RadioShack Corp. (RSH), the leading electronics and wireless devices retailer in the U.S., recently entered into an agreement with Barnes & Noble Inc. (BKS). As per the agreement, starting from October 3, 2011, RadioShack will offer the innovative NOOK series of e-reading devices and related accessories from over 3,000 stores and online site throughout the U.S. The company will sell various types of NOOK devices, such as the Nook Simple Touch Reader with a 6-inch screen for $139, to the Nook Color, with a 7-inch screen for $249. The Nook Color also offers Nook Apps, email, and internet.
Barnes & Noble has an extensive digital business, whch is growing substantially more than 50% year over year. This is in major contrast with the declining print book sell of the company. In 2009, Barnes & Noble created a powerful e-book reader called the NOOK to revamp itself as a digital bookseller. NOOK commands about 25% of the global e-book market and at present is the second largest e-book reader after the “KINDLE” of Amazon.com Inc. (AMZN).
We believe the decision to sell NOOK e-reader will be incrementally positive for RadioShack. Throughout the world, people are gradually shifting to smartphones and tablets from paper versions of books and magazines. RadioShack has established a very powerful wireless business. From September 15, 2011, the company has started selling postpaid and prepaid products of Verizon Wireless in its 4,300 company-operated stores nationwide. Verizon Wireless is the largest wireless operator in the U.S. and is a joint venture between Verizon Communications Inc. (VZ) and Vodafone Group plc. (VOD). Being one of the late entrants in the tablet market, RadioShack is showing signs of aggressiveness by adding renowned tablet brands like Apple Inc.’s (AAPL) iPAD 2, Motorola Mobility Holdings Inc.’s (MMI) Xoom and Research In Motion Ltd’s (RIMM) PlayBook.
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