Business models of e-book suppliers

[scrapking]

I'm curious on people's thoughts on the various business models that companies are employing to grow their e-book selling storefronts. Which strategies do you see as more, or less, successful? Who's on the right, or the wrong, track? Who's going to grow, and who's likely to stagnate (or even shrink)?

I see it breaking down like this (and I don't intend this to be an exhaustive list of e-book sellers, so please feel free to add your own that you think has the potential to be a key contributor to the market):

AMAZON KINDLE
They continue to try to low-cost their way into the market, and KDP Select gives them an exclusive indie flair. They're one of the biggest booksellers in the world, and leveraging that as people switch to e-books. Few publishers would choose to not be on Kindle.
PROS: they're the brand name in e-reading, the first name many people think of when the topic of e-books comes up.
CONS: retail backlash is a real threat (they routinely lose marketshare whenever a market-dominant bricks-and-mortar retailer launches a concerted attack on them. Amazon's often criticised for a lack of a global focus (smaller international e-book catalogues, delayed releases of new Kindle devices, surcharges for international customers despite digital delivery of content, etc.).

KOBO
With the huge financial backing of Rakuten (which is reportedly investing heavily into Kobo's growth), and the partnerships that keeps opening up (most recently Buy.com, Play.com, and Pinterest), Kobo's not yet in the #2 spot globally but is possibly in a better financial position than any of Amazon's competitors. Kobo's focus has been to position itself as the platform of choice for a major book retailer who wants to either get into the e-book business, or to seek an alliance for a floundering e-book business. By sharing royalties with local retail giants, Kobo has established their brand as the exclusive e-reader sold by key retailers in Canada, the UK, France, the Netherlands, and more. Kobo's the #1 e-reader in Canada by a long shot (approximately double the market penetration of the Kindle now), and other recent alliances such as WHSmith (UK) and FNAC (France) have shown Kobo can make big marketshare gains with the right partner. Japan's nascent e-book industry is considered right for the picking as the Japanese are pretty voracious readers (of both prose and manga), as well as lovers of gadgets, and Rakuten's rebranding it's Japanese e-book business under the Kobo umbrella and planning a major effort on that market.
PROS: a global reach, huge opportunity with Rakuten's deep pockets, and retailers looking for an ally against Amazon that will be attracted by Kobo's success with Chapters/Indigo, WHSmith, etc. Kobo also has been successful at getting their software pre-installed by OEMs making laptops, tablets, and more.
CONS: outside of Canada, Kobo's behind not only Amazon but also Sony at this time, and there's no retail partner with the size of B&N in the U.S. for Kobo to partner with with the closing of Borders; while there's a big world out there, the U.S. is nonetheless not a market to ignore. OEM deals to have their software on devices might be under threat by Microsoft's investment in Nook.

NOOK
No longer just the B&N Nook, the Nook is now co-owned by B&N and Microsoft. B&N has taken a page out of Kobo's playbook and used bricks-and-mortar influence to surpass Sony and Kobo and make the Nook the #2 player in the U.S. market. Microsoft may include Nook software by default with future versions of Windows, giving the Nook that international reach it has thus far lacked. Previously B&N had apparently been planning to go the Kobo route of international retailer partnerships, but appear to have struck this deal instead of that and are no longer pursuing that (or at least not as aggressively as before).
PROS: Microsoft partnership gives them a giant partner with a global reach.
CONS: Continued success of Microsoft platforms now important to the Nook, and while Windows on the desktop is not likely under near-term threat there are bigger questions about Windows 8 tablets and Windows Phone's ability to help drive the Nook platform. Microsoft may expect future versions of the Nook to migrate away from Android and towards the tablet version of Windows 8 which may be disruptive to the company (slowing release of new devices, etc.), at least in the short-term. (Though I love Windows Phone 8, so I personally think that would be kind of awesome.) It's unclear where B&N's investments in Android apps for Nook will be in this Microsoft co-owned future.

SONY
Sony was early out of the gate and was (and is) a major competitor for Amazon's Kindle, but seems to be floundering lately. The e-reader market in Japan (Sony's home market) has grown slowly due to the publishers there insisting that e-books should cost as much, or nearly as much, as the paper copy. They've lost share to the Nook in the U.S., they've lost share to Kobo in Canada (where they actually went from first to third in less than a year), and likely elsewhere. That said, Sony's e-readers are probably available in more markets than even the Kindle (Sony being in Japan when the Kindle isn't is no small advantage), meaning no e-reader device maker has a larger global reach at this point. Sony has to make sure their reach doesn't become wide, but shallow, with spirited competitors in each market eating their lunch.
PROS: available almost everywhere, and reportedly some very strong device designs.
CONS: I haven't used it myself yet, but I've read complaints from Mobileread members with high karma about Sony's e-book catalogue (more the technology behind it than the selection, I believe); Sony Corp's financials are poor so the mother corp. likely won't be investing in the e-book business. Global focus being so broad may mean that they lose marketshare everywhere due to lack of specific focus on key markets.

GOOGLE PLAY
Will Google Play become a major e-book seller, on the backs of the huge success of Android in the devices market? Your guess is as good as mine.
PROS: Android is a force to be reckoned with in smartphones.
CONS: Android hasn't yet seem quite as much success in tablets and other devices. Not all Android devices support the Google Marketplace either. It's also likely a tiny sideline for Google, not a major focus like it is for Amazon, Kobo, Nook, etc.

APPLE iBOOKS
Apple's dalliance with e-books seems to have moved a lot of volumes, but not rocketed it into importance in Apple's mind.
PROS: iOS devices are big sellers, meaning a large possible market.
CONS: The presumptive forthcoming end of the agency era may further reduce its importance to Apple. Whereas many e-reader device sellers price devices as cheaply as possible with the hopes of selling content, Apple does the reverse (using content to encourage high-margin device sales) meaning their focus on e-books (which are not device sellers for Apple in my estimation) will likely never be as laser sharp as their fiercest competitors.

SMASHWORDS
They've been growing strongly, and are indispensible for a lot of indie authors. Their catalogue is huge, and their indie cred (at least, when they're not evangelising the agency model) is strong.
PROS: huge growth in indie publishing brings them a steady stream of content, some of it exclusive.
CONS: Not much "name brand" content, and their business model lives and dies based on the strength of indie publishing (and consumer interest in same).

So, I'm interested in everyone else's perspectives on all of the above.