Kobo e-reader set to ship first week of May

Canada will get its very own piece of e-reader hardware in the first week of May at bookstores and online, at a price that undercuts the heavyweight competition.

Toronto-based Kobo Inc. is set to release its $149 E-Ink tablet and ship the pre-orders it has received. A spin-off company of Indigo Books & Music, Kobo has already been selling e-books via a slew of mobile apps and over the Web.  There is a free app for iPhone, iPad, BlackBerry, Palm Pre and Android devices. The .epub format can also be downloaded on a computer and read with Adobe’s free Digital Edition Desktop Reader.

In releasing a piece of hardware, Kobo enters a new phase of competition — taking on heavyweights in both the e-reader and tablet PC category including Amazon’s Kindle, Barnes & Noble’s Nook, and Apple’s iPad.

But the Kobo team is confident an attractive price tag and open source approach will help them succeed, says Dan Galperin, vice-president of research and development.

“We want to create e-reading any time, any place,” he says. “A customer can read and can move our books to any device they already own. That’s the biggest differentiation between us and Amazon.”

Pre-order sales have been above Kobo’s expectations, he adds. The recently launched iPad app has also seen rapid growth, as have book sales through the app.

The e-reader market is hot place to compete in 2010, according to a Gartner Inc. study released last November. E-reader shipment volumes are projected to reach 19.76 million units by 2013 with a value of $4.16 billion.

Kobo’s $149 price tag is intended to undercut its main rivals and help the device gain traction, Galperin says. “[We’re keeping] the price as low as we possibly can so we can appeal to as wide an audience as possible.”

The device is 183 mm long and 119 mm wide, with a six-inch screen, and weighs 220 grams. It has a textured back, a directional-pad button on the front and will store up to 1,000 books. Readers may have to forego features found on other e-readers such as the Nook’s ability to play music and read .doc format files, or the Kindle’s ability to wirelessly download books.

Some think Kobo’s hardware might be a no-go.

“The iPad and tablets, in general, make me question how successful these things are going to be,” says Arjun Basu, editorial director at Montreal-based Spafax Canada Inc. “From some really smart people, one of the first thoughts they had is this is a Kindle-killer.”

The media tablet makes e-readers look limited by comparison, the author adds. The e-reader may remain a niche product while many consumers opt for more functionality in a portable device.

Many online consumers are poised to buy Apple’s iPad or another tablet, according to a recent comScore Inc. survey on the likelihood of people purchasing one of the top five e-reader or tablet products – the iPad, Kindle, Nook, Sony Reader, and Samsung Papyrus.

Of the 2,176 people surveyed online, 15 per cent were considering buying an iPad within the next three months and 14 per cent were considering buying a Kindle in the same time period.

The e-reader is only one part of Kobo’s bet. It can also sell books – as low as $9.99 – via its various other channels on the Web and mobile platforms.

“We’re making efforts to ensure customers are able to move things around and remove as many restrictions as we can,” Galperin says. “We are a building platform and we’re completely open for any partner to come in and built on that platform.”

Kobo has attracted investors such as Indigo Books & Music, Borders, REDgroup Retail, and Cheung Kong Holdings.

Boost for Canadian publishers

A Canadian-based e-reader competing in more than 200 countries for eyeballs will be good for Canadian authors and publishers, Basu says.

“There are more ways to disseminate your product if you’re a publisher,” he says. “It gives them a domestic platform to distribute their e-books, depending on how open it is.”

It is open, Galperin insists. Authors will be able to submit books for conversion to the .epub format and Kobo will return the format to them. The author is then free to go and sell it on other platforms if they choose.

“We have a great relationship with the Canadian publishing industry, the American publishing industry, the New Zealand publishing industry and the U.K. publishing industry,” he says. “Canada is an extremely important market for us.”

A banner on Kobo’s Web site at the moment advertises the Canadian dollar’s parity with the American greenback. That means Canadians can buy books at American prices, Galperin says.

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