When Kobo announced the Kobo Glo last week in Japan, I'm sure they thought they were being quite clever in underselling the Kindle Paperwhite's price of 8,480 yen. Today Amazon showed that 2 can play at that game.
The Kindle Paperwhite still hasn't shipped from Amazon.co.jp, but today Amazon dropped the price. They've matched the current price on the Kobo Glo, making the Japanese price of the KPW a steal.
Amazon's newest ereader is now listed at under $100 in Japan. That's $40 lower than they're selling the ad-free model on Amazon.com, and it stands as a warning to the competition.
Amazon will not be undersold. Just like we saw in 2010, Amazon is more than willing to get into a price war to make sure that doesn't happen. This is great for consumers in the short run, but in the long run it's going to thin out the competition.
The only reason Kobo can afford to go toe-to-toe with Amazon is that they have Rakuten's deep pockets to hide in. This in effect puts Rakuten and Amazon in an elaborate game of chicken, and I cannot predict who will blink first.