Late Fees for Barnes & Noble's Nook
Posted by: Douglas MacMillan on December 21, 2009
Over the weekend, bookseller Barnes & Noble notified some customers who ordered the Nook e-book reader that the device wouldn’t arrive in time for the holidays. Its consolation gift, $100 toward online purchases for each late Nook, is only part of the cost the company is likely to pay for the blunder.
Barnes & Noble has taken orders for as many as 50,000 of the $259 readers, estimates Forrester Research analyst James McQuivey. He guesses the company will miss shipment on about 2% to 4% of the devices, adding up to $100,000 to $200,000 worth of gift certificates. That’s store credits and not cash, so Barnes & Noble will no doubt recoup some of that investment. Still, it’s not an insignificant cost and “It certainly doesn’t give them any ground against Amazon and Sony,” McQuivey says.
Sony says it will avoid a belated Christmas, announcing on Monday that all orders of its $399 Daily Edition reader that were placed by Dec. 20 will begin shipping Dec. 23 and arrive “in-time for the holidays.” Meanwhile, Amazon has shown no signs of supply issues for the Kindle, despite the company’s claim last week that the e-book reader is having its best month of sales ever.
For Barnes & Noble, the late fee that’s harder to measure is the damage done to its credibility as a device maker, say analysts. The company’s inability to meet consumer demand suggests to Forrester’s McQuivey that the product was rushed to market. “The perception is going to be that they don’t have their act together,” he says. Barnes & Noble blames the delay on unexpected demand.
With the e-reader category evolving so rapidly, the Nook’s tardiness could also rob it of the momentum it will need to face off against the next generation of devices. During January’s Consumer Electronic Show, at least two hyped e-book readers are expected to be shown off to potential buyers: the dual-screen Entourage eDGe and the sleek, flexible Plastic Logic QUE. Though such devices may run into startup snags of their own, they are likely to raise the bar for any would-be buyer of the Nook.