Publishing/Writing: Insights, News, Intrigue


Apple’s Prices for E-Books May Be Lower Than Expected

More intrigue and drama coming from inside the meetings between Apple and publishers re eBook pricing. Motoko Rich, New York Times, reports:

Maybe e-book prices won’t be rising so much after all.

Since Apple announced plans to sell digital books on its forthcoming iPad, it has been cast as something of a savior of the publishing industry for allowing e-book prices to go above the $9.99 that Amazon charges for e-books on its Kindle device, a price that publishers say is too low to sustain their business.

But as more details come to light of the actual negotiations between Apple and publishers, it appears that Apple left room to sell some of the most popular books at a discount.

When Steven P. Jobs showed off the iPad last month, he announced agreements with five of the six largest publishers to offer their content through a new iBooks application. Those publishers — the Hachette Book Group, HarperCollins Publishers, Macmillan, the Penguin Group and Simon & Schuster — agreed to terms under which they would set e-book prices and Apple would serve as an agent to sell the books to consumers. Apple would take 30 percent of each sale, leaving 70 percent for publishers to split with authors.

Publishers indicated that e-book editions of most newly released adult general fiction and nonfiction would sell in a range from $12.99 to $14.99, under a complicated formula that pegs e-book prices to the list prices of comparable print editions. Publishers liked Apple’s deal because it resulted in a marked increase above Amazon’s $9.99 price for most new releases.

But according to at least three people with knowledge of the discussions, who spoke anonymously because of the confidentiality of the talks, Apple inserted provisions requiring publishers to discount e-book prices on best sellers — so that $12.99-to-$14.99 range was merely a ceiling; prices for some titles could be lower, even as low as Amazon’s $9.99. Essentially, Apple wants the flexibility to offer lower prices for the hottest books, those on one of the New York Times best-seller lists, which are heavily discounted in bookstores and on rival retail sites. So, for example, a book that started at $14.99 would drop to $12.99 or less once it hit the best-seller lists.

Moreover, for books where publishers offer comparable hardcover editions at a price below the typical $26, Apple wanted e-book prices to reflect the cheaper hardcover prices. These books might be priced much lower than $12.99, even if they did not hit the best-seller list.

Tom Neumayr, an Apple spokesman, declined comment.

While e-books still represent a relatively small proportion of total book sales, they are the fastest-growing part of the industry. How they are sold and priced has become a matter of fierce debate within the publishing industry.

For Amazon, the $9.99 price on new and best-selling e-books helped it market the Kindle device — which now sells for $259 — and build market share quickly. But Amazon has effectively lost money on each sale at that price because it buys and resells e-books as it purchases printed books, by paying publishers a wholesale price generally equivalent to half the list price of a print edition. That means that on a $26 hardcover book, Amazon would typically pay the publisher $13, losing just over $3 on a digital edition it sells for $9.99.

Under the agreements with Apple, both the publishers and Apple should make money on each book sale.


Apple’s Jobs Introduces iPad To The World

Steve Jobs has introduced the “tablet”, or as he calls it: “iPad”, to the world… And it looks like a blockbuster with more apps (including an iBook app) than expected AND a lower price to boot (starting at $499)! The only thing that wasn’t mentioned was an app for newspapers and magazines…But Jobs left the development of this app open to them.

From ChannelWeb’s Damon Poeter:

It’s official — the long-awaited tablet from Apple (NSDQ:AAPL) is an ultra-thin, “intimate” Web browsing device called the iPad. Apple CEO Steve Jobs lifted the curtain Wednesday in San Francisco on perhaps the most anticipated new product from the Cupertino, Calif.-based company since the iPhone.
“It’s so much more intimate than a laptop,” Jobs said of a device Apple will pitch as “sitting in the middle” between smart phones like the iPhone and notebook computers, according to reports.

Bashing netbooks, the ultra-small mobile PCs that some believe also fill that gap, he said the iPad will be “better” than either smart phones or laptops at tasks like Web browsing, e-mail and reading e-books.

“Netbooks aren’t better for anything,” said Jobs, a longtime critic of that product category.

The iPod will come in 16GB, 32GB, and 64GB models. There will be three models which support only WiFi and three that come with WiFi and 3G support.

The iPad will launch with two data plans from AT&T (NYSE:T): One with a monthly data cap 250MB a month for $14.99, the other with unlimited data for $29.99. Both plans include the free use of AT&T hotspots.

These plans are prepaid and don’t require a carrier contract, enabling users to cancel at any time if they’re not satisfied with the service. In addition, the iPad 3G models come unlocked and support GSM micro SIMs. Apple is working on carrier agreements in other countries and plans to share details in June, Jobs said.

Pricing for the 16GB iPad without 3G is $499, while the 64 GB model with 3G and Wi-Fi is $829. This is well below the price range that was speculated and decisively answers one of the biggest questions around the iPad in the run-up to the launch event. Wi-Fi models will ship in 60 days and 3G models will ship in 90 days, he said.

“We had a very aggressive price goal, because we wanted to put it in the hands of a lot of people,” Jobs said.

Like the iPhone, the new iPad features a multi-touch screen that can be viewed either vertically or horizontally simply by turning it in your hands. Jobs emphasized the experience of viewing photos on the iPad, which allows users to flick through an album as with the iPhone, but on a significantly larger, 9.7-inch screen.

The iPhone’s tiny keyboard isn’t conducive for typing, but the iPad’s much larger keyboard is “a dream to type on” and is “almost life size,” Jobs said.

More specs: The iPad gets a very attractive 10 hours of battery life, about four hours more than is possible on most notebooks. It’s half an inch thin and weighs in at 1.5 pounds. The iPad has the same full-capacitive, multi-touch screen as the iPhone.

Ending quite a bit of speculation, Apple revealed that the central processor powering the iPad is in-house hardware, presumably from its P.A. Semi subsidiary, a 1GHz fourth-generation ARM-based chip. The iPad has 16GB of memory and options for 32GB or 64GB of storage on a solid state disk.

Much of the speculation around the iPad has centered on its potential as an e-reader, and Jobs showed off a new application called iBooks that’s based on the open ePub standard. Jobs noted that Amazon (NSDQ:AMZN) has done “a great job of pioneering this technology,” but the writing certainly appears to be on wall for Amazon’s proprietary Kindle format.

As expected, Apple also launched iBookstore, an online bookstore where iPad users can download content from a wide range of publishers. The iBookstore joins the App Store and iTunes as content options for iPad users.

Jobs demonstrated three iWork apps that Apple has built specifically for the iPad, and said Apple is now offering and SDK to developers to start working on their own iPad apps. Most iPhone apps will work on the iPad, and Apple will also highlight specific iPad apps on the App Store.

“It’s phenomenal to hold the “Internet in your hand,” Jobs said.

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