[jonknee]

> Analysts estimate that Amazon has sold more than one million Kindles in 18+ months (Amazon has never said). We will sell more of our new devices than all of the Kindles ever sold during the first few weeks they are on sale. If you stick with just Amazon, Sony, etc., you will likely be sitting on the sidelines of the mainstream ebook revolution.

Hindsight is a funny thing. Amazon's eBook/Kindle business is continuing to soar while Apple doesn't even mention iBooks anymore.

And then there was this, something believable only in the middle of a reality distortion field:

> Apple is proposing to give the cost benefits of a book without raw materials, distribution, remaindering, cost of capital, bad debt, etc., to the customer, not Apple. This is why a new release would be priced at $12.99, say, instead of $16.99 or even higher. Apple doesn’t want to make more than the slim profit margin it makes distributing music, movies, etc.

In Steve's world, Apple's raising the price by 30% and then taking 30% is a benefit to the customer and not Apple. Fascinating!

[austenallred]

Jobs could have set the price at whatever he wanted and they probably would have given in; Amazon was selling them for $9.99 and had already set the low bar, Jobs just had to pick his price and hold it.

Classic negotiation says the other party will give in if he or she can so long as you hold your points as not for debate. Jobs did just that. Brilliant.

[jonny_eh]

It all depends on either party's willingness to walk away. For Apple, books was just one small avenue for potential revenue, for the publishers it's their whole business. If Apple was missing a publisher on iBooks, they'd hardly care. If a book publisher can't get their authors' books on an iPad, those authors might go elsewhere.

[jplmelanson]

> If Apple was missing a publisher on iBooks, they'd hardly care With 4 out of 6 major publisher in, maybe, but that would have been another game with only 1 or 2 in.

[robryan]

Yeah, so what it says is that some of the other publishers should have also held out. By the time it got down to HC it was too late.

[weixiyen]

Not hard to negotiate when you are in the driver's seat. The outcome was already decided before the negotiation even took place based on the given circumstances of both companies.

[Steko]

"In Steve's world, Apple's raising the price by 30% and then taking 30% is a benefit to the customer and not Apple"

The price was already $12.99. The fact that Amazon was willing to eat a large amount of that price on a tiny volume of ebooks in the short term doesn't mean that would have favored consumers in the long term. Today, with agency pricing, the average price of an ebook is around $8. Hasn't that benefited consumers?

[jonknee]

> Today, with agency pricing, the average price of an ebook is around $8. Hasn't that benefited consumers?

Thanks to the settlement, Amazon can now [again] charge what it would like and the result was an immediate drop for titles by publishers that settled. Consumers were hurt by Apple and have benefited from the DOJ's case against Apple's business practices.

http://www.politico.com/news/stories/0912/80961.html

> The settlement approved Thursday requires the publishers not only to kill their contracts with Apple within a week but also to end contracts with any e-book retailers that specifically place restrictions on a retailer’s ability to set prices on e-books. And the settlement also bars the publishers from granting a retailer “most favored nation” status for five years.

And: http://www.mhpbooks.com/amazon-begins-discounting-macmillan-...

[Steko]

I'll take your word that that's what happened, but that cite doesn't really support the claim. I think we all agree there was a settlement and those contracts were cancelled.

There may have been some specific things in the Apple model that were anti-consumer (perhaps there were price floors, it's not clear) and if so good riddance but the linked negotiation seems to be indicate that the major points of contention were:

(1) the migration away from wholesale pricing (publisher sells online stores X copies of an ebook, do whatever they want with them);

(2) publishers wanting to force higher prices but Apple insisting on a price ceiling. The MFN was explicitly tied to this in the first email from Harper Collins.

(3) Apple's commission.

What specifically about the app store pricing model hurts consumers?

Does a wholesale model makes sense for digital goods?

Does anyone really believe that Amazon was going to keep losing money on ebooks at the same scale as before when they were 2% of volume?

[Tloewald]

Amazon had to match Apple's price model (or at least maintain a facade of doing so — in fact amazon's royalties only come close to matching Apple's for books under $10). It's hard to compete with someone who sells at a loss to grow market share with no apparent sustainable business model in mind. What's really odd is that Amazon's investors are perfectly happy with this.

[doctorpangloss]

> Hindsight is a funny thing. Amazon's eBook/Kindle business is continuing to soar while Apple doesn't even mention iBooks anymore.

That's true, but for a few idiosyncratic reasons, if anything.

The Kindle app is available for the iPad, and for a period of time an iPad user could buy the book directly in the app.

If Apple wanted to, it could coerce Amazon to pay 30%, regardless of where the books are sold.

I wouldn't be surprised if Amazon makes most of its money off iPad users. But there are no hard figures. Though if the opposite were true, I'm sure Amazon would be trumpeting everywhere how successful the Kindle is.

[MatthewPhillips]

> That's true, but for a few idiosyncratic reasons, if anything.

> The Kindle app is available for the iPad, and for a period of time an iPad user could buy the book directly in the app.

Are you sure you meant to use the word idiosyncratic here? Because being available on as many platforms as possible is the default behavior for a business that sells content. It's Apple that is idiosyncratic here, by choosing to not make its stores available on any device not made by them. It helps their hardware business, where the money is made, but it's a bad choice for consumers.

[notimetorelax]

> I suspect Amazon makes most of its money off iPad users

Just wondering, why do you think that?

[FireBeyond]

Agreed, I don't believe it to be true at all, either.

Let's face it, the people who are that invested in reading that they'd consider a Kindle are likely to vastly prefer reading on a device purposefully built for it.

My Kindle Paperwhite is gorgeous. I also have an iPad 4, and a rMBP. As great as both those devices screens are, the Paperwhite wins, without a doubt, for reading. Even the iPad is too big, too heavy, to comfortably hold up or above my head for any period of time.

People so heavily invested in reading that they purchase many eBooks using Amazon's infrastructure are likely to have investigated the hardware designed for same. And whilst my preference for the hardware over an iDevice doesn't automatically mean everyone will find it the same, I find this claim highly tenuous.

[gtaylor]

yeah, I love reading on my Kindle. It's much cheaper, the battery lasts forever, I can buy stuff off of Whispernet without paying a monthly fee, it's easier on my eyes, and I can read it in bright sunlight.

Anecdotal on both accounts...

[snowwrestler]

Because it's easy to order all sorts of things off Amazon on an iPad, not just books. That's why Amazon pushes the Kindle Fire so hard now, but they have a long way to go to catch up to the iPad installed base.

[CJefferson]

"It is easy to see from the numbers that the vast majority of Kindle book readers use Apple devices."

Out of interest, where are those numbers?

[doctorpangloss]

Is it so cynical to assume that Steve Jobs & the "analysts" he mentions were right–that not many Kindles have actually been sold?

Sure, you're right, they've never given a sales figure.

I think because they haven't sold very many.

http://gizmodo.com/5963577/lets-just-assume-amazon-has-sold-...

[jonknee]

It's the top selling product on Amazon and has been so for years. They have sold a ton of them, it's ridiculous to think otherwise. Who do you think was buying all the Kindle books before there were other supported platforms?

Amazon doesn't release sales figures. Period. Not of the Kindle and not of any product.

[rmrfrmrf]

> [The Kindle is] the top selling product on Amazon

> Amazon doesn't release sales figures.

I'm not trying to step foot into this lose-lose debate, but you really can't say what has sold the most on Amazon without the release of sales figures. Amazon could easily be lying and none of us would know for certain.

[jonknee]

I'm going to assume they haven't been committing securities fraud just like I assume Apple has really sold however many million iPads that they claimed.

[FireBeyond]

Your supporting evidence for this opinion is a blog post that offers no evidence whatsoever?

Amazon does however publish Top 100s of categories, and the Kindle has been consistently high in the categories related to electronic entertainment.

Perhaps the claim is that Amazon manipulates that list, next...

[jonknee]

> If Apple wanted to, it could coerce Amazon to pay 30%, regardless of where the books are sold.

That would be interesting to witness. Apple's second trial over their criminal behavior over eBooks would be a hoot.

[meepmorp]

> That would be interesting to witness. Apple's second trial their criminal behavior over eBooks would be a hoot.

What criminal behavior would there be in this instance? It's their platform and they're not convicted monopolists, so they can set their pricing however they like. If Amazon doesn't like it, they can take their ball and go home (and likely get Apple to cave, cause people seem to prefer Kindle to iBooks).

This is called capitalism.

[jonknee]

Well for starters since Amazon does not sell anything through Apple's platform (and indeed removed that ability because of Apple's new rules requiring a 30% cut), there would be no setting of pricing.

You're suggesting that Apple would somehow require Amazon to fork over 30% of every Kindle book sold as long as the purchaser has downloaded the Kindle for iOS app. That would be quite anti-competitive and would introduce a whole host of troubles over their approval process (they would also have to take 30% of HBO's revenue or kick out HBO Go, Watch ESPN would be gone, Netflix etc etc). Not to mention nearly impossible to audit.

[meepmorp]

> Well for starters since Amazon does not sell anything through Apple's platform (and indeed removed that ability because of Apple's new rules requiring a 30% cut), there would be no setting of pricing.

It would be setting pricing for the opportunity to make use of Apple's platform.

> You're suggesting that Apple would somehow require Amazon to fork over 30% of every Kindle book sold as long as the purchaser has downloaded the Kindle for iOS app. That would be quite anti-competitive and would introduce a whole host of troubles over their approval process (they would also have to take 30% of HBO's revenue or kick out HBO Go, Watch ESPN would be gone, Netflix etc etc). Not to mention nearly impossible to audit.

You're conflating an impractical suggestion with an illegal one here. It's a patently unworkable idea if the vendor in question doesn't use Apple's APIs for transaction processing, and it'd be stupid and tone deaf and a bad deal for their customers. But that's got nothing at all to do with legality.

Speaking of legality, would such a hypothetical move on Apple's part be illegal? Since Apple isn't a convicted monopolist, I don't think it is. And in this particular case, you'd have a difficult argument to make that Apple is meaningfully interfering with Amazon's ability to sell e-books, since they have (as you point out elsewhere in this thread) a booming business selling e-book readers, as well as content on other platforms (such as Android).

My post was merely questioning your assertion that instituting such a policy would be criminal behavior by Apple. So far, I don't see that it would be. Feel free to show me where I'm wrong.

[mehwoot]

> It's their platform and they're not convicted monopolists, so they can set their pricing however they like.

I can't speak for countries I don't live in (like the US), but where I live, this isn't actually the case. You'd think it would be, but it isn't.

[meepmorp]

Right, I'm only talking about how it is in the US. Also, note that this isn't an endorsement (or condemnation) of how we do things.