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Amazon (AMZN) is set for another win in the e-book wars after Apple (AAPL) and four major...

Amazon (AMZN) is set for another win in the e-book wars after Apple (AAPL) and four major publishers offer to allow retailers to sell the books at discounts for two years in order to end an EU antitrust probe. The publishers include CBS's (CBS) Simon & Schuster and News Corp's (NWS) HarperCollins. The offer follows a similar deal in the U.S. with publishers, although not with Apple.
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Comments (5)
  • johnycarrs
    , contributor
    Comments (96) | Send Message
     
    So amazon will sell for 0 profit- hardly a win for them.

     

    This company is so overvalued.
    19 Sep 2012, 06:30 AM Reply Like
  • sfphoto
    , contributor
    Comments (678) | Send Message
     
    With the new ruling, there is or will be a price war for ebooks. So that means AMZN will see even less profit from each Kindle book sale, further compressing its profit margins.
    19 Sep 2012, 06:57 AM Reply Like
  • Tae Kim 75
    , contributor
    Comments (183) | Send Message
     
    The key part of this story that people are missing is both Apple and Barnes & Noble has matched Amazon's price cuts on ebooks, so even though Amazon is cutting ebook pricing it doesn't benefit from market-share gains like in the past when it only competed against traditional book-sellers.

     

    Apple/Barnes & Noble matching Amazon ebook price cuts news article: http://on.wsj.com/QZqZHS

     

    The net effect is Amazon actually losing profit margin.
    19 Sep 2012, 07:42 AM Reply Like
  • sfphoto
    , contributor
    Comments (678) | Send Message
     
    AAPL initiated the price war after the legal settlement which forced AMZN to lower its Kindle ebooks prices. Considering that AMZN's Kindle business is its most profitable (in terms of margins), this settlement would ironically hurt AMZN the most because AMZN simply doesn't have the cash to wage a price war against APPL.

     

    The coming imposition of sales tax on AMZN will have the same effect. AMZN will be forced to lower its prices, further reducing its profit margins.
    19 Sep 2012, 01:40 PM Reply Like
  • Lake Investor
    , contributor
    Comments (198) | Send Message
     
    The free market is great for consumers!! Apple and Amazon have made life better for everyone while making profits and jobs. I'm long Apple but a long-time customer of both companies.
    19 Sep 2012, 12:19 PM Reply Like
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