Barnes & Noble partners with Plastic Logic; Opens up; Targets Kindle
Updated: Barnes & Noble has outlined its answer for Amazon's Kindle: A partnership with Plastic Logic, which will launch an eReader in early 2010, and plans to open its e-book sales to multiple platforms.
Context & Ripple Effects
With no hardware of its own, Barnes & Noble is buying its way into the e-reader race rather than building it: the Plastic Logic partnership hands the chain a dedicated reader slated for early 2010, while the more consequential move is the plan to sell its e-books across multiple platforms instead of locking purchases to one device.
First-order effects
- Barnes & Noble gains a Kindle-class hardware answer for early 2010 without in-house device manufacturing, while Plastic Logic gets the retail distribution and catalog backing of the largest US bookstore chain.
- Amazon's Kindle now faces a competitor whose core asset is a physical retail footprint and a customer base that buys books there weekly.
Second-order effects
- Amazon's closed device-plus-store model comes under pressure to justify itself, since Barnes & Noble's open, multi-platform e-book sales attack the lock-in that keeps Kindle owners inside Amazon's store.
- Publishers gain negotiating leverage from a second major US retailer bidding for e-book distribution, weakening any single buyer's terms.
Third-order effects
- If the pattern holds, the e-reader market splits into integrated ecosystems versus open stores, shifting durable value from device margins toward whoever owns the customer's book-buying relationship.
- Retail chains entering devices through partnerships set a template other booksellers could follow, accelerating consolidation around a few bookstore ecosystems rather than gadget makers.
The trend: Book retail competition is moving from shelf space to device-and-store ecosystems, with challengers using platform openness to break the incumbent's hardware lock-in.