Is Kobo becoming the #1 Kindle competitor?

The Kindle, on the surface, seems to have only two serious eReader competitors – Nook, with its library book support and eInk screen, and Sony Reader, with its eInk Pearl screen and touch capability. All three devices target dedicated readers.

There’s also the Nook Color – However, that’s more of a Reading Tablet and targets casual readers.

On the ebook front, we again have two ebook stores which are big Kindle competitors – Google, with Google eBooks, and B&N, with its store and its reading apps.

In the midst of all of this, there’s a surprisingly strong emerging Kindle competitor – Kobo. 

Kobo is, without a doubt, the company making the most dangerous moves in the eBook space. It’s eReader is rather unimpressive – However, the eBook moves it is making and the distribution channels it is building up are both extremely impressive.

Kobo’s moves are worth paying attention to

If you look at everything Kobo is doing, there’s a lot to admire – In fact, there are multiple areas where it’s beating other eReader and eBook companies.

  1. eBook Deals. It’s bringing the concept of deals and coupons to ebooks. While Kindle Store and Nook store have only two extremes, full price books and free books, Kobo constantly offers 10% off and 35% off coupons and deals. It’s strange that Amazon offers deals in every other department but pretends Kindle owners don’t care about deals. The latest strange move is closing the popular Kindle Deal of the Day section.
  2. Distribution Channels. Kobo is building up relationships with a lot of partners for its reading apps. It has a deal with RIM to be pre-loaded on the PlayBook Tablet, and one with Samsung to be pre-loaded on the Galaxy Tab. The Kobo for iPhone reading app is in the Top 4 free reading apps (iBooks, Kindle, Nook are above it). TeleRead has details of a press release in which Kobo’s CEO is claiming Kobo will come preloaded on 20 million devices in 2011.
  3. International Availability. Your experience might differ from mine – Kobo offers a really good range of books for Canadian eReader owners. From anecdotal evidence it seems to offer a pretty good range of books for other non-US countries too. Given that Kindle Store books can’t be read on other eReaders, and Kobo store books can be, the #1 ebook store choice for non-Kindle ereader owners outside the US becomes Kobo.
  4. Prices Lower than Agency Model. By using 35% off coupons, and taking advantage of periodic deals, you can get books for prices much below Agency Model prices. Not sure how Kobo manages to do it – but it does.

Those are four areas where no other eReader company is moving as quickly. Amazon has a big advantage in international, but things like not selling Kindles outside US and UK in the last two months of 2010, not offering enough free book offers outside the US and UK, and tacking on $1 or $2 book download charges is preventing it from capitalizing fully on its lead.

Kobo is improving in other areas too

Kobo is also making other good moves -

  1. Kobo today added 175,000 education, technical, and reference PDFs to the Kobo Store. These include medical texts, business manuals, technical manuals, academic texts, and other education and self-education related PDFs. They claim the prices are much lower than textbook prices.
  2. While the Kobo eReader is not very good you have to give Kobo credit for two things – releasing the first $150 eReader back in early 2010, realizing wireless support is crucial and introducing a new wireless eReader. It seems it’s learning from its mistakes, and is willing to fight on price.
  3. Kobo eReader owners mention a lot of positives – simplicity of use, support for library books, no distractions, quilted back, light weight, memory slot, ePub support. It seems like Kobo did get some things right. A few users mention that the lower number of buttons makes things simpler – that’s an interesting thing to wonder about.
  4. Kobo bundles a pack of 100 classics with its eReader. That’s definitely a good move – most people don’t realize these are available free online. Also, it’s nice to have something you can start reading as soon as you get your eReader.
  5. Kobo has done very well with its reading apps. Contrast its progress (supposedly 20 million devices with Kobo reading apps preloaded in 2011) with Sony which hasn’t even released apps for the major platforms. Even the Notion Ink CEO, Rohan Shravan, mentioned Kobo would be one of the apps available on Adam soon. Note: Kindle for Android is already available on Adam.

There are improvements and good moves across the board.

People are beginning to notice that Kobo is good and improving

There are quite a few people waking up to Kobo’s progress -

  1. At Teleread one of the writers recently called Kobo the best reading app. 
  2. Most articles about eReaders or eBooks now mention Kobo along with Kindle and Nook.
  3. A few articles about the best reading apps for iPhone and iPad mention the Kobo reading app.
  4. If you head over to MobileRead, there’s a decent amount of activity going on at the Kobo forum – only Kindle, Nook, Sony, and iPhone forums are seeing more activity. There’s also a 35% off coupon: NEWYOU11, which you can use on the next 10 Kobo books you buy.
  5. Freescale Semiconductor has included the Kobo reading app in its blueprint for Android Tablets. Which means a lot of Tablet manufacturers will be introduced to Kobo as the ‘recommended by Freescale’ reading app.

After factoring in everything, it’s hard not to come to the conclusion that Kobo is rapidly becoming a huge threat.

Kobo’s 4 strengths – 4 reasons Kobo is becoming the #1 Kindle competitor

Quite simply -

  1. It’s fighting on Price. It’s introducing cheap eReaders, and its ebook prices are amongst the lowest. Combine that with its propensity to offer Agency Model busting coupons, and suddenly we have a company willing to compete with Amazon on price. Perhaps the only company other than B&N that’s willing to compete with Amazon on price.
  2. It’s getting distribution right. It’s the anti-Sony in that it’s providing a great ebook solution, and it’s providing it over every platform and to every eReader owner (except Kindle, where it’s locked out).
  3. It’s fighting in lots of countries. Unlike Nook which is US-only, Kobo is international.
  4. It’s improving its eReader based on market trends. Kobo is admittedly behind in the eReader wars – However, it’s added wireless and has made improvements. It might be able to release a decent eReader in 2011 – one capable of competing with Kindle 3 and Nook 2.

If you look at the evidence, there’s a very strong chance that by the end of 2011 the Big 3 eReaders will be Kindle, Nook, and Kobo. Additionally, B&N hasn’t taken Nook international. If it doesn’t release Nook internationally in 2011, it might cede the #2 spot to Kobo by early 2012.

Sony, because of its lack of infrastructure and its terrible ebook store and its lack of reading apps, and Google, because of its lack of an eReader, might fall behind Kobo. It makes you wonder why Google and Sony don’t team up.

We arrive at a surprising conclusion – Kobo might have the best strategy after Amazon. It might even have as good a strategy as Amazon. Kobo is rapidly becoming the #1 Kindle competitor.

18 Responses

  1. youve been able to walk into any CVS pharmacy in the DFW metroplex and buy a kobo for $180 since about october… whereas i still havent seen a kindle retail anywhere… thats got to be worth something in their favor…

  2. I’ve been searching their store and can’t find this information, do you see it?

    1) Do they allow returns on eBooks?

    2) Do they store bookmarks, highlights and notes of Kobo eBooks in their cloud?

    • Not sure of either.

      At MobileRead there are complaints about customer service so it seems returns won’t be easy. What scenario do you see for needing to return books? The formatting is usually very good.

    • Yes they do from the store within the allowed amount of time for the store, however the kobo customer support gave me a really hard time and accused me of abusing my Kobo (i feel so they didnt have to help me) but Walmart in my hometown took it back and replaced it no issues. But according to their rules you only have 90 days from purchase.

  3. My understanding is that the coupons are not applicable to any agency priced books. I saw a few people answer that way on a site where someone remarked about the coupons. Are they usable on the agency books?

    • Well, yes. Kraken by Mieville is one example.

      • Actually Kraken is a Random House book, which isn’t an agency publisher. If you read the fine print on Kobo’s promotional emails, it explicity excludes agency publishers from their coupon offers.

  4. “…tacking on $1 or $2 book download charges is preventing it from capitalizing fully on its lead.”

    I thought Amazon wasn`t doing that anymore.
    I haven`t got my Kindle yet(waiting since Nov but expected next week) and haven`t bought any books yet but I thought I read somewhere that this was not the case anymore.
    Their free books really are free with no additional charge at least in Canada.

    • Well, free books aren’t free in all countries. And some books aren’t free in Canada either.

      • I meant the extra charge.
        I know not all free books are available in Canada but I`ve never been charged an extra fee when downloading a free book.
        Do they charge International customers that extra fee when you buy a book?

      • I think we’re talking about different things.

        I mean the fact that every book outside the US has a component of data charges baked in. Which is charged whether or not you download wirelessly or not.
        So the costs of book downloads are baked into the price. When they shouldn’t be.

      • I see.Thanks

  5. While I’ve been very happy with Kobo’s bookstore and customer service, the reader (I had a first generation without wireless) was slow and buggy. I lept at the new Sony Touch PR 650 and have been very happy. I imported all my Kobo books, all my older PDFs, and am still able to borrow ebooks from the local library and read them on the Sony.

    I wanted to support Kobo, but the frustration of dealing with the hardware and software bugs, coupled with the opportunity to get better performance from the new Perl eInk on Sony was irresistible. I did not even evaluate getting a new Kobo. Alas.

  6. Both my wife and myself have first generation Kobo ereaders. The biggest selling factor to me was the simplicity of the device itself. I’m very involved with copious amounts of technology and tend to tinker with things a lot. Looking at a Kindle or Nook, there’s no getting around the fact you’re using a piece of modern technology. Even the screen shows the time and battery life. With the Kobo you have the book and nothing else. Nothing to tinker with or get me distracted. I can sit down and use it for its intended purpose and read a good book.

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