Big trouble for Barnes & Noble: Amazon’s Kindle
Tom Dougherty, CEO – Stealing Share
7 October 2011
The Nook is getting squeezed from both ends
Last week, I wrote a blog that focused on the upcoming release of Amazon’s new e-reader, the Kindle.
At that time, I speculated that Amazon, by releasing its new e-readers at a lower price, had made a very wise decision. Additionally, I felt that the strength of its brand, in conjunction with the release of a covetous product at an affordable price point, was going to give them a definitive share of the e-reader market.
It seems as though my hypothesis may have been dead on the money. Now that the pre-orders for the Kindles are being reported as high, Amazon is poised for a breakthrough product release.
“What makes this worse for Barnes & Noble, is that its primary lifeline, the Nook, is now being undersold by Amazon.”
This is wonderful news for Amazon, but near tragic news for Barnes & Noble — which may soon be destined to take the route of Borders (that of bankruptcy). That is, if it does not come up with a conclusive strategy very soon.
Sadly, the proof may already be in the pudding for Barnes & Noble. Since the announcement of the new line of Kindles, many recent investors in Barnes & Noble are now selling their shares and, in turn, the stock price is taking a free-fall. What makes this worse for Barnes & Noble, is that its primary lifeline, the Nook, is now being undersold by Amazon. (Amazon is selling a $79 and $99 models as well as a $200 color version of the Kindle and the competing products are just as intuitive and offer more reading content.)
So far, the lower price point is working for Amazon.
The rumors are awhirl that the Kindle Fire is being pre-ordered at a record-setting pace for Amazon. If these leaked documents are true, 250,000 Fires have already been pre-ordered. By the time of the November 15 street release, Amazon could potentially sell 2.5 million units. That could make cripple the already hobbled Barnes & Noble brand.
Looking at the bigger situation, Barnes & Noble maintains the ability to be the last of its kind — a traditional bookstore. But truth be told, bookstores are a dying breed. Much too often, I popped into our local Barnes & Noble to scout out a new book, only to find it was not available from the store clerk. When offered, “would I like to order,” my reply is always, “It’s okay, I can just get it on Amazon.”
If Barnes & Noble doesn’t rethink its model and rebrand Nook so it has more meaning, soon, “getting it on Amazon” may be the only option.
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