Books written by Ray Sullivan

Thursday, 8 December 2011

Is Kobo To Be The Kindle For Christmas 2011?

As announced in my blog Tuesday night, Asda, the Wal-Mart UK subsiduary, is going to stock the basic Kobo e-Reader and the Kobo Touch, and all indications are that it will undercut the UK high street newsagent WH Smith on both products.

It has been announced by WH Smith that they welcome Asda's entry into the Kobo e-Reader field, which might appear a little unusual given the amount they have invested in launching the Kobo products.  However it transpires that Asda will not be stocking the Kobo Vox, at least at first.  And we shouldn't forget that WH Smith will get a small rake-off every Kobo book sold in the UK, so every Kobo device sucking down Kobo paid-for books will send a small royalty to WH Smith.  Perhaps it's the book royalties they are after anyway, it's not unknown for a device to be sold at cost so that the follow on payments can be realised.

But a part of the equation has to be the muscle that Asda bring to the table; I doubt WH Smith would last long in an arm wrestling contest with them, so perhaps a welcome smile and a nod to those added royalties is probably a pragmatic approach.

What this means, for the UK at least, is that the e-Reader contest on the run up to Christmas is going to be a two horse race, as I've been saying for the last month.  I'm sorry Sony, Bebook and the other e-Reader manufacturers, but you've just been effectively frozen out of the UK market.  In the red corner we have the Amazon Kindle range, supported by Amazon, of course, and Tesco - one of Britain's most powerful supermarkets that is certainly uncowed by Asda.  In the blue corner we have the Kobo devices, supported by WH Smith, a national treasure,, an influential UK internet seller with aspirations to be an Amazon, and Asda, the king of the stack-it-high, sell-it-cheap brigade.  The others will be just side orders this year.

Amazon enter the final rounds as Britain starts to stack up the Christmas presents for sons, daughters, mums, dads, grandparents, aunties and uncles with a proven brand.  Most people who haven't got an e-Reader think they're all called Kindles anyway, that it is a generic label.  And it may end up to be so, such is fate.  With Tesco at their elbow they will make a formidable pitch for the newcomers onto the market.  Their biggest disadvantage is that having had the lion's share of the e-Reader market for the last year, those devices are now coming up for a year old and some will be experiencing attrition.  I'm personally aware from my knowledge of colleagues who have had Kindles for the last year that they have experienced issues with the on/off slider - by virtue of having the lion's share of the market Amazon have to accept that failures like that will appear to be proportionately larger compared to the opposition.

Kobo don't have a track record to marr perception over here, but are now being backed by three trusted brands: WH Smith, and Asda.  All have a good reputation for putting things right.  WH Smith also has the Kobo Vox to play for the upper echelon of the e-Reader market, bridging the gap between the basically functional e-Reader and the iPad, a gap Amazon are attempting to plug in the US but don't look like plugging over here until sometine in 2012.  Add to all of this Asda's aggressive pricing, which WH Smith currently doesn't appear to be matching, and you've got the making of a fight.  Play are price matching WH Smith right now, but they don't spend much time as also-rans in the price department, so I expect them to price match Asda soon.

Which means Kobo have won round one.  My guess is that round two will take place within a week of Asda launching, and it will be Tesco taking the fight to them.  I'm expecting Tesco to compete pound for pound, pitching basic Kindle against basic Kobo.  The Kindle Touch, released about the same time as the Kindle Fire, doesn't look like making it over here before Christmas so probably Kobo will dominate the upper basic e-Reader segment as well as the slice that the Vox will occupy.  So at best a draw for Amazon, possibly round two to Kobo unless Tesco undercut Asda big-time.  It sounds like it's worth waiting a week if you're in the market for a basic e-Reader (for yourself or as a present) and don't have a strong view which brand to go for.

My view is that as last year was the year of the Kindle, then this year could very well be the year of the Kobo!
Postscript:  Will this repeat in the US?  Well I know that although Asda is a subsiduary of Wal-Mart, I've seen it take its ideas across the Atlantic before, which implies it's not just a passive subsiduary; that it has credibilty with the Arkansas based mega-corporation.  So it is possible that Wal-Mart will follow Asda's lead - and possibly already is, I'm not following the US market that closely, but haven't heard anything mentioned on-line.  However the Fire and Vox are slugging it out at the same price point right now and, given the maturity of the US ebook market compared to the UK, that's probably the major battle over there this season.


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