As I’ve noted when discussing the e-reader market, Amazon and Barnes & Noble have an inherent advantage in garnering overall revenue given that they can call upon databases of millions of active book-buyers. When I wrote about the in-store Nook angle that Barnes & Noble was taking, I mentioned how electronics retailers could benefit from this level of integration. Last week, prior to the Google TV announcement, Best Buy announced it will offer its version of Sonic Solutions’ RoxioNow video program under its original CinemaNow brand, which Best Buy has acquired.
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I admit to being biased. I work at a company that tracks actual sales results and I spent 10 years at retail. I have always lived and breathed sales results. And while shipments are a great tool (and I worked at a place that tracked those as well), the final verdict of success or failure of an item is sales. If a consumer puts down their hard earned money for a product you can be sure that they saw some spark of value or usefulness to their lives in that device. That is why it is shocking to me that many folks in this industry don’t understand the difference between sales and shipments - and often confuse them in the most basic ways. The latest example is a report this week in DigiTimes and repeated all across the web that the Barnes & Noble Nook out-shipped the Kindle in March. Note I said, and DigiTmes said as well, shipped, not sold. This has caused shock and disbelief throughout the blog community. We will now hear for a few days about how the Kindle is doomed; the iPad is killing it, and various other conspiracy theories.
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Visit Amazon.com’s home page and you’ll learn that the Kindle is the retailer’s best-selling product (even beating out 50″+ rear-projection televisions). That’s not too surprising given the momentum of the category as well as its shipping-friendly dimensions. But the Kindle’s success at Amazon has also been helped by the device being sold exclusively there, whereas Amazon must compete with other retailers for nearly all of its other products.
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This week brought news that Walmart has purchased Vudu, a one-time on-demand video device company that transformed its business to servicing connected TVs and Blu-ray players. As the largest seller of packaged home video in the country and one of the largest sellers of consumer electronics, Walmart clearly has an interest in maintaining its position as more video is consumed digitally, but also in establishing ties to the televisions and Blu-ray players that are featuring the Vudu service.
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One of the open questions surrounding the iPad that has quickly come to the fore in light of the recent Amazon-Macmillan brinksmanship is to what extent the device will jeopardize sales of e-readers. This is particularly true of the market-leading Kindle, upon the metaphorical shoulders of which Steve Jobs said Apple stood.
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The uneasy relationship between digital delivery and physical stores has a steadily improving history. In 2004, as its Virgin Megastores were struggling, parent company Virgin funded Virgin Electronics, which quickly disappeared in 2005 in the shadow of the iPod. (My colleague Stephen Baker is quoted in this CNET-authored obituary.) Nintendo’s Wi-Fi connection took it to the next level, providing connectivity in retail stores for the Nintendo DS, but didn’t provide much differentiation for retailers. And while Apple provides free Wi-Fi in its stores, it instead partnered with Starbucks to offer a customized iTunes store home page that offered lists of recent songs for purchase playing in its coffee shops.
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Consumer Technology | Ross Rubin, Executive Director, Industry Analysis | 
May 24, 2010 2:59 pm | 
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