Switched On: Competing by hook or by Nook

Ross Rubin
R. Rubin|05.06.12

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Switched On: Competing by hook or by Nook

Each week Ross Rubin contributes Switched On, a column about consumer technology.

Microsoft has a long history of supporting bitter rivals -- even those that have long publicly disparaged the company, offering funds to Nokia, Corel and, most famously, Apple. It also has a long history of supporting e-reading. Prior to ending development last year, the company offered its Microsoft Reader software for about a decade -- first on handheld devices using Windows CE and Windows Mobile and later on desktop Windows. Those two traditions intersected yesterday as Microsoft invested in a new Nook e-book business designed to compete better against Apple and especially Amazon.com.

It is a good bet that the Microsoft-infused Nook will move away from Android, the object of contention between the software giant and book retailer prior to the investment, but Barnes & Noble likely won't shed many tears despite its once spirited defense of its right to use Android against Microsoft. Even when compared to its rival Amazon, which has maintained control of Kindle Fire apps via the Amazon App Store, Barnes & Noble turned up its nose at the vast majority of Android apps, hand-picking those optimized for the Nook experience.

The new venture's focus on textbooks should be a fertile ground for the partnership; the large e-reader market has come a long way since Amazon launched the Kindle DX almost three years ago. Barnes & Noble has strong ties into the college textbook market and Windows 8 tablets can be expected to be larger than the average notebooks today. Already, even Android devices are testing the upper limit of tablet size with the 13" Toshiba Excite tablet.

Indeed, textbooks stand to be a great showcase for the power of Windows 8. Digital textbook startup Kno -- which abandoned plans to ship not only a 14" tablet but a dual-screened version of such a device -- has applied some effort into designing a textbook experience that goes beyond the demands of simple book reading. However, far more can be done to enable true collaborative studying and management of multiple texts. At the same time, a Nook experience should allow for long battery life and simple operation; these will also be battlefronts for Microsoft versus Android and iOS-based competition.

Amazon has shown what can be built from a focus on books. The Kindle, and in particular the Kindle Fire, opened people's eyes into the role the company could serve as an ecosystem backer. Text-heavy books may represent about the simplest of digital media and bestsellers may be of interest to relatively few when compared to music or movies. But the textbook market in particular has high potential for serving as a Trojan horse into households via schools, something that Apple has clearly recognized with its release of iBooks Author.

The Microsoft-Barnes and Noble tie-up breathes new life into the Nook, but it also shows that Microsoft is committed to closing gaps when it comes to competing with Apple, Amazon.com and Google in every digital media market. While the investment in the digital book space may have the most direct impact on Microsoft Washington state neighbor Amazon.com, the resulting trio of digital media storefronts -- Windows Marketplace for apps, Zune for music and video, and Nook for books -- create a point-by-point answer to address Apple's iTunes app store, iTunes and iBooks.

Ross Rubin (@rossrubin) is executive director and principal analyst of the NPD Connected Intelligence service at The NPD Group. Views expressed in Switched On are his own.

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