Nook Tablets Are Basically Toast

When Barnes & Noble reports its Q3 2013 earnings this Thursday, losses in its Nook Media division, which includes sales of its e-books and Nook devices, will be more than the year before, Leslie Kaufman of The New York Times reports.

And now, a person familiar with Barnes & Noble's strategy tells Kaufman that the company will focus more on licensing its own content, rather than making its own devices.

“They are not completely getting out of the hardware business, but they are going to lean a lot more on the comprehensive digital catalog of content," the Times' source says.

When Barnes & Noble reports its earnings this week executives will emphasize the company's commitment to strengthen its partnerships with tablet makers like Microsoft and Samsung.

Meanwhile, Jeffrey McCracken of Bloomberg reports that Barnes & Noble founder and chairman Leonard Riggio wants offering to buy out Barnes & Nobles's bookstore unit, and spin out the Nook unit.

Last quarter, Barnes & Noble's bookstores generated $996 million in sales, while it's Nook unit had only $160 million in sales.

Unfortunately for Barnes & Noble, its Nook just can't seem to attract consumers the same way Apple, Samsung, Amazon, and Google can for their respective devices.

“It is a very tough space," Sterne Agee Senior Analyst Shaw Wu told the NY Times. "It is highly competitive, and extras like the depth of apps are very important. But it requires funding and a lot of attention, and Barnes & Noble is competing against companies like Apple and Google, which literally have unlimited resources.”

Update: We just heard from Barnes & Noble spokesperson Mary Ellen Keating. Here's what she says, "To be clear, we have no plans to discontinue our award-winning line of NOOK products."