Can Borders Unseat Amazon in the E-Book Market?
Borders today launched both an electronic book store and two handset clients — for BlackBerry and Android 2.0 devices — as it tries to compete against offerings from Amazon, Barnes & Noble and Apple. According to Reuters …
Context & Ripple Effects
Borders has spent the first half of 2010 assembling a hardware lineup for its digital push — a January deal to carry the Alex e-reader, followed by the Kobo's cheap e-reader arriving at Borders and the $150 Kobo unit in stores by May. What was missing was the storefront itself: until today, Borders sold devices without owning the book ecosystem behind them.
The launch closes that gap with an electronic bookstore plus handset clients for BlackBerry and Android 2.0, putting Borders in direct contention with Amazon, Barnes & Noble and Apple — and extending the pattern set when big-box retailers like Best Buy and Verizon jumped into the reader market last fall.
First-order effects
- Amazon, Barnes & Noble and Apple each gain a fourth major competitor at retail for e-books, one with physical shelf space to promote the store where the others have none.
- Borders' BlackBerry and Android clients make its catalog reachable without any dedicated reader, letting customers who bought the $150 Kobo or Alex hardware from Borders buy books through phones they already own.
Second-order effects
- Kobo, whose low-cost reader anchors Borders' hardware strategy, benefits from every store download because its device is positioned as the budget companion to the new catalog — the same dynamic that kept Best Buy and Verizon's entry focused on affordable units.
- Barnes & Noble faces the most direct pressure: it shares Borders' brick-and-mortar model, so a rival chain bundling devices, apps and a store narrows the differentiation B&N had from being early with its own reader.
Third-order effects
- If bookstore chains can only compete in e-books by renting hardware partners (Kobo, Alex) while Amazon and Apple own both device and store, the structural advantage tilts toward vertically integrated platforms and retail becomes the distribution layer rather than the destination.
- Carrier involvement of the kind Best Buy and Verizon showed in 2009 points toward e-book access becoming a mobile-bundled feature, with phone clients like today's BlackBerry and Android releases as the wedge.
The trend: Book retail is splitting into vertically integrated ecosystems owned by Amazon and Apple versus store-front entrants that assemble partner hardware, with mobile handsets becoming the primary reading surface.