Amazon is a big player but Apple is much bigger, with lot of cash.
The market for ebook before Ipad: bookstores are wholesalers.
Buy ebook at a price negotiated with the publishers (for example $10). Then sell it at whatever price it choose.
$14,$13,$12,$11 for profit
$10 at cost
$9 as loss-leader, $8 as loss-leader etc..
My question is that could Apple have take on Amazon on selling ebooks using the wholesale model?
p.s. Amazon Kindle Store has always been profitable (even when they sold a few popular books at a loss).
"The DOJ investigation (page 9, paragraph 30) indicates that Amazon has consistently turned a profit on eBooks since they began selling them."
In my opinion, if Apple wanted it to, they could undercut Amazon on price.
Amazon: $9 for ebook X
Apple: $8 for ebook X
Amazon margin is razor thin ( which mean it is less likely to fight back effectively against Apple $80 billion cash reserve). Apple can afford to wage war on Amazon in order to gain ebook market share.
Itunes had something like 75% of music downloads market. Amazon is trying to gain some market share by selling popular songs at $0.99 (compare to $1.29 on Itunes). (fyi: Digital music selling are done wholesale by both Apple and Amazon)
Could Apple done the same thing? (price lower than Amazon on popular ebooks to gain market share?)
The market for ebook before Ipad: bookstores are wholesalers.
Buy ebook at a price negotiated with the publishers (for example $10). Then sell it at whatever price it choose.
$14,$13,$12,$11 for profit
$10 at cost
$9 as loss-leader, $8 as loss-leader etc..
My question is that could Apple have take on Amazon on selling ebooks using the wholesale model?
p.s. Amazon Kindle Store has always been profitable (even when they sold a few popular books at a loss).
"The DOJ investigation (page 9, paragraph 30) indicates that Amazon has consistently turned a profit on eBooks since they began selling them."
In my opinion, if Apple wanted it to, they could undercut Amazon on price.
Amazon: $9 for ebook X
Apple: $8 for ebook X
Amazon margin is razor thin ( which mean it is less likely to fight back effectively against Apple $80 billion cash reserve). Apple can afford to wage war on Amazon in order to gain ebook market share.
Itunes had something like 75% of music downloads market. Amazon is trying to gain some market share by selling popular songs at $0.99 (compare to $1.29 on Itunes). (fyi: Digital music selling are done wholesale by both Apple and Amazon)
Could Apple done the same thing? (price lower than Amazon on popular ebooks to gain market share?)
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