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Barnes & Noble, Inc. Message Board

  • losangelesli losangelesli Jul 30, 2011 1:34 PM Flag

    Apple to Possibly Purchase Barnes & Noble?

    Personally, I think it would make more sense if Google buys BKS because of Nook.

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    • apple will more likely but bks out of business

    • If this were the case...that they are buying to get access to the B&M locations...they could have gotten Borders on the cheap. This news is not true at all.

      • 2 Replies to wilma6311
      • I think you missed what the article was getting at-

        Apple would buy BKS partly for the digital catalog and the retail locations, but mostly BECAUSE they don't need the nook. The nook's low margin razor-and-blade business model is the biggest threat for the future of the Ipad- and the rest of the computing market as well.

        Think about it- Amazon doesn't want to compete with Apple- Jeff Bezos signaled that clearly last summer when he stuck with E-ink on the Kindle 3. Both companies have too much money to go head to head- things would just get ugly for both. The only reason Amazon is coming out with a tablet is because the nook color forces them to do so. If you take away the nook, then Amazon will price their rumored tablet much higher than they otherwise would have- helping preserve Apple's market share and margins.

        Just getting rid of the nook is probably worth a billion or two for Apple. If you look at the financials for BKS- the money being spent on the nook and the website is the only thing making BKS unprofitable, BKS core bookselling and college business are still paying for themselves. And they will probably remain profitable long enough for Apple to convert the locations they want into Apple stores and wait out the leases on the rest (five-ten years). So this strategy would eliminate a competitive pressure for Apple and pay for itself.

        But I also don't see it happening. Steve Jobs doesn't like to do business that way. It would damage the Apple brand if they are seen as resisting innovation. That cancels out the bean-counting benefits.

        A company like Microsoft, on the other hand...

      • BKS has four things that Borders don't have:

        1) 630+ college bookstores that serve the best customers for Apple's products, which are the young crows that usually want the latest gadgets. I think this is the most important reason Apple would consider BKS.

        2) Nook and digital contents, the future of book sellers. If Apple doesn't want Nook, it could just obtain the patents associate with Nook while licensed the Nook to others.

        3) Starbucks coffee contracts, which has much higher value than the 2nd tier Seatle's Best Coffee

        4) BKS actually have a profitable retail business, unlike Borders, which still show a negative earning from last month's MOR. Not to mention, the retail sectors of BKS actually makes money according to the last filing, is the one that lose money.

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