Amazon vs. Apple/ Ipad vs. kindle/ IBook store vs. Kindle store

excerpt from http://www.nytimes.com/2010/03/18/technology/internet/18amazon.html?ref=business

Five of the country’s six largest publishers — Macmillan, Simon & Schuster, Hachette, HarperCollins and Penguin — have already reached deals with Apple to sell their books through its iBookstore, which will be featured on the iPad. (The holdout is Random House.)

Under those agreements, the publishers will set consumer prices for each book, and Apple will serve as an agent and take a 30 percent commission. E-book editions of most newly released adult general fiction and nonfiction will cost $12.99 to $14.99.

Amazon has agreed in principle that the major publishers would be able to set prices in its Kindle store as well. But it is also demanding that they lock into three-year contracts and guarantee that no other competitor will get lower prices or better terms.

Apple, for its part, is requiring that publishers not permit other retailers to sell any e-books for less than what is listed in the iBookstore. So the publishers have sought to renegotiate agreements they have with Amazon under which they sold books to it at wholesale, allowing Amazon to set the consumer price.

Amazon has built up a 90 percent share of the American e-book market, in part because it sells most new releases and best sellers at a heavily discounted standard price of $9.99. Many Kindle owners have said the low price motivates them to buy more e-books, but publishers feared that the price would eventually erode their profits.