Barnes & Noble has informed the U.S. Securities and Exchange Commission that the giant book retailer will release information concerning the launch of a new e-reader on May 24. No further details were provided in the financial filing, and the company didn't immediately respond to a request for further details.
Some industry observers think Barnes & Noble intends to introduce an e-reader based on Honeycomb -- Google's Android 3.0 platform for web tablets. That speculation is based on the retailer's recent rollout of a software upgrade for the nook color that gives the e-reader tablet-like e-mail access as well as Adobe Flash playback capabilities.
However, Forrester Research Vice President James McQuivey is anticipating something that would be considerably less flashy but would enable Barnes & Noble to keep pace with the latest Kindle price cuts that rival Amazon.com announced last month. "This will probably be a slimmer version of the E Ink nook, with some improvements in software, page turn times, and user experience -- all at a cheaper price than before, closer to $129," McQuivey said Thursday in an e-mail.
Riding Apple's Coattails
According to IDC, e-reader shipments rose 325 percent year over year to 12.8 million units in 2010, in part by hitching a ride on intense interest in Apple's iPad. The strong growth reflects a more competitive environment, "as well as widening interest in the category -- including a boost from the media-tablet press and much lower pricing," said IDC Vice President Loren Loverde.
This helps explain the strategy behind Barnes & Noble's nook color upgrade, which in addition to an integrated e-mail client and Flash 10.1 support also includes an Android app store as well as an improved user experience through a myriad of tweaks.
"These upgrades make the nook color look more and more like a tablet, with a very attractive $249 price point, to boot," McQuivey explained in a blog late last month. On the other hand, the tablet market is "gradually moving into higher-power features, not lower-power experiences," he added.
The numerous tablet competitors aiming to grab market share from the iPad are pitching products at higher prices and with more powerful features, McQuivey noted. By contrast, the nook color "remains a smaller, less-powerful tablet than the iPad" that is really "about setting a new bar for e-readers," he wrote.
Back To Basics
Even with the updated software, the nook color has too many shortcomings to have a great deal of appeal beyond the dedicated e-reading space. Barnes & Noble's device "has tiny audio quality through small speakers in the back of the unit and, while it plays Flash, a great deal of web video is not optimized for mobile," wrote Gartner Vice President Al Weiner in a blog. "The experience can be hit-and-miss: On The New York Times site, video worked well; on Hulu, not so great."
McQuivey thinks Barnes & Noble will eventually need to release a basic nook without the color touch panel for $79 to encourage families to own a range of nook devices that satisfy a variety of needs. However, he doesn't expect to see this happen later this month.
"I doubt they'll have moved that far that fast," McQuivey said Thursday. "I don't expect the color touch panel to disappear yet -- even if that is the long-run low-end version of nook that Barnes & Noble will want to have to keep the bottom of the market from getting away from them."