Barnes and Noble’s Nook e-reader took a 12.6-percent hit in sales this holiday. (AP)
The holidays were hellish for the Nook.
Sales of Barnes & Noble’s electronic reading tablet and the e-content for it tumbled 12.6 percent to $311 million during November and December — a dismal decline that raises questions about the Nook’s future as it faces increasingly brutal competition with rival tablets.
The revenue retreat over the nine weeks leading up to Christmas came despite the bookseller’s November announcement that the Nook was off to a strong start for the holidays, with sales doubling during the Black Friday weekend.
But pitted against Amazon’s Kindle, Apple’s iPad and new tablets powered by Google’s Android system, the Nook “fell short of expectations” after Black Friday, B&N CEO William Lynch said yesterday.
“We are examining the root cause of the December shortfall in sales, and will adjust our strategies accordingly going forward,” Lynch said in a statement.
The surprise holiday drop “will weigh significantly on investor confidence in the product’s momentum for 2013,” said Gary Balter, an analyst at Credit Suisse.
”The investment question for [B&N] in 2013 is the Nook’s staying power as a legitimate tablet device,” the analyst said.
Sales of just the digital content for the Nook, such as books, movies and magazines — and not the Nook itself, rose 13.1 percent, a slower clip than in prior periods.
B&N didn’t specify how many Nook devices it sold.
Barclays Capital estimated that the number likely dropped between 3 and 5 percent with average sale prices down between 8 and 10 percent — a disappointing performance that’s “quite concerning,” according to Barclays analyst Alan Rifkin.
Hopes had been high for the Nook as B&N introduced new HD and HD+ versions after Black Friday. The new models, with sharper screen images and a video-streaming service, won good reviews from critics.
In a September announcement, B&N noted that the Nook HD devices, starting at $199, were less than half the price of an entry-level iPad, which retails for $499. B&N also blasted Amazon’s Kindle for barraging users with ads.
In a further bid to boost sales, B&N had expanded distribution to Walmart and Target, Balter noted.
Rivals, however, didn’t sit still. Amazon introduced new versions of its Kindle Fire and Apple launched a smaller iPad. Samsung also launched a tablet version of its popular Galaxy smartphone, with industry analysts reporting brisk demand.
The Nook’s holiday flop came just a week after B&N announced that British education and media giant Pearson took a 5 percent stake in the Nook business in a deal that valued it at $1.8 billion.