4 ms·

> Analysts estimate that Amazon has sold more than one million Kindles in 18+ months (Amazon has never said). We will sell more of our new devices than all of t

by jonknee 13y ago

> Analysts estimate that Amazon has sold more than one million Kindles in 18+ months (Amazon has never said). We will sell more of our new devices than all of the Kindles ever sold during the first few weeks they are on sale. If you stick with just Amazon, Sony, etc., you will likely be sitting on the sidelines of the mainstream ebook revolution. Hindsight is a funny thing. Amazon's eBook/Kindle business is continuing to soar while Apple doesn't even mention iBooks anymore. And then there was this, something believable only in the middle of a reality distortion field: > Apple is proposing to give the cost benefits of a book without raw materials, distribution, remaindering, cost of capital, bad debt, etc., to the customer, not Apple. This is why a new release would be priced at $12.99, say, instead of $16.99 or even higher. Apple doesn’t want to make more than the slim profit margin it makes distributing music, movies, etc. In Steve's world, Apple's raising the price by 30% and then taking 30% is a benefit to the customer and not Apple. Fascinating!

austenallred 13y ago
Jobs could have set the price at whatever he wanted and they probably would have given in; Amazon was selling them for $9.99 and had already set the low bar, Jobs just had to pick his price and hold it. Classic negotiation says the other party will give in if he or she can so long as you hold your points as not for debate. Jobs did just that. Brilliant.
- jonny_eh 13y ago
  It all depends on either party's willingness to walk away. For Apple, books was just one small avenue for potential revenue, for the publishers it's their whole business. If Apple was missing a publisher on iBooks, they'd hardly care. If a book publisher can't get their authors' books on an iPad, those authors might go elsewhere.
  - jplmelanson 13y ago
    > If Apple was missing a publisher on iBooks, they'd hardly care With 4 out of 6 major publisher in, maybe, but that would have been another game with only 1 or 2 in.
    - robryan 13y ago
      Yeah, so what it says is that some of the other publishers should have also held out. By the time it got down to HC it was too late.
- weixiyen 13y ago
  Not hard to negotiate when you are in the driver's seat. The outcome was already decided before the negotiation even took place based on the given circumstances of both companies.
doctorpangloss 13y ago
> Hindsight is a funny thing. Amazon's eBook/Kindle business is continuing to soar while Apple doesn't even mention iBooks anymore. That's true, but for a few idiosyncratic reasons, if anything. The Kindle app is available for the iPad, and for a period of time an iPad user could buy the book directly in the app. If Apple wanted to, it could coerce Amazon to pay 30%, regardless of where the books are sold. I wouldn't be surprised if Amazon makes most of its money off iPad users. But there are no hard figures. Though if the opposite were true, I'm sure Amazon would be trumpeting everywhere how successful the Kindle is.
- CJefferson 13y ago
  "It is easy to see from the numbers that the vast majority of Kindle book readers use Apple devices." Out of interest, where are those numbers?
  - doctorpangloss 13y ago
    Is it so cynical to assume that Steve Jobs & the "analysts" he mentions were right–that not many Kindles have actually been sold? Sure, you're right, they've never given a sales figure. I think because they haven't sold very many. http://gizmodo.com/5963577/lets-just-assume-amazon-has-sold-like-eight-kindles http://gizmodo.com/5963577/lets-just-assume-amazon-has-sold-...
    - jonknee 13y ago
      It's the top selling product on Amazon and has been so for years. They have sold a ton of them, it's ridiculous to think otherwise. Who do you think was buying all the Kindle books before there were other supported platforms? Amazon doesn't release sales figures. Period. Not of the Kindle and not of any product.
      - rmrfrmrf 13y ago
        > [The Kindle is] the top selling product on Amazon > Amazon doesn't release sales figures. I'm not trying to step foot into this lose-lose debate, but you really can't say what has sold the most on Amazon without the release of sales figures. Amazon could easily be lying and none of us would know for certain.
Steko 13y ago
"In Steve's world, Apple's raising the price by 30% and then taking 30% is a benefit to the customer and not Apple" The price was already $12.99. The fact that Amazon was willing to eat a large amount of that price on a tiny volume of ebooks in the short term doesn't mean that would have favored consumers in the long term. Today, with agency pricing, the average price of an ebook is around $8. Hasn't that benefited consumers?
- jonknee 13y ago
  > Today, with agency pricing, the average price of an ebook is around $8. Hasn't that benefited consumers? Thanks to the settlement, Amazon can now [again] charge what it would like and the result was an immediate drop for titles by publishers that settled. Consumers were hurt by Apple and have benefited from the DOJ's case against Apple's business practices. http://www.politico.com/news/stories/0912/80961.html http://www.politico.com/news/stories/0912/80961.html > The settlement approved Thursday requires the publishers not only to kill their contracts with Apple within a week but also to end contracts with any e-book retailers that specifically place restrictions on a retailer’s ability to set prices on e-books. And the settlement also bars the publishers from granting a retailer “most favored nation” status for five years. And: http://www.mhpbooks.com/amazon-begins-discounting-macmillan-ebooks-penguin-ebooks-still-listed-as-set-by-the-publisher/ http://www.mhpbooks.com/amazon-begins-discounting-macmillan-...
  - Steko 13y ago
    I'll take your word that that's what happened, but that cite doesn't really support the claim. I think we all agree there was a settlement and those contracts were cancelled. There may have been some specific things in the Apple model that were anti-consumer (perhaps there were price floors, it's not clear) and if so good riddance but the linked negotiation seems to be indicate that the major points of contention were: (1) the migration away from wholesale pricing (publisher sells online stores X copies of an ebook, do whatever they want with them); (2) publishers wanting to force higher prices but Apple insisting on a price ceiling. The MFN was explicitly tied to this in the first email from Harper Collins. (3) Apple's commission. What specifically about the app store pricing model hurts consumers? Does a wholesale model makes sense for digital goods? Does anyone really believe that Amazon was going to keep losing money on ebooks at the same scale as before when they were 2% of volume?
Tloewald 13y ago
Amazon had to match Apple's price model (or at least maintain a facade of doing so — in fact amazon's royalties only come close to matching Apple's for books under $10). It's hard to compete with someone who sells at a loss to grow market share with no apparent sustainable business model in mind. What's really odd is that Amazon's investors are perfectly happy with this.

by jonknee 13y ago

austenallred 13y ago

Jobs could have set the price at whatever he wanted and they probably would have given in; Amazon was selling them for $9.99 and had already set the low bar, Jobs just had to pick his price and hold it. Classic negotiation says the other party will give in if he or she can so long as you hold your points as not for debate. Jobs did just that. Brilliant.

jonny_eh 13y ago
It all depends on either party's willingness to walk away. For Apple, books was just one small avenue for potential revenue, for the publishers it's their whole business. If Apple was missing a publisher on iBooks, they'd hardly care. If a book publisher can't get their authors' books on an iPad, those authors might go elsewhere.
- jplmelanson 13y ago
  > If Apple was missing a publisher on iBooks, they'd hardly care With 4 out of 6 major publisher in, maybe, but that would have been another game with only 1 or 2 in.
  - robryan 13y ago
    Yeah, so what it says is that some of the other publishers should have also held out. By the time it got down to HC it was too late.
weixiyen 13y ago
Not hard to negotiate when you are in the driver's seat. The outcome was already decided before the negotiation even took place based on the given circumstances of both companies.

doctorpangloss 13y ago

> Hindsight is a funny thing. Amazon's eBook/Kindle business is continuing to soar while Apple doesn't even mention iBooks anymore. That's true, but for a few idiosyncratic reasons, if anything. The Kindle app is available for the iPad, and for a period of time an iPad user could buy the book directly in the app. If Apple wanted to, it could coerce Amazon to pay 30%, regardless of where the books are sold. I wouldn't be surprised if Amazon makes most of its money off iPad users. But there are no hard figures. Though if the opposite were true, I'm sure Amazon would be trumpeting everywhere how successful the Kindle is.

CJefferson 13y ago
"It is easy to see from the numbers that the vast majority of Kindle book readers use Apple devices." Out of interest, where are those numbers?
- doctorpangloss 13y ago
  Is it so cynical to assume that Steve Jobs & the "analysts" he mentions were right–that not many Kindles have actually been sold? Sure, you're right, they've never given a sales figure. I think because they haven't sold very many. http://gizmodo.com/5963577/lets-just-assume-amazon-has-sold-like-eight-kindles http://gizmodo.com/5963577/lets-just-assume-amazon-has-sold-...
  - jonknee 13y ago
    It's the top selling product on Amazon and has been so for years. They have sold a ton of them, it's ridiculous to think otherwise. Who do you think was buying all the Kindle books before there were other supported platforms? Amazon doesn't release sales figures. Period. Not of the Kindle and not of any product.
    - rmrfrmrf 13y ago
      > [The Kindle is] the top selling product on Amazon > Amazon doesn't release sales figures. I'm not trying to step foot into this lose-lose debate, but you really can't say what has sold the most on Amazon without the release of sales figures. Amazon could easily be lying and none of us would know for certain.

Steko 13y ago

"In Steve's world, Apple's raising the price by 30% and then taking 30% is a benefit to the customer and not Apple" The price was already $12.99. The fact that Amazon was willing to eat a large amount of that price on a tiny volume of ebooks in the short term doesn't mean that would have favored consumers in the long term. Today, with agency pricing, the average price of an ebook is around $8. Hasn't that benefited consumers?

jonknee 13y ago
> Today, with agency pricing, the average price of an ebook is around $8. Hasn't that benefited consumers? Thanks to the settlement, Amazon can now [again] charge what it would like and the result was an immediate drop for titles by publishers that settled. Consumers were hurt by Apple and have benefited from the DOJ's case against Apple's business practices. http://www.politico.com/news/stories/0912/80961.html http://www.politico.com/news/stories/0912/80961.html > The settlement approved Thursday requires the publishers not only to kill their contracts with Apple within a week but also to end contracts with any e-book retailers that specifically place restrictions on a retailer’s ability to set prices on e-books. And the settlement also bars the publishers from granting a retailer “most favored nation” status for five years. And: http://www.mhpbooks.com/amazon-begins-discounting-macmillan-ebooks-penguin-ebooks-still-listed-as-set-by-the-publisher/ http://www.mhpbooks.com/amazon-begins-discounting-macmillan-...
- Steko 13y ago
  I'll take your word that that's what happened, but that cite doesn't really support the claim. I think we all agree there was a settlement and those contracts were cancelled. There may have been some specific things in the Apple model that were anti-consumer (perhaps there were price floors, it's not clear) and if so good riddance but the linked negotiation seems to be indicate that the major points of contention were: (1) the migration away from wholesale pricing (publisher sells online stores X copies of an ebook, do whatever they want with them); (2) publishers wanting to force higher prices but Apple insisting on a price ceiling. The MFN was explicitly tied to this in the first email from Harper Collins. (3) Apple's commission. What specifically about the app store pricing model hurts consumers? Does a wholesale model makes sense for digital goods? Does anyone really believe that Amazon was going to keep losing money on ebooks at the same scale as before when they were 2% of volume?

Tloewald 13y ago

Amazon had to match Apple's price model (or at least maintain a facade of doing so — in fact amazon's royalties only come close to matching Apple's for books under $10). It's hard to compete with someone who sells at a loss to grow market share with no apparent sustainable business model in mind. What's really odd is that Amazon's investors are perfectly happy with this.