Seeking Alpha
Profile| Send Message|
( followers)  

By Ingrid Lunden

barnes_and_noble_nook_tablet_1161200_g2

An enlightening and frustrating evening in equal measure Monday in London, where Barnes & Noble (NYSE:BKS) sponsored a Nook developer event and panel discussion on the state of the tablet market.

The bookseller is definitely planning to launch its tablet outside of the U.S. — the company has confirmed as much, and the fact that they’re here in London attests to that — but after a developer event at Mobile Monday London very light on details, the takeaway from several app makers was that a lot more work needs to be done before B&N will be able to make a credible entry into the market here.

On the plus side, the company’s director of developer relations later gave some enlightening numbers on who it is that is using those devices in the U.S.

In packed room, Barnes & Noble’s director of developer relations, Claudia Romanini, took the audience through some of the basics of developing apps for the Nook tablet. In attendance, a lot of Android developers. Afterwards, we caught up with a couple to gauge their feedback: in short, they were a bit perplexed on why B&N held the event in the first place, given how little they are able to offer at the moment in terms of information:

Major focus around U.S. market, for now, is completely unfriendly to doing business abroad. Consumers currently need to have U.S. credit cards in order to purchase apps. Meanwhile, developers do not need U.S. bank accounts in order to get paid, but they will still be paid by check, in U.S. dollars. And one developer who won a Nook in the raffle after the event told me that he’ll need to pay an import tax if he hopes to get the device eventually. (“They could have brought it over with them today. Why do I have to pay for my prize?” he asked.)

There are no details on when the tablets will go to its first non-U.S. market, but we do know that they will not be sold through Barnes & Noble stores. Specifically, Romanini said: “We’re expanding our digital business, but not our stores.”

In the U.S. the physical stores have been an instrumental part of the company’s marketing of the tablets: apps and e-books are free to use and read in the stores for an hour, and there are tables to sample tablets; the stores also market specific apps.

There have been many rumors that Barnes & Noble will partner with UK bookseller Waterstones, which has said it would launch a tablet this year. Its CEO has even described how it could mimic the model laid out by B&N by leveraging its physical stores to promote the devices. However, neither B&N nor Waterstones has confirmed this plan, and Waterstones doesn’t have a similar kind of “hangout” feel in their retail locations.

Lack of functionality. There are still no in-app payments, or in-app advertising, available for apps on the Nook. This is partly why paid apps have done well but also cuts out a big part of the business model used by developers here — especially since the in-store app usage, at this moment, would not apply here because B&N is not opening stores here.

Low number of apps. Two developers told me they thought that Romanini’s characterization of the number of apps in Nook in the “thousands” — not tens or hundreds of thousands; just thousands — was alarming: yes, it means more visibility/less crowding for the apps that are there, but goes very much against the ethos of an active marketplace.

For all the vagaries of the developer event, Romanini then delivered on some pretty amazing specifics on how the Nook is doing in the U.S.

She says that B&N has sold “millions of units” of the Nook. How does that work out in market share? IDC estimates that the Nook tablet accounted for 3.5 percent of all tablet shipments in Q4 2011, compared to the 54.7 percent held by the iPad from Apple (NASDAQ:AAPL) and the 16.8 percent taken by the Kindle Fire in its short time on the market. The Nook is currently selling for $249 for its highest-range device.

She noted that at the moment “over 70 percent” of buyers of the Nook tablet are women aged between 25 and 45. They live within 15 minutes of a B&N store and often have kids. “When you go in, you can see kids running around loose in the store,” she said, adding that the stores have special, short tables for those little ones to try out apps.

“We are very focused on families and children,” she continued, and she says they know their tablet customer so well they have given her a name: Julie. “We know what Julie would like to buy and how to approach her.”

She says that “Julie” does not like to consume apps on phones because she is “a bit afraid of data consumption,” and because of that B&N has found a good way to market apps to her: by making them free when she is in the store to try them out. This, she calls, “approaching the device from a content perspective.”

She says that because of this mother/female focus, and the fact that the Android Market (now Google Play) is not very strong on female apps, B&N has put a big emphasis them in its Nook app store.

One-third are children’s and education apps; one-third are games; and one-third are lifestyle apps covering areas like fashion, food, health, fitness and travel. “Basically, anything that would interest a woman,” she said.

Great information, but will B&N try to use some of it in its global push? With no details to link up the two sides of the evening, our screen on that one remains dark.

Original post

Source: Barnes & Noble Nook Needs Work If It's To Go International