Well, that didn’t last long because the government intervened to save a monopoly business, Apple paid a few hundred million dollars in fines, and competition in the e-book industry dwindled down to iBooks. Most estimates put Amazon’s monopoly share of digital books at above 80-percent while Apple’s iBooks is down to about 10-percent.
Amazon won. Apple lost. iBooks has stagnated for years.
What happened in detail? Well, in a nutshell, Apple offered book publishers a competing platform that, in some cases, raised e-book prices which brought publishers more money, and the government thought that was price fixing and took Apple to court.
Amazon won. Apple lost. What about iBooks?
Apple may be ready to make a change because iBooks will be renamed Books in iOS 11.3 due later this spring and Bloomberg reports the iPhone maker is working on a new application for the online e-book store. Oh, and Apple hired a top executive from Amazon to help carry out the plans.
This will be the biggest upgrade to Apple’s e-book service in several years and provides renewed competition in a market that Amazon has dominated. Selling digital books was once a key part of Apple’s services business, and the company was a contender against Amazon. But the U.S. Department of Justice sued Apple and publishers in 2012, alleging they orchestrated a scheme to raise the price of e-books. That resulted in a $450 million fine for Apple in 2016. Many industry participants blasted the ruling, arguing it handed even more control of the market to Amazon.
That’s the sad story of Apple’s iBooks.
Apple competes with Amazon in a number of other areas, though, and not just Echo vs. HomePod. Apple’s Services business is pushing $30-billion in annual revenue and that makes it a Fortune 100 company by itself. Services includes Apple Music, movie and TV show rentals on iTunes, and App Store sales. Where Apple is weak is where Amazon is strong. e-books and audio books.
Bloomberg explains the distinctions between Amazon’s approach vs. Apple.
Apple’s renewed effort highlights its different approach to software services and hardware, compared with Amazon. Apple sells e-books to make its high-priced devices more attractive, making money on the sale of the hardware. Amazon churns out new versions of Kindle devices at or near to cost and tries to make money selling content.
In simpler terms, Apple has awakened to an opportunity that has been there all along. Services that help to sell hardware. That means movies, TV shows, music, and, of course, e-books and audio books. Apple has over 1-billion customers using iPhone, iPad, and Mac. That base is substantial enough to put a dent into Amazon’s aggressive moves into media sales and distribution.
Yes, iBooks is a sad tale. Maybe with some effort and renewed focus, plain old Books will do better. It couldn’t do much worse.