Earlier this week, we wondered if Apple (AAPL) was planning to open its own e-book store — an “iTunes for e-books” — for its forthcoming tablet device and the iPhone and iPod touch. The answer is no, according to a source connected to the e-book business.
Based on our conversation with this person, it seems that any Kindle-killing the Apple tablet does will have to come from third-party e-book sellers, like Amazon (AMZN), Barnes & Noble (BKS), etc.
If true, this makes sense. Why?
- The e-book market is still rather small, and even if Apple’s tablet is a huge hit, it’ll be hard to make enough revenue selling e-books to make the huge project — setting up and running an e-book store — worthwhile.
- Apple’s iTunes music, video, and apps stores are designed as break-even businesses to help sell more Apple hardware, like iPhones, iPods, and Macs.
- There’s already a ton of e-book vendors in the App Store that could provide a good-enough e-book shopping and reading experience to fulfil the “help sell more Apple hardware” mission. Better ones are showing up all the time.
- E-book stores that use Apple’s iTunes e-commerce platform — or are standalone e-book apps — generate a very nice 30% revenue cut for Apple. The company probably wouldn’t get enough additional revenue selling e-books on its own to be worthwhile.
We also heard that Apple may have initially planned to enter the e-book business a few years ago, but based on how archaic and screwed up the book publishing industry is — worse than the music industry, our source says — Steve Jobs supposedly scrapped those plans. (Based only on one source, we’d treat this as scuttlebutt for now. But if you have more information, let us know — [email protected])
Our curiosity came from the last sentence of a Financial Times article about new iTunes music features: “Book publishers have been in talks with Apple and are optimistic about their services being offered with the new computer, which could provide an alternative to Amazon’s Kindle.”
It’s clearer now that means that Apple will help publishers and e-book vendors sell their wares on the new devices — and not that Apple is planning to enter the e-book sales industry itself.
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