Borders in deal with Alex e-reader for e-books
NEW YORK (Reuters) - Borders Group Inc said on Thursday it has reached a deal with the maker of the upcoming Alex electronic reader that will prominently feature the U.S. bookseller's e-bookstore on the device when the site is launched later this year.
Context & Ripple Effects
Borders enters 2010 without a device of its own while Amazon's Kindle and Barnes & Noble's Nook define the category — and while general retailers muscle in, with Best Buy and Verizon jumping into the e-reader market last September. The deal announced Thursday puts Borders' e-bookstore, confirmed for launch later this year, prominently on the upcoming Alex reader instead.
The arrangement makes the second-largest U.S. bookstore chain a storefront-on-someone-else's-hardware player rather than a device maker, betting that its brand and catalog reach customers through partner screens.
First-order effects
- Borders gains a flagship placement for its not-yet-launched e-bookstore on the Alex reader, giving the store day-one distribution without hardware R&D cost.
- The Alex reader's maker gets a named retail content partner at launch, strengthening the device's pitch against Kindle- and Nook-backed rivals.
Second-order effects
- Amazon and Barnes & Noble now face a bookstore chain using partner devices to extend reach, pressuring both to lock up their own retail and carrier distribution channels.
- Other device startups see that content partnerships are becoming the price of entry, accelerating a scramble among e-reader makers for bookstore tie-ups before Borders' store goes live.
Third-order effects
- If retailer-as-storefront becomes the norm, the e-book market structures around device-plus-storefront ecosystems rather than standalone gadgets, with content exclusivity and preinstalled stores deciding winners more than screen specs.
- Brick-and-mortar booksellers' survival strategy shifts toward digital distribution alliances — a structural hedge for chains whose physical footprints no longer guarantee sales.
The trend: Book retailing is reorganizing around bundled device-and-storefront ecosystems, where chains compete through hardware partnerships rather than shelves alone.