Barnes & Noble ups its ante in a looming e-book battle as tablet makers compete for consumer dollars this holiday shopping season. The bookseller's popular Nook Simple Touch and Nook Color e-readers go on sale at Radio Shack stores starting October 3.
The move puts the Nook under the noses of even more potential buyers. It's now sold at major chains including Best Buy, Staples, and Wal-Mart. Adding 3000 Radio Shack retail stores in the U.S. allows Barnes & Noble to more aggressively compete against the Amazon Kindle, which is sold in many of the same storefronts, and has already been in Radio Shack stores since June.
While e-reader sales overall actually took a dip in the second quarter of 2011, IDC expects big growth in shipments over the holiday season to reach a total for the year of 27 million units, up from earlier estimates of 16.2 million. If current trends hold, at least a fifth of those e-readers will be Nooks.
For Barnes & Noble, the Nook has been one of the few areas of growth for the company, with year-over-year sales up 140 percent.
The Nook Simple Touch reader competes with the original e-ink Kindle, but unlike the Kindle, offers a touchscreen and retails for $139. The Nook Color also competes with other color e-readers, but is also being used by many as an inexpensive tablet option, given its ability to run a growing number of apps, and built-in e-mail and Web access. The 7-inch multitouch e-reader retails for $249, half the price of an iPad.
One part of Barnes & Noble's sales pitch for the Nook has been customer service, with the e-readers primarily sold online and in-store, where often at least one staff member is typically assigned to do nothing but answer questions and demonstrate the e-readers. The company says Radio Shack was chosen as a partner because of the stores' small size and ability to maintain the same level of customer service.
“Just like Barnes & Noble stores, RadioShack’s convenient, comfortable, easy-to-shop format means that every customer gets the personal attention they deserve,” said Chris Peifer, Vice President, Digital Business Development at Barnes & Noble.
But the Nook faces stiff competition from the Kindle, which currently accounts for more than half of all e-reader sales, and Sony's Reader. Look for these competitors to be stepping up their holiday game plan soon.
Barnes & Noble and other e-reader manufacturers will also have to deal with something new this year -- a flood of new Android tablets.
As the rush to grab firesale-priced HP TouchPads demonstrated, consumers are hungry for inexpensive tablets. Archos and ViewSonic already offer sub-$200 Android tablets and the pressure is on bigger names to push their prices down. Lenovo has already announced it will offer a 7-inch tablet to compete around a similar price point.
"The consumer proposition will have to be carefully managed as e-book readers and tablets converge into a single category in the not too distant future," says Peter King with Strategy Analytics.
In other words, consumers will begin to demand devices that can do it all, and recently all eyes have been closely watching Amazon to see if they'll be able to offer exactly that. The company is expected to step up its tablet game with some type of tablet and Kindle hybrid device. The most recent reports expect some sort of Amazon tablet running a custom skin on top of Android to become available right after Thanksgiving.
"If Amazon launches a tablet at a sub-$300 price point — assuming it has enough supply to meet demand — we see Amazon selling 3-5 million tablets in Q4 alone," says Forrester analyst Sarah Rotman Epps.
The operative word in that sentence for Barnes & Noble is "If" – the Amazon tablet still isn't official, and neither is the upcoming iPad3. For that matter, there's been reports that a Nook Color 2 would start shipping this month, but we haven't seen that yet either. Whether it will be ready to ship when the other Nooks hit Radio Shack shelves in two weeks remains to be seen, but regardless, expanding into more stores could give the Nook -- or Nook 2-- a nice boost ahead of the holidays.