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Apple Claims 20% of U.S. E-Book Market, Double Previous Estimates

Publishers Weekly reports (via paidContent) that testimony from Apple executive Keith Moerer in the ongoing e-book price fixing trial has revealed that Apple holds approximately 20% of the e-book market in the United States, roughly double many of the previous estimates made by third parties.
The government also focused on the relative success of the iBookstore asking Moerer what marketshare the store held in the months after launch (about 20% Moerer said) and what its marketshare was after several years of operation and adding Random House in 2011 (also about 20%).
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Beyond the market share claim, Moerer pointed to strong growth of the iBookstore in vigorously challenging the U.S. government's assertion that Apple's e-book effort has been a failure.
The government called the iBookstore “a failure,” and charged that “Apple pricing was unfair to consumers,” and that “Apple sold fewer books because of the higher price caps.” Moerer challenged that characterization, “I disagree. E-book sales grew 100% last year at the iBookstore and it had over 100 million customers.” The government countered that “when you drop prices you sell more books,” and Moerer said, “sometimes, yes.”

But the government bluntly said, “Apple forgot to focus on customers that’s why the iBookstore is a failure.” Moerer: “that’s not true.”
Testimony in the case is now in its second week, with Apple senior vice president for Internet Software and Services Eddy Cue scheduled to take the stand tomorrow.

Top Rated Comments

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17 months ago

WTF? It is a failure because the government claims it is a failure? That's it? Are these guys just naturally stupid or do they have to go to special training courses?


It's incredibly ironic and ludicrous that the US Government is lecturing Apple on wooing and taking care of customers.
Rating: 8 Votes
17 months ago

If Apple has 20%, I'm curious who makes up the other 80% (?)


ummm....Amazon.
Rating: 8 Votes
17 months ago

I find this case incredibly interesting in as far as that the government is going after Apple for the price of ebooks yet oil companies continue to have free reign to price gouge at every drop of the hat.


I think Apple should get into the oil business and launch a string of Apple gas stations with gas priced at about $10/gallon. What is a gouge by existing oil companies will probably be spun into comments like "but my car is snappier when I use Apple gas" or "I've noticed a significant improvement in how my car runs with Apple gas" and probably some "Die, Exxon Die", etc. ;)

Then, a few months later, out comes Samsung Oil with bigger screen gas pumps at about 2/3 of the price of Apple-branded gas. And of course, that will be substantially inferior gas even if Samsung is the underlying supplier to themselves and Apple's gas stations.

All ;)
Rating: 7 Votes
17 months ago

But the government bluntly said, "Apple forgot to focus on customers that's why the iBookstore is a failure." Moerer: "that's not true."

WTF? It is a failure because the government claims it is a failure? That's it? Are these guys just naturally stupid or do they have to go to special training courses?
Rating: 6 Votes
17 months ago

I like low prices as much as the next guy, but what you need to realize about this case is that Apple's behavior (legal or not) disrupted a market where Amazon was taking a loss on every book sold to drown out competition, intending to monopolize the market and then charge whatever they damn well pleased once their dominance was permanently established. By forcing Amazon to make a profit, they actually save the DOJ from having to step in with an antitrust suit against them in a few years time.


Wrong, Amazon was making a profit with their ebook division, they only sold at a loss some ebooks
Rating: 6 Votes
17 months ago

Yes, our government is very wasteful. But, no matter how the government acts or how Apple's high-powered lawyers spin Apple's behavior/words, it's more than highly likely Apple is guilty in this case. The evidence is overwhelming.


Why don't you wait till the verdict is announced. :D.

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The trial is about not allowing big companies to screw over us consumers by fixing ebook prices at higher than what they would have otherwise sold for. In other words, this is the (seeming rare) government action actually trying to do something for the people- not the huge corporations- and we're finding fault with it because one of the culprits happens to be Apple. If this was a thread about someone like Samsung or Amazon doing the same, I bet the sentiment would be substantially the other way.


Do you work for Amazon :D ?
Rating: 5 Votes
17 months ago
This is the strangest anti-competitive trial I've ever seen. Apple is not a monopoly in the e-book market, Apple acted to break Amazon's stranglehold in that market, and by the government's own admission was a "failure." The only reason the government appears to be suing is that Apple's actions allowed publishers to increase prices for their books, which they were unable to do under Amazon's monopoly because Amazon often sold their ebooks at a loss, which artificially decreased the public's perception of ebook value.

Some conspiracy!
Rating: 5 Votes
17 months ago

This is very good for authors. Amazon is using the Wholesale Model to artificially run it's prices down, well below cost, running it's competition out of business. The agency model prevents retailers from using their near unlimited resources to run the competition out of business.


Amazon pays the publisher FULL price when they purchase them. They chose to offer some books at a loss for short periods of time.

Apple is on trial here. Not Amazon.
Rating: 5 Votes
17 months ago

Am I missing something? It was my understanding that Amazon bought ebooks at a significantly higher price paid to publishers then marked them down to $9.99 to drive sales to their website and the their new device the Kindle. That was a business decision made by a company. Publishing companies themselves couldn't compete with the artificially low $9.99 price that Amazon sold their books for. Apple came in and offered to sell ebooks on their new device called an iPad, under different terms. But in either case, the price of the ebook had already been significantly lower than what the publishers sold the same ebook for to begin with. Outside of the favored nation clause, which was dumb, but has been revoked, I don't see a case here. Consumers can choose to buy ebooks from the retailer they wish, can't they?


I suggest you take the time to dig into the details and look at it all objectively... not as someone who might generally believe Apple is all wonderful and caring but mentally replace the company name Apple with- say- Microsoft or Samsung. Let it be them that did what was done here. Then see how you interpret the events and if you would feel any differently if the Gov was taking this action against Microsoft or Samsung.

Changing the name of the company here often shifts the sentiment to the opposite extreme. Even the most diehard of Apple fans should try this and see if their view of this case remains the same or not.
Rating: 4 Votes
17 months ago

I like low prices as much as the next guy, but what you need to realize about this case is that Apple's behavior (legal or not) disrupted a market where Amazon was taking a loss on every book sold to drown out competition, intending to monopolize the market and then charge whatever they damn well pleased once their dominance was permanently established. By forcing Amazon to make a profit, they actually save the DOJ from having to step in with an antitrust suit against them in a few years time.


I appreciate trying to recast Amazon as the plotting culprit here. So play that out. Amazon dominates the Ebook market by that strategy, kills off all competitors, then socks it to us by- say- doubling or tripling prices. What then? Apple and other competitors could step into the market and undercut Amazon's new, much higher prices and kill their monopoly. While Amazon does control how it prices it's products, it doesn't control the products themselves. If suddenly, Amazon decided to triple all prices right now, it's consumers would just shop elsewhere. If there was no elsewhere at the moment, there would soon be many elsewheres popping up looking to take advantage of the huge opportunity provided by Amazon's decision to jack up prices.

Flip it. Can't we see Apple as the Amazon of eMusic? IMO, I think so. Does that stop upstart music competitors from competing against Apple with lower prices and apparently making a profit at lower prices? Lots of other players have music at lower prices than Apple. If Apple suddenly flexed it's dominance on music by doubling or tripling prices, would we all keep paying up or would more of us go buy our music elsewhere?

There's a big difference between the classic monopoly concept where a company can completely control the flow of a resource (oil, telephone service, etc) and the idea of a retailing monopoly in that the retailer that dominates to kill all competition and then jacks up prices to take advantage will essentially create new competitors who can offer the great consumer appeal of much lower prices. If that was Amazon's grand plan, Apple could have rolled out ebook in that scenario and quickly take a lot of share from the monopoly of that Amazon... make it's target margin and probably then some and not do what they did here.

If you want to talk retail monopoly, think Walmart. What seems to be the #1 focus of Walmart from a consumer's point of view? What makes many e-tailers shop Amazon instead of many other e-tailing stores? Both are built on a price-competing model. Both could indeed have plans to eventually double or triple prices if they ever achieve a complete monopoly, but as soon as they do the shoppers will look for lower-priced alternatives that would pop up right at that point. This is especially true in a cheap infrastructure e-tailing business like Ebooks.

Can this really happen? Think of absolutely unique products like maybe a patented pharma product. Price in U.S.: say $10/pill. Price in- say- Canada: say $2/pill. Anyone buy their medicine from Canada if they had the option? Of course. Need some serious dental work near the Mexican border. $5K or $10K US or drive across the border and get the same for $500 or $1000. Anyone drive across the border for dental services? It's thriving.

Lastly, by saving the DOJ from an anti-trust suit in a few year's time, Apple's actions replaced that legal burden with the current suit underway now.
Rating: 4 Votes

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