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Kobo killed their own e-reader

So I was sitting last night, pondering the Kindle announcement, when I realized that the ereader price war was over and the company who started the war shot themselves in the foot.

You see, unlike most people I don’t date the beginning of the ereader price war to when B&N announced the Nook Wifi. No, I think Kobo started the war when they announced their ereader back in March. They priced it over $100 less than the other leading ereaders; basically they were selling it at cost. Now that they aren’t selling as many as they expected, they are likely losing money on each sale.

The problem with pricing the ereader that low is that it forced everyone else to respond. I don’t think B&N would have set the Nook Wifi at $149 if the Kobo had cost more. I think B&N would have been happy to price it higher and make more per unit.

Here’s my point: Kobo isn’t an unfortunate victim of the price war; they are their own worst enemy.

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Alexander Inglis July 29, 2010 um 5:35 pm

I can’t really agree that Kobo "started the price war".

Kobo entered the market with a different value equation for the consumer: simple matters to some customers. They stripped out the dictionary, communications, note taking, recharger … and left in DRM epub and a very simple reader. No bells, no whistles and a dead simple learning curve. The $149 price point was supported by this : buy less, pay less.

B&N Nook started the price war dropping the entry level while leaving many features in place. Yes, the dropped 3G and added WiFi only for their $159 device but it was the $60 drop, falling below $200 for their premium model which forced Amazon’s hands.

Nate the great July 29, 2010 um 5:41 pm

Actually, no.

The Kobo e-reader is the stock Netronix model (with Bluetooth added). They didn’t strip out anything. What Kobo are selling fro $149 is the same as what Cool-ER were selling for (I think) $249. Also, Bookeen and Pocketbook are still using the same hardware and both charge more.

the only thing that set Kobo apart was the price.

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