torsdag 4. februar 2010

Why Amazon Cannot Afford To Lose The eBook Wars To Apple

"One defends when his strength is inadequate, he attacks when it is abundant."—Sun Tzu, The Art of War

The Apple iPad isn't even available yet, but already it is forcing Amazon to respond in a variety of ways to protect its competing Kindle eBook business. Amazon just snapped up a touchscreen technology startup, presumably to update the already ancient-looking Kindle. Emboldened book publishers are pushing back on Amazon's $9.99 pricing now that they can sell the same eBooks on the iPad for $14.99, and Amazon is capitulating. And the Kindle team at Amazon, which once had an arrogant approach towards publishers when it was the only game in town, is now bending over backwards to solicit their loyalty, says one editor at a publishing company who has noticed the change in tone.

The coming battle between Apple and Amazon will occur on many fronts, but place where Apple can really hurt Amazon is on pricing. Just as Apple initially did with 99-cent songs on iTunes, Amazon imposed a uniform $9.99 price on bestsellers in the Kindle Store.  A single price helps to establish markets for new product categories, especially when that price is at a discount to the physical alternative.  While the 99-cent strategy worked well for Apple in digital music, in books Apple doing a jujitsu move on Amazon by allowing publishers to have more control over the pricing. Now Macmillan is demanding that Amazon sell its eBooks for $14.99, and News Corp's Rupert Murdoch is making similar grumblings about  HarperCollins.

Ingen kommentarer:

Legg inn en kommentar