Product Strategy: What’s up with the Nook?

Currently there’s a lot of talk about Barnes and Nobles’ new full color Nook. It is directly competing with Amazon’s Kindle, except it includes a color screen and web surfing features. I agree with a lot of analysts who are saying the Nook will radically change the e-reader game. My blog post today will look at the Nook’s product positioning and marketing strategy. This information will be particularly helpful to those in the SAAS product management process.

We don’t know if the Nook will forge ahead of Amazon in sales, but it definitely will in terms of its vision. It is an Android-based e-reader in the form of a tablet. Today over a quarter of mobile subscribers in the US have smart phones of some sort, and to me it seems the same type of users would be attracted to the reader-tablet color hybrid with multi-touch interfaces. All I am saying is that people will expect such things in the e-reader sooner or later, and the Nook is the first to lead the way.

It is true that the Kindle is cheaper, and we’ll probably see a slower transition among those who are using the grayscale device to the full color Nook, but I think we’ll also see the same people wanting more from the Kindle than it offers. Consumers will soon demand more robust features and they will start to migrate to higher price-points. The Nook has an advantage, as it is cheaper than the iPad; however, it contains more updated, desirable features. The Nook will be more attractive to those who are already familiar with the market and are ready to switch to a device with more sophisticated content.

In addition to Nook’s vision, its other strategy includes the development of some social connectivity – the “loan a book” feature. Even though this may seem limited, it is a huge step in an increasingly important direction for e-readers. People like to share books and they like to talk about them – this is what the Nook is tapping into. The Nook will let you clip up to a page of text for instant sharing on Facebook; it will also let you send gifts to friends’ e-readers from barnesandnoble.com. Going social is the next step in the e-reader business and the full color Nook’s LED screen will make a significant difference in this regard.