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Barnes & Noble: From Book Store To Nook Store

Nook

Barnes & Noble may be planning to close more stores in the next few years, but it's ramping up its digital book business. The company recently said it plans to build 1,000-square-foot boutiques in all of its stores to boost promotion of its Nook e-book reader.

By replacing the modest Nook counters now found at B&N outlets with something more like separate Nook stores within stores, the company is clearly doubling down on its advantage over e-book competitors like Amazon and Sony in giving consumers ample opportunity to demo its e-reader before purchase.

While the Nook hasn't caught up in sales with Amazon's Kindle -- and might never do so -- it's already neck-and-neck with the Sony Reader in ownership, purchase intent and consideration, according to a July Forrester report on the e-reader market.

As of mid-June, more than 600,000 Nooks have been sold compared to 2 million Kindles, according to publishing industry consultant Codex Group. But the Nook went on sale only last October, while the Kindle has been available since December 2007.

At the same time, B&N is aggressively pursing an app strategy for its e-book business, introducing a Nook for Android title last month and rolling out an upgrade to the Nook iPhone app on Tuesday. The new version promises greater personalization, including content tailored to day or night reading (whatever that means), and text and graphics optimized for the iPhone 4's Retina display. Its eBookstore has more than a million titles, most available for $9.99.

As of Tuesday, the Nook iPhone app ranked 61st among free apps downloaded in the App Store, while the Kindle app didn't crack the top 100. B&N has also released a Nook app for the iPad. In the coming years, Forrester expects tablet PCs to far exceed e-readers in popularity, with a total of about 60 million users by 2015, compared to 29.5 million for e-readers.

Before then, it's possible B&N could offer a tablet version of the Nook with broader multimedia capability. In the meantime it can continue to sell e-books for $10 apiece on the iPad or other tablets. But the company's diversified approach to the digital book market suggests it will remain a significant player regardless of how the emerging business evolves.

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