Samsung, Barnes & Noble team up on tablet design
The arrival of the Galaxy Tab 4 Nook effectively ends Barnes & Noble's ill-fated foray into hardware design. But what's in it for Samsung?
Barnes & Noble, the bookseller that has struggled to establish itself in the tablet market, is calling on Samsung for some help.
The companies announced Thursday that they will launch co-branded tablets with a mouthful of a name: Samsung Galaxy Tab 4 Nook. The devices will feature Samsung's hardware and customized Nook software from Barnes & Noble. The first Galaxy Tab 4 Nook, sporting a 7-inch display, will hit US store shelves in August.
The decision to partner with Samsung might be a good one for Barnes & Noble and its Nook Media subsidiary. The company's Nook business has fallen off a cliff: its last-reported quarter, ended January 25, showed a 50.4 percent decline in sales, and shareholders have been calling on the company to make drastic changes or shutter the operation altogether. Samsung, meanwhile, has found some success in the tablet market and is one of the leaders in Android-based tablets.
The partnership effectively ends Barnes & Noble's foray into hardware design. The company said Thursday that while it'll still offer its Nook GlowLight -- a backlit e-ink e-reader -- it will now only support the Nook slates it's launched to this point. Leaving the hardware design to Samsung allows Barnes & Noble to focus on its own software and Nook content sales.
Nook content sales have also proven difficult to generate. During the last-reported quarter, Nook content sales, which includes digital apps and e-books, among other services, saw sales drop 26.5 percent year-over-year to $57 million.
What's not immediately clear is what Samsung gets out of the deal. The company is performing well on its own and doesn't necessarily need a Nook partnership to dramatically improve its business. In a statement Thursday, Samsung kept its plans close to the vest, providing no insight into why it might have taken the deal.
Two years ago, Microsoft invested $300 million into the newly formed Nook Media, then known as "Newco," as part of the settlement of a patent dispute between Barnes & Noble and the software giant.
Barnes & Noble also announced on Thursday that it's relocating its campus. The company is moving from its 208,000-square-foot Palo Alto, Calif., campus to two new facilities in nearby Santa Clara and Mountain View that together take up just 88,000 square feet. The move is part of a broader attempt on the part of Barnes & Noble to reduce expenses. Indeed, the company expects the relocation will save it $102 million over the length of lease.
Barnes & Noble shares were up 60 cents, or 3.17 percent to $19.50 in pre-market trading following today's news.