Borders Undercuts Kindle, Nook With Kobo eReader

Borders has started taking pre-orders for an electronic reader called the Kobo that is far less expensive than competitors' devices, including the Amazon Kindle and Barnes & Noble Nook.
Borders began taking pre-orders for the $150 Kobo on Friday, promising customers that they would start receiving the device June. 17. With a price that's more than $100 less than competitors', Borders could pressure rivals into dropping prices.

Sony also makes a $150 e-reader, called the Reader Pocket Edition, but the device has a display that's an inch smaller than the Kobo's six-inch screen. The comparable Nook and Kindle sell for $259.

Beyond price, the Kobo offers less than its rivals. One missing feature that's important in making it easy to buy books is a 3G wireless connection. Such a connection on the Nook and Kindle makes it possible to buy books directly from the e-book stores of Barnes & Noble and Amazon, respectively. The Nook also has a Wi-Fi connection.

The Kobo, on the other hand, comes with software that makes it possible to buy and download e-books from Borders' online store to a PC or Mac, and then transfer the books to the Kobo via a USB cord. The Kobo does have a Bluetooth wireless connection that makes it possible to sync the e-reader to a smartphone with the Kobo software.

Like Amazon and Barnes & Noble, Borders plans to make its upcoming eBook store hardware agnostic, which means anyone can download the needed software and buy digital books from a Mac, PC, Apple iPhone and iPad, Research in Motion Blackberry or smartphones based on Google's Android operating system.

The Kobo uses the same E Ink black-and-white display as its rivals. The device comes with 1 GB of storage, which is enough to hold up to 1,000 titles; and a battery that can last up to two weeks before needing to be recharged, according to Borders.

Borders does not make the Kobo. The device is made by a startup of the same name that counts Borders as a majority shareholder

Whether the Kobo forces other e-reader prices down remains to be seen. However, in pricing the device low, Borders is doing what some analysts have said is pivotal for e-reader makers to compete with the emerging category of slate computers, such as the recently released iPad.

While the iPad is much more expensive than e-readers, starting at about $500, it has a lot more functionality. Besides being a digital book reader, the device has a color screen; a full Web browser and can play video and music. The iPad is also available with Wi-Fi and 3G wireless connections.

Apple has sold more than 1 million iPads since releasing the device April 3. If the iPad maintains its current sales rate, it will reach $1 billion in revenue by end of May, according to Yankee Group analyst Carl Howe.

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