The Nook HD and HD+ got a great update late last night (via Engadget), as Barnes & Noble finally moved away from its closed and system-specific app and media ecosystem. The two Android tablets now offer Google Play, and new devices will ship with the app pre-loaded, while existing owners can get it via a software update over-the-air or via direct download.

Other changes with this update include the introduction of some stock Android apps, including Gmail, Maps and Chrome (which replaces the Nook’s existing web browser as the default option). Essentially, Barnes & Noble is turning the Nook HD line into a very cheap Android tablet play, and not in the limited way it was doing so before.

Where once the Nook brand was a reader first, with Android-powered full-color readers with some tablet functionality, now it looks like we’ll see Barnes & Noble embrace the tablet identity much more fully. Another sign that the book seller is banking on tablets as a much broader attempt at reaching customers is the fact that the Nook Tablet and Color don’t get the Play update, meaning we could see those left behind in terms of future hardware updates.

John took a look at the updated Nook HD+, and found it impressive, especially at $269, or a full $60 cheaper than the cheapest iPad (16GB Wi-Fi iPad mini). The problem, though, was summed up in John’s conclusion: the Nook HD+ is a great upgrade as a reader, but not necessarily a real tablet competitor. Opening up the broader Android software market place and its selection of tablet apps definitely helps to change that.

The Nook line could be the key to Barnes & Noble’s future, but right now it’s also a weight hanging around its neck, as slow sales of the Simple Touch e-reader prompted a fire sale to help move more HD+ inventory, and the Nook division lost cash in the most recent fiscal quarter. There’s still an opportunity for a cheap Android tablet to capture the hearts and minds of consumers, however, and Nook is now in a better position to capitalize on that now that its ecosystem wall has come down.

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The Nook HD+ came out last December to mixed reviews. The device had a great screen but problematic bugs caused laggy performance and low scores. The company has come out with an updated version and we took a look.

The 9-inch Nook HD+ is a Retina-quality tablet with a very simple mission – it wants to replace the iPad in the entry-level tablet market. It runs an acceptably fast 1.5 GHz processor that powers a 1,920

Barnes & Noble content and tablet subsidiary Nook Media, part-owned by Microsoft specifically to help boost content for its new Windows 8 platform, today put some of that strategy into action: it has announced that people who download the Nook app for Windows 8 will get five books and five magazines free of charge.

This is in addition to the company’s existing list of free books from its back catalog, similar to what Amazon offers on the Kindle. The Nook store currently stocks over 3 million books, comics and other reading material, which includes 1 million free books.

B&N says it is creating a “select list” of free books from which to choose, which will include bestsellers like Best American Series 2012, Blue Bloods, Hello, Cupcake!, Life of Pi and The Enemy, as well as popular magazines like GQ, Real Simple and TIME.

Somewhat annoyingly, B&N is setting up some parameters for people to take up the offer quickly. For example, Life of Pi is only available to the first 100,000 customers who download the book on the NOOK app for Windows 8. A little lame considering we’re talking here about a digital asset, not a pre-printed copy of the book, which theoretically should not “sell out.”

The deal puts a closer link between B&N and Microsoft, something the two had already been fostering through their JV and development initiatives. This includes giving users the ability to pay for items on the Nook store using their Microsoft accounts.

“NOOK is the highest-rated reading and digital bookstore app for Windows 8, and by providing bestselling books and top magazines for free, new NOOK customers can start their digital libraries with some of the best content in the expansive NOOK Store,” said Jamie Iannone, President of Digital Products at NOOK Media LLC. “With the NOOK app for Windows 8, customers get an incredible reading experience and can choose from over 3 million NOOK Books, including 1 million free titles, as well as magazines, newspapers and comics on any Windows 8 device.”

Indeed, the deal will sweeten the deal for people considering whether or not to buy Windows 8-based tablets, which reports claim have so far not been selling as well as people had hoped they would. But at the same time, it’s a way for B&N to grow its own base of users, who will hopefully return to the app to buy books once their free offer has ended.

The move comes on the heels of other free offers created by B&N as it scrambles to beef up user numbers and sales after a poor quarter, where Nook sales were down by 28%. That has included offering users a free lower-end version of the Nook, the Nook Simple, with every purchase of a Nook HD+.

There was one silver lining in those results: while device sales were not meeting expectations, digital content grew by 13%. This is where books could help save the day for B&N’s digital business.

B&N also plans to enhance those services in the weeks ahead with the launch of in-app purchases, which will finally put it in line with offerings from other purveyors of apps like Apple, Google, and, specifically, its arch nemesis in the books category, Amazon.

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The Barnes & Noble Nook isn’t doing amazingly well by most accounts, including a recently introduced giveaway program from the company itself that isn’t quite (but sure resembles) a fire sale. Now, B&N has made an announcement that is clearly designed to prop up developer interest in the platform, with the introduction of a feature that brings it up-to-speed with others: in-app purchases.

In-app purchases aren’t coming to Nook right away; they’ll be rolling out gradually over the next few weeks and months, with availability beginning in April, thanks to a new partnership with mobile payments company Fortumo. Fortumo will be providing the software tools and resources needed to build in the in-app purchases, as well as a dashboard where developers can track their progress.

It’s about time, too. In-app purchases have been available on iOS and Android for years now, and in fact have risen to become one of the most important revenue sources for developers on those platforms. Amazon, the Nook’s chief direct rival, took the beta label off of its own in-app purchase system back in April 2012. That brought Kindle Fire and Fire HD developers the chance to implement the popular revenue generating option, so the Nook HD, HD+, Nook Color and Nook Tablet are now a year behind their biggest competition.

Nook’s implementation through Fortumo will be one-click, the company says in its official release. ”In-app purchasing makes it possible for developers to ensure the customer only pays when they absolutely love the app,” said Rain Rannu, Co-Founder and CEO of Fortumo in the announcement. “This has proven to be a compelling value proposition for customers and a very successful strategy for developers.”

Nook needs this to be a draw for both developers and consumers, which is why it’s promoting the feature now before it’s fully baked. Nook sales dropped significantly last quarter, contributing to a $6.1 million quarterly loss. Digital content sales were up, however, and Barnes & Noble said that it remained fully committed to Nook hardware. In-app purchases are a good way to both capitalize on and hopefully increase digital goods sales, while making Nook hardware more attractive to consumers who are now used to the freemium model of content delivery. But it’s a late move, and one that brings the Nook only to parity with other, more popular platforms.

A key ingredient will be the revenue agreement B&N works out with developers for in-app purchases. It hasn’t shared that info on its site or in the announcement, but we’ve reached out directly to learn more, and will update if they provide additional information.

Update: Nook developers will get 70 percent, pretty much par for the course:

Developers will receive  70% revenue share from IAP transactions within their apps.  This is standard across all platforms.

- Claudia Romanini, Vice President, NOOK Apps

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There’s been nothing but bad news coming from Barnes & Noble lately, and it seems as though the company has decided to resort to the desperate measure of giving away Nooks for free. Reuters is reporting that customers who purchase the $269 Nook HD+ will receive a $79 Simple Touch free of charge as a limited offer.

It’s a great deal if you’ve been looking for both a tablet and an ebook reader, but I can’t help but feel a little sad that this is what it’s come down to. Nooks have always been solidly designed products, it’s just that they were never able to catch on with consumers after being doubly sucker punched by the iPad and the Kindle.

In January, Barnes & Noble revealed its plans to close nearly 20 of its retail locations over the next decade, which was followed by news last month that Nook revenue had dropped 26 percent YOY.

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Barnes & Noble has reported Q3 2013 earnings for the fiscal three-month period ending January 31, with a loss of $0.18 per share on quarterly revenues of $2.2 billion. That’s down 8.8 percent from the same period last year, when B&N reported gains of $0.71 per share.

Net losses in Q3 totaled $6.1 million, a clear drop from net earnings of $52 million a year ago.

Analysts predicted revenues of $2.4 billion, and an EPS of $.54. Last quarter saw revenues of $1.9 billion and losses of $0.04 per share.

Q3 has been a messy one for the retailer, which started out as a college text book store. The holiday period, which is usually a sure spike for retailers, left Barnes & Noble with a 10.9 percent sales decrease on B&N retail and BN.com from the same time last year. B&N blames this on declining Nook hardware sales at its retail locations.

Reports are floating around that Barnes & Noble may spin out its Nook hardware business, or perhaps focus its OEM vision on partnerships with Microsoft.

Barnes & Noble denies the reports, with CEO William Lynch stating today that the company is adjusting the Nook strategy and righting the segment’s cost structure. But based on the widening losses compared to Barnes & Noble’s glory days, a drastic change could be needed.

The Nook segment had revenues of $311 million during the nine-week period ending December 29, which was a 12.6 percent decrease from last year’s holiday Nook sales. All in all, Q3 saw a 26 percent YOY drop in Nook retail.

Barnes & Noble announced on January 28 that it would shutter nearly 1/3 of its retail stores, bringing its total number of locations from 689 to between 450 and 500 over the next decade.

Luckily, digital content sales rose 13.1 percent over that same nine-week holiday period, indicating that a departure from hardware and a focus on digital products could be the saving grace for the company.

The company also said on Valentine’s Day that it expected the Nook business to post an increased full-year loss, exceeding the $262 million loss seen in fiscal 2012. Though, B&N also expected losses to be less than $3 billion.

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According to a number of reports, beleaguered bookseller Barnes & Noble could be shuttering its Nook hardware division and focusing primarily on connecting its digital content to other tablets and readers. In a related report, B&N founder Leonard Riggio is considering a buy-out of the company’s consumer division and spinning out the Nook and collegiate sales divisions while maintaining the bookstores.

Sales numbers for the Nook line look bad. By the end of the holiday, book sales dropped 10.9 percent over last year while Nook sales fell 12.6 percent. Both Amazon and B&N guard their sales numbers and instead crow about short-term percentage gains, but little has been said about post-holiday sales barring a short mention last January. Although the Nook is arguably often the better product when compared to similar models from Amazon, neither company can stand up against the Apple/Samsung juggernaut.

An NYT report notes that B&N isn’t completely abandoning hardware but will focus more on partnerships with hardware manufacturers and software distributors like Microsoft.

For its part, B&N claims that there are no plans to discontinue the Nook products. This is all still obviously conjecture at this point, and plans could change as partnerships are modified.

What will the ebook market look like without a third ereader? Not much different, sadly. The ereader of choice will always be a general-purpose, 8-inch tablet and only a certain subset of customers will want an e-ink device. While the Nook’s Glowlight models were first to market and superior to Amazon’s offering in many ways, the Kindle is still an early adopter’s darling, a market that B&N never cracked.

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Barnes & Noble has put up an excellent fight over the past few years against the rising tide of digital competitors like iPad, Kindle Fire, etc.

But it would seem that the bookseller has still come up a bit short, as the Wall Street Journal reports that the company has plans to shut down nearly 20 stores per year over the course of the next decade.

Just last week, we learned that B&N had a rough holiday sales season with a 10.9 percent sales decrease over last year’s holiday season.

Barnes & Noble currently has around 689 retail stores in operation, but the cuts would eliminate around a third of those stores, leaving the total somewhere between 450 to 500 stores.

However, Barnes & Noble’s Mitchell Klipper, who delivered the news to the WSJ, explains that less than 3 percent of B&N stores lose money. Still, shutting down stores is expected to strengthen B&N’s hardware business, including the Nook HD and Nook HD+, which has been a growing focus at the company.

In the face of such a digital shift, it would appear that the bookseller expects its brick-and-mortar business to become more and more of a liability over the coming years.

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Amazon may have been touting its record holiday sales season, but Barnes & Noble is now reporting the opposite: according to a report released today, the company’s retail businesses, which include the Barnes & Noble bookstores and BN.com, saw a 10.9 percent decrease in sales over the nine-week holiday period ending December 29, 2012. Nook sales and BN.com were also down.

The retail segment had revenues of $1.2 billion, and the company said the nearly 11 percent decline was attributable specifically to troubles in its brick-and-mortar stores and declining Nook sales. 8.2 percent of the decline was due to lowered store sales  store closures and lower online sales. Sales at stores, excluding Nook products, declined by 3.1 percent compared to last year.

But adding in the Nook sales don’t help the bottom line: B&N also said that sales of the Nook products had dropped as well, with the company noting the “lower unit volume and average selling prices.”  The Nook segment, which includes ereaders, digital content and accessories, had revenues of $311 million during the holiday period – or 12.6 percent down from a year ago. Digital content sales, which include digital books, newsstand, and apps, were up 13.1 percent, however, indicating that at least those who own Nooks are using them to buy content.

The company didn’t break out the sales volume for specific devices, like the Nook HD or Nook HD+, though. In a statement, B&N CEO William Lynch said that the Nook devices got off to a good start over the Black Friday period, but “fell short of expectations for the balance of holiday.”

“We are examining the root cause of the December shortfall in sales, and will adjust our strategies accordingly going forward,” he said. As a result of the holiday declines, B&N now syas that it expects Nook media revenue of approximately $3 billion in 2013.

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Nook Media, the Barnes & Noble subsidiary that handles Nook e-readers and digital content, announced today that education publisher Pearson has invested $89.5 million, giving it a 5 percent stake in the company.

Nook Media spun out from Barnes & Noble earlier this. B&N owns 78.2 percent , while Microsoft (which made a big investment aimed at  bringing Nook content to Windows 8 devices) owns 16.8 percent, according to the press release. The deal gives the company a post-money valuation of $1.789 billion.

The companies paint the deal as a partnership allowing Nook to improve the experience it offers to students. In the release, Pearson North America CEO Will Ethridge says:

Pearson and Barnes & Noble have been valued partners for decades, and in recent years both have invested heavily and imaginatively to provide engaging and effective digital reading and learning experiences. This new agreement extends our partnership and deepens our commitment to provide better, easier experiences for our customers. With this investment we have entered into a commercial agreement with NOOK Media that will allow our two companies to work closely together in order to create a more seamless and effective experience for students. It is another example of our strategy of making our content and services broadly available to students and faculty through a wide range of distribution partners.

In the regulatory filing discussing the investment, Nook Media also says that it “expects” its holiday sales numbers, which it plans to release on January 3, will fall below the company’s previous projections.

[via PaidContent]

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