Barnes & Noble is revolutionizing e-readers by adding mobile payment technology to its Nook, through a partnership with Microsoft to challenge rivals Apple and Amazon.
Big Plans For Mobile Payments and Microsoft
The bookseller is adding NFC technology to the Nook, and plans to integrate mobile payments with its in-store browsing experience.
"You can walk up to any of our pictures, any of our aisles, any of our bestseller lists, and just touch the book, and get information on that physical book on your Nook and have some frictionless purchase experience. That's coming, and we could lead in that area," CEO William Lynch told Fortune, highlighting how the company plans to wield NFC to give it a leg up on competitors without in-store components.
Barnes & Noble's foray into NFC will help the Nook stand out from other e-readers, and its partnership with Microsoft is fostering deep integration, which will further boost the Nook's credentials.
Lynch discussed the potential for running the Nook on Windows 8 instead of Android, which would be a huge boon for Microsoft and give the e-reader a distinguishing characteristic. Windows 8 is set to connect mobile devices with laptops and computers, and connecting an e-reader to the wider Microsoft ecosystem opens up possibilities for the Nook to take advantage of.
Lynch, for example, envisioned integration with Microsoft's Office suite and other publishing tools, so authors could put materials composed through Microsoft directly to the Nook. Apple already does this with iBook Author, but Office is the most-used word processor, so the Nook will have a big advantage in luring authors. Moreover, the controversy surrounding Apple's publishing deals may further push writers into Barnes & Noble's arms.
... But Rivals Won't Take This Lying Down
The Nook will have formidable competition no matter how well it innovates. Apple may lose authors if Barnes & Noble incorporates Microsoft's publishing tools, but the iPad is still the premiere tablet, and other companies are also striving to make revolutionary changes to e-publishing, like LG with its upcoming flexible, paper-like e-reader.
Amazon's Kindle sales are still brisk, and the company is testing an app purchasing system, looking to recruit the best app developers. Also, one of Microsoft's problems with its OS is its lack of apps, so Barnes & Noble may need to figure out a way to compensate or risk losing business.
The Bottom Line
Barnes & Noble's embrace of NFC shows the company is looking for ways to stand out, but it may run into problems convincing customers to adopt the technology, as research shows buyers are less enthusiastic about mobile purchasing than the retailers implementing it. No matter how cutting-edge the NFC debut looks, unless customers are open to using it -- and unless there is enough content and apps to take advantage of it -- the benefits will be negligible.
Barnes & Noble's recent ventures with Microsoft and NFC may give the company a boost, but it has to convince customers to use NFC technology and prove Windows' worth as a mobile OS to sway consumers. The publishing advantages Barnes & Noble's integration with Office are likely to attract authors, but it may take time to reap the benefits from other customers.