Business media is reporting that Barnes and Noble has reached a deal that sources the production and distribution of the book chain’s Nook branded color readers with Samsung Electronics. According to these reports, the revised sourcing deal relieves the burden of Barnes in Noble to continue to invest in product design and manufacturing and focus more on its book distribution businesses.
According to a report published by the Wall Street Journal, the deal calls for Barnes and Noble to commit to buying one million Samsung co-branded tablets over the next 15 months which will be sold either online or in physical stores starting in August. These tablets will be a version of the Samsung Galaxy Tab 4 released in May. Barnes and Noble is also moving its Nook related staff out of expensive office space in Palo Alto California into newly leased office space in both Santa Clara and Mountain View California.
From our Supply Chain Matters lens, this development places Barnes and Noble is a less desirable position to be able to compete with the likes of Amazon and Apple in the reader and tablet area, since Samsung will reserve its most cutting-edge technologies for its own branded product. However, if Barnes’s strategy is to solely leverage readers and tablets as a distribution media for book content, than technology that lags leading-edge may be just fine since it accomplishes the prime objective of electronic distribution.