Barnes & Noble is hoping to cut losses by spinning out production of its Nook tablets.
The company said it will keep designing and making the Nook Simple Touch and Glowlight ebook readers, but will “co-brand” its Nook HD and Nook HD+ tablets with a partner hardware manufacturer.
“The company plans to significantly reduce losses in the Nook segment by limiting risks associated with manufacturing,” the company said, in its quarterly results.
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“Going forward, the company intends to continue to design ereading devices and reading platforms, while creating a partnership model for manufacturing in the competitive colour tablet market,” it said.
“Thus, the widely popular lines of Simple Touch and Glowlight products will continue to be developed in-house, and the company’s tablet line will be co-branded with yet-to-be-announced third-party manufacturers of consumer electronics products.”
The Nook HD and Nook HD+ will continue to be sold, and to receive support and updates, the company said.
The Nook division – which includes devices as well as digital content – posted revenue of $108 million in the fourth quarter of 2013, down from $164 million in 2012.
For the full year, the division posted revenue of $766 million in 2013, down from $933 million in 2012 – and losses last year of $475 million, double the year before.
“Device sales declined during the fourth quarter due to lower selling volume,” the company said. “Digital content sales increased 16.2% for the full year. However, they decreased 8.9% for the fourth quarter due in part to the device sales shortfall, as well as the comparison to the Hunger Games and Fifty Shades of Grey trilogies a year ago.”
The Nook tablets and ebook readers have been well received by reviewers, but face tough competition from more established brands such as Amazon and Google.
Barnes & Noble recently slashed the price of its Simple Touch ebook reader to £29, and released an update that allows the device to access the web and email, while also adding support for Google Play to its tablets.
Rumours last month had suggested that Microsoft might buy the Nook division, after investing heavily in Barnes & Noble’s ebook’s division last year.
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