Wednesday, October 19, 2011

Can Kobo Win at the Races?

Racing it’s not just about the horse, or the rider, the form book , the course and the conditions. The winners and losers are often decided by all these factors and more. Outsiders do win and favourites lose and that’s what makes the ‘sport of kings’ interesting.

So can Kobo steel up on the inside track and get placed or do they remain an also ran?

Kobo has announced, "the People's eReader" called VOX. It intends the VOX to compete head to head with the Barnes and Noble Nook and the Kindle Fire and in doing so attempt to capture the middle ground between a full blown and expensive tablet such as the iPad2 and the cheap eink lookie likies such as the Kindle, Sony reader etc. Vox will retail for $199.99 runs on Android 2.3 and weighs in at a low end 14.2 ounces. They also have the touch which is priced around $139 in the US, or £110 if you are unfortunate to have to buy it in the Uk. They also have the basic WiFi model at $99 in the US and the poor exchange rate of £89 in the UK.

So they have a stable of horses but what about the riders. Kobo is as well know outside of North America, as it part time parent and book retailer Indigo. However, it has struck deals with WHSmiths for them to sell into the UK market and with Fnac to sell into the French Market. Looking at their web site they already have an impressive list of retailers Indigo in Canada, Walmart, Best Buy and others in the US, Angus Robinson and Borders in Australia (perhaps we should scratch that last entry). The franchise strategy is sound, but if it were a winner, one would have expected better market share results in the US, where they even ran the Borders ebook setup.

Perhaps the strategy will work in more fragmented markets such as Europe. However remember Waterstones made a huge leap to the front with Sony, but despite all the hype, some would say that they failed to get past the starting gate and now look to be changing stables.

Perhaps the market is more mature now and willing to back the outsider? The challenge for Kobo is not the size of their repository, nor the cuteness of their reader, but the effectiveness of their rider. Will WHSmith break the mould and actually make a great sale job of promoting it and getting it in the consumer space, or will they expect it to earn its keep and shift itself. It’s one thing to put it on a shelf, it’s often another to sell it.

Price and colours aren’t Kobo’s unique selling points. If Kobo are to succeed with this franchise model, where others such as Sony have failed, then they have to get their franchisees set up to promote, shout, spend serious money and sell, sell, sell. Amazon has been promoting the brand Kindle everywhere, Apple have a brand that sells itself, but is Kobo up to the job and what is its USP (unique selling point)?

Back in the early internet bookshop days I was asked who would win; Barnes and Noble, Amazon or My answer was quick and based on one simple piece of logic. Pick any 100 people on; Oxford Street, London, 5th Avenue, New York, Main Street, Frankfurt and ask them the same question, ‘Have you heard of Amazon, Barnes and Noble or and do you know what they sell?’ I could predict the answers then and unfortunately today is not much different.

So as we return to today’s race we have the favourite Amazon Kindle, followed by Barnes and Noble in the US, Apple and then a pack of outsiders lead by Kobo. There is a dark horse in the shape of Google but for all its hype it is still hanging around in the stables.

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