Now Borders Has A Kindle, Too: Here's The $150 ‘Kobo’ (BGP, AMZN, AAPL)
If black-and-white “e-ink” e-readers have any chance to compete with more sophisticated tablets like Apple's iPad, they had better be cheap. — And that's the best feature of Borders' new Kindle clone: At $150, “Kobo” is by far the cheapest of the bunch.
Context & Ripple Effects
The $150 Kobo landing at Borders closes a loop opened when Kobo's budget e-reader was first slotted for Borders shelves back in March, giving the struggling bookseller its first real answer to Amazon's Kindle in dedicated devices. It also lands squarely on top of analyst pressure on Amazon: in April, Piper Jaffray's Gene Munster argued Amazon should cut the Kindle to $149, and Borders has just undercut even that number without Amazon moving.
First-order effects
- Amazon's Kindle loses its price umbrella overnight — at $150, the Kobo is by far the cheapest e-ink reader on the market, forcing Amazon to either defend its premium positioning or follow Munster's cut-to-$149 prescription.
- Borders gains a device to anchor its e-book storefront against Amazon and Barnes & Noble, with Apple's pricier iPad looming over both.
Second-order effects
- A visible sub-$200 price point pressures every e-ink vendor's margin structure — if $150 sells, the Kindle's $259 sticker looks like a tax on branding rather than hardware.
- Booksellers competing on device price shift the battleground to their e-book stores and content libraries, where Borders must prove it can monetize readers beyond the hardware sale.
Third-order effects
- If the pattern holds, dedicated e-readers split into two camps — rock-bottom commodity devices sold near cost to lock buyers into a bookstore ecosystem, and premium tablets like the iPad above them — squeezing out mid-priced hardware and turning the e-reader itself into a loss-leader for content.
The trend: Dedicated e-readers are racing toward commodity pricing as tablets press from above, pushing the industry's profit center from hardware into bookstore ecosystems.