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Borders (BGP) has announced that starting June 17, its online e-bookstore will go live and it will be distributing a range of reader solutions that include software for PCs, smartphones and the iPad.

It will also be distributing the Kobo eReader — from Toronto-based Kobo Inc. — a $150 stripped-down e-reader. The technology got a glowing review from Wired last December, although it’s not clear how much is applicable.

This is Borders’ attempt to remain relevant and earn a seat at the table before physical bookstores go the way of physical record stores. As far as I know, the company has released nothing about the platform — only the physical device and how it will be used — but here are some random thoughts:

  • The $150 price point is going to put pressure on Amazon (NASDAQ:AMZN), Apple (NASDAQ:AAPL) and Barnes & Noble (NYSE:BKS), even if nobody is going to buy an e-reader that can’t even surf the web.
  • On that point, what’s with Bluetooth instead of WiFi? Do we want it to dictate books via our headset rather than connect to a WLAN? Or is this for the really clueless user who doesn’t know how to use a hotspot at the local library?
  • Is the market made up of consumer impulse buyers, or does Borders (HQ a few miles from U. Michigan) understand the potential for the education market? A $150 list price might mean a $100 price in bulk, and $100 is where basic e-readers start to become common in K-12 and higher ed. It seems likely that we’ll see a Nook and/or Kindle below $200 by Christmas, even if the iPad remains overpriced for now (or Apple tries to get people to settle for an iPod Touch).
  • Amazon and Apple have successfully created proprietary reader platforms, but why are the others using anything but Android? (as Barnes and Noble is..).
  • Borders seems to realize that the world doesn’t need another book format, so it seems to have turned control of its platform (and thus switching costs) over to Adobe (NASDAQ:ADBE), who appears to provide the DRM for the otherwise open-format EPUB book format.
  • I’m guessing the content will be readable 5 years from now, but otherwise this has “angry orphan” written all over it — once Borders figures out its long term strategy.

Now what? If I were Borders, I’d ally with Bertelsman or one of the Japanese publishers.

The company is a distant third in the US market — and probably 4th or 5th in eBooks — so it will have little to say about the eventual platform standards and format wars. Allying with Adobe provides good technology but is a very risky business move (like allying with Google (NASDAQ:GOOG) for smartphone OSs).

Some dominant overseas publisher will decide that it does not want to accept marching orders from Amazon, Apple or Adobe, and will come up with a strategy that gains traction in its home market. Borders could gain traction there, sell to their tourists and also perhaps (if the copyright agreements allow it) sell US content to that market.

Source: Borders Seeks e-Book Strategy