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February 5, 2010

Increased Competition = Higher Prices?

I've been following the idea of this iPad from Apple online. I'm not a huge fan of Apple in general and really feel like they overcharge for their products. As long as there are people out there who want to feel good about themselves, Apple will continue to sell products. I heard on NPR once that a company called Mindset did some survey work of 7,500 Mac and PC owners and found, "that Mac users were more self-important, intellectually curious, and felt themselves to be extraordinary and superior." I don't really care...bottom line is for the price I pay for my PC, even if it sucks, I can replace it three times for the price of one Mac. That is not the point of this blog post though.

So your obvious next question...What is the point? My co-worker's daughter got a Kindle for her birthday. I got to play with it while she was in the office and it really is pretty sweet. At first, I thought it seemed like a waste of money to buy something like that just to buy more books to use with it. Then someone asked me, "Isn't that what your iPod does too?" Good point. I like to read, it would be very convenient. I know in the somewhat recent past, other companies have entered the e-book market also. Sony has their reader, Barnes and Noble has their Nook and now Apple throwing themselves in with the iPad.

Apple began negotiations with the publishers for e-books and now the publishers are starting to flex a little muscle of their own. Amazon has typically charged $9.99 for new e-books, which seems very fair considering the company is saving so much in paper, printing, shipping, etc. Now because of the deals that Apple is making, companies are wanting to bump those prices up, and take more of the profits. So the e-book market has been growing and expanding, but now Apple enters the picture and the increased competition brings - you guessed it - higher costs! It somehow ties to companies wanting to make sure the value of a hard copy book isn't diminished according to Rupert Murdoch. I love how one reader summed it up in his comment.

Yeah! Ever since iTunes and Amazon started charging $1.29 per mp3 instead of
$0.99 I decided it's worth it to buy $17 CDs instead of downloading music for
free. Oh wait...

I'm hoping that somehow this can get worked out so that the consumer will actually benefit from having another competitor in the market. We'll see how it plays out eventually.


Matt Coulter said...

Reason number 1,456,237,832 to love Google. They offer services for free and let the market, via advertisements, take care of the rest.

Apple and Google are now more or less sworn enemies according to Steve Jobs. Yet another reason to hate Apple.