Kobo's Cheap E-Reader Headed for Borders
In the era of the iPad, there are two paths that the still-nascent gadgets known as e-readers can take. They can try to take the iPad on head-to-head by adding fancy color touch screens and new features that go beyond reading.
Context & Ripple Effects
Borders is stacking its e-book hardware bench: after signing on the Android-based Alex e-reader in January 2010, it now adds Kobo's stripped-down, budget-priced reader to its shelves. The two deals give the chain both ends of the market — a feature-rich device and a cheap one — as it tries to keep book buyers in its ecosystem.
The timing matters because Apple's iPad is weeks from launch, and the article frames the split facing every e-reader maker: chase the tablet with color touchscreens or retreat to pure reading at a low price. Kobo's move through Borders is an explicit bet on the second path, using retail distribution rather than specs to differentiate.
First-order effects
- Kobo gains physical shelf presence at a major U.S. bookstore chain, putting its low-cost reader in front of walk-in customers Amazon's Kindle and Barnes & Noble's Nook have to reach online or through their own stores.
- Borders now sells two e-readers under its brand umbrella, letting it capture e-book revenue across price tiers instead of betting everything on the pricier Alex.
Second-order effects
- A sub-$200 dedicated reader at Borders pressures Kindle and Nook pricing at the low end just as the iPad defines the high end, squeezing margins for devices that try to sit in between.
- Other book retailers face the same channel logic: if device sales drive e-book lock-in, stocking multiple third-party readers becomes a defensive necessity rather than a choice.
Third-order effects
- If the pattern holds, dedicated e-readers bifurcate into commodity reading devices competing almost purely on price and tablets absorbing everything else — leaving mid-priced single-purpose readers the most exposed segment.
- Retail chains become device-agnostic e-book storefronts, shifting competitive power toward whoever controls the customer relationship and the store catalog rather than any single hardware vendor.
The trend: Dedicated e-readers are splitting into cheap commodity readers sold through retail chains and premium tablets, with bookstore chains hedging by stocking multiple vendors' devices.