OtherNewsE-CommerceJuly 25, 2012

EBooks Leader – Amazon or Apple

EBooks Leader – Amazon or Apple

Amazon Ebook VS Apple Ebook

With the increase of mobile products, consumer habits have also changed.  One of such habit is reading books.  The habit of reading printed books is getting changed with the invention of Tablets, iPads and other mobile devices. According to this year’s February survey, 21% adults reported that they have read eBooks in the previous year as compared to the 17% reported in December.  This increasing trend is pushing tech developers to produce high class tech devices for consumers.  In the world of eBooks most of the people would know a giant online retailer known as Amazon who started its business back in 1995 with just a group of few people.

Amazon had been able to retain its position as a leader in eBooks because of low cost selling at around $9.9.  Back in 2010 an effort from Apple and five books publisher HarperCollins, Simon & Schuster, Hachette Book Group, Macmillan and Penguin was made to kick out Amazon from its position. It would especially benefit Apple since at that time its new iPad was about to be launched and Apple was looking with lion’s eye to grab the market and drive customers to its new IPAD for reading eBooks.

 But bad luck caught up Apple, an antitrust lawsuit was made against Apple and those publishers with a charge that their union was built to merely raise the prices of eBooks and eliminate the competition. According to the investigation several private meetings were held in Manhattan hotels between Steve Jobs and executives of book’s publishers where in the topic of discussion was how to kick out Amazon from the competition. And it was Steve Jobs who purposed a new price Model called Agency Model in which price for the books will be set by publishers and not retailers, and instead of Amazon, books will be sold out through Apple’s store at higher prices about $12.99 - $14.99. Apple would get 30% of the sales while 70% will go to the publishers.

 This model is against the wholesale-retailer price model in which retailer sets the price and not the wholesaler. According to the justice department, the agency price model plan would cut the competition and force people to purchase books at whatever rates there would be. Three of the publishers Hachette Book Group, Simon & Schuster and HarperCollins had taken back their decision to participate in this agency pricing model whereas other two have not yet.  Those three are now required to terminate their contract with Apple.

 This would benefits mostly the consumers in a sense that they won’t have to pay higher prices. And for Amazon this is really good news as it would keep their monopoly once again on its peak despite the fact that their market share has lowered to 60% than 90% in 2010. On the other hand Justice Department has been trying to settle these conflicts by eliminating agency model. Few of the publishers have reluctantly agreed. About sixteen US states sued Apple and publishers to recover the money consumers paid extra. Two of these publishers settled with them and have agreed to provide $51 million as compensation.

 Although there is not huge percentage of people reading books but according to the surveys this trend has been increasing as the time goes by and appear as an important aspect of eCommerce services.