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Comment by fab13n | Hacker News Reader

The business model to compete with Apple has been known for extremely long: offer lesser products at lesser prices. Everyone else failed at the "lesser price" part.

Amazon can pull it off, because they don't need to make money with the tablet: as long as it sells ebooks and movies, it remains profitable for them. Since there's nobody to challenge them on this market, they will get the volumes to drive the BOM prices down, too.

HP hadn't the option to make money by selling ink cartridges for subsidized tablets, as they used to do with printers...

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Since there's nobody to challenge them on this market, they will get the volumes to drive the BOM prices down, too.

Barnes & Noble is in this space too, and they have hundreds of stores that will serve as points-of-sale for the Nook. Don't forget them.

EDIT: apologies to the European HNers. Still, those B&M stores in America are incredibly popular, making it easier for Barnes & Noble to find new Nook users.

> Still, those B&M stores in America are incredibly popular

They're actually an albatross. Ask Borders how popular physical book stores are. B&N is only still alive because of its digital business. Barely alive too, Amazon is 150x larger in terms of market cap. Digital sales are up, physical sales are down and at the end of the quarter they are losing a lot of money.

The Kindle line is sold in Target. I'd wager Targets are more popular and will be around longer than B&N. Even better, it doesn't cost Amazon a dime to keep Target stores open.

>Even better, it doesn't cost Amazon a dime to keep Target stores open.

Since vendors often pay retailers for prime shelf space, Amazon might in fact contribute to keeping Target stores open. Still, I get what you mean.

Agreed. I can't help but think Apple has to be paying Target something for the 10 foot long Apple-branded cases/displays for the iPad/iPod lines. Maybe Target would pay for that themselves to have the privilege of selling ipads, but I'd be less surprised if Apple was paying for the space.

I'm not in the USA, so I don't know B&N (although my company provides some of the hardware in the Nook).

However, B&N's main advantage compared to Amazon is its network of B&M stores, right? Now, the bet here is "let's lose money on the tablet, and hope that people buy tons of ebooks".

I'd guess that people for whom the existence of B&M stores is important aren't going to be the biggest ebook buyers: they'll be more into dead tree books, on average. If B&N subsidizes their Nook, and it's only used as a web browser, B&N has lost.

Barnes & Noble also has in-store cafes and their in-store Wi-Fi offers Nook users free reading and coupons for goodies in the store. I'm not sure how many people take them up on it, but it seems like they are at least playing with a business model.

B&N doesn't have the operational chops that Amazon does. Its going to take more than Brick & Mortar to make a dent in the tablet market. B&N will fight with Dell for table scraps while Amazon and Apple each capture sizeable, material share. I wrote a bit about why I think Amazon is going to kill this on my blog earlier today - http://www.byte.org/2011/09/28/amazon-coming-into-its-own/ - tl;dr: Amazon is one of the few tech companies with the ops and distribution chops in the same league as Apple.

How true. I had to buy a heap of textbooks recently, and had a discount coupon for B&N, so I decided to give them a try instead of just buying from Amazon as I had originally intended.

Bad idea. I saved about $75, but had to deal with billing errors, cancellation of part of my order, slow and overpriced shipping, and that cost me several hours of my valuable time. I was astonished at how poor the experience was.

I buy as much as I can on Amazon now - with Prime it is a no-brainer...

This is after wondering why I could order books from Amazon and they arrived 9am the next day (the joys of living in a teeny country like the UK :P) but when I ordered X other thing from different sites it took days, and was full of mistakes.

Amazon have absolutely nailed the shipping side of online retail - which is usually what people most complain about in retailers, after all!

Barnes & Noble is only america right? I have never seen a Barnes & Noble store anywhere in europ, were as amazon is very commen in europe. Thats not a small market.

Europe is a bigger market than the US is.

I'm in London. Where's my nearest B&N so I can go and pick one up?

Right next to the Amazon store ;-)

Touché! :-)

Seriously though, do Barnes and Noble actually sell the Nook to international customers? They certainly don't market it over here, while Amazon have run quite a lot of TV and print ads. Buy the look of it I'd have to buy the device and books in US dollars instead of my local currency. These things don't give me the feeling that B&N are serious about sales outside the US, while Amazon definitely are.

no, the whole nook ecosystem is US-only. we don't even get it in canada.

I'm in Australia. My local supermarket sells Kindles (woolworths). So does the local electronics store owned by the same brand (Dick Smiths).

What's this Nook thing you're talking about?

Borders Australia, may it rest in peace with it's absurd over RRP pricing policy, sold them.

I think you might be confused with this: http://www.koboereader.com

You jest, but I think an Amazon store could be a cool idea -- they simply stock a revolving selection of their best rated books from every genre.

In Seattle we have Amazon Fresh, which is home grocery delivery. I can generally get next-day delivery, so I can order groceries and anything else they have in the local warehouse (books, movies, whatever) and have it sitting on my doorstep by 6am the next day.

I can't imagine living my life without it. Seriously.

Opening physical Amazon stores would trigger a sales tax requirement in every state where it operates, regardless of whether or not Amazon is able to negotiate a federal override of the state right to collect taxes on e-commerce.

States do not have the right to tax Amazon, if Amazon does not have a physical presence in their state. That's not a "federal override" but rather is part of the constitution and is a protection against every state collecting taxes on every business across the country. No taxation without representation.

States do have a right to tax their individual citizens who purchase online. Unfortunately, most citizens do not comply with these state taxes (called "use taxes" because they aren't on a sale, the sale occurs out-of-state).

>they have hundreds of stores that will serve as points-of-sale for the Nook.

I've seen Kindles in Wal-marts and Targets recently.

> Everyone else failed at the "lesser price" part.

Apple's operational mastery and their cornering of the NAND flash market in particular is a big part of this.

And their mastery of PR is a big part of why the transition from Jobs to Cook has gone so smoothly ...

WRONG.

Tim Cook has been running operations at Apple for a decade now. Here's a 2006 story about Apple's number two:

http://online.wsj.com/public/article/SB116096027141893457-aw...

Downvoted--please try to disagree more tactfully next time.

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