Six Ways of Looking at the Nook

Barnes and Noble announced today that it was introducing a WiFi-only version of its e-reader, the Nook, for $149. It has also reduced the WiFi+3G model to $199, from $259. The Amazon Kindle is $259. [Whoops! That was a few minutes ago. Kindle now down to $189. Interesting.] Points to make:


1) I have used Nook for several months, and like it a lot. (Spelling note: B&N was originally pushing an all lower-case spelling of the name, as nook, which just looks odd. It now seems to be getting around the problem by switching to all upper-case, NOOK. I'm sticking to conventional orthography and calling it Nook. Disclosure note: as mentioned several times earlier, I've bought the two Kindles I use but got the Nook as a gift from someone involved in its production. Photo from B&N site.)

2) The Nook should be thought of as basically similar to the Kindle, rather than basically different -- though it has several nice touches. Trivial-sounding but convenient: the Nook has "forward" and "backward" buttons on both the left and right side of the device. The Kindle has a back button on the left side only. I often find that useful when I'm holding the Nook with my right hand while on a subway etc. The ability to use WiFi connections is also handy; as long as you're at a hot spot, you can shop or browse whether or not you have good phone coverage. (Turns out that this works only inside the US, for copyright rather than technical reasons. I'm still trying to find out whether it would work overseas, if the WiFi connection ran through a VPN that "seemed" to be in the US.) For more, some earlier compare-and-contrasts here and here.

3) The real differences between the Nook and the Kindle should be thought of as large-scale business model differences, even future-of-publishing-industry differences, rather than look-and-feel differences as you hold the devices in your hand. In this sense, the decision to use one or the other is somewhat like deciding to use Firefox rather than IE, when Firefox first emerged several years ago. That is, part of what you're choosing involves the actual features of the product. ("Tabs" and "extensions" when it came to Firefox; WiFi, "sharing," and other features for the Nook.) But part is also an "open" versus "closed" or proprietary business model. Firefox was of course an open-source software development project, versus Microsoft's proprietary IE. The Nook is meant to break two closed systems. One is Amazon's proprietary Kindle format for e-reading books, versus the Nook's open ePub format. The other is Apple's implicit efforts to "app"-ize the Web,

4) For a very good discussion of the stakes in both the Amazon and Apple efforts, including app-izing the Web, see this article by Sue Halpern in the New York Review of Books, which centers on the emergence of the iPad. She argues that publishers, writers, and readers will all be better off if the "open" models prevail and both the Amazon and the Apple proprietary efforts are defeated. After the jump, a note from a reader to the same effect. And our new issue has a very good story by Michael Hirschorn on this trend.

5) Also after the jump, a comment by a first-hand informed source about another larger implication of the Nook's emergence: What it means for the next stages of electronic-device development in general, especially in China.

6) Probably tomorrow, a guest essay by David Rothman, of Teleread, who has been talking and writing about e-readers since long before they were cool (or existed). He also has a theory about the larger importance of these devices, notably the iPad.

Supplementary notes from readers:

1) I noted early on that when I was looking for the same book on the Kindle and the Nook, the price on Amazon was lower. An industry source gave this explanation:

B&N is working hard to develop parity with Amazon as they both adopt a new agency pricing model requested by the publishers as has Apple. As you know Amazon was trying to hold out and price their books at $9.99 even though they were losing money. The publishers are fighting this. The new model allows the publishers to set the price and B&N (or Apple or Amazon) takes 30%. While the publishers often get less under this model they can establish the retail. They also don't want Amazon to use this predatory pricing that will hurt other retailers and make them more powerful.

Here's an example:

Book sells for $25 in hardcover
Costs retailers (Amazon, B&N, Apple) $12.50
E-Book version costs retailers $12.50

Up to now Amazon sold it for $9.99 (taking a loss).

Now the publisher sets the price of the ebook at say $11.
Retailers pays $7.70, makes $3.30 profit. Publisher gets 7.70 (instead of $12.50).

More to the same effect, from Rupert Murdoch, here.

2) About the implications of the Nook for future electronic devices in general, from a person with deep experience in the Chinese manufacturing industry:

The nook was no ordinary development. Remember, B&N is not an electronics company. They're not Amazon nor Sony. But what they were able to do was remarkable. Sources in China are reporting that they assembled a small focused team, and brought the product from a concept sketch into production in about a year. Compare that to Amazon and Sony that took three and four years, respectively.

This is probably the best example of what's becoming the trend for successful consumer electronics product development. Those companies with nothing have everything and those with everything have nothing. This apparent paradox simply means companies with the urge and need to develop products are often better off without an entrenched engineering organization that slows things down and is resistant to doing things in new ways. Those that are free and unencumbered can assemble the best small teams and work with the best ODMs in China and do a better, quicker job.

3) About whether e-readers generally will bring publishers more money, as discussed here, a reader writes:

I want to share an observation with you. I own a Kindle and I have been disappointed with the lack of ads. I see no reason in subscribing to, say Vogue on my Kindle if the glossy color ads are not included. To your article's section of "Display ads", I am awaiting the day when I see an add for a great shirt while reading a men's article on Google.

Imagine if you could interact with the ad by putting in your height, weight, dimensions, skin and hair color then the ad would insert the body type. Next the image would strut down the runway, possibly in 3D. If I find that shirt and several other items I want at my local department store I could have them waiting for me to try and purchase. I would have more time for browsing. I believe an interactive ad that eliminates wasted time is possibly the avenue Internet advertising would support news articles. Google could ask you to personalize your home computer, phone, notebook etc. for your desired ad content. Hopefully, some variation is on the way.

Dispatch from David Rothman tomorrow. This is plenty for now!