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Thursday, January 21, 2010

Preparing for the Apple Tablet

The latest reports say that the long awaited Apple tablet will debut at an event in San Francisco on January 27th and begin shipping in March. On Monday, Apple sent an invitation to journalists with minimal information about the event. The invitation notes, “Come see our latest creation” with the Apple logo surrounded by colorful splatters of paint. An interesting posting on the Bits blog features comments from Tech bloggers about what the invitation could mean.

The Wall Street Journal is also reporting that HarperCollins is in discussions with Apple and will likely make its e-books available on the tablet. Other reports say that all the major publishers are in discussions. According to the WSJ article, the e-books will feature enhanced content and HarperCollins will set the price. It is not clear if the e-books will be sold through a new e-book store or the iTunes Store but Apple will likely receive a percentage of all sales. The article notes that Amazon could face significant competition from the tablet because the new e-books will require color and video capabilities that the current Kindle models do not offer. This would give Apple a new e-book product and an advantage over Amazon. In addition, by working with Apple, publishers may be able gain back some control over e-book pricing which has been dictated by Amazon in recent months.

Amazon has clearly taken note of these recent developments because on Wednesday Amazon issued two press releases. The first press release announces a new deal for Kindle publishers that is similar to the Apple iPhone App Store business model with a 70-30 split in favor of the content provider. The press release notes, “Today, authors often receive royalties in the range of 7 to 15 percent of the list price that publishers set for their physical books, or 25 percent of the net that publishers receive from retailers for their digital books. We're excited that the new 70 percent royalty option for the Kindle Digital Text Platform will help us pay authors higher royalties when readers choose their books." An article from Fast Company points out that those who participate in the new model must meet a specific set of criteria defined by Amazon and the press release is misleading. "Assuming publishers do choose the higher royalty option, there's absolutely no guarantee it'll translate into larger pay checks for the author--it'll depend on contractual agreements between publishers and their writers, and the only authors who'll clearly benefit are self-publishers. Furthermore, the entire press release, spun expertly to look like a positive move by Amazon, is covering up the fact that until now Amazon's maintained a strict stranglehold over its e-book content with a lower royalty share scheme that has increasingly come under fire from the publishing world as a threat to the future of good book writing.”

Amazon’s second press release announces the release of a Kindle Development Kit to give developers the opportunity to build apps for the Kindle. This is interesting news because the current black and white E Ink screens on the Kindle will not support apps the way Apple devices can. Is it possible a next generation device is in the works? If anything is clear, Amazon is anticipating some big news from Apple next week.

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