Posted on 2013-Jul-10
From Palm to Nook
Another turn of events is flagged as a red alert from the largest bookstore chain in the US. Barnes & Noble encountered another depressing period when its CEO, William Lynch, recently stepped down. Based on the quick research done by TeleRead, Lynch has had a long history in eBook business dated back to the Palm era. According to their official statement via B&N.com, there are three specific reasons how they see themselves as the “Web’s premier destination for books, eBooks, magazines…and related products and services.” They operate the Internet’s largest bookstore, have more than books, and make shopping easy. Unfortunately, it seems they cannot live up to their promise in order to compete in the business as their internal turmoil happens to overshadow their new releases.
Credit for Nook Product Line
Lynch’s immediate resignation left industry experts wondering what will influence their next move. Although the empty chair has been reserved for nobody so far, Leonard Riggio, chairman, might execute a critical action plan to save the company. According to the company’s press release, William Lynch is thanked for Nook® products which basically includes all the featured tablets and eReaders currently promoted and sold on their website. With analysis from Forbes, there are strong correlations leading up to the company’s difficult moment. Senior executives’ promotion is one of the tell-tale signals.
Despite his managerial credits in digital devices, the troubling Nook business accounts for a nine-digit loss over a two-year period. To make matters worse, this year’s content sales cannot make up for the disappointing device sales. After years of accumulated losses, the company will discontinue their tablet production and may make a similar decision to the declining sales of their eReaders.
Strong Competition in Devices Sales
Why? The company’s relevance in eBook industry is diminishing amidst the dominance of stronger competitors in the market. Based on the worldwide tablet market data during first quarter sales released by IDC, Apple’s unrivalled market share is crowned the top spot at 39.6%. While Samsung’s rose to 17.9%, Asus, Amazon.com, and Microsoft come consecutively in a lower position pushing other competitors down to anonymity. This very obstruction seems to prevent Nook from surfacing internationally. The shipment of eReader does not bode well any positive signs for makers of such device. Unlike its tech-savvy counterpart, eReaders owners find no ‘urgency’ to buy another device unless they look for a major upgrade in tablets. Based on the data from IHS iSuppli research, the eReader sales will continue its declining trend throughout next year. Their persistence to struggle in the eReader market puts them in a difficult position with Apple, Amazon, and Kobo that sell their digital devices worldwide.
More Restructuring, Perhaps?
Who knows what future might hold? Perhaps, B&N is looking for new business partners to spice up their diminished profit margins. So far, they cannot comment on anything else unwritten in the press release. Until they publicize their next statement, we can only digest the senior leadership’s restructuring news as a reflection of their overall performance. Maybe, more changes are underway. To be continued…
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