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IMO, Kobo's main problem is that there are quite a few Amazon Kindle exclusive authors, at least in the U.S. Now for people that know how to convert and side-load, that's not an issue. But that's an extremely small group.
To make the Kobo eReader more attractive, they're going to have to give authors incentives to make their work available for sale on Kobo itself in addition to Amazon Kindle.
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