Jun 22, 2011
Fourth Quarter Earnings Soar
On Tuesday, Barnes & Noble reported it sold three times the number of digital books through its website as it did physical books during the fourth fiscal quarter of 2011.
The rise in sales of digital books through the company’s website and corresponding decline in sales through its physical bookstores during the fourth quarter follows a report from February, in which B&N announced it was selling two times more ebooks than physical books. Despite the ratio of ebook sales to physcial book sales, the physical books still get the most sales volume.
Barnes and Noble sells its ebooks for the proprietary Nook e-reader and Nook application for third-party smart phones and tablets. The company is adding millions of Nook users each fiscal quarter, according to CEO William Lynch who made the announcement during a conference call.
The unexpected surge in ebook sales did not insulate the company from a loss, however. For the fourth consecutive quarter, B&N reported a consolidated net loss of $59 million, on total sales amounting to $1.37 billion. Considering that one year ago the company reported a loss of $33 million on sales of $1.32 billion, this year’s figure represents a reflection of the global economic crises the world is immersed in, especially US consumers.
Not surprisingly, Amazon.com was the first to report a greater ebook sales figure than traditional book sales. Some of Amazon’s recent ebook earnings have been harmed by the existence of its app for the iPad, however, and the Internet’s first online bookseller is reportedly planning to launch its own tablet device to compete with Apple’s iPad as early as the end of this year. If they are smart, they will offer cable internet bundles for the iPad.
One rumor suggests that Amazon will sell a fully functional tablet with a proprietary OS it would design itself, while another suggests the online e-tailer will outsource for it’s operating system. Either way, it is believed that the Kindle, the world’s most popular ebook reader device, will remain available, possibly at a much lower price than what it is now. This would give consumers who wanted a full tablet experience the chance to get more mileage for more money, if they chose. It would also make the electronic book reader’s base model even more affordable to the masses than it already is.
Amazon earlier this year introduced an ad supported pricing model for a less expensive version of its Kindle.
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