Friday, January 29, 2010

Apple iPad: Is It Actually an Amazon Trojan Horse?

As anyone on Planet Earth knows, Apple announced its new iPad device Wednesday with enormous hoopla. There's particular excitement among publishers because Apple has agreed to sell books in an iTunes-like store at prices somewhat higher than Amazon has been charging for new titles on the Kindle.

The excitement is somewhat paradoxical because although Apple is giving publishers a better split of sales proceeds (70 percent vs. Amazon's 50), these sales will actually make the publishers less money: Apple "iBooks" prices will be capped at $14.99, while right now, Amazon is paying publishers half of a list price that could be $25 to $30.

Furthermore, what no one has mentioned so far is that Amazon already has a Kindle reader app for the iPhone which allows you to buy books and read them--and supposedly all iPhone apps will work on the iPad.  So will you potentially have a choice of buying an e-book from
Apple's iBooks store for $14.99--or, buying the same title from Amazon, on the same device, just as conveniently, for $9.99?

I feel as though I must be misunderstanding something, because this seems like a setup to make iBooks completely irrelevant in a hurry.  This will be no skin off Apple, because the iPad will be just as good an e-reader with a Kindle app as it is with iBooks. So it could be a "Kindle killer" in the sense of luring potential customers of Amazon's device. But it could at the same time actually strengthen Amazon's hold over the book market--the exact opposite of what publishers hoped would happen.

In that case, our joy at the tablet will be short-lived. Not as short-lived as Adolf Hitler's, though, in this latest expression of the unquenchable internet meme:

7 comments:

Anonymous said...

Ok, the Hitler skit is really funny.

EH said...

I am astounded that Apple wants to sell books. They are very busy to censor the content on Itunes already.
Will Henry Miller be available on the IPAD ever? :).

Scott said...

I have the Kindle App for my iPhone and enjoy it very much. I would be highly pissed if Apple discontinued the app's use on its products ... to the point that I probably would be a Kindle reader.

vsground said...

not really an apple fan, but if ipad to be available @ mac store at my country... well i'll buy it. kinda hassle to buy kindle from amazon.

Ben said...

This occurred to me too. I think the question is whether the iBooks app adds legitimate value. Amazon is stuck here--until they produce a device that can display color books with additional features, they can't include that kind of material in their files. So: will full-color ebooks be sufficiently exciting to draw the extra $5 from consumers? We'll see.

Peter Ginna said...

Ben, good point about color, and illustrations in general. The biggest drawback to Kindle for me (and Kindle for iPhone even more so) is that it's not good on illustrations. IBooks may be able to deliver much better image quality than Kindle. This will probably make it a great platform for the next generation of textbooks, but it won't give the iBooks store any advantage over Kindle on straight-text books. And we know commercial fiction is the most popular category of e-book right now.

Scott, it seems unlikely to me that Apple would drop the Kindle app from iPad. Not only would there be an outcry from consumers, there are antitrust issues raised by that--which already flared up when they blocked the Google Voice app for iPhone.

But see my next post for a key new development on this point.

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