Back to the archive

The encyclopedia · Product & Design · Product decision · 2009–2016

Nook: Barnes & Noble's Kindle rival — split off in 2014, shut down in 2016

Barnes & Noble's answer to the Kindle lost the ecosystem war: the Nook division was split off in 2014, and its app store shut down in 2016.

Barnes & Noble · 2009-11-30

What happened

Barnes & Noble launched the Nook e-reader on November 30, 2009 at $259 — the bookstore chain's answer to Amazon's Kindle, and the centerpiece of its digital strategy. The company poured resources into hardware lines, content stores and a $300 million partnership with Microsoft in 2012.

The strategy bled: Nook sales declined as tablets and phones absorbed the market, the Nook HD/HD+ hardware line was discontinued in fiscal 2013 due to financial losses, and in 2014 Barnes & Noble announced it would split the company in two — separating the Nook division from the bookstore business. Microsoft ended the partnership in December 2014.

The end came in steps: Barnes & Noble stopped selling digital content in the UK, and on March 15, 2016 it shut down the Nook App Store, Nook Video and the UK Nook Store, pushing users toward Google Play. The bookstore survived by cutting the Nook loose — the e-reader war had been won by ecosystems, not devices.

Why it happened

  • The Nook competed on hardware against the Kindle the moment the market moved to tablets and phones: a single-purpose device could not win against ecosystems with apps, stores and content libraries.
  • Barnes & Noble was a retailer financing a technology war: the $300M Microsoft deal consumed capital the bookstore needed, and the 2014 split was the company choosing survival over the Nook.
  • The digital strategy bet on owning the device: Amazon's Kindle won by tying hardware to a store, while the Nook's app-store closure in 2016 showed Barnes & Noble never built the ecosystem to match.
What it costDivision split off 2014; app store shut 2016costly

The lesson

Hardware is not a hedge: Barnes & Noble's answer to the Kindle became a division so costly it was split off in 2014 and shut down in 2016 — ecosystem wars are not won with devices alone.

Sources

spotted an error? The club wants to know.

Comments · 0

    Sign in to join the comments.

    More like this

    Somewhere, someone solved the problem this company failed at. 2nd Opinion →