Stop Throwing E-book at Apple
The last thing America needs right now is for the U.S. government to take pot shots at the world's most prosperous and admired company, Apple Inc. But that's what's happening.
Even after the death last October of Apple co-founder and presiding genius Steve Jobs, the company has soared ever higher. Its popular iPad, iPhone, iMac, iPod and other products have pushed its market value above $500 billion, $100 billion higher than the second-most valuable company, oil giant Exxon Mobil Corp.??
But providing great products for consumers and creating thousands of new jobs isn't enough for the U.S. government.
The Wall Street Journal reported recently that, "The Justice Department has warned Apple Inc. and five of the biggest U.S. publishers that it plans to sue them for allegedly colluding to raise the price of electronic books, according to people familiar with the matter."
Talks are ongoing. "If successful, such a settlement could have wide-ranging repercussions for the industry, potentially leading to cheaper e-books for consumers," the Journal reported.
This shows how little the federal government knows about what's going on out there in innovative companies. The iPad, the platform most of these textbooks would appear on, is only two years old. It already has competitors, most based on Google's Android operating system. And the five biggest U.S. publishers themselves face competition from dozens of smaller companies.
Apple is also going to make it easy for anybody — professors, teaching assistants, even students — to create their own textbooks on the iPad platform.
So far, the e-book market actually is dominated by Amazon.com's Kindle device, according to Ryan Radia, associate director of technologies at the Competitive Enterprise Institute. Last fall, the Kindle Fire was introduced, retailing for $199 instead of the $499 of the iPad. Kindle Fire sold 6 million units in the fourth quarter of 2011, compared with 15 million for the iPad.
The devices aren't exactly equivalent. Kindle Fire is smaller and less versatile, but more easily can tap into Amazon's vast content resources. And it's only the first model of this device.
?"The antitrust lawsuit only will discourage Apple from competing in e-books," Radia warns. "We want competition. But the lawsuit limits the ability of publishers creatively to set pricing for books."
Radia says that the charge Apple and "a handful of publishers" somehow are colluding to rig the market is absurd. "The abundance of books is extreme."?
?And let's not forget the Nook Tablet, a similar device by Barnes & Noble, sold both online and in the company's bookstores, which taps into sources similar to Amazon's. Scores of other tablets are coming out.
It simply is amazing that sclerotic bureaucracies in Washington, D.C., choose to interfere with brilliant entrepreneurs. If they keep this up, the design of these devices, not just their manufacture, could shift to China.
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