The bookstore chain says it will add Google's Play app store to its 7-inch Nook HD and 9-inch HD+ products in the U.S. and U.K. via a software update Friday. The move expands the number of apps available from the roughly 10,000 the Nook already offered in its own store -- such as Angry Birds and Netflix -- to 700,000-plus apps and games offered on Google Play. And it comes after a weak holiday sales season for the Nook, which is struggling to gain market share in the rapidly expanding tablet market.
CEO William Lynch said research and sales during the holidays show that consumer preference is shifting toward all-purpose tablets rather than simple e-readers.
"We saw coming off holiday the market moved to multifunction tablets," he said. "Consumer research showed us the breadth of applications available is really critical."
Lynch said the company had been in discussions with Google "on and off" for the past several years.
"This addresses the one perceived gap that we had with other tablets virtually overnight," he said. Terms of the deal were undisclosed.
The update is automatic and will occur over-the-air to all devices connected to Wi-Fi. It will also include other Google Inc. services like the Chrome browser, Gmail, YouTube and Google Maps. Google Play Music includes millions of songs as well.
The prices and styles of the Nooks that Barnes & Noble offers are not changing. The 7-inch Nook HD starts at $199 and the 9-inch Nook HD+ tablet starts at $269. Barnes & Noble also sells non-tablet e-book readers, the Nook Simple Touch and Nook Simple Touch with GlowLight, which will not offer Google Play.
Barnes & Noble Inc., based in New York, has invested heavily in its Nook e-book readers and a digital library as more readers shift to electronic books and competition has grown from discount stores and online rivals.
The retailer launched high-definition versions of its Nook HD and Nook HD+ tablets in September in an effort to better compete against Amazon.com's Kindle Fire as well as other tablets like the iPad, iPad Mini and Google's own Nexus 7.
The company's Nook unit has attracted investors -- Microsoft Corp. owns 16.8 percent, while U.K. publisher and education company Pearson PLC has a 5 percent stake. But aside from investor funding, it has not been profitable. In its most recent quarter, which included the holiday season, Nook revenue fell 26 percent to $316 million. Barnes & Noble recorded $21 million in returns due to weak demand during the holiday season, and $15 million in allowances for promotions.
Meanwhile market share has slid. Barnes & Noble had a 1.9 percent share of the worldwide tablet market in the fourth quarter, making it the No. 5 Tablet player behind Apple, Samsung, Amazon and Asus, according to data from IDC. But by the first quarter it had slipped out of the top 5, replaced by Microsoft.
At the same time, competition is proliferating, with the global tablet market growing quickly. It more than doubled to 49.2 million units during the first quarter, according to IDC's estimate.
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