Apple Was Never An eBook Weakling

In its latest court filing, Apple asserts its right to trial before the anti-trust settlement between the Department of Justice and three of the Big Six publishers goes into effect.

Incredibly, Apple argues:

Apple had zero market share and no market power when it negotiated its entry through the challenged agency agreements

Really? Zero market share? No market power?

Let’s just look at the facts.

Fact: iBooks was introduced on January 27, 2010. On that date, Apple already knew it had sold close to forty million iPhones.

Fact: That number already exceeded the sales of all Sony Reader, Amazon Kindle, and other eInk devices combined. In its January 25, 2010 report, it announced it sold 8.7 million iPhones in just the previous quarter.

Fact: That iPhone device population were all potential eBook readers. They were already in use for Kindle books.

Fact: Jobs even bragged Apple was now the top mobile devices company.

Fact: Steve Jobs even listed eBooks in his iPad presentation, something he never mentioned in all past Keynotes.

Fact: Apple had 284 Apple Stores at the time.

Fact: Those Apple Stores had fifty million visitors in the last quarter of 2009.

Fact: Amazon had zero stores at the time — and still has zero.

Fact: Amazon’s mobile device revenues didn’t even rate placement in the list Jobs showed of mobile device revenues.

Fact: Apple was on its way to being a sixty billion dollar a year company.

Is Apple really going to argue that its installed device population wasn’t a factor in getting the Big Six to sign contracts?

Is Apple really going to argue that it had zero market power with those number of stores, those number of visitors, and with those revenues? Does that sound like a powerless company to you?

Really, would any other company that had true zero market share have been able to change the existing wholesale model as Apple did — and then force Amazon to adopt that model too?

And here is something that everyone else has missed:

even today, Apple is a distant third to Amazon and Barnes & Noble.

So Apple is claiming that it has already beat both Kobo and Sony in eBooks?

Both were established in the market well before Apple entered with the iBookstore — especially Sony.

Could any other company with true zero market share have done that, post-Amazon?

Kobo, which was founded in 2009, and had its Kobo eReader on sale in over five hundred Borders stores, was surpassed by Apple’s iBookstore, if Apple is to be believed.

No, on the day that Apple introduced its iBooks software, it already had an existing device population that exceeded the total number of all eInk devices.

Apple was by default already the number one eBook device maker too.

If that doesn’t count for something, then everything is simply wrong with the Department of Justice’s case.

And let me kill one line of argument that Apple is very likely to use in its court defense. I saw this tactic early on and I’ve been waiting for Apple to play this card. It’s that iBooks is not pre-installed on iOS devices.

But if you step into any Apple Store — in fact, any store that has demo iOS devices for trying — you will find iBooks is pre-installed on those demo models.

Microsoft argued that although Internet Explorer was pre-installed with Windows, anyone was free to download any other browser. Well, iBooks is pre-installed on all iOS demo devices and that’s a clear unfair advantage against eBook software from Amazon, Barnes & Noble, Kobo, Bluefire, and others.

No government bought Microsoft’s argument and the Department of Justice should not buy Apple’s argument.

Apple is trying to have its cake and eat it with iBooks. And the Department of Justice had better call them on that.

I’m not even going to bring up — oh wait, I am! All of the iPad ads — on TV and in print — that show iBooks software being used!

Barnes & Noble — which is also against the Department of Justice settlement, siding with Apple — introduced its original Nook eBook device in October of 2009. Why didn’t Barnes & Noble offer the Big Six Agency contracts? Wouldn’t that arrangement have been in their best interest, to preserve the print bookstores they now claim are endangered?

Finally, it’s time for Amazon to show its numbers.

To establish Apple’s pre-existing defacto dominance in the eBook marketplace, Amazon needs to reveal how many eInk Kindles it sold versus the number of Kindle app downloads to the iPhone.

If the iPhone app number exceeds the eInk device number, case closed.

Apple already knows how many iPhones had the Kindle app.

Now we need to compare that to the number of Kindles sold then.

I would bet that there were more Kindles as iPhones out there than there were Kindles.

Apple an eBook weakling?

If sixty billion dollars and forty million devices is being “weak,” then how does anyone define “strength”?

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14 Comments

Filed under Apple: The Company, eBooks: General

14 responses to “Apple Was Never An eBook Weakling

  1. jfutral

    Market potential is not the same as market share or power. If someone tells me they have market power but haven’t sold a single product, they are smoking crack regardless of who they are. And since the Kindle App is available on hardware devices beyond just the iPhone, Amazon’s Kindle ecosystem is already beyond the iPhone.

    Just having the iBook app on an iPhone does not guarantee ebook sales. I wish I could delete my iBook app. Haven’t purchased a single book there yet. I have several on my Kindle App, though. “App” or even device sales does not equal market share or strength. Actual _ebook_ sales do.

    Joe

    • mikecane

      >>>I wish I could delete my iBook app.

      You can delete it any damn time. It’s not in the ROM.

      And seriously, you don’t think forty million devices from a sixty billion dollar company didn’t influence the Big Six to collude for Agency?

      • jfutral

        Alleged collusion.

        But that is not what I said. And not your sub-line. You questioned “Zero market share? No market power?”

        Neither is the same as market (and channel) potential. If I went to the publishers and tried to convince them I had market potential, they’d laugh. Apple obviously had market potential. But they still had zero market share and zero strength as they had neither sold an ebook nor had a mechanism in place as yet to do so, thus no way to demonstrate they could actually successfully sell ebooks. Nor was Apple associated with book sales, much less ebook sales. At best they had Audible books as a direct market comparison. Don’t know how well they do there.

        And because of how Apple chooses to do business, Amazon still has greater market channel, strength, and share than Apple and the larger ebook channel. Apple only has Apple. Amazon has Apple+. Heck, Amazon has even gotten into the public library market. Apple at best can only offer an app for that if someone else makes it.

        Thanks for the heads up on the iBooks app deleting. Gone. Now if I could delete the Newstand app, too. I can’t even bury it like I did the iBooks app.

        Joe

      • mikecane

        I thought for a while before replying and your argument still doesn’t work. Apply it to Apple before there was an iPhone — yet they got out of AT&T huge concessions and even unprecedented changes (Visual Voicemail, for one) without having ever sold a phone before. If that’s not power, what is?

      • jfutral

        “If that’s not power, what is?”

        That certainly is power, but it is not market power. It’s persuasive power. It is Jobs’ “reality distortion field” power. But it is not market power. You can’t wield market power when you have no market share. And you have no market share if you have not sold the actual, relevant product.

        Amazon wielded market power when they told the publishers they were going to sell their ebooks at a loss against their wishes. _That’s_ market power. And I have no doubt Amazon would have wielded market power again to force the publishers to lower their prices later to accommodate Amazon’s pricing. And I have no doubt Amazon would have also incorporated a most favoured nation clause. Such clauses are a matter of course these days, more so than most people realize.

        But I kind of really don’t have much sympathy for the publishers, either. They didn’t HAVE to offer their ebooks to Amazon. They are fighting the same battles as the music industry. People griped about the same thing with Apple and music as they are about Amazon. Not surprised about this in the least.

        Joe

      • mikecane

        >>>You can’t wield market power when you have no market share. And you have no market share if you have not sold the actual, relevant product.

        See my AT&T argument. They had ZERO market power and got AT&T to do what they wanted. And you can’t keep saying that was just Jobs being persuasive.

        >>>Amazon wielded market power when they told the publishers they were going to sell their ebooks at a loss against their wishes.

        No, Amazon did that from the start of the Kindle. The publishers only started to bitch about it before Apple entered and had them collude to change the rules of the game. They weren’t losing a cent from Amazon’s discount. Amazon took the loss.

      • jfutral

        Personally, I think a smarter route for the publishers to take that would have not let them cede power to any single company would have been to adopt a common ebook format and offer their ebook titles exclusively through independent book sellers. But then i am a romantic and still prefer local books sellers (and retailers of all sorts).

        Joe

      • mikecane

        The Hulu For Books That Never Was

        http://mikecanex.wordpress.com/2012/02/06/the-hulu-for-books-that-never-was/

        Bookish is coming next month from them. We’ll see if it’s anything.

  2. haah

    The real issue is that if you believe Apple could compete with wholesale model then you are the one smoking crack.
    Apple doesn’t discount mp3 like Amazon only saving grace is that people have invested so much time and money on iTunes that they continue to use it and the ipod integration.
    It is notable that B&N has more stores yet it doesn’t have ebook market share. It can’t discount books on the hope that you buy cds and coffee from them.

    According to some Amazon had 97% market share in 2010
    now has 60-70%.

  3. I don’t think the number of Kindle apps downloaded onto iPhones, iPads, and Macs has any bearing on the power of the iBook app, if anything it shows how many more hardware devices are capable of buying books from Amazon than are capable of buying from Apple’s book store.

  4. Mike,
    I stopped reading when you alleged that they sold 40 millions ibooks with they sat down with the publishers.

    One more thing no one dare to publish or announce their sales figures and it you can get hold of them from the horses themselves then the story is more credible otherwise it is ……….. .

    • mikecane

      >>>I stopped reading when you alleged that they sold 40 millions ibooks with they sat down with the publishers.

      I never said that. No wonder you stopped reading. Because you can’t read.

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