5 ms·

Early reports suggest almost 3 million NC's sold in four months[1]. That would mean a run rate of at least 6 million per year. That is astonishing for a brick a

by npalli 16y ago

Early reports suggest almost 3 million NC's sold in four months[1]. That would mean a run rate of at least 6 million per year. That is astonishing for a brick and mortar retailer with no consumer electronics background. The very attractive price point (could drop under $200) and decent ergonimics (lightweight 7") would mean NC could end up taking a major chunk of the light browsing/reading/email/ebook-reader market. 1. Amazon now has to bring out a tablet running Android. It is only a matter of time before the NC drops to under $200 and then people start buying the NC instead of Kindle. While rooting the NC is easy, if you check the downloads of the images, I would say less than 15% end up actively rooting. So that means no Kindle app on NC. 2. Apple now has to figure out alternate uses for the iPad since they are going to get disrupted on the browsing/email/ebook-reader category. I don't even know if they can bring out a 7" iPad (current investments in 10" and maybe even hardware optimized for 10"). Looks like they are trying to repurpose the iPad into a gaming device. In any case, they can't be happy with the rapid rise of NC. Strangely B&N is the only company which has a lower supply chain cost than Apple in the tablet market -- they own retail, they don't have to do any OS development, they don't have to put out the latest hardware. 1. http://news.cnet.com/8301-17938_105-20048052-1.html http://news.cnet.com/8301-17938_105-20048052-1.html

brianbreslin 16y ago
Curious as to how you see B&N having lower supply chain cost than Apple? Apple is making 15M+ ipads, their unit costs on chips etc are going to be lower, B&N still has to source and develop the hardware for NC
- kenjackson 16y ago
  The OP seems to be implying that B&N has to pay very little for OS development (Google picks up most of the tab). And in terms of HW, the NC isn't a cutting edge device, so they can get 2nd/3rd gen parts. And coupled with good volume, gives them a low supply chain cost. I don't know if its lower than Apple's, but it's probably lower than anyother Android vendors except probably Samsung.
- npalli 16y ago
  Few things. kenjackson alluded to them 1. NC is using older generation parts (ex. their SoC is OMAP3621 which is at least two generations behind). This is off the shelf from Texas instruments who own the entire supply chain in design and foundry. Look at all the products using this technology -- http://en.wikipedia.org/wiki/Texas_Instruments_OMAP#OMAP3 http://en.wikipedia.org/wiki/Texas_Instruments_OMAP#OMAP3 -- now you are looking at pretty decent volume and per unit cost. 2. 6 million vs 15.4 is not very meaningful in per unit cost difference since both volumes are pretty huge. This is not accounting for the fact that other companies could be using this SoC. Also, Apple does custom design for thier own products so Samsung cannot sell off their chips to someone else. So Apple has to invest in design and all the associated costs in the development and obsolescense of the chips. Given the tight margins it is not surprising Apple buys gross manufacturing capacity below forecasts and let shortages occur.
podperson 16y ago
This is interesting from another perspective. Some pundits have argued that Amazon is, in the long run, Apple's biggest potential competitor in the iPad space because it owns the whole foodchain. But it doesn't have a retail presence. Not only does B&N have a retail presence (and a great customer experience) but it owns a big part of the foodchain too. If Amazon loses its sales tax edge or B&N can end-run its sales tax disadvantage...
neuroelectronic 16y ago
Amazon forced to make an Android pad? Nope. 1. Now Nook is just another Android pad. Amazon has Android app for Kindle. Nook is a Kindle. Good luck to B&N on trying to compete with the rest of the market. They'll probably be buying whatever is cheap and just re-branding it, as I'm sure they're doing now. This will mean it's not a quality product. 2. People will continue to buy iPad no matter where the market goes. It will continue to be the trend-setter when it comes out soon with a hidef screen, 3d and battery life to match. The fact that B&N doesn't do any Hardware or Software work will mean their quality and finish will suffer. I imagine they're selling it at cost or slightly above to stay competitive with the Kindle. My guess, in the long run, people will have a new Android pad and then another. Kindle users will still be using their device for reading and buying books because that's all it does. But when color e-Paper come out, Amazon will be the only manufacturer with a mature OS that is practical for the slow refresh rate of e-Paper. The battery life and display quality over typical LCDs will make it appeal to a niche that no other device has.
- deleted 16y ago
  [deleted]
- npalli 16y ago
  1. I doubt Kindle is a quality product, NC seems a better product than that. You can't install Kindle for Android in an unrooted NC. The cost factor works for B&N since they own retail distribution. That alone gives them a 30% advantage over other tablet players. In the past few months, Amazon shutdown their Kindle SDK program and opened an Android store. So not exactly a great backing of the Kindle product. 2. True, but will there a big enough market for all these features?. Apple can make the greatest tablet, but if their margins are challenged and the customers flock to a low cost good-enough device then I don't think Apple will be pleased with the result. B&N made a profit for the first time in many quarters. They sold a boatload of Nook Colors. I doubt they are losing money on NC.
  - neuroelectronic 16y ago
    Your opinion of the Kindle vs Nook is not relavant. The fact is that they are different products and the Nook is competing with the iPad. The Nook sells well because it's a cheap iPad, not because it's a color Kindle. Amazon did not shutdown their SDK? How to you think the App store is populated with apps without an SDK? Obviously, you are just a bit biased and your opinion is not objective.
DrHankPym 16y ago
What's the point of an e-reader without e-paper? I don't need my Kindle to play music or surf the web. I have a phone, computer, netbook, and tablet that can do all that. All I want to do with my Kindle is read books on e-paper. Honestly, the nook seems like a cheap version of the iPad or Android tablets. I wouldn't compare it with the Kindle because if it doesn't have e-paper, it is not an e-reader.

by npalli 16y ago

brianbreslin 16y ago

Curious as to how you see B&N having lower supply chain cost than Apple? Apple is making 15M+ ipads, their unit costs on chips etc are going to be lower, B&N still has to source and develop the hardware for NC

kenjackson 16y ago
The OP seems to be implying that B&N has to pay very little for OS development (Google picks up most of the tab). And in terms of HW, the NC isn't a cutting edge device, so they can get 2nd/3rd gen parts. And coupled with good volume, gives them a low supply chain cost. I don't know if its lower than Apple's, but it's probably lower than anyother Android vendors except probably Samsung.
npalli 16y ago
Few things. kenjackson alluded to them 1. NC is using older generation parts (ex. their SoC is OMAP3621 which is at least two generations behind). This is off the shelf from Texas instruments who own the entire supply chain in design and foundry. Look at all the products using this technology -- http://en.wikipedia.org/wiki/Texas_Instruments_OMAP#OMAP3 http://en.wikipedia.org/wiki/Texas_Instruments_OMAP#OMAP3 -- now you are looking at pretty decent volume and per unit cost. 2. 6 million vs 15.4 is not very meaningful in per unit cost difference since both volumes are pretty huge. This is not accounting for the fact that other companies could be using this SoC. Also, Apple does custom design for thier own products so Samsung cannot sell off their chips to someone else. So Apple has to invest in design and all the associated costs in the development and obsolescense of the chips. Given the tight margins it is not surprising Apple buys gross manufacturing capacity below forecasts and let shortages occur.

podperson 16y ago

This is interesting from another perspective. Some pundits have argued that Amazon is, in the long run, Apple's biggest potential competitor in the iPad space because it owns the whole foodchain. But it doesn't have a retail presence. Not only does B&N have a retail presence (and a great customer experience) but it owns a big part of the foodchain too. If Amazon loses its sales tax edge or B&N can end-run its sales tax disadvantage...

neuroelectronic 16y ago

Amazon forced to make an Android pad? Nope. 1. Now Nook is just another Android pad. Amazon has Android app for Kindle. Nook is a Kindle. Good luck to B&N on trying to compete with the rest of the market. They'll probably be buying whatever is cheap and just re-branding it, as I'm sure they're doing now. This will mean it's not a quality product. 2. People will continue to buy iPad no matter where the market goes. It will continue to be the trend-setter when it comes out soon with a hidef screen, 3d and battery life to match. The fact that B&N doesn't do any Hardware or Software work will mean their quality and finish will suffer. I imagine they're selling it at cost or slightly above to stay competitive with the Kindle. My guess, in the long run, people will have a new Android pad and then another. Kindle users will still be using their device for reading and buying books because that's all it does. But when color e-Paper come out, Amazon will be the only manufacturer with a mature OS that is practical for the slow refresh rate of e-Paper. The battery life and display quality over typical LCDs will make it appeal to a niche that no other device has.

deleted 16y ago
[deleted]
npalli 16y ago
1. I doubt Kindle is a quality product, NC seems a better product than that. You can't install Kindle for Android in an unrooted NC. The cost factor works for B&N since they own retail distribution. That alone gives them a 30% advantage over other tablet players. In the past few months, Amazon shutdown their Kindle SDK program and opened an Android store. So not exactly a great backing of the Kindle product. 2. True, but will there a big enough market for all these features?. Apple can make the greatest tablet, but if their margins are challenged and the customers flock to a low cost good-enough device then I don't think Apple will be pleased with the result. B&N made a profit for the first time in many quarters. They sold a boatload of Nook Colors. I doubt they are losing money on NC.
- neuroelectronic 16y ago
  Your opinion of the Kindle vs Nook is not relavant. The fact is that they are different products and the Nook is competing with the iPad. The Nook sells well because it's a cheap iPad, not because it's a color Kindle. Amazon did not shutdown their SDK? How to you think the App store is populated with apps without an SDK? Obviously, you are just a bit biased and your opinion is not objective.

DrHankPym 16y ago

What's the point of an e-reader without e-paper? I don't need my Kindle to play music or surf the web. I have a phone, computer, netbook, and tablet that can do all that. All I want to do with my Kindle is read books on e-paper. Honestly, the nook seems like a cheap version of the iPad or Android tablets. I wouldn't compare it with the Kindle because if it doesn't have e-paper, it is not an e-reader.