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Forrester Research senior analyst Sarah Rotman Epps on Barnes & Noble’s decision to cut the prices of its Nooks.
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-- -- noble slashing prices on all of its nook readers today as it faces increasing competition.
But the company trailing Amazon for XE book domination is this enough to give that the need the boost that it really could that's the question Cerro Rockland and the senior analyst at Forrester Research.
Sarah so what do you think does this going to make a difference as far as bombs and I was concerned and it's competition.
Well this is only partly about it -- saying competitive pressure from Google Amazon and apple.
It's also just business as usual for consumer electronics company -- -- -- -- before they introduce a new product which we assume Barnes & -- will be doing for the holiday season.
Well let's talk about we've got it on the screen the -- caller hi this is pretty significant price cut here.
That might stimulate people to to go in and -- it but -- -- and where I mean they close the -- -- noble in my neighborhood in Edgewater New Jersey I'm just wondering.
What is their their long term strategy here.
Well and so long term strategy seems to be increasing mean di diverging.
Electronic business from the brick and mortar retail business and we've seen -- Our recent investment from Microsoft and in the next digital business which well -- -- Barnes noble the power to release new products keep innovating expand internationally and I do what it means to compete.
Well you say compete how much of the market does it happen is this really get a make a difference in the closely at the threat.
Of apple coming out possibly -- this new maybe I plant which could really -- there share of the market.
Once you -- contents sales Barnes and bought actually has quite a good market share we estimate they have.
Between twenty and 25% of the -- contact market.
And apple is as much lower than that actually but in terms of device that is very small also in 2011 and we estimate that -- noble sold.
Between three and a half informally and that there net -- net tablets and that's compared wed four and a half to five million of Amazon Kindle fires.
And many many times more than out of the iPad just last quarter -- -- sort of seventeen million ipads.
So Lawrence noble and that device space is that David competing against several collapse.
Yeah.
Goliath that that I tend to look at lately is the Kindle fire because they came out they were not first to -- certainly.
But -- -- -- Amazon crash that they really did suddenly it was so while -- supplements my iPad I heard a lot about from people.
-- but do you see a long -- for that will that continue.
-- -- had a very successful.
Q4 or without device of of last year but.
From what we've seen in the market for that device really soft -- throughout -- twelve.
And so am -- needs to keep innovating as while we expect this year.
We -- seeing some some great new products for Amazon -- -- -- snowball if either of them won't -- competitive against Google and apple and the look revenue down more than ten this that we just showed that graphic and when you stop cutting prices even more mean the margins getting pretty slim isn't.
The margin is very slim and your right it does raise questions about what is the long term strategy here.
On the other hand it's not cause for alarm because this is this isn't normal business practice for consumer electronics manufacturer to cut -- says.
Clear out old inventory.
Before it -- new products chat.
Sarah were showing stocks here and Microsoft is right there as well they're coming out with the surface of does that give everybody -- -- for its money put have you heard what's the scoop.
Well my first.
That is looking better and better and it and the more I have and spent time wind actual product.
Windows eight tablets not the surface in particular but it.
The ones that are created by Samsung and other manufactures.
The more positive and optimistic I am I about Microsoft's success in this category you know what price Syria selling billions literally we'll sell globally we were waiting on a price for the surface have you heard anything.
The prices and we have heard will be on the higher and don't have arranged.
I mean -- service and an -- itself is just one small part of Microsoft's.
Product strategy with -- window -- so it's really meant and set the bar firms where they want to see hardware innovation.
But at the surface and enough itself won't be event that mass market windows product Sarah brought -- apps thanks for being here to see you next time -- slowly.
