Samsung and Barnes & Noble (NYSE:BKS) announced yesterday a partnership to develop a new tablet for the bookseller's Nook e-reader line: the Samsung Galaxy Tab 4 Nook. The hardware will be all Samsung, but the software will be a customized version of Android tailored to the Barnes & Noble Nook e-reader experience. The idea is to reinvigorate the moribund line of Nook e-readers.
It begs a few questions: Why would a company as successful as Samsung invest in this partnership? What happened to the $300 million that Microsoft invested in the Nook in 2012? Is Samsung hoping to compete with Amazon? How much will this device cost?
So let’s address what we can. Samsung has kept its lips sealed so far on the business partnership, but it’s not tough to read between the lines -- Barnes & Noble’s Nook line has failed, and Amazon is pretty much unchallenged in the e-reader sector as its Kindle line ballooned in popularity. But with that popularity, Amazon was able to dive into the media streaming and consumption market with products like Amazon Fire TV and Amazon Prime. Why should anyone let Amazon have that bundle market all to itself?
Samsung certainly has the clout to make the hardware research, manufacturing and distribution happen. But then, the same could be said for Microsoft, which invested $300 million in “Nook Media” two years ago, and Microsoft knows a thing or two about manufacturing (e.g., Xbox gaming consoles) and distribution in the tech world. Yet, there hasn’t been a Nook tablet with official branding or support from Microsoft, so perhaps Microsoft didn’t see a viable market for a high-powered Nook tablet.
So now it's Samsung's turn to step up to the plate. While it's released no concrete specs for the Galaxy Tab 4 Nook, we know it’s going to be in the 7-inch tablet class, much like Samsung’s pre-existing Galaxy Tab 4. Basically, it seems the Nook version will have all the same hardware as the regular Galaxy Tab 4, but the OS will be tweaked and tailored for the Nook experience.
Barnes & Noble’s role in overseeing the manufacture of the hardware for its e-readers is effectively dead. But its brick-and-mortar enterprise has struggled in recent years, too, as digital consumption and sales (i.e., Amazon) have stolen many customers who used to travel to its stores to buy books. Borders Bookstores closed three years ago, largely because of this phenomenon.
The regular Galaxy Tab 4 starts at $199.99, as does the new Nook’s main e-reader competitor, the Amazon Kindle Fire HD. Expect to see the Galaxy Tab 4 Nook priced similarly when it rolls into stores in August. Let’s see if Samsung’s investment pays off.