FORTUNE -- Unfortunately for Barnes & Noble, its Nook readers and tablets just haven't been the home run the struggling bookseller had hoped, a hard truth that became clear when the company reported a $118.6 million net loss for its fiscal fourth quarter this week.
"It's no secret the HD and HD+ didn't quite meet our expectations in terms of sales," Stephane Maes, Barnes & Noble (BKS) VP of product, told Fortune this May. Indeed, the company's tablet shipments tumbled to 1 million in the fourth quarter, down from 1.4 million a year earlier, according to research firm IDC. Part of that has to do with the simple fact that Barnes & Noble didn't differentiate its product enough from competition like the Kindle, which Amazon (AMZN) has aggressively plugged as a superior product on its site and in ad campaigns.
Now in an abrupt about-face, Barnes & Noble announced alongside earnings that it would stop manufacturing its own tablets and let interested third-party manufacturers potentially make their own Nook-compatible devices. (It will continue to sell its traditional Nook e-readers for the time being.) For all the grief Barnes & Noble has been getting of late, and the looming question of whether the Nook now is a dying brand, it's easy to overlook the simple truth that the Nook reader and tablets remain quality products that have pioneered some important needle-moving features in the e-reading market. Here are just three:
When the Kindle Paperwhite launched last fall, it got positive reviews for its built-in illumination technology. No longer would millions of e-bookworms have to turn on a nearby lamp, use a special case, or attach an awkward portable light to read in the dark. But while the Paperwhite may do it best, it wasn't the first such mainstream e-reader to the market. That honor goes to the somewhat awkwardly-named Nook Simple Touch with GlowLight, introduced in 2012. Using a combination of LED lights and a thin film that sits atop the entire screen, the LEDs pipe out light, and the film acts as a conduit, distributing that light across the screen. It's a technology somewhat similar to one used by the Paperwhite, which arrived more than a year later. The Nook's lighting isn't quite as smooth and uniform as the Paperwhite's -- something borne out in our review back then -- but it more than gets the job done.
Superior hardware design (mostly)
For a company that had never designed hardware before, the Nook e-readers are excellent examples of industrial design that outshine many competitors, even their Kindle counterparts. With its contoured soft, black rubbery back, the Simple Touch still looks slick two years later and remains hands-down the most comfortable e-reader to hold for long bouts of time. And while the latest Nook tablets, the HD and HD+, are far less impressive, the Nook Color and Tablet, designed by go-to tech industrial designer Yves Behar, were the best reading-focused tablets for their time, trouncing the first-generation Kindle Fire.
Excellent "three-tap" software
Great hardware would be nothing without equally good software to back it up, and the Nook readers had this, too. The Simple Touch launched with an interface so simple and elegant that executives promised users should only have to tap up to three times to get anywhere they wanted to go. And unless you're banging out the name of a title in a book search, that's pretty much held true. The Nook tablet software has changed a lot in three years, first from an experience that emphasized a lot -- perhaps too many -- shortcuts to items like books, apps, and music, but a major overhaul earlier this year cleaned things up and made it easier to use and sophisticated. And by letting Nook owners readers also buy from Google's (GOOG) online store, Google Play, it did something Amazon likely wouldn't do and opened up its ecosystem.
Squeezed by Amazon, the No. 2 maker of e-readers is exiting the color tablet business.
FORTUNE -- If Apple (AAPL) manages to win U.S.A. v. Apple, the e-book antitrust suit that closed last week, it will be thanks in large part to the testimony of Theresa Horner, Barnes & Noble's (BKS) vice president of digital content.
It was her story about what the e-book market looked like to Barnes & Noble in late 2009 MOREPhilip Elmer-DeWitt - Jun 25, 2013 12:43 PM ET
As a witness, Theresa Horner was everything Apple could hope for.
FORTUNE -- Barnes & Noble (BKS), the last of the nationwide brick-and-morter bookstore chains, plays only a bit part in the Department of Justice's antitrust case against Apple (AAPL). It was one of the "other retailers" that, alongside Amazon (AMZN), was forced to change its business model when Apple joined the cabal of book publishers conspiring to raise the price MOREPhilip Elmer-DeWitt - Jun 19, 2013 7:07 AM ET
Barnes & Noble's tablet business is struggling mightily. So what's the book chain to do? Let Google in.
FORTUNE -- Ask Stephane Maes, Barnes and Noble VP of Product, why holiday sales of its Nook tablets were weaker than expected, and he'll tell you it wasn't due to lack of interest. When shoppers looked at the Nook HD, one of the first things they asked was whether apps bought for their MOREJP Mangalindan, Writer - May 3, 2013 1:07 PM ET
If it wants to have any chance of succeeding, Barnes & Noble needs to build an ecosystem of services for its tablet — and quickly.
FORTUNE -- The idea of owning a thriving content ecosystem is nothing new where companies like Apple, Amazon and Google are concerned. But can a smaller company like Barnes and Noble (BKS) do the same?
Come late October, the bookseller will try when it starts shipping two MOREJP Mangalindan, Writer - Sep 26, 2012 6:51 AM ET
William Lynch talks about the future of the Nook business -- including how the company's software could be used in Windows and the potential of NFC chips showing up soon.
FORTUNE -- The battle for e-book dollars became a lot more interesting earlier this week when Barnes & Noble (BKS) announced a strategic partnership with Microsoft (MSFT). Over the next five years, the Redmond, Washington-based software giant will invest at least $605 MOREJP Mangalindan, Writer - May 1, 2012 2:47 PM ET
Barnes & Noble is adding a brilliant light to its e-reader. Does it work? And, is it enough to goose sales?
FORTUNE -- Although black-and-white e-readers are generally lighter, cheaper, and snappier than they used to be, they still don't excel in low light. That's an area where tablets and their brightly lit color screens have a clear advantage. With its new $139 Nook, arriving this week, Barnes and Noble (BKS) MOREJP Mangalindan, Writer - Apr 24, 2012 11:11 AM ET
Decoding the Department of Justice's antitrust whodunnit
FORTUNE -- At a hearing in a Manhattan federal court Wednesday, attorneys for Apple (AAPL) and two major book publishers said that rather than settling -- as three of their co-defendants had -- they wanted to go to trial to defend themselves against U.S. government charges that they had colluded illegally to raise e-book prices. (See The Apple e-book conspiracy: Three days in January.)
Which means MOREPhilip Elmer-DeWitt - Apr 19, 2012 3:16 PM ET
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* Apple (AAPL) has responded to the Department of Justice's antitrust charges of colluding with book publishers, claiming the accusations are not true. "The launch of the iBookstore in 2010 fostered innovation and competition, breaking Amazon's monopolistic grip on the publishing industry," the company said in a statement. "Since then customers MOREJP Mangalindan, Writer - Apr 13, 2012 11:34 AM ET
The latest version of the company's e-reader features some very bright features.
FORTUNE -- Ask a Nook or Kindle owner what they love about their readers, and they may rattle off several points: they're affordable, lightweight, and easy to read e-books indoors or outside. What Barnes & Noble believes users don't love is trying to read such devices in low light. In an era of such whiz-bang technology as touch screens and pervasive MOREJP Mangalindan, Writer - Apr 12, 2012 4:30 PM ET
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