risky move as Nokia
is seeing in the smartphone market. It may come down to what platform future
Nooks run on. If they run on a Windows-platform, they may see slower adoption
just like the Window-based smartphones.
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