Barnes & Noble Nook is Sold Out Already? Hmmm.

Barnes & Noble's e-reader Nook is already sold out, and Sony's is in short supply just four days before Black Friday, according to the Financial Times. Analysts estimate that this year's holiday season could move as many as 1,000,000 e-readers -- a third of all e-reader purchases this year -- and some of them are blasting Barnes & Noble for rushing the product to market before they set up supply chains to meet demand.

I suppose that's unarguable -- it is a little embarrassing to sell out the Monday of Thanksgiving week -- but this story presents two silver linings for B&N.

First, the worst case scenario would be the Nook failing to find an audience. B&N's problem of overwhelming demand is a good problem to have in the long-term, even if this year's shortage leads to foregone yuletide profits. Second -- and this is what I find more interesting -- I wonder whether, and how, companies manufacture reports that their products are in short supply to juice buzz. One way to read today's sold-out story is: B&N's supply chain stinks. Another for an e-reader buyer to read it is: The Nook is selling so fast it has to be great. Call it the Jingle All the Way Theory of Buzz Marketing.

Consider the Microsoft Zune, which (with about 4% of market share) competes with iPod sales like the Washington Nationals compete with the Philadelphia Phillies for the World Series. And yet here was news in September that the new Zune HD had sold out (!) in retailers across the country, leading the Vista Blorge blog to sing its praises to the rafters. Did Microsoft low-ball the Zune's supply to stoke positive "sold-out" stories? Obviously, I have no idea. But I wonder how companies manage supply between Thanksgiving and Christmas to both maximize profit and maximize buzz that their product is selling so fast they can "barely keep up with demand."

Oh, and more about the Barnes & Noble Nook (and the new Sony readers to your right) here.

This article available online at:

http://www.theatlantic.com/business/archive/2009/11/barnes-noble-nook-is-sold-out-i-already-i-hmmm/30658/