September 1, 2010

Staples To Carry Kindle, Borders Cuts Reader Prices

Staples Inc. said Tuesday that it will begin selling Amazon's Kindle electronic book readers beginning this fall, becoming the second major retailer to do so.

The company said it plans to offer the $139 model of the Kindle, the 3G version and the higher-end Kindle DX at its more than 1,500 stores. 

Separately, Borders Group Inc. announced that it would slash prices on some of its e-readers, a move that underscores the competitive intensity within the growing digital books market.

Amazon hopes the deal with Staples will boost its position by making the Kindle available in more retail locations. 

In April, Target agreed to sell the Kindle in its stores, while electronics retailer Best Buy said it would begin selling Barnes and Noble's Nook e-reader at its 1,070 locations.

Amazon has sold some 5 million Kindles since the launch of the device in 2007, while Barnes & Noble has sold 1 million Nooks since introducing the e-reader last year, according to data from Forrester Research.

Competition in the digital books market has become fierce in recent months between the Kindle, the Nook and Apple Inc.'s iPad.

In July, Amazon, Barnes & Noble and Sony Corp. engaged in a price war that resulted in dramatic price reductions on their respective e-readers. 

In late July, Amazon introduced its wireless-only Kindle for $139. 

Borders, the second-largest U.S. book retailer by sales, said Tuesday that it was reducing the price of the two e-readers it sells. 

Beginning Wednesday, a Borders-branded e-reader made by Kobo Inc. will sell for $129.99, while Aluratek's "Libre" eBook Pro will sell for $99.99.  Staples also offers the Libre at a current of price of $124.99 according to its Web site.

Borders decided against developing its own e-reader, and was a late entrant to the e-books market, having only last month introduced its own e-bookstore.

In May, Borders CEO Mike Edwards predicted prices for e-readers would continue to drop.

"The lion's share of the e-reader business will be under the $200 price point going into the fourth quarter," Reuters quoted him as saying.

Although falling prices mean dwindling margins for retailers, electronic readers are critical in driving e-book sales, a rare area of growth within the publishing world.

Shares of Staples' stock rose 0.74 percent on Tuesday, while Amazon's stock closed up 0.84 percent.  Shares of Borders' stock closed down 2.7 percent.


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