Kobo and Rakuten Launch Competitive Strategy with Affordable Glo HD eReader
A few days ago, the Kobo Glo HD was officially introduced after it had previously been leaked. This update refreshes the 6-inch offerings from the Canadian-Japanese company, which surprisingly hadn’t received an update last fall. Back then, “only” the Kobo Aura H2O was introduced, which, although an excellent eReader, primarily appeals to dedicated digital readers due to its relatively high price.
With the Glo HD, Kobo is now pursuing a different strategy, offering an affordable, technically advanced device that could intimidate the competition and accelerate the downward price spiral of other competitors.
The new Kobo reader enters the European market with a suggested retail price of 129 euros, directly succeeding the original Kobo Glo (without “HD”) in terms of price. However, the real trick with this price is not in looking at its predecessors but rather in comparing it with other manufacturers.
Promising Technology at a Prime Price
Different concepts at the same price.
The Kobo Glo HD is priced the same as the Tolino Vision 2 but offers a much higher resolution screen (300ppi vs. 212 ppi) with (presumed) infrared touchscreen technology, presumably providing even better readability. With the cheaper competition from the Kindle Paperwhite (€99), the current price of the Vision 2 is difficult to justify against the technically advanced Glo HD.
While features like water protection and the Tap2flip function are useful and meaningful additions, the ultimate focus of a dedicated reading device is, after all, on delivering the best possible screen performance.
Not only will the Tolino alliance need to adjust prices, but Amazon could also feel the pressure. Rakuten, Kobo’s parent company, is likely keeping a close eye on the U.S. retailer’s pricing strategy (for both the Kindle Voyage and the Paperwhite).
The Kobo Glo HD is marketed as a direct competitor with the same screen specifications as the Voyage, yet costs over 30 percent less in this country. In other words, you save 60 euros but get the same display performance with Kobo’s latest reader. Especially since the Kindle Voyage has been plagued with display issues due to color tinting since its launch, most customers will likely find it easy to opt for the cheaper Kobo eReader (with ePub support).
Of course, this only applies if the Glo HD functions flawlessly without similar quality problems or display errors. This will become clear once the forthcoming reviews are available.
In North America, the new Kobo eReader is positioned not only against the Voyage but primarily against the equally priced Kindle Paperwhite there. Unlike here, in the U.S. (and Canada), you pay between $119 (ad-supported) and $139 (ad-free) for the Paperwhite. This creates the same dilemma for Amazon in its home market (despite Kobo being a relatively small competitor) as the Tolino partners face here. In Germany, the Paperwhite is only available at such a low price (€99) because Amazon and the Tolino alliance are engaged in an aggressive battle for market share.
In any case, the launch of the high-end Glo HD at an affordable price is a clear signal that Rakuten intends to shake up the international eReading market. With the Aura H2O, they already made a significant statement, and the Glo HD reinforces their claim to become the international market leader in digital reading.
Dedicated Reading Devices Remain the Key to Success
This is particularly interesting because not too long ago, the holy grail of the digital reading market was believed to be in tablets. Many analysts and market observers predicted based on various surveys and declining demand for dedicated reading devices that this category would soon be cannibalized by multifunctional flat computers. However, it turns out that eBook readers have established themselves as a separate category alongside tablets.
The most prominent victim of the tablet misconception is the US bookseller Barnes & Noble. By focusing on Nook tablets, they lost ground to Amazon and, amid consistently negative reports about their business development, are no longer a serious competitor for the US retail giant.
Content Offerings Come into Focus
The Japanese retailer Rakuten isn’t just relying on high-quality eBook readers; it has also made headlines in the content market with its recent announcement to acquire Overdrive. With this move, Rakuten-Kobo could potentially eliminate the current significant disadvantage of their international offerings in the long run.
The eBook selection in non-English-speaking markets is still noticeably smaller than that offered by the national competition (and Amazon). This also applies to Kobo’s German-language offerings.
But this situation could soon change with Overdrive as backup, particularly as a challenge to Amazon as a global player. The Tolino partners will also be watching the developments closely, as their international growth plans could similarly be disrupted by Kobo.
It seems that the Kobo acquisition by Rakuten in 2011 is slowly paying off, and the Canadian company is gradually but steadily being placed on a sustainable expansion path. Now, everyone is eager to see if the offensive will be successful in the long term and how the competition will respond to the strengthened rival.
