Barnes & Noble Inc. (BKS:US) began selling a Nook-branded tablet made by Samsung Electronics Co. (005930), aiming to use the South Korean company’s technology prowess to challenge Amazon.com Inc.’s Kindle in the electronic-reader market.
The new Samsung Galaxy Tab Nook is a 7-inch (18-centimeter) device that combines the features of a regular tablet with Nook software for e-books, the companies said today in a statement. Barnes & Noble, the biggest bookstore chain, is offering the product at more than 660 stores as well as online.
Barnes & Noble teamed up with Samsung in June after a money-losing effort to sell its own e-reader hardware. The deal lets the bookstore company offer an alternative to the Kindle while reducing its costs. For Samsung, the Nook branding and Barnes & Noble retail placement gives it a fresh advantage against Apple Inc. (AAPL:US) and Amazon in the tablet market.
“Having human beings that you can come in and talk to, knowing there’s a store that stands behind the product, makes a difference to a lot of people,” Chief Executive Officer Mike Huseby said in an interview. The new Nook also will drive traffic into Barnes & Noble locations, said Huseby, who unveiled the tablet at a store near Manhattan’s Union Square.
The retailer also is working with Samsung on new software for the device, helping better suit “how people read today,” Huseby said. He wouldn’t comment on the timing. At 9.74 ounces (0.3 kilograms), the device is light and features cameras in the front and back.
As part of the agreement with Samsung, Barnes & Noble will buy at least 1 million devices from the electronics giant within the first 12 months. The Samsung Galaxy Tab Nook sells for $179 after a $20 rebate.
Barnes & Noble, based in New York, announced plans in June to split up its Nook business from the bookstore chain, saying it would help management focus on the unique challenges of each division. While the retail chain remains profitable, same-store sales are declining.
Though Barnes & Noble enjoyed initial success in the tablet business after entering the market in 2010, analysts have long doubted it could maintain the investments necessary to compete with Amazon and Apple.
The concerns came to a head during the 2012 holiday shopping season when the chain released two tablets, including a 9-inch model that then-Chief Executive Officer William Lynch said could challenge the iPad. The devices didn’t sell well, leading to writedowns on excess inventory and eventually the replacement of Lynch by Huseby.
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