It’s been a little while now since Microsoft implied that they might be interested in entering into the eReader market with Windows 8. Apparently this was more than just a passing comment, given their recent acquisition. Microsoft is now the owner of 17.6% of the Barnes & Noble subsidiary created to handle the Nook line. This has some immediate implications, both financially and in terms of Windows 8 user experience, but it might have an even greater impact down the line.
Among the more short term effects that this $300 million investment will have is the creation of a Nook app for Windows 8 Metro. Under the terms of the agreement between these companies, Microsoft will be providing direct assistance and support including their own employee time and expertise to get the new Nook app up and running. While there is no intention to bundle the app with Windows 8 or Windows RT, having that sort of backing will likely result in a far better user interface than the bookseller would be able to field on their own.
As another result of the investment, Microsoft has settled their ongoing patent lawsuit against B&N over the Nook. Microsoft will now be receiving royalties based on Nook device sales, though presumably small enough payments that it will not negatively affect the profitability of the devices.
In the longer term, Microsoft is now in a position to make a major play for eReader and budget tablet markets when they decide the time is right. The Nook line is the second most popular eReading option in the US and the most recent incarnation of its E INK reader is widely considered the best on the market. While the Nook Color and Nook Tablet have not held up nearly as well in the face of the competition, they have still enjoyed enough success to be noted as decent options in 7” tablet shopping.
By creating versions of the Nook that run Windows RT, Microsoft would have the opportunity to highlight the speed and versatility of their software while also increasing the exposure of their tile-based user interface. Creating a cohesive experience is one of the company’s major stated goals.
Building a version of the Nook Tablet that runs on Windows 8 would have the potential to make an even bigger splash. Thus far the Nook options have made almost no impact on the sales of the dominant Kindle Fire. The Fire controls the overwhelming majority of the Android tablet market only months after its initial release and shows no signs of losing popularity. Creating a Windows tablet vs Kindle Fire situation using familiar brand competition might breathe new life into the market and take the focus away from Android in a major way.
We cannot say for sure how Microsoft will choose to use this new connection to the reading world. We can definitely point to signs that they intend for it to become a bigger thing as time moves on, however. It would not be surprising to see a Windows 8 Nook early in 2013.