1) B&N is selling Nooks in just 1 country. Estimates for Nook Tablet and Nook Color sales fall between 3 million and 7 million.
So as it expands to UK and perhaps to other countries sales are going to go up.
2) Windows 8 will feature Nook Bookstore as the DEFAULT bookstore. This is HUGE. People don't really realize how huge.
Example: Google and Microsoft pay Verizon and wireless providers hundreds of millions of dollars to have their search engine as the DEFAULT search engine. Google pays/used to pay Mozilla $100 million or so to have Google as the default search engine in the Firefox browser.
Every single Windows 8 user will have the DEFAULT option of buying Nook Books. This alone is enough to keep B&N's Newco division doing well for as long as Windows 8 is around.
3) B&N has a new Nook Tablet in the works. It might be very good or it might be very bad. However, everyone seems to be comparing Kindle Fire 2 (which isn't out) and Galaxy Nexus 7 and iPad Mini (which isn't out) with the current Nook Tablet. The competitor will actually be Nook Tablet 2.
4) B&N has a TON of store traffic. Real people walking into stores. Real people who read books.
So, the advice to end the Nook Tablet doesn't really make sense.
Perhaps the iPad Mini is absolutely amazing (though it's hard to imagine who can 100% without-any-doubht convince people of that now that Steve Jobs is gone).
Perhaps that reduces available market for Nook Tablets.
However, there's a lot to be gained from even being the #3 or #4 Tablet maker. Take PCs. We have HP, Dell, Apple, Acer, Asus, Samsung, Sony all making laptops and PCs. Some aren't very profitable but they are all in there and doing fine.
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The most important reason for having Nook eInk eReaders and Nook Tablets is that you lock-in those customers forever (or for life of the device). So they are a recurring source of income and they don't ever leave.
Right now it seems strange to be taking losses but over time the $10 or $25 per year of profit per Nook Tablet owner and per Nook eInk eReader owner will add up.
If you think about it, Google and Amazon and B&N are all doing the EXACT same thing. Taking losses on devices to lock in customers.
So not sure why Google and Amazon are supposed to be WINNING while B&N is supposed to give up. It's the same strategy and it pays off over the long term because of THE POWER OF THE DEFAULT i.e. people will do what's easiest and that's buy ALL content from the device/provider they already have.
Microsoft has something like 11 different businesses that are each billion dollar businesses. Nook is also going to be a billion dollar business (perhaps it already is). It's #2 in ebooks in the US. That's a very big deal. Books overall used to be a $26 billion a year business in the US. If the shift to ebooks keeps happening then being #2 in ebooks in the US and even being #3 or #4 worldwide will be a VERY VERY BIG deal.
And having eReaders and Tablets is very important for that. Because then you don't have to depend on an ebook store or a search engine or a physical bookstore to reach customers. They come to you (via the device).
