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Print 26 comment(s) - last by Gul Westfale.. on Mar 15 at 4:50 PM

Apple's latest gadget, the iPad is being marketed heavily as an eBook reader.  (Source: Apple)
Pricing is predicted to be very variable and in the $10-$15 range

Apple has been widely maligned as "selling out" and heralding the "death of eBooks" for agreeing to higher electronic book prices.  Amazon.com traditionally bought eBooks wholesale for half the list price ($26 typically for hardcovers), then sold them to customers for $9.99, stomaching the approximately $3 loss per title.

Apple declined such a deal and since it has helped cause multiple publishers to demand new deals from Apple.  Among them are Rupert Murdoch's HarperCollins Books, Macmillan, and Hachette.  Mr. Murdoch personally cited the Apple deal as justification for demanding higher prices from Amazon.

However, new reports indicate that Apple's eBook prices may not be as consistently high as expected.  Apple CEO Steven P. Jobs had already announced that he had personally worked out deals with five of the six largest publishers -- Hachette Book Group, HarperCollins Publishers, Macmillan, the Penguin Group and Simon & Schuster.  

According to insiders knowledgeable about Apple's arrangement, the Cupertino electronics company will keep 30 percent of the sales revenue, and give publishers 70 percent (of which authors will get a cut).  The arrangement is identical to Apple's app store model.  Most new fiction and nonfiction will sell in the range of $12.99 to $14.99 (unlike Amazon's traditional $9.99).

More significantly, Apple insisted on inserting provisions that gave it flexibility to discount some bestsellers much lower -- possibly at $9.99 or lower.  Could Apple sell some of the most popular eBooks at prices lower than Amazon's traditional ones?  That remains to be seen.

It seems that where Amazon's deal gave its customers the broadest selection, Apple prefers flexible pricing on the handful of hottest titles.  The arrangement should also allow Apple to actually profit on some of its eBook sales (those at $14.99), while potentially selling other titles at the market's cheapest prices..  

Apple's iPad starts at $499, while Amazon's eBook reader, Kindle, starts at $259.  One key advantage Amazon currently holds is it uses E-Ink, which uses less power and reduces eyestrain.  Many have complained about the iPad's 10-hour estimated battery life and the fact that titles may be hard to read on the LCD screen.  However, that advantage may be erased as Amazon is reportedly contemplating replacing the Kindle with an LCD-equipped reader.

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Prices lower than expected?
By lightfoot on 2/18/2010 3:20:57 PM , Rating: 4
Of course prices could be lower than expected. It's Apple, everyone expects the prices to be high.

Apple couldn't maintain their huge margins if they sold any of their products at, or near, cost.

A recent tear down of the iPad showed that it cost about $250 to make. This implies that the price could be lower than the $1,000 that many analysts had expected. Lo-and-behold the official price was announced as $500 which was, lower than expected.

The ultimate problem is that people expect Apple prices to be higher than they should be. It helps that they have convinced so many of their loyal fans that no competitors exist for their products - especially when that is not true.




RE: Prices lower than expected?
By Solandri on 2/18/2010 4:13:02 PM , Rating: 5
quote:
Apple couldn't maintain their huge margins if they sold any of their products at, or near, cost.

Market price is how much people are willing to pay for it. It has nothing to do with cost.

If you wish to hold sellers to the premise that they have to sell products for near cost regardless of how much they could actually get for them, then you must hold buyers to the corollary premise that they have to buy products for near cost whether they actually think it's worth the price or not.

I would agree with you that Apple's marketing tactics are despicable. They've basically turned their products into fashion, getting people to pay premiums just for the name brand. But like it or not, that is a legitimate way to market your product. Ultimately, the fault lies with the people for allowing hype and peer pressure to cloud their purchasing judgment.


RE: Prices lower than expected?
By lightfoot on 2/18/2010 5:36:37 PM , Rating: 2
quote:
Market price is how much people are willing to pay for it. It has nothing to do with cost.

I never said otherwise. However it would be unrealistic to expect any company to sell a product at a price below cost. This simply establishes a minimum price point at which Apple could sell their product. I was simply pointing out the fact that there is a huge variance between what a product could be priced versus the price that it is expected to be sold at.

I have no issue with the actual price, the market will determine if it is correct or not. The problem is when you inflate expectations and then state that it could be less than that inflated expectation. It is hedging at its finest. Instead of saying that the price will be lower than expected, they should simply have stated that the price will be set to maximize profits. If this is lower than expected it is only because your expectations were unreasonable to begin with.


RE: Prices lower than expected?
By Gul Westfale on 3/15/2010 4:49:08 PM , Rating: 2
amazon is bloody expensive. i recently published my first book through an independent publisher, and they have a deal with amazon: my book will appear there, but amazon's profits are almost the same as mine and my publisher's combined.

so i decided to sell the e-book version directly through my publisher's site for only $3.99, and i still make just as much money off that as i would make through a sale of a much more expensive, printed copy on amazon. now apple wants to be even more expensive?

all they are doing is create a new market for piracy. if e-books continue to be so expensive, more people will simply steal instead of buy them. 15 bucks for an e-book is obscene.

if anyone should be interested, my book can be found at:
lul.com/saschavonbornheim

sorry for teh shameless plug, but if sites like lulu obtained more exposure the salesmen (aka amazon/apple) might be taken out of the equation entirely and we could sell directly to the readers, thus reducing cost to the reader without reducing our profit margin. everybody wins, except the god damned suits.


By Gul Westfale on 3/15/2010 4:50:07 PM , Rating: 2
sorry, the proper address is
http://stores.lulu.com/saschavonbornheim


text?
By smackababy on 2/18/2010 3:09:44 PM , Rating: 2
Why is the text different in this article? Is it some kind of copypasta you forgot to format or just a change you thought looked better?




RE: text?
By The0ne on 2/19/2010 10:31:33 AM , Rating: 2
I definitely should do my tech reports in different fonts! Be amazing to read through.


New Release Price
By jdietz on 2/18/2010 4:07:07 PM , Rating: 2
New release books are about $16 if you buy them from Amazon.




By sapiens74 on 2/18/2010 6:30:35 PM , Rating: 2
I prefer something with a light source or a book with a lamp. I like the eReader in theory but I have a hard time with the ways it affects my eyes.

The I phone is too small though I use it in lieu of my macbook




That ebil man, Jobs...
By rtrski on 2/18/2010 6:35:26 PM , Rating: 2
He's so nasty and businessy-greedy he's beating his own company's contracts into renegotiation:

quote:
Apple declined such a deal and since it has helped cause multiple publishers to demand new deals from Apple .

{emphasis added}

Really, Jason? (sigh) Why do I still bother coming here?




By lecanard on 2/18/2010 11:11:45 PM , Rating: 2
With its LCD screen, the iPad is not really an e-reader. No one wants to read books on a computer screen. I think that as an e-reader, the iPad will be a dud once people who try it realize they would rather read paper or e-ink. I use Amazon's Kindle for iPhone app sometimes like when I am waiting in line during the day, but when I actually want to do some real reading I always use a real kindle or a book. Reading off an LCD PDA is how people read e-books before the Kindle came out and made that obsolete. And Steve Jobs is trying to pretend the obsolete e-reader technology (LCD) is new.




Jason's at it again.
By Alexstarfire on 2/19/2010 1:27:59 AM , Rating: 2
I don't get it. I was expecting them to be at $13-$15 just like Amazon's is now, which is exactly what it says in here. This article just reiterates what has already been said so why is it a brand spanking new article? Does DailyTech just need more click revenue from ads? Or did you not meet the quota for Apple articles this week?




E-readers have no future.
By reader1 on 2/18/10, Rating: -1
RE: E-readers have no future.
By cmdrdredd on 2/18/2010 4:02:32 PM , Rating: 4
Wrong, wrong, and wrong.

If you look at the Kindle and others from Sony etc and use them for a length of time, you'll see the superiority of the screen over ANY LCD. Why? A couple reasons. First, there is almost zero battery usage when the screen is active which gives you weeks worth of reading on a single charge. Second, the eInk screens are about the same as reading text on a book page as far as eye fatigue is concerned. With an LCD you'll have to stop reading and take a break because your eyes will literally hurt after a while. There's no comparison here. The iPad cannot replace a netbook. There's no Office, no photo editing apps that are pro like, and the on screen keyboard is crap compared to even the tiny netbook keyboard. I can install Firefox on my netbook too, iPad can't. No flash support too!

So lets get it right here.

1)No USB to plug my camera in, I need an adapter that costs me more.
2) more expensive than a full featured notebook or any netbook
3) only safari for web browsing and no flash support
4) no photoshop if I wanted to do any manipulation with RAW images when I'm away.
5) no office suite
6) smaller screen
7) uncomfortable and almost unusable keyboard
8) it's slower than a netbook
9) lower storage space than a netbook
10) it's bigger than my iPhone but does less


RE: E-readers have no future.
By smackababy on 2/18/2010 4:13:38 PM , Rating: 2
But it is magical. You can't beat magic with technology...


RE: E-readers have no future.
By cmdrdredd on 2/18/2010 5:08:16 PM , Rating: 2
quote:
But it is magical. You can't beat magic with technology...


I've never seen a person who claimed to have magic stop a bullet.

The only magic in the world is at Disney.


RE: E-readers have no future.
By smackababy on 2/19/2010 10:02:08 AM , Rating: 2
You've obviously never shot a wizard.


RE: E-readers have no future.
By cmdrdredd on 2/19/2010 4:13:47 PM , Rating: 2
quote:
You've obviously never shot a wizard.


Nope but I have witnessed someone claiming to have a voodoo spell upon them confront a police officer and end up with a lead injection.


RE: E-readers have no future.
By carniver on 2/18/2010 4:19:18 PM , Rating: 2
> reader1 has no future

FTFY


RE: E-readers have no future.
By Reclaimer77 on 2/18/10, Rating: -1
RE: E-readers have no future.
By omnicronx on 2/18/2010 6:08:58 PM , Rating: 2
I think you are confused. Static images will always be easier on the eyes. ereaders in particular are basically static images unless you are changing pages.

To say LCD's have eliminated eye fatigue is vastly incorrect, regardless of the technologies being used, they still refresh several times per second (usually 60hz).

This puts a lot of strain on your eyes no matter who you are, with some people being extra sensitive (like myself). I don't think I could get through 50 pages reading from my computer screen, but I can go hundreds of pages reading a book.


RE: E-readers have no future.
By lightfoot on 2/18/2010 6:23:03 PM , Rating: 2
Good point, but in addition to refresh rate is the critical difference between emitted light and reflected light. With a CRT or LCD you are looking into a light source. With eInk or paper you are looking at a surface that is only reflecting light.


RE: E-readers have no future.
By Reclaimer77 on 2/18/2010 6:27:49 PM , Rating: 2
Staring at ANYTHING long enough will cause eye fatigue though. Saying blanketly "LCD's cause eye fatigue" is just misleading.

quote:
but I can go hundreds of pages reading a book.


And that's good for your eyes ? Probably not.


RE: E-readers have no future.
By porkpie on 2/19/10, Rating: -1
RE: E-readers have no future.
By Oregonian2 on 2/19/2010 2:15:41 PM , Rating: 2
I used to be an LCD Dork. I used to think LCD's were fine -- I look at them all day, I'm looking at one now. I thought Kindles were a dumb idea, even though I'm an electronic-toy junkie (being an electronic engineer).

Then my mother saw the Kindle promoting Oprah show (I know, silly). Got her excited, even though she's a semi-Luddite (she'd not have an electronic toy herself "for anything"). So she offered to buy me one for my birthday that was about then. I declined at first, but she gave me the "sad treatment", and so I changed my mind and told her I'd accept it.

Boy was I wrong. Five minutes after it arrived and I actually used the Kindle, my life was changed. All that is said here about the eInk display being wonderful are all true.


RE: E-readers have no future.
By Cheesew1z69 on 2/18/2010 11:29:47 PM , Rating: 1
No, no reasons at all, not that storing thousands of books on one device is a reason of course

/me rolls eyes


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