The loss-making bookseller Borders Group Inc. is venturing into the digital-book arena by backing a new e-reader, ‘Kobo’, which costs nearly 40 percent less that the expensive market-leading e-readers – the Amazon Kindle and the Barnes and Noble Nook.

According to the information forwarded by Mary Davis, a spokeswoman for the Ann Arbor, Michigan-based Borders bookstore mega-chain, the Kobo e-reader is manufactured by a startup that is partially owned by Borders. Orders for the Kobo e-reader have already begun; and while shipping will commence next month, store sales will start in August.

The e-reader-market foray by Borders clearly comes at a time when the bookseller is looking to become profitable again – the company has been already been shutting down stores and making cost reductions, after posting four yearly losses in a row.

Talking about the price advantage associated with Kobo, Borders, which is expected to promote the e-reader fervently, revealed in a recent statement that the Kobo is priced at $150 – the price-tag being notably lower than the devices higher-cost rivals Kindle and Nook; both of which cost $259.

Noting that the lower price is the mainstay of the Borders-backed Kobo e-reader, rather than hardware, software, or service, Michael Souers, a New York-based analyst for Standard & Poor’s, said: “They are certainly trying to break in with a lower-cost reader. It’s their only hope, because they are facing competition that is already entrenched.”