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Borders launches Kobo-powered 'Area E' e-book store, eyes 17 pct market share.

Borders Group Inc. (NYSE.BGP), the second largest bookstore chain in the US, forayed into the growing e-book market, Wednesday, by launching its very own e-book store called 'Area E.' The company is eyeing 17 percent of the e-book market by 2011.

Borders, which competes with bigger rival Barnes & Noble in the US, has launched its own branded e-book store that offers about 1.5 million titles in a variety of formats. The books are priced between $9.99 to $12.99 for most new titles. Some recent titles go for $4.99. There are lots of free books, too.

The company said loyalty card members would receive extra points for purchasing its $150 Kobo e-reader as well as exclusive offers on digital content. The Borders Rewards program has over 38 million members.

The new e-book store will be powered by Canadian e-book retailer Kobo, a global eBook project backed by Indigo Books & Music, Borders Group, REDgroup Retail, and Cheung Kong Holdings. Kobo has already launched iPhone and iPad apps for Border's e-book store. Apps for the BlackBerry and Android platforms were also launched by Kobo on Wednesday.

Border's move is part of its plan to capture 17 percent of the e-book market by 2011. According to Albert Greco, a book industry researcher, Borders had a 10 percent share of the retail book sales market in 2009.

"The race to emerge as a retail leader within the digital category is just starting. During the past several months, we've been carefully crafting a digital strategy. We believe we are very well positioned to come out strong," Borders CE Mike Edwards said.

The e-book store is also expected to ramp up Borders' falling sales. Borders saw sales fall at its established stores and online store fall some 11.4 percent in the first quarter of this year. The company operates 500 super stores and more than 100 smaller stores in the US.

Borders, which is the fourth major US company to enter the e-book business after Amazon, Barnes & Noble and Apple Inc., had launched Kobo e-reader in June, signaling that it was serious about taking a plunge in the e-book market. The company was one of the first to sell e-readers in the US and was a retailer for Sony Reader devices for several years. Last December Borders invested in Kobo and said that Kobo would eventually provide e-books for its online store Borders.com. Though Borders does not make its own e-readers, it now sells inexpensive e-readers called Kobo and Aluratek Libre, which competes with Amazon's Kindle, Sony Reader, Barnes & Noble's Nook and Apple's iPad.

A Goldman Sachs report in April said e-book sales made up 3 percent of overall US book sales now and would rise to 12.8 percent by 2015. Amazon is the market leader in US e-book industry with an estimated 70 percent market share. Last week, Barnes & Noble told investors that it had won 20 percent of the US e-book market since launching the Nook.

At 12.31PM (EDT), shares of Ann Arbor, Michigan-based Borders were trading up 5.98 percent at $1.24 on the New York Stock Exchange.
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Publication:International Business Times - US ed.
Date:Jul 7, 2010
Words:524
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