Can the Kobo eReader compete with the Apple iPad?

REDgroup Retail has finally released the Kobo eReader device and eBooks platform, with the gadget to sell for $199 in Borders bookstores and online in an attempt to challenge the Amazon Kindle’s grip on the market.

But analysts question whether the gadget will actually achieve success in Australia, as the Apple iPad threatens to topple the dedicated eReader market with a more powerful offering.

REDgroup, which operates the Borders and Angus & Robertson book chains, launched the gadget in Sydney yesterday. It is one of the first eReaders to be launched towards a mass-market audience in Australia.

While Amazon has already offered the international Kindle model for some time, the device is not actually sold in stores – one advantage the Kobo has over the retail giant.

About two million eBooks are already available on the Borders eBook store, and are in a format that can be read on any device including the iPhone, iPad, BlackBerry and any Android-based mobile device. The company also hopes to push the availability of local authors as a key drawing card.

Setting the gadget’s price at $199 will also provide an advantage over the Amazon Kindle, which costs $US259, and the iPad, which starts at $629. Books will sell for about $10-15, which is similar to the prices offered by Amazon and Apple.

But despite Kobo’s first-mover advantage, some analysts are questioning whether the gadget will actually have any traction in the Australian market. While dedicated eReaders have been popular for some time, some analysts say they may be overridden by stronger, multi-purpose devices like the iPad.

Telsyte analyst Alvin Lee says while the Kobo has an attractive battery life, and the in-built books are a nice touch, it won’t necessarily be able to compete against multipurpose devices.

“However, the fact that an eBook-store-app will also be made available across platforms including Blackberry, Android and iPad, might cause the device itself to be less attractive to consumers.”

“Further comparing with Apple’s iPad, it is missing the wow factor as a late comer to the market. Kobo eReader is now competing with Apple’s iPad, who essentially offers not only eBooks, but a much wider range of applications and services.”

But Ovum analyst Nathan Burley says the market is splintering into different types of niche products.

“If you look at what’s happening in devices at the moment, you have a lot of different form factors which are emerging. We are at the point now where producing electronics is cheap, and cheap enough to create entirely new categories.”

“If you look now, we are getting steps away from just a phone and a PC, we have tablets, eReaders, smartbooks as well as netbooks, which came on the scene about two or three years ago. There will be more and more devices like this, but the question is, do customers want one product that does something very well, or a multi-purpose product?”

Burley says the market will see both scenarios occur – while some users will choose single-use devices, others will opt for more complex gadgets.

“Look at cameras. Almost everyone has a camera in their phone now, but you still have people buying more complicated cameras to do more complicated things. Music players, eReaders all fall into that category as well.”

One industry expert also expressed doubt the device would achieve much success in Australia, saying the local market is becoming used to more powerful gadgets such as the iPad, which will eventually overshadow single-use devices like the Amazon Kindle.

Nevertheless, demand for eReaders is set to grow. A new study from Boston Consulting Group revealed last week that 23% of Australians plan to buy an eReader or tablet within the next year, while 49% plan to buy one within the next three years.

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