Borders is joining Amazon.com, Apple and Barnes & Noble in the race for e-books. On Wednesday, the bookstore chain announced the launch of a Borders-branded e-book store, with the stated goal of obtaining a 17 percent share of the e-book market by July 2011. Industry observers estimate Borders currently has about 10 percent of the retail book market in the U.S.
The e-store is powered by Kobo, a Canada-based e-book seller in which Borders has invested. It offers more than 1.5 million titles, including thousands of free e-books, available in EPUB, PDF and other formats. The company also announced a free e-book reader application for BlackBerrys and Android-based devices.
These announcements follow the introduction of a free Borders e-reader application for Apple's iPhone and iPad, and the availability of the Kobo and Aluratek Libre e-readers on the company's web site.
In addition, the Borders Rewards loyalty program will be extended to include exclusive offers on popular e-books, double Borders Bucks incentives accompanying the purchase of e-readers, and other new benefits. The company said its rewards program has signed up more than 38 million members since its 2006 launch.
CEO Mike Edwards said his company has been "carefully crafting a digital strategy" with an emphasis on a "device-neutral philosophy." He added that the "race to emerge as a retail leader within the digital category is just starting."
Like Barnes & Noble, Borders is playing to the key strength that differentiates it from Amazon and Apple -- its brick-and-mortar stores. The e-book store will be promoted in the physical stores in upcoming "Area-e" sections, which will be rolled out by September. Salespeople will staff those areas, and will be available to demonstrate products and answer questions.
The company indicated that its strategy is based on research about what this emerging market wants. It said "convenience, choice, content and quality hardware" are the top attributes consumers want in "an ideal digital bookstore experience," and predicted that e-readers under $200 will be popular items in this year's holiday season.
The Kobo e-reader, priced at $149, comes bundled with 100 free e-books, and the Libre eBook Reader Pro is $119.
E-Bookstore 'Mirrors' Real-World Overlap
Kobo is a global e-book service that is a collaboration of the Borders Group, Indigo Books & Music, REDgroup Retail, and Cheung Kong Holdings. Kobo also has a "Powered by Kobo" program to provide a branded e-book store for hardware manufacturers and other retailers, complete with more than two million titles and e-reading applications for virtually any device.
Ross Rubin, director of industry analysis for consumer technology at the NPD Group, said Borders' digital offering is "ultimately not very different from what Barnes & Noble is doing." This overlap, he pointed out, "mirrors the overlap" between the two bookstore chains in the physical world.
He said that, while Amazon and Barnes & Noble have released e-reader devices of their own, "if there was a flourishing e-reader market, there would be less need for them to do so." Neither company, Rubin pointed out, is fundamentally an electronics company.
He noted that Borders still has a "leg up" on selling e-books, compared to companies other than Amazon and Barnes & Noble, because it regularly reaches large numbers of readers.