Kindle Paperwhite vs Kobo Aura HD

We just discussed Kindle vs Kobo heating up with ZDNet calling Kobo Aura HD ‘the best eReader’. It’s time to do a Kindle Paperwhite vs Kobo Aura HD review.

Disclaimer: I only own Kindle Paperwhite and Nook Glowlight and other Kindles and Nooks and the older Kobos. I don’t own Kodo Aura HD. So please keep that in mind.

Kindle Paperwhite vs Kobo Aura HD – Context

We are comparing Kindle Paperwhite and Kobo Aura HD for the crown of ‘best eReader’. We aren’t considering Tablets at all. We won’t give much weight to the price difference though we will discuss it.

Assume you have $169 and have to buy one eInk eReader. Will it be Kindle Paperwhite or Kobo Aura HD?

Kindle Paperwhite vs Kobo Aura HD – Kobo Aura HD advantages

Kobo Aura HD has the following main advantages -

  1. The HD screen. This is definitely a big advantage and a very clear one. 1440 by 1080 pixels on Kobo Aura HD is considerably better than 1024 by 758 pixels on Kindle Paperwhite. Additionally the 265 pixels per inch on Kobo Aura HD are Retina display level and much sharper than the Kindle Paperwhite’s 212 pixels per inch.
  2. The Reading Experience will be better on Kobo Aura HD. The combination of the HD eInk screen and better lighting (Note: This is according to the ZDNet review – there are individual differences in screens) will make for a clearly better reading experience on Kobo Aura HD.
  3. More in-built memory and a microSD card slot. Kobo Aura HD has 4 GB of memory while Kindle Paperwhite has just 2 MB. Kobo Aura HD also has a microSD card slot. This can be very very useful if you have a ton of books.
  4. Kobo Aura HD is a latest generation eReader. If you buy Kindle Paperwhite now you definitely know the screen is a generation behind Kobo Aura HD. You also have the added fear that Kindle Paperwhite 2 and Nook Glowlight 2 might be much better. With the Kobo Aura HD you are at least assured you’ll have a latest generation eReader for a year or so.
  5. By creating the ‘no compromises, best reading experience’ $169 Kobo Aura HD, Kobo has shown that it is focused on readers. Amazon seems to have forgotten readers in its pursuit of Tablets and Phones and Casual Readers and who knows what else. It might very well be the case that Kobo does a better job for readers over the next 4-6 years.
  6. ePub support which means you can buy from any store out of Nook, Sony, Kobo and the other ePub Stores. It also means your library is in ePub format and you can move freely to a Nook or Sony Reader in the future. With Kindle you are stuck with Kindle Store.
  7. [Separate since it's important] Kobo books can also be read on any other eReader that supports ePub with Adobe DRM. That includes Nook eReaders and Sony eReaders. This means that if you don’t like the next Kobo eReader you can easily switch. With Kindle you’re locked into the Kindle ecosystem (unless you decide to leave eReaders and go to Tablets).

What’s most interesting to me is that the Kindle Paperwhite Product Page and Kindle Paperwhite Reviews focus on two main strengths – the screen resolution and the reading light. Kobo Aura HD clearly beats Kindle Paperwhite on screen resolution and perhaps beats it on the quality of reading light too. Basically, Kindle Paperwhite’s two biggest strengths are now weaknesses. Kudos to Kobo for lighting a fire under Kindle Paperwhite. This will force Amazon to do something big for Kindle Paperwhite 2.

Kobo Aura HD also has the following advantages -

  1. Kobo Aura HD’s screen is 6.8″ and is slightly larger than the Kindle Paperwhite’s 6″ screen. Makes it closer to the size of a real book.
  2. Kobo Aura HD’s ridged back is apparently easier to grip.
  3. Kobo Aura HD’s light can be turned off. Additionally, there is a dedicated light on/off button. Doesn’t seem like a big deal until you are in bed and trying to start/stop reading quickly and conveniently.
  4. Kobo Aura HD supports cbz and cbr formats for comic books, while Kindle Paperwhite does not. Note: There might be a way to get comic books on Kindle Paperwhite – not sure about this area. Support for comic books is big for people who read comics.
  5. Kobo Aura HD comes with Kobo’s Reading Life ‘social reading’ feature. This gives you lots of reading stats and you also have the option to share these socially.
  6. Kobo Aura HD has more font sizes and styles. Note: To Be confirmed after actual use – However, the choice of 10 font styles and 24 font sizes and the option to choose font sharpness and weight definitely seems better than Kindle Paperwhite’s font options.
  7. Kobo is a very dynamic company and isn’t afraid to try new things. Whether it’s adding features like Kobo Reading Life or it’s taking a chance with the Kobo Aura HD (Amazon and B&N were probably offered the screen first). You know you’ll get something exciting and new from them every year.
  8. Kobo Aura HD is available in black and white. It might also be available in Espresso color too (whatever that is). Kindle Paperwhite is only available in black.

As you can see from these lists, the Kobo Aura HD is a real challenger to the Kindle Paperwhite.

Kindle Paperwhite vs Kobo Aura HD – Kindle Paperwhite advantages

Kindle Paperwhite has the following main advantages -

  1. Kindle Store has the most books and the best ebook prices. When it comes to range of books and price of books, Kindle Store is the best.
  2. Kindle Store has the most free books. Indie Authors sign an exclusive deal with Amazon in return for the ability to promote their books as ‘free books’ for 5 days per 3 month period. That means two things – the most free books are in the Kindle Store (most are indie author books), the most cheap indie author books are in the Kindle Store (because they sign the exclusivity deal).
  3. Kindle customer service is stellar. Kobo Customer Service is supposed to be atrocious. Chances of you needing customer service are low – perhaps 10% to 20% of people will have any real issue. If you do, then you’ll be in trouble with Kobo. I’ve seen 2-3 reports myself of really bad customer service and none of great customer service.
  4. Kindle Paperwhite is backed by very solid infrastructure. You get reading apps for various platforms like iOS, Android, PC, and Mac. You get features like WhisperSync that sync your place in the book across devices.
  5. Amazon is probably going to be around longer than Rakuten (Kobo’s parent company). Additionally, Kindle is probably going to be around longer than Kobo. The demise of Sony eReader and the ongoing gradual decline of Nook shows that the #2 and #3 players in the eReader market aren’t as safe a bet as the #1 player. On the flip side, Kobo is very aggressive and hungry and it seems to want the #1 spot more than Kindle does.
  6. It’s a bit hard to compile a proper list of biggest strengths because Amazon spends so much time focused on the screen and the reading light. Now that they aren’t advantages, there’s not that much left apart from the store and the infrastructure.

Kindle Paperwhite also has the following advantages -

  1. I haven’t used the Kobo Aura HD so this might not be true for it. Kobo devices tend to be shoddily made. The best, when it comes to build quality, are Sony eReaders. Nook eReaders are also good. Kindle is not very good but decent. Kobo was weakest. Perhaps with Kobo Aura HD it’s changed. Perhaps not. If you can try the device out in person, I’d strongly recommend that.
  2. Kindle Paperwhite is slightly lighter (213 grams versus 240 grams) and slightly more compact (Kindle Paperwhite is 169 mm x 117 mm x 9.1 mm, while Kobo Aura HD has Length: 175.7 millimeters, Width: 128.3 millimeters, Max Depth: 11.7 millimeters, and Edge depth:  7 millimeters).
  3. Kindle Paperwhite comes with lots of features like X-Ray which lets you get information on characters in books. With the combined information of Shelfari and (in the future) GoodReads, this will be a hard feature for other eReaders to match.
  4. IF you’re an Amazon Prime member then you get access to the Kindle Owners’ Lending Library and can loan out one book a month out of a selection of titles. There are a lot of books available but only around 100 current and past New York Times Bestsellers and the Harry Potter titles.
  5. Free WiFi at AT&T Hotspots across the US.
  6. Kindle Paperwhite has a limited app store. It’s now closed so there will not be new apps – However, there are a few hundred apps and games available.
  7. Kindle Paperwhite supports Doc and Docx formats while Kobo Aura HD does not.
  8. There is a Kindle Paperwhite 3G version available for $179 (or $199 without Ads). There’s no Kobo Aura HD with 3G.

It’s clear that Kindle Paperwhite has a lot of advantages of its own. It’s interesting to see Amazon once again in a familiar position – Not having the best hardware but leveraging a better store and a better infrastructure to remain competitive.

Kindle Paperwhite vs Kobo Aura HD – The Question of Kindle Paperwhite 2

The biggest thing looming over this Kindle Paperwhite vs Kobo Aura Review is the fact that Kindle Paperwhite 2 is probably scheduled to arrive in September or October 2013.

That means, in 3 or 4 months, the discussion will be Kindle Paperwhite 2 vs Kobo Aura HD vs Nook Glowlight 2. If you aren’t in a rush, then it’s best to wait for the Kindle Paperwhite 2 and Nook Glowlight 2 launches in September or October. Since Kobo, Amazon, B&N all buy eInk screens from the same company (PVI/eInk) it’s likely we’ll end up with the same HD eInk screen on all three devices. Then it comes down to smaller features and store and book prices and infrastructure – a war that Kindle will perhaps win easily.

Kindle Paperwhite vs Kobo Aura HD – Price and Quality of Reading Experience and Total Cost of Ownership

Price is obviously a factor. Kobo Aura HD is $169. Kindle Paperwhite without Ads is $139. Kindle Paperwhite with Ads is $119.

First, let’s add $10 for the wall charger (unless you plan on charging from a computer always). That means Kindle Paperwhite without Ads is $149. At that price Kobo Aura HD at $169 is a much better option. You get the HD screen and a microSD card slot and 2 GB of extra memory. The Reading Light is also supposed to be more evenly spread without glitches.

Kindle Paperwhite with Ads is $129 after factoring in the wall charger. That’s $40 cheaper than the Kobo Aura HD and will be very tempting for those on a tighter budget. It clearly beats Kobo Aura HD for such readers.

Finally, when factoring in Total Cost of Ownership it’s worth including two things – number of free books, resale price.

Kindle Paperwhite wins on both. Kindle Paperwhite will have much better resale value due to Amazon being a much trusted company. Kobo Aura HD has the HD screen – However, very few people know of Kobo or Rakuten. Kindle Paperwhite has a LOT more free books. Amazon has a special program for authors that leads to exclusives for Amazon. If you plan on surviving on free and cheap books, Kindle Store is the best choice and Kindle Paperwhite wins over Kobo Aura HD.

Kindle Paperwhite vs Kobo Aura HD – Which should you buy?

This is a really tough question. Some answers are easy -

  1. If money is no object, and you want the absolute best reading experience, get Kobo Aura HD. This is a really big deal. Kindle and Nook were forgetting about ‘the best reading experience’ and going for ‘the cheapest reading experience’. They were forgetting hard-core readers and targeting casual readers. It’s really good to see Kobo go for the best reading experience and cater to hard-core readers.
  2. If you already have a library of books from Kobo, Nook, or Sony – get Kobo Aura HD.
  3. If you want to be able to buy books from Kobo or Nook or Sony or another ePub store – get Kobo Aura HD. Same if you think that down the line you might want to switch to a Nook eReader or a Sony eReader. Kobo does not lock you in.
  4. If you want to do more than just read – Don’t buy either. Get a Tablet.
  5. If you have a tight budget – get a Kindle Paperwhite with Ads for $109 + charger for $10. Consider the Nook Simple Touch on sale for under $50.
  6. If you have a library of Kindle Books – get a Kindle Paperwhite.
  7. If you want the best customer service – get a Kindle Paperwhite. Note: Keep in mind that customer service might not come into play at all. However, if and when it does, Amazon is much better than Kobo.
  8. If you want lots of cheap and free books from indie authors – get a Kindle Paperwhite.
  9. If you want social features and statistics on your reading habits – get Kobo Aura HD.
  10. If you need a microSD card or want 4 GB instead of 2 GB – get Kobo Aura HD.
  11. If you want the lightest and most compact eReader – get Kindle Paperwhite or Nook Glowlight.
  12. If you want the cheapest reading option – pick a $69 Kindle WiFi or get the Nook Simple Touch when it next goes on sale (it drops to $49).

The other answers are difficult.

The safest options are -

  1. Wait for Kindle Paperwhite 2 and Nook Glowlight 2 to launch. Make a call then with all the information available on Kindle vs Nook vs Kobo.
  2. Buy Kindle Paperwhite and assume that the better customer service and better infrastructure and services and the better store are worth more than the HD screen of the Kobo Aura HD.
  3. Buy Kobo Aura HD and assume that if you need customer service it won’t be great but you’ll live with it. Note: This is an easier call if you have a store nearby that sells Kobo Aura HDs.
  4. Buy both Kobo Aura HD and Kindle Paperwhite, if your budget allows it.
  5. Buy one of the very cheap eReaders for now and wait to see what the next generation eReaders from Amazon & B&N (Kindle Paperwhite 2 and Nook Glowlight 2) are like. The Nook Simple Touch (the one without glowlight) is often on sale for as low as $49 and Kindle WiFi is $69.

I’d suggest #1 or #3 or #5. Truth is that having a HD screen on your eInk eReader is a big deal. If you get a Kindle Paperwhite you will know you’re missing out on the obviously better HD eInk reading experience. If you can wait, it’s worth it to see what Kindle Paperwhite 2 and Nook Glowlight 2 are like. If you can’t wait, either grab a Nook Simple Touch on sale for under $50 or go with the Kobo Aura HD.

Kindle vs Kobo heats up – ZDNet anoints Kobo Aura HD ‘best eInk Reader’

Kindle Paperwhite is in danger of losing its ‘best eInk Reader’ crown.

Kobo delivered the Kobo Aura HD earlier this year with an HD eInk screen. The HD screen, obviously, gives Kobo Aura HD an edge over Kindle Paperwhite and Nook Glowlight. However, the handful of reviews were mixed – with the reviewers finding various faults in the Kobo Aura HD.

Now, we have the first Kobo Aura HD review that claims the HD eInk screen makes Kobo Aura HD better than Kindle Paperwhite. It’s from ZDNet. It’s a contentious claim. However, let’s take a look at why ZDNet thinks Kobo Aura HD is ‘the best eReader’.

Why ZDNet thinks Kobo Aura HD is ‘the Best eReader’

Context: The reviewer’s previous favorite eReader was Kindle Paperwhite. Before that he liked the Kobo eReader Touch. I think that makes the case for a relative lack of bias.

Reasons why the reviewer thinks Kobo Aura HD is the ‘best eInk Reader’ -

  1. Display Resolution of 1440 by 1080 pixels. On a 6.8″ screen that translates to 265 pixels per inch. This is considerably better than Kindle Paperwhite’s 758 by 1024 resolution and 212 pixels per inch pixel density. 265 pixels per inch is approximately Retina-level pixel density.
  2. The reviewer also says Kobo Aura HD has a lighting solution that has no visible glare spots – even when brightness is set to 100%. Kobo calls the lighting solution ComfortLight and it apparently lights up the entire display evenly. Some Kindle Paperwhites had problems with leaks and shadows at the bottom edge. Some Nook Glowlights had problems with bright spots at random places on the screen. Kobo Aura HD apparently bypasses both issues. Note: This is just one device. So we don’t know if the problem is solved or this single device happens to be perfectly lighted.
  3. Kobo Aura HD has a unique design at the back with ridges. This apparently fits better in your hand than a flat back. I don’t really know what to think of this advantage. Note: Kobo Aura HD seems to be a larger device (makes sense given the 6.8″ screen size) and that would actually be a negative in my book, ridges or no ridges.
  4. There is a button dedicated to turning the light on and off. A definite advantage over Kindle Paperwhite where the light can’t be turned off.
  5. MicroSD card slot at the bottom. This is definitely a big plus over Kindle Paperwhite. The microSD slot supports cards up to 32GB.
  6. Note: A little miffed that the reviewer hasn’t mentioned Kobo Aura HD disadvantages. So I’ll add a few of the ones I know of – Kobo Aura HD is supposed to be less polished than Kindle paperwhite, Kobo support is supposed to be atrocious, Kobo Store has less range and slightly higher prices than Kindle Store.
  7. Kobo Aura HD’s processor is 1 GHz and is supposedly 20% faster than the processors on Kindle Paperwhite and Nook Glowlight.
  8. The 6.8″ screen is a bit bigger than Kindle Paperwhite’s 6″ screen.
  9. Support for ePub. This is an advantage over Kindle Paperwhite. ePub means books can be bought from Kobo or Nook or Sony. Kobo Aura HD also supports PDF and MOBI formats.
  10. Formats supported include txt, html, rtf, cbz, cbr.
  11. 10 font styles and 24 font sizes. This is definitely good.
  12. There are some games included for quick breaks – chess, solitaire, word scramble, sketch pad, Sudoku. Of course, Kindle Paperwhite has a whole array of apps and games (a few hundred) so this is actually a Kindle Papertwhite advantage.
  13. There are some good options. A reading status thingie on the bottom left shows – stats for the chapter, upcoming chapter, graph of future chapter length, stats for how many hours are left in the chapter and the book.
  14. Dimensions of Kobo Aura HD are – Length: 175.7 millimeters, Width: 128.3 millimeters, Edge depth:  7 millimeters, Max Depth: 11.7 millimeters, Weight:  240g. This is a bit of a disadvantage as Kindle Paperwhite is more compact and lighter – It’s 213 grams in weight and its dimensions are 6.7″ x 4.6″ x 0.36″ (169 mm x 117 mm x 9.1 mm).
  15. Kobo Aura HD comes with 4 GB internal memory while Kindle Paperwhite only has 2GB.
  16. Price is a disadvantage for Kobo Aura HD at $169. Kindle Paperwhite is $139 without Ads and $109 with Ads.
  17. Kobo Aura HD comes with a wall charger while Kindle Paperwhite doesn’t – you have to pay $10 to add-on one.
  18. Kobo Aura HD comes with Kobo’s Reading Life. Depending on your perspective, this is a good thing or a bad thing. I think it’s good. It lets you view your reading stats – book progress and time to complete the book, hours of reading, average pages per minutes and more. I particularly like the idea of knowing the number of books you have finished and hours of reading you’ve done.
  19. Available in black and white. Also says ‘Coffee’ color on the website, but can’t find that for sale.

Overall, Matthew Miller at ZDNet considers the Kobo Aura HD the best eReader available today. He writes -

Sony used to be the premium ebook reader company … that premium crown now goes to Kobo with their Kobo Aura HD.

Based on everything he has shared, and the details at the Kobo site, I have to say it certainly seems like the Kobo Aura HD has left the Kindle Paperwhite and Nook Glowlight in the dark. I might have to get one of these to see how they are in everyday use.

How much of a threat to Kindle Paperwhite is the Kobo Aura HD?

We’ve covered how Kobo Aura HD is the ‘shiny new HD eReader’ and how that makes Kobo Aura HD a threat to the Kindle Paperwhite.

This glowing Kobo Aura HD review from ZDNet, however, takes things up a notch. It’s one thing for a device to be the ‘new new thing’. It’s quite another for reviewers to start anointing it the new King of eReaders.

Kobo Aura HD is suddenly a HUGE threat to the Kindle Paperwhite -

  1. Firstly, it’s the NEWEST eReader. HD sells. So, having the newest eReader, which is also the only HD eReader, is a big advantage.
  2. Secondly, if people are beginning to call it ‘the Best eReader’ and the ‘winner of the premium crown’, then that only adds to visibility and sales.
  3. Thirdly, people forget that for readers the quality of reading is worth more than a $20 to $50 price difference ($10 for charger). If you love reading and can afford the extra $20 to $50 (depending on whether you consider ads intrusive or not), then you’ll want to spring for the Kobo Aura HD.
  4. Fourthly, based on the details people are sharing and the specifications, the Kobo Aura HD seems clearly better than the Kindle Paperwhite - on paper. That hasn’t happened since Nook Glowlight last year. An HD screen is worth more than a reading light. So, if anything, Kobo Aura HD is much stronger positioned right now than Nook Glowlight was in the months before Kindle Paperwhite launched.
  5. Fifthly, Kobo has set the bar and also demonstrated to Amazon that B&N might be losing focus but Kobo is getting hungrier.

If, and this is a big if, a reader didn’t have an existing library of Kindle Books, then Kindle Paperwhite vs Kobo Aura HD would be a really, really hard decision. I’d guess that Kobo Aura HD would win out 30% to 45% of the time. That’s huge.

If a reader has an existing library of Nook Books or Sony Books or Kobo books, then it’s not much of a contest. Kobo Aura HD can read the books. Kindle Paperwhite can’t. Kobo Aura HD would win 50% to 60% of the time.

The latter has to be very worrying for Amazon. As Sony has faded away, and as B&N is in danger of slipping away, it has seemed that Amazon’s Kindle Paperwhite would sweep up more and more readers. Unfortunately for Amazon, Kobo is providing an option for Nook owners and Sony eReader owners that threatens to be clearly better than Kindle Paperwhite.

For the next few months Kindle vs Nook has become irrelevant. It’s all about Kindle Paperwhite vs Kobo Aura HD now. I’ll add a specific Kindle Paperwhite vs Kobo Aura HD post because Kobo Aura HD seems to be much stronger than assumed. Might even buy a Kobo Aura HD to see if it really is as good as claimed.

Kindle & Kindle Paperwhite under pressure from Kobo & Kobo Aura

The hard times B&N is facing with its Nook HD and Nook HD+ tablets seem like they will greatly strengthen Amazon’s position as the #1 eBook, eReader, and Reading Tablet seller. Good times for Kindle Fire HD and Kindle Paperwhite and the Kindle Store.

Well, not so fast.

It seems Kobo is growing rapidly. Additionally, Kobo’s new Kobo Aura HD eReader is doing well. This puts pressure on Amazon to really deliver with Kindle Paperwhite 2.

Kobo morphing into the type of Competitor B&N should have been

Nate at The Digital Reader shares some figures from Kobo’s Strong Growth Press Release -

  1. Kobo’s revenue was up 143% in 2012. In Q1, 2013 it’s up 98%.
  2. Kobo now has 14.5 million customers worldwide. That’s pretty impressive. Perhaps even more impressive is that Kobo added 2.5 million customers just in the last 3 months.
  3. Hardware sales increased 145%.
  4. Half of the new Kobo Aura HD sales were to new customers. No details on precise numbers, but Kobo Aura HD accounted for 27% of Kobo devices sold at retail.
  5. Rakuten is Kobo’s Parent Company and it’s very strong. Rakuten’s Internet Services Division generated $3 billion in revenue in 2012. Rakuten’s Internet Finances Division generated $1.5 billion.
  6. Rakuten has very strong international presence and solid partnerships. As opposed to B&N, which is US-centric, Kobo is World-centric.
  7. Indie Author titles now account for 10% of Kobo sales (by unit sales, not revenue).

It’s really interesting to see these figures. Keep in mind that B&N’s Nook division sales were actually down in Q4, 2012. While a lot of that is due to poor device sales, it still makes Kobo’s 143% growth last year, and its 98% growth in Q1, 2013, really, really impressive.

Adding 2.5 million new customers in the last 3 months is very impressive too. Of course, these are registrations, so we don’t know how many are paying customers.

Nevertheless, a 14.5 million customer market makes Kobo an important eReader and eBook seller.

Does this really put pressure on Amazon and Kindle?

Yes.

Normally, B&N would have been the one to raise the bar by releasing a HD screen eReader. This year, perhaps because of its disastrous holiday season, B&N wasn’t able to.

That would normally have meant big gains for Amazon. It can keep selling Kindle Paperwhite while preparing a solid Kindle Paperwhite 2 for the Holiday Season.

However, Kobo stepped up and shipped the Kobo Aura HD.

This does a few things -

  1. The ‘new shiny thing’ in eReaders is now a HD resolution eInk screen. Kindle Paperwhite is now seen as ‘last year’s model’.
  2. People start assuming a Kindle Paperwhite 2 is around the corner. Lots of them delay their purchases. Regardless of when Amazon planned on releasing Kindle Paperwhite 2, it’ll have to revisit those plans.
  3. New customers to eReaders hear about Kobo Aura HD. If Kindle Paperwhite 2 were available, new customers would just gravitate to it because ‘Kindle = eReader’. But they hear ‘HD’ and want to check out the Kobo Aura HD.
  4. Internationally, it puts a lot of pressure on Amazon because Kobo has strong presence internationally. Amazon is well aware of the HUGE advantage of becoming the ‘default’ eReader and ‘default’ eBook Store in a country.
  5. Amazon now has to anticipate moves by both B&N and Kobo. Amazon’s strategy so far has been to let B&N take a shot, and then counter. That’s what it’s done with the Nook Color, the Nook Simple Touch, and the Nook Glowlight. If it suddenly starts seeing 1 release a year from B&N, and 1 release a year from Kobo, Amazon will have to adjust its strategy. Things become especially difficult if Kobo does spring releases and B&N switches to Summer or Fall releases.
  6. It ensures there is at least one strong contender left standing. If B&N were to quit the eReader market in 2013 or 2014 or 2015, Amazon would be left with no competition if Kobo weren’t around. Amazon might see a strong #2 fall away, and be promptly replaced by a stronger and more dangerous #2.
  7. It helps Kobo capture more market share. This will become very important in the long run. A strong #2 with 20% market share and a strong #3 with 10% market share is much more dangerous than having just a strong #2 with 20% market share. Things like economies of scale and word of mouth and network effects really come into play once you get to tens of millions of customers.
  8. Kobo can push harder worldwide. Outside of the US and UK, people are neither in love with Amazon to an incredible extent, nor are they already invested in the Kindle ecosystem. For those people, it comes down to better device and better ebook store and better service. While Kobo’s service is supposedly atrocious, their device is now shiny and pretty and HD. Kobo also has a good ebook store in most countries.

Kindle Paperwhite is no longer the ‘newest and best and default’ eReader. Well, it might still be best. We don’t know how well Kobo Aura HD works.

However, Kindle Paperwhite definitely isn’t ‘newest’ and it definitely doesn’t have a HD screen which can be used as a marketing differentiator. If enough people start thinking ‘HD’ eInk screens are a big deal, then Kindle begins to slip from its status as ‘the first eReader you think of when someone says eReader’.

What could make Kobo even more dangerous?

Buying Nook Media. That’s what.

If Kobo can get Nook Media for $1 billion or so, it would instantly go from approximately 10% market share to 25% to 30% market share. It would also give it a brand that’s strong in the US.

Worldwide, Kobo could leverage the larger economies of scale to really push for market share.

Finally, you can be pretty sure that a LOT of Nook owners would choose Kobo over Kindle. Kobo can read their existing Nook Books. Kobo supports ePub. Kobo isn’t Amazon.

Could B&N remain a strong #2 based on just Reading Apps?

It’s very unlikely.

B&N might exit Reading Tablets and eReaders. The former seems likely, and the latter seems a possibility.

It’s quite conceivable that B&N stops making devices altogether. That it tries to fight the Book Wars using Reading Apps. There are a few problems with this approach -

  1. Users of a device tend to go with the ‘default’ Reading App. Kindle Fire owners use the in-built reading app. Apple users tend to use the iBooks App. And so forth.
  2. When users don’t go with the ‘default’ reading app, they go with the ‘Best’ or the ‘Most Well-Known’ Reading App. Best Reading App varies wildly by platform. B&N isn’t ‘best’ on any platform except Nook devices. ‘Most Well-Known’ tends to be Kindle.
  3. Outside the US, B&N has no mind share. Most people won’t even know B&N’s Nook Reading Apps exist, or for that matter B&N. On the other hand, if B&N were able to sell devices internationally, users would gravitate to the in-built default reading app (which would be B&N’s own).
  4. Serious Readers want a device focused on reading. The more focused a device is on reading, the less likely it is to have ‘lots of Reading Apps’ and/or the option to ‘choose a Reading App from another ebook seller’. Kindles don’t have reading apps from other stores. Kindle Fire allows sideloading, but Kindle doesn’t allow anything.
  5. On another company’s device, you get taxed and/or get treated like a third class citizen. Apple forced Reading Apps to remove their ebook stores from the app, and also to remove their ‘buy’ buttons. It wanted a 30% cut. Amazon would simply never allow B&N’s Reading App in its Kindle Fire Store. Google could simply hide the B&N Reading App by making it hard to find.

Unfortunately for B&N, there’s only one way to keep fighting the Book Wars – to have both reading apps for other devices and your own devices (both Reading Tablets and eReaders).

It seems inevitable that Kobo will become the Pepsi to Kindle’s Coca Cola

Kobo is making a lot of good aggressive moves. It is fighting in Reading Tablets and eReaders. Its first few efforts have been terrible – However, it has been improving gradually, and at some point of time it’ll catch up. With the Kobo Aura HD it has really put the pressure on Kindle and Nook. Now Kindle Paperwhite 2 and Nook Glowlight 2 have to deliver.

As it grows likelier and likelier that B&N is going to leave Reading Tablets and eReaders. As Kobo keeps improving and pushing and expanding worldwide aggressively. It becomes more and more likely that Kobo will become the #2 eBook seller and the #2 eReader seller worldwide.

Once that happens, Amazon will find that Kindle vs Kobo is a much more dangerous fight for it than Kindle vs Nook. Rakuten is an Internet giant conglomerate (much like Amazon), and knows how to fight the Digital Book Wars much better than B&N.

By 2015 we might have Amazon wishing B&N had done better with Nook, and stayed around as an annoying but contained #2. Kindle vs Kobo is going to make Kindle vs Nook seem like a walk in the park.

Kobo crashes the Kindle vs Nook party with $129 touch eReader (Kobo Wireless just $99)

Wow! Kobo just totally stole the spotlight from Amazon and B&N. It’s hard to imagine any way B&N (or for that matter, Amazon) can get the attention back.

  1. Firstly, there’s a new $129 Kobo eReader with a touchscreen and WiFi. That’s a touch screen eReader at a lower price point than the Kindle WiFi.
  2. Secondly, Kobo Wireless is down to $99. It’s a bit primitive but the Kobo Store is really good.

Those are two astounding bits of news – they weren’t supposed to be announced today, and they certainly weren’t supposed to be announced by Kobo. Engadget had the scoop on the incredible $129 touch screen Kobo eReader.

Last year, Kobo pushed the envelope on pricing and introduced the first $150 eReader. This year, it’s hit the $99 mark.

Kobo vs Kindle

The Kindle is in a tough spot here (Engadget has a Kindle vs Kobo video which amply demonstrates this) -

  1. The $139 Kindle WiFi is obviously a much better device than the $99 Kobo WiFi. However, $99 is $99. It also makes Kindle with Special Offers seem a lot less special.
  2. The $139 Kindle WiFi will also get compared to the $129 touchscreen Kobo WiFi. Touch does make a difference and $10 cheaper isn’t bad either. Perhaps the most compelling factor for readers looking for total cost of ownership will be Kobo’s propensity to hand out eBook coupons and discounts.
  3. The $189 Kindle 3 is in deep trouble. An eReader that is $60 cheaper with the same eInk Pearl screen and the added bonus of touch? Amazon has to cut the Kindle 3′s price to $150 or it will start seeing a non-trivial drop in sales.

I’m still a little in shock that Kobo managed to pull this off. Who knows – perhaps it goes bankrupt running this race to $99. On paper, Kobo certainly doesn’t seem capable of taking on Amazon and B&N – but somehow it is putting up a real fight.

Concerns over Borders don’t really apply. Firstly, Kobo is part owned by lots of international conglomerates and such - It will not go down with Borders. Secondly, Kobo has its own ebook store which is very solid. Thirdly, it uses ePub so you can just read books from other stores that sell ePub – lots of stores will be happy to get your business.

Kobo vs Nook 2 – Will B&N be able to compete?

B&N’s Nook 2 might have a touch screen of its own and that would negate one of the Kobo’s big pluses. B&N also gets advance notice – even if it is less than 24 hours until the grand unveiling of the Nook 2.

The big disappointment for Godfather Riggio and the B&Nians will be that they aren’t the ones putting the fear of God into the hearts of all other eReader makers. B&N is now effectively a bridesmaid at Kobo’s wedding - a bridesmaid who just realized that her own wedding in two weeks is probably not going to be as impressive.

Apart from the element of surprise, there are two very real concerns -

  1. The $129 Kobo will be a dangerous competitor. If Kindle doesn’t get ‘em, Kobo might.
  2. The $99 Kobo is even more trouble.

You have the rock - Amazon offering up free Internet and free 3G and a very impressive ebook store. You now also have a hard place - Kobo crossing the $99 threshold and also making its high-end model an absolute steal at $129 (Can we call a $129 eReader high-end?).

If B&N doesn’t announce something very impressive tomorrow, its position as the #2 eReader and #2 eBook Store will be under severe threat.

The Kobo Threat

  1. Same eInk Pearl screen as Kindle 3 – This negates one of Kindle’s big advantages, i.e. the only reasonably priced eReader with eInk Pearl.
  2. Faster processor makes things like PDF scrolling super fast and makes page turning faster. A definite advantage – the PDF scrolling was scary good.
  3. Touch makes it easier to use for people who aren’t comfortable pressing buttons. Infra-red system so readability is not affected at all.
  4. Smaller.
  5. Low $129 Price.
  6. It’s very simple to use – one Kobo owner said it’s dead simple and that’s an accurate description. It, thankfully, doesn’t do all the social network nonsense.
  7. It has expandable memory – a microSD card slot that can take up to 32GB.
  8. [Separate Model] Older model is now just $99. It’s not impressive at all – but for people stuck in *Reading is only worth $100* Land it seems magical and revolutionary.

Please Note: This post doesn’t cover Kindle’s advantages (free 3G, better ebook store, better ebook prices, WhisperNet features, etc.). That’s because this post is mostly meant to talk about how Kobo is turning Kindle vs Nook 2 into Kindle vs Nook vs Kobo.

And that’s the key thing – 2011 was set to be The Year of Kindle vs Nook, until Kobo decided to take matters into its own hands.

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.

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