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Technology Stocks : Apple Inc.
AAPL 277.910.0%3:25 PM EST
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To: iggyl who wrote (130663)4/11/2012 12:59:36 PM
From: Kelly G.1 Recommendation  Read Replies (2) of 213174
 
I guess I will jump in here with my thoughts.

It is in Apple's best interest to be on the good side of content providers. Apple makes money on the hardware but needs access to the content. So, if they can help, in this case, publishers make a dime and ensure that they get the books, it is a win-win.

Now, what they did will likely be viewed as price fixing and some adjustments will be made. That will hurt the publishers but won't really hurt Apple (small fine maybe?). Apple can still go toe-to-toe with Amazon on sell electronic books for next to nothing because, unlike Amazon, Apple actually makes good money on the sale of the "readers".

You could easily argue that Amazon is good for the consumer. The business model though is a bit like Walmart in retail where they squeeze the providers of the product to offer the lowest prices. Nothing wrong with that except it tends to cheapen things. Quality is secondary. Think Net Books.

The above is not Apple's world. Apple builds the best products and then gets a fair price for them.

I think you will see more instances of Apple siding with content providers and against Amazon and others. But Apple's ace in the hole is that they can give away the content if it comes to that and sell the hardware and still make a nice profit. Make money on the razor or the blades? How about both or either at your leisure.
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