Late Apple CEO Steve Jobs didn’t want the iPad to be an e-reader. And he wasn’t a big supporter of what would become the iBookstore, either.
There are among the interesting revelations about Apple’s past surfacing this week in the DOJ ebooks trial.
On Thursday, Apple’s Eddy Cue testified in federal court to profess Apple’s innocence in the purported ebooks price-fixing scheme.
“I didn’t raise prices,” Cue said according to a report from Reuters, adding that he wasn’t surprised when publishers did raise prices for new and best-selling titles after Apple’s entry into the ebooks arena in 2010.
Cue, however, did admit to feeling “tremendous” pressure to reach a deal with publishers after the late Steve Jobs finally signed off on an iBookstore to follow the first-gen iPad launch in 2010.
Jobs, who died in 2011, was “near the end of his life” as the January 2010 unveiling of the iPad neared, Cue said. Not getting a deal done would have meant debuting the iPad without the bookstore, he said later. “I wanted to get it done in time for that as I wanted to get it done for him,” Cue said.
According to Cue, because Jobs wasn’t a major proponent of ebooks on the iPad, Apple initially planned to adopt a wholesale model like Amazon before ultimately settling on an agency model for ebooks (that’s where publishers set the price and Apple takes a 30% commission).
Publishers subsequently pushed Amazon to similarly adopt the agency model, a shift the government contends Apple encouraged through a contract clause that would allow it to reduce prices on its bookstore if other retailers sold e-books cheaper.
Because of this emergent dynamic in digital publishing, the government argues, prices for new and best-selling books increased sharply.
Cue says Apple “was not tying to shift its rival off of its wholesale approach, and that the price parity clause was intended only to ensure his company could effectively compete with other retailers.”
Apple is now the sole defendant in the lawsuit. The other involved publishers have reached settlements with the U.S. government.
