From the press release:
Barnes & Noble, Inc. (NYSE: BKS),the leading retailer of content, digital media and educational products, today reported record holiday sales for its NOOK business, including devices and digital content. During the nine-week holiday period ending December 31, 2011, NOOK unit sales, including NOOK Simple Touch™, NOOK Color™ and the new NOOK Tablet™, increased 70% over the same period last year. Sales of NOOK Tablet exceeded expectations, while sales of NOOK Simple Touch lagged expectations, indicating a stronger customer preference for color devices.
Digital content sales also grew briskly during the same nine-week period, increasing 113% on a comparable basis. Content sales are defined to include digital books, digital newsstand, and the rapidly growing apps business.
The entire line of NOOK products have been acclaimed widely as the best in the marketplace, and validate the Company’s first-class digital organization. While the Company has invested heavily in developing its new platform, including recruiting world-class talent and increasing its advertising and marketing spend, its customer Life-Time-Value (LTV) models continue to indicate these up-front investments will create significant value.
The Company expects fiscal 2012 digital content sales to be approximately $450 million. By fiscal 2012 year-end, based upon forecasted device sales, the Company expects annualized U.S. digital content sales will achieve a run-rate of approximately $700-$750 million.
Due to the increased significance of the NOOK business platform, the Company is evaluating its reporting segments. The evaluation is expected to be complete by the end of this fiscal year, which may result in reporting NOOK as a separate operating segment.
STRATEGIC EXPLORATION OF NOOK DIGITAL BUSINESS
In order to capitalize on the rapid growth of the NOOK digital business, and its favorable leadership position in the expanding market for digital content, the Company has decided to pursue strategic exploratory work to separate the NOOK business.
“We see substantial value in what we’ve built with our NOOK business in only two years, and we believe it’s the right time to investigate our options to unlock that value,” said William Lynch, Chief Executive Officer of Barnes & Noble. “In NOOK, we’ve established one of the world’s best retail platforms for the sale of digital copyright content. We have a large and growing installed base of millions of satisfied customers buying digital content from us, and we have a NOOK business that’s growing rapidly year-over-year and should be approximately $1.5 billion in comparable sales this fiscal year. Between continued projected growth in the U.S., and the opportunity for NOOK internationally in the next 12 months, we expect the business to continue to scale rapidly for the foreseeable future.”
The Company also said that it is in discussions with strategic partners including publishers, retailers, and technology companies in international markets that may lead to expansion of the NOOK business abroad.
There can be no assurance that the review of a potential separation of the NOOK digital business will result in a separation. There is no timetable for the review, and the Company does not intend to comment further regarding the review, unless and until a decision is made.
I think this release underscores that eink devices are essentially toast now that 7″ tablets are at the 200-250 price point the einks started at.
There is a beauty in itself in reading in color and since I got my NC in 2010 on release my poor eink PRS 650 (touch and all) just stayed unused and unloved until recently when i made the mistake of installing Angry Birds and the like on the Nook and my son took over it for large periods of time; but of course the answer is a Nook tablet which is just awesome, much faster, lighter and all around a great machine.
I have not yet seen the Fire in store as I kept forgetting to look for it in target and the like but people I know that saw both said that the Nook tablet is much cooler, better and nicer. Now of course Amazon owns the content ecosystem and BN sucks big time at that so it all depends, but still I see both the original kindle and the rest of the einks toast soon.
“I think this release underscores that eink devices are essentially toast now that 7″ tablets are at the 200-250 price point the einks started at.”
This report seems to indicate eInk is still going strong…
“Despite the loss of LCD-based products (relocated into the media tablet category), ePaper-based eReaders continued to see strong shipment growth. In 3Q11 the worldwide total improved to 6.5 million units, up from 5.1 million units in 2Q11, representing quarter-over-quarter growth of 27% and year-over-year growth of 165.9%. IDC expects growth to continue in the fourth quarter thanks to new products introductions and price cuts from the major vendors.”
That’s exactly the problem- the idc report is from December, reporting E ink orders placed by manufacturer’s before the Christmas season.
The BKS report is from today- showing the results of the Christmas season. Ereaders didn’t sell as well as expected.
Or, it could be just a nook vs. kindle thing- but if that were the case, BKS should have come up short on tablet sales as well. They certainly shouldn’t have seen a rise in traditional store sales.
Of course, this doesn’t mean Eink ereaders are dead, it just means they aren’t growing that much anymore.
That’s what google trends shows:
Sure there will be a few more years of eink readers around, but my “einks are toast” contention refers that in a few years – say 4 to 5 at most – I strongly believe they will completely disappear and color tablets will take their place.
For now the 99$ and under eink is still somewhat competitive with the 199 Kindle fire and with significantly more battery time and less weight, they will still sell but as the 7″ tablet will go towards 150 or lower and improve in specs too (weight especially as battery will stay around the 7-8 h I think) people will just migrate there.
Now of course there may be a sector that will want both, but i predict that it won;t be large enough to keep eink as a mass market device as if households will need 2 or more devices they will simply get 2 or more color tablets
Already Amazon’s sparse data indicate the same trend that Kindle fires outsell the rest
Is it “einks are toast” or is it “B&W is toast”? In 4 or 5 years, we’ll have our color E-Ink… er, Mirasol… er, Pixtronix… er, flying car… well, I dunno. One can hope that within that timespan *something* will emerge in the arena of [somewhat] reflective color displays. Maybe even with a refresh rate fast enough for video.
But I have to wonder, what does it matter about whether reflective screens “are toast” or not? It’s just a screen. I think the bigger question is whether a significant number of people *really* want to read e-books, or just want to update their Facebook page in between playing Angry Birds. Given that B&N reported disappointing sales of the Simple Touch, which is a pure e-reader, and booming sales of the NOOK Tablet, my guess is that it’s the dedicated e-reader that’s “toast.”
And if that’s the case, what does *that* mean for the future of the publishing industry???
I agree that if eink somehow solves the refresh/color issue at competitive prices it has a future but I frankly doubt that will happen – so yes you are right, b&w is dead and most likely eink with it.
As for reading, I read 200+ books a year (for almost 40 years now and in the past 4-5 years i would say that anywhere from 70% to probably 90% today as ebooks) and I never warmed that much to dedicated b&w readers preferring my Nokia 770 and iTouch until the PRS 700 with touch and internal light came along and then of course when that broke and i got a PRS 650 in replacement I used it in parallel to the revived Nokia 770 which i previously shelved, till NC came and from there I never looked back to b&w.
The crowds got into ebooks with the Kindle as Amazon made it easy and convenient and they will stay in with the Fire and its color successors as Amazon still makes it easy and convenient, so I think dedicated readers were just a stepping stone that will go in the dustbin of history soon.