Go Back   MacRumors Forums > iPhone, iPod and iPad > iPad

Reply
 
Thread Tools Search this Thread Display Modes
Old Apr 18, 2012, 04:52 AM   #1
EbookReader
macrumors 65816
 
Join Date: Apr 2012
Could Amazon compete against Apple on ebook price (when Ipad was launched)?

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?)

Last edited by EbookReader; Apr 18, 2012 at 05:01 AM.
EbookReader is offline   0 Reply With Quote
Old Apr 18, 2012, 05:08 AM   #2
EbookReader
Thread Starter
macrumors 65816
 
Join Date: Apr 2012
I think Apple would be better off TODAY if it buys ebooks at wholesale (like it does for music for Itunes) and try to compete against Amazon on price back in 2010 (when the Ipad debuted)

Why?

1) More people have Ipads than Kindle e-readers and Kindle Fire.
2) People with Ipads/iphone will buy at iBookstore because it is generally cheaper than Kindle Store
2) Apple can afford to have 0% profit margin on ebook, Amazon less likely to afford that. (Kindle Store has been profitable for Amazon).
3) No anti-trust lawsuit ----(this will cost tens of millions in lawyers fee and it harms the company reputation)
4) iBookstore marketshare today would be A LOT more than 10% if it competed on price with Kindle Store, especially if the iBookstore is known as offering better prices than the Kindle Store.



.....thoughts?


------what if Apple went "wholesale" with ebooks and it did with digital music, digital movies, digital movie rental.

-----better off?
------worst off?
EbookReader is offline   0 Reply With Quote
Old Apr 18, 2012, 05:30 AM   #3
tayloralmond
macrumors 6502
 
Join Date: Mar 2009
Location: Michigan, USA
The biggest problem Apple has in the eBook world is it's inability to access their books outside the walled in iOS world. With Kindle, you can access your books online, on iOS, or Android. That's why I generally avoid iBooks because I refuse to buy a book that can only be used on a very limited number of devices.
__________________
PowerMac G5: 2.0GHz DP, 4GB RAM; PowerMac G4: 1.5GHz DP (oc'd); iMac G5: 2.0GHz; iBook G3 14": 900MHz;
iMac G3: 600MHz; iBook G3 Clamshell: 466MHz
tayloralmond is offline   3 Reply With Quote
Old Apr 19, 2012, 11:43 PM   #4
EbookReader
Thread Starter
macrumors 65816
 
Join Date: Apr 2012
so could Apple compete with Amazon on ebook prices?

and would Apple be better off if things were done wholesale? (higher market share, no DOJ lawsuit but very low margin instead of 30% guarantee)
EbookReader is offline   0 Reply With Quote
Old Apr 19, 2012, 11:52 PM   #5
blevins321
macrumors 68030
 
Join Date: Dec 2010
Location: Winnipeg MB
Quote:
Originally Posted by EbookReader View Post
so could Apple compete with Amazon on ebook prices?

and would Apple be better off if things were done wholesale? (higher market share, no DOJ lawsuit but very low margin instead of 30% guarantee)
I think this would work out well. If you think about it, Apple and Amazon have entirely opposite models. Amazon sells their Kindles at a reasonable loss (the Fire more than the e-ink models) in exchange for drawing you into their media sales to make money. Apple on the other hand sells their software/hardware at a high markup in exchange for reasonably-priced digital media (not very reasonable for videos yet, but that's probably coming). It would be a huge draw for people to spend the money for their devices in exchange for reasonably-priced media to put on them.
__________________
15" Retina MBP; iPhone 6; iPad Air 2
blevins321 is offline   1 Reply With Quote
Old Apr 20, 2012, 12:08 AM   #6
ucfgrad93
macrumors G5
 
ucfgrad93's Avatar
 
Join Date: Aug 2007
Location: Colorado
Quote:
Originally Posted by tayloralmond View Post
The biggest problem Apple has in the eBook world is it's inability to access their books outside the walled in iOS world. With Kindle, you can access your books online, on iOS, or Android. That's why I generally avoid iBooks because I refuse to buy a book that can only be used on a very limited number of devices.
That is why I don't buy iBooks. I only have and iPhone and I don't want to read on a 3.5 inch screen.

Quote:
Originally Posted by blevins321 View Post
I think this would work out well. If you think about it, Apple and Amazon have entirely opposite models. Amazon sells their Kindles at a reasonable loss (the Fire more than the e-ink models) in exchange for drawing you into their media sales to make money. Apple on the other hand sells their software/hardware at a high markup in exchange for reasonably-priced digital media (not very reasonable for videos yet, but that's probably coming). It would be a huge draw for people to spend the money for their devices in exchange for reasonably-priced media to put on them.
Excellent summary of how Amazon and Apple approach things.
__________________
If guns kill people, do pencils misspell words?
ucfgrad93 is online now   0 Reply With Quote
Old Apr 20, 2012, 04:45 PM   #7
ru4real
macrumors member
 
Join Date: May 2010
For me the cost of the book has nothing to do with which store I choose to buy from. Reading on the Kindle is far and away a much much better reading experience than either iPhone or iPad. If it came down it it I probably wouldn't even notice if I was paying an extra dollar or two per book on the Kindle store, and if I did notice I wouldn't really care.

I think that this whole line of thinking that price is a big factor would make more of a difference to the really casual book reader who only reads 1 or 2 books a year, but people who read a lot more (and therefore spend a lot more) are much more likely to care about how much better an experience reading on a Kindle is.

EDIT: The real game changer is going to be when the publishing industry starts to produce real mass market interactive books. You can't pull those off on an e-ink reader, so the iBookstore will do better in that particular market. If I were to guess I would say that's exactly why Apple has made it so easy for anyone to self publish an interactive iBook - so they can try and jump start the market that they will be stronger in.
ru4real is offline   0 Reply With Quote
Old Apr 24, 2012, 04:04 AM   #8
EbookReader
Thread Starter
macrumors 65816
 
Join Date: Apr 2012
Quote:
Originally Posted by ru4real View Post
For me the cost of the book has nothing to do with which store I choose to buy from.
For most people, the cost of a product is a major reason to shop at one store vs. another.
EbookReader is offline   0 Reply With Quote
Old Apr 24, 2012, 06:18 AM   #9
thewitt
macrumors 68000
 
thewitt's Avatar
 
Join Date: Sep 2011
Apple could bury Amazon in the wholesale eBook market if it wanted. How about $.99 eBooks? Say goodnight Amazon.

Drop a few billion on the project Apple, it's ok...

Will they? Unlikely.
thewitt is offline   0 Reply With Quote
Old Apr 24, 2012, 06:34 AM   #10
taipan61
macrumors 6502
 
Join Date: May 2011
Location: corner starbucks
wasn't apple just sued by the DOJ for price fixing?

anyways i much prefer the kindle app as it is multi-platform
taipan61 is offline   0 Reply With Quote
Old Apr 24, 2012, 09:20 AM   #11
thewitt
macrumors 68000
 
thewitt's Avatar
 
Join Date: Sep 2011
Quote:
Originally Posted by taipan61 View Post
wasn't apple just sued by the DOJ for price fixing?

anyways i much prefer the kindle app as it is multi-platform
Just starting. They will be found innocent in court.

Selling all their pre-purchased titles for cheap in order to force Amazon out of business is not illegal - should they wish to play that game.

The DOJ suit is politically motivated, and is meant to benefit Amazon. The Amazon.com PAC has put thousands in the pockets of both Democrats and Republicans, and they are calling in their chits.
thewitt is offline   0 Reply With Quote
Old Apr 24, 2012, 09:24 AM   #12
BaldiMac
macrumors 604
 
BaldiMac's Avatar
 
Join Date: Jan 2008
Quote:
Originally Posted by EbookReader View Post
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?)
Because something that isn't working in the music downloads market is sure to have worked in the ebook market?
BaldiMac is offline   0 Reply With Quote
Old Apr 24, 2012, 09:49 AM   #13
spice weasel
macrumors 65816
 
Join Date: Jul 2003
Quote:
Originally Posted by thewitt View Post
Apple could bury Amazon in the wholesale eBook market if it wanted. How about $.99 eBooks? Say goodnight Amazon.

Drop a few billion on the project Apple, it's ok...

Will they? Unlikely.
Given that Apple is currently fighting the DOJ in an anti-trust matter, I highly doubt that it would resort to predatory pricing in order to force Amazon out of the business. That would most definitely draw the ire of the DOJ and land them in court again.

However, even if Apple did drop iBook prices drastically, there are two huge hurdles it faces to dominating the e-book market: 1) the iBook store offers far fewer titles than does Amazon (there are plenty of books that are available only on the Kindle or the Android Kindle app and not on the iOS Kindle app, by the way), and 2) there are lots of people who enjoy reading e-books on a much cheaper Kindle and don't want to drop hundreds of dollars more for an iPad.
spice weasel is offline   0 Reply With Quote
Old Apr 24, 2012, 10:15 AM   #14
thewitt
macrumors 68000
 
thewitt's Avatar
 
Join Date: Sep 2011
There is no law on selling at a loss. The DOJ can scream all they want.

Apple won't do it of course, as they are not petty, but if they really want to punish Amazon, they can.
thewitt is offline   0 Reply With Quote
Old Apr 24, 2012, 10:21 AM   #15
BaldiMac
macrumors 604
 
BaldiMac's Avatar
 
Join Date: Jan 2008
Quote:
Originally Posted by thewitt View Post
There is no law on selling at a loss. The DOJ can scream all they want.

Apple won't do it of course, as they are not petty, but if they really want to punish Amazon, they can.
There is in certain circumstances. It's called predatory pricing. I'm not sure which situation you are referring to, so I'm not sure if this applies or not.
BaldiMac is offline   0 Reply With Quote
Old Apr 24, 2012, 11:03 AM   #16
thewitt
macrumors 68000
 
thewitt's Avatar
 
Join Date: Sep 2011
Simply selling at a loss is not predatory pricing.
thewitt is offline   0 Reply With Quote
Old Apr 24, 2012, 11:08 AM   #17
BaldiMac
macrumors 604
 
BaldiMac's Avatar
 
Join Date: Jan 2008
Quote:
Originally Posted by thewitt View Post
Simply selling at a loss is not predatory pricing.
I didn't say it was. Did you miss "in certain circumstances"? You did not specify which situation you were commenting on, so I was unsure whether or not it applied.
BaldiMac is offline   0 Reply With Quote
Old Jul 12, 2012, 03:30 AM   #18
anutharoundu
macrumors member
 
Join Date: Aug 2011
I'm ready for the amazing deals on ipads that will come of apple declares war on amazon.
anutharoundu is offline   0 Reply With Quote
Old Jul 24, 2012, 05:13 AM   #19
EbookReader
Thread Starter
macrumors 65816
 
Join Date: Apr 2012
Amazon: okay with very low margin (often offer discount)
Apple: 30% commission

Amazon is competing against Apple in selling digital music. Both use wholesale. Both are able to offer discount if they want.
EbookReader is offline   0 Reply With Quote

Reply
MacRumors Forums > iPhone, iPod and iPad > iPad

Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Similar Threads
thread Thread Starter Forum Replies Last Post
Microsoft to Cut Windows Licensing Price by 70% to Compete with Apple MacRumors Mac Blog Discussion 279 Mar 29, 2014 06:23 PM
rMBP 2.7 / 16/ 768 (MD831LL/A) Price When launched fskywalker MacBook Pro 2 Apr 21, 2013 03:06 PM
iPad: Can iPad 5 Compete with Playstation 3 if not upcoming PS 4? rahul247rocks iPad 78 Feb 24, 2013 03:20 PM
Google Launches Free Scan and Match Music Service to Compete With Apple and Amazon MacRumors MacRumors.com News Discussion 387 Dec 21, 2012 09:19 PM
Apple is fighting Amazon in the ebook price wars (discounting books aggressively) EbookReader Apple, Industry and Internet Discussion 4 Sep 12, 2012 01:31 PM

Forum Jump

All times are GMT -5. The time now is 08:24 PM.

Mac Rumors | Mac | iPhone | iPhone Game Reviews | iPhone Apps

Mobile Version | Fixed | Fluid | Fluid HD
Copyright 2002-2013, MacRumors.com, LLC