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CNET First Look
Barnes & Noble's e-readers reach new highDavid Carnoy talks with Jamie Iannone about the future of Barnes & Noble's digital products.
-Hi! I am David Carnoy. I am here with Jamie Iannone. He is the president of Barnes & Noble. He is responsible at least partially for the Nook Color which came out. Barnes & Noble just announced very good sales. -Sure. Nook Color was an incredibly hot product this holiday season. We just reported yesterday, we had over 10%, almost 10% in same store sales over last holiday versus this holiday. On Christmas Day, we sold almost a million e-books and really under the tree whether it's the Nook Color or Nook Wi-Fi or 3G customers just really responded to the device that we had this holiday. It was a great holiday. -Now, you guys and Amazon, don't ever talk about specific sales numbers and everybody always wonders why you guys don't do that. Amazon's been very- played it reclusive as you guys have to. Why don't you let us know why you do that? -You know, I think for competitive reasons just in the industry, we haven't released specific numbers of devices, etc. But we have said is that we had a million books downloaded on Christmas Day and that our sales were 10% over last year. Our dotcom business was almost 80% over last year. This was the best quarter Barnes & Nobles had in over a decade and I think a large part to the fact that consumers really wanted this device. They love color. They love touch, and they love the Android-based experience that we packed in the Nook Color. -And you guys have obviously been focusing on the Nook Color but you have an e-ink reader out there. Do you guys talk about the sales of that older e-ink reader versus the sales of the Nook Color in terms of percentages? -I mean, Nook Color was the dominant selling product this holiday season across the board primarily because consumers love the color. They love the touch. They love the magazines, newspapers that you can read, kids book in really rich color and there's nothing like it on the market. When you look it kind of the e-reading space and a reader that's focused on that, it gives you that breadth of content. There's really no product like that on the market. So, it was our lead seller for the holiday season. I think we'll be well in 2011. -But, obviously, Amazon has done very well with the Kindle 3rd Generation. In terms of your commitment to e-ink and the next generation device there, there are rumors that you guys might put something out the next few months. Can you comment on your commitment to the e-ink plasma? -You know, consumers- some consumers prefer the e-ink line because of readability outdoors or because of the price point is lower on our e-ink line. It's $149 versus a $249. And I think there will always be some consumers that prefer kind of the e-ink over LCD. We've done a lot to minimize any glare issues or anything with a really bright, rich LG screen that's backlit. It has a full lamination coding, so it's bonded right to the glass to minimize that, you know, any glare that you would get from that. In our internal studies, David, we really haven't seen any issues in terms of the impact on eyes of reading on an LCD versus e-ink. But I still think there's a little bit of consumer preference and that's why we offered a portfolio. So we have Nook Wi-Fi, we have 3G, and we have the Color line. -And would you, then, in theory, update that e-ink e-reader later this year. -You know, we're constantly looking to innovate on the product lines that we have by bringing out new features and new functionality. In December, we launched a huge update, our biggest update ever to our e-ink line, making it incredibly faster. It's 50% faster page turns. A lot of features that consumers wanted, the top 5 requested feature- most features. And so we're gonna continue to innovate on devices just like we did here. I mean, I think this device really surprised the market in terms of how much they like reading on it and the fact that it's such a great Android-based experience for only $249. -Why won't we talk about that for a second because some people have complained that you should have launched more apps for it out of the gate, even in a Barnes & Noble branded app store. Can you talk about your decision to go with a very limited number of apps that launched. Was that partially because you want to keep the device secret or what was the reason behind that? -Yeah, you know what, we really wanted to do was show off a couple of the great applications that we could have on this device. So you can have Pandora and listen to streaming music. You could play crossword puzzles. You can look at pictures, etc. But really to give you an example of how powerful this device could be. At the same time, announce to the world and the developer community, "Hey! Come build applications or bring your applications to our device." So early this year, we're gonna be opening up an application store on the device. We've already released an SDK. We're putting notifications out to developers and there are tons and tons of interest historically and even here at CES in building applications for Nook Color. And, you know, we think it will be a whole new kind of step generation excitement about this product when we launch the app store. -Now, people have actually what they call "hack" or "rooted" the device ready to run Android marketplace, turned it into a true Android tablet. Does Barnes & Noble care? -You know, I think that it's really interesting to look at, you know, how the developer community already is so excited to build applications that folks have hacked in and kind of launched the applications. We, obviously, have devices that are running, you know, Angry Birds. I think I may have even showed it to you before and the applications look great. They run great on this experience. And I think it just builds excitement for what's coming which is I think a really exciting application store. -But do you prefer people not to run the Kindle app on the Nook? Is that blasphemous? -You know, we already have the best bookstore that's out there in the world. I mean, you have over 2 million books. You have children books in rich color that can read to you, read your child at night or in the car. We have over a hundred newspapers and magazines. We just added over a hundred more kid's books. We have 11,000 chapter books. So we already have the best content, it integrates amazing into the experience that's on here and we think, you know, the shopping experience, the personalized recommendations from booksellers at Barnes & Noble, all of that experience ties in. It's just a great overall reading experience and probably what every consumer is gonna want. -Now, we get a lot of readers, we have a lot of international overseas readers and they're wondering when Barnes & Nobles is gonna branch out into a global market. Is that in your guys' plans? -You know, we've had a tremendous amount of interest internationally. Primarily across the world, folks have kind of realized what a great reading experience this is. They love the Barnes & Noble brand internationally and so we're exploring it. We've kind of said publicly that within the next couple of years we think that, you know, this product will be a global product, but that's all we're really announcing at this point. -In terms of those kid's books and kid's apps, you obviously done a big push with that. How do you see those- the kid's apps on the iPad which tend to be a little bit cheaper than children's books on these competing with those books? -You know, just before the holiday, David, we released Nook Kids for the iPad. And our strategy has been to read what you love anywhere you like. So we have reading clients that go across, iPhone, iPad, Android, PC, Macintosh, etc. And your digital locker with Barnes & Noble lives in the clouds. You've acces to those books everywhere. So now you can read your Nook Kids titles on your Nook Color, have them read to you, buy them from our shop, etc. You can also do that on the iPad. And we have the biggest catalogue of kid's books. We have 11,000 chapter books and hundreds of interactive kid's book that can read to me, so, you can now do that on either platform. We're really excited with the launch of that product. It just came out before Christmas. And for iPad owners that have kids, it's great option for them. -Alright, thanks a lot Jamie. Thanks for coming today. We appreciate it and thanks so much. We'll see you back with our continuing live coverage of CES 2011 in a few minutes, so hang on.