This isn't quite the $49 "paperback Kindle" that marketing guru Seth Godin has been urging (Nasdaq: AMZN) to build, but Ann Arbor, Mich.-based bookseller Borders (NYSE: BGP) is firing another shot in the e-reader price wars brought on by the introduction of Apple's (Nasdaq: AAPL) iPad, which scared the bejeezus out of the nascent industry.

Borders has announced that it is offering a $20 gift card with purchase of its $149.99 Kobo e-reader. Plus, there's a new Kobo app for the Apple iPhone and iPad. It's all part of an overall digital strategy that Borders hopes will rescue it from hard times.

Borders lost about $109 million last year, as revenue fell 14 percent to $2.8 billion, making for four straight years of losses. In addition to its efforts to restructure by closing stores and reducing its workforce, Borders knows that to survive will mean to change with the times. So the company has said that its Kobo eReader is just the first of what it says will be up to 10 different devices that it will offer by the end of this year.

Borders invested in Kobo, the Canadian company that makes the Kobo e-reader, last year, and plans to launch a Kobo-branded e-book store that's integrated with Kobo's mobile applications will be "device-neutral," meaning customers will be able to purchase e-books on many different mobile gadgets.

With this latest gift-card announcement, Borders is sending out a message that its Kobo device, which uses a screen manufactured by Hsinchu, Taiwan- and Cambridge, Mass.-based E Ink, is a player in a high-stakes game seemingly dominated now by Apple and Amazon. Borders is convinced that, eventually, all readers will fall below $200, and it is already well-p ositioned under that price point.

Oh, and it's throwing in one other thing it hopes will jolt customers awake. Show your Borders eBooks app on your iPhone or iPad, and get a free cup of joe at its in-store Seattle's Best Coffee cafes.

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Howard Lovy is Xconomy's Detroit correspondent. You can reach him at

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