When the dust settles, I think what we will see is Google buying both Borders and B&N, then offering a deal to Sony. The Sony deal I envision is to merge the Sony bookstore into the Google-Borders-B&N store (which will be Google Books) and in exchange, Google will drop the B&N and Borders hardware and subsidize the Sony hardware to make it more competitive against Amazon. Bottom line -- in my opinion -- is that if pricing were equal and all Sonys had wireless, the Sony hardware is far superior to the Kindle, and I think Google has the resources to make that battle.
At that point, I think Google could approach Kobo to join forces as a challenge to Amazon. Kobo could redo Google Books and provide much of the missing expertise.
I wrote about this on my
blog.