Microsoft does not make its own hardware products, except, of course, in the rare cases when it does, like the Xbox videogame console, the Zune music player and computer mice. In the PC and phone markets, though, Microsoft has been extraordinarily careful to say it wants to create only the software that powers those devices, leaving the hardware to outside partners.
But the company’s decision to invest in the Nook e-book business of the struggling retailer Barnes & Noble offers some tantalizing clues that Microsoft may be rethinking its position on hardware.
First, there is the Microsoft investment itself in the new Barnes & Noble e-book subsidiary: $300 million for a 17.6 percent stake, plus an additional $305 million in payments over five years. There is speculation that Barnes & Noble, as a result of this investment, will create new Nook devices that are based on Windows 8, a coming operating system designed for devices with touch-sensitive screens. Full article
IN March 2009, an eternity ago in Silicon Valley, a small team of engineers here was in a big hurry to rethink the future of books. Not the paper-and-ink books that have been around since the days of Gutenberg, the ones that the doomsayers proclaim — with glee or dread — will go the way of vinyl records.
Facing economic gloom and competition from cheap e-readers, brick-and-mortar booksellers entered this holiday season with the humblest of expectations.
Barnes & Noble answered Amazon’s challenge in the tablet wars on Monday, introducing a $249 color device called the Nook Tablet.
… In the first five months of 2009, e-books made up 2.9 percent of trade book sales. In the same period in 2010, sales of e-books, which generally cost less than hardcover books, grew to 8.5 percent, according to the Association of American Publishers, spurred by sales of the Amazon Kindle and the new Apple iPad. For Barnes & Noble, long the largest and most powerful bookstore chain in the country, the new competition has led to declining profits and store traffic. After the company announced last week that it was putting itself up for sale, Leonard Riggio, Barnes & Noble’s chairman and largest shareholder, who has declared his confidence in the company’s future, hinted that he might make a play to buy the company himself and take it private. 
