Technology

What Strategy Did Apple Use To Shake Up The E-book Market?

The recent lawsuit that Apple has been involved in, has raised many questions related to the strategy that Apple used to shake up the e-book market? It was initially believed that the Cupertino, California company tried to fix or raise prices of their e-books, but the evidence they have brought in court only proves that the iPhone maker was trying to make e-books a profitable business for them, the Associated Press reports.

Apple admitted during the lawsuit that took place in the past two weeks that they have made a lot of efforts to turn the e-book business into a profitable one. Apple’s Senior Vice President, Eddy Cue, revealed that profit is what they had in mind. “We’re not willing to lose money in any business,” he added making an indirect reference to Amazon’s practice of selling e-books at a far lower price in 2009.

The strategy that the tech giant has used has had some negative repercussions on the rest of the companies that they have collaborated with. Reports have shown that Apple has violated the antitrust laws imposed by various publishers, such as, HarperCollins, the Penguin Group, the Hatchett Group, MacMillan, and Simon & Schuster. They have, indeed, managed to raise the prices of electronic books, but the publishers were not pleased with the method that Apple used.

The two parties took the case to court because Apple chose to defend its practices through a DOJ antitrust trial which is being attended by the U.S. District Court for the Southern District Court of New York. Everyone’s fingers were pointed at Cue, who was regarded as the only person responsible for the strategy enacted in 2010. He explained that the agency model – the new price they have established for electronic books – was somewhat different than the one used by the rest of the companies. In their case, the price was set by the manufacturer and the retailer would receive only a certain sale percentage. According to him, the publishers need not request Apple to observe antitrust laws because the books did not belong to them in the first place. The case will continue to be debated in the following weeks, even though Cue’s presentation has brought an unexpected turn in the evolution of the lawsuit.

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Eli Wads is one of our expert authors in technology and business fields.Currently living in San Marino, Eli has graduated at Southwestern Academy with a Bachelor Degree in business in 2008. Contact him by dropping him an e-mail at Eli.Wads@dailygossip.org

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