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“The Prices Will be the Same”

16 April 2012

One of the core allegations in the Department of Justice antitrust complaint against Apple and the Agency Five publishers is that, in connection with the introduction of the iPad, the publishers had colluded with Apple and each other to set the prices of ebooks.

Paragraph 77 of the complaint says:

Apple understood that the final Apple Agency Agreements ensured that the Publisher Defendants would raise their retail e-book prices to the ostensible limits set by the Apple price tiers not only in Apple’s forthcoming iBookstore, but on Amazon.com and all other consumer sites as well. When asked by a Wall Street Journal reporter at the January 27, 2010, iPad unveiling event, “Why should she buy a book for … $14.99 from your device when she could buy one for $9.99 from Amazon on the Kindle or from Barnes & Noble on the Nook?” Apple CEO Steve Jobs responded, “that won’t be the case …. the prices will be the same.”

Here’s a video the jury will almost certainly see if the case goes to trial. Wall Street Journal tech guru Walt Mossberg is interviewing Jobs at the iPad launch. In addition to the quote included in the DOJ complaint, Jobs says, “Publishers are actually withholding their books from Amazon, because they’re not happy with it.”

You can hear Jobs describe the ebook pricing agreement beginning at about 1:55 on the video. Sorry for the short commercial at the beginning.

Apple, Big Publishing, Legal Stuff, Pricing, Video

6 Comments to ““The Prices Will be the Same””

  1. It strikes me that Steve Jobs was as much a proponent of high prices (ie: Apple products) as Jeff Bezos is of low prices.

    • Excellent observation, EC.

    • The marketing helps. “It just works” has been a rallying cry, as well as a perception that it’s all high-end hardware that’s cutting-edge.

      Which is sort of strange.

      I just glanced at the current Mac Pro Desktop lineup and priced out the components for the basic one which is priced at $2,499 (Xeon 2.8ghz Bloomfield W3530 processor) and the super-deluxe one priced at $6,199 (Dual Xeon 2.93ghz Gulftown X5670 processors). With the basic config for memory for each (3GB and 6GB), single 1-teraybte hard drive, Radeon X5770, DVD drive, mouse, keyboard, Operating System, and no Monitor…

      I could price the same systems at retail prices including case, fans, and motherboard for about $1,000 and $3,500 respectively. Meaning they’re pulling about a $1,500 profit on the basic Mac Pro and about $3,000 on the deluxe 12-core Xeon model.

      Frankly, while the processors are still viable (although they came out 2 years ago and are not exactly cutting edge) the graphics cards are effectively obsolete and not even easy to find anymore – they were advanced when they came out two and a half years ago but are several generations behind at this point. The rest of the hardware is basic stuff as well.

      Basically, I wouldn’t even bother building a system out of 2-year-old components. You could build a system a few generations newer in underlying hardware for considerably less than those prices. And if you’re set on an Apple OS, no problem. Apparently people build “Hackintosh” computers for $1,000 or less.

      • I considered a Mac when my old laptop started (literally) falling apart a couple of years ago. The closest equivalent to the Toshiba laptop I eventually bought would have cost two and a half times as much.

      • I have always had that same problem with apple, they were always over priced for what you got.
        The only reason I have an iPhone is that I got it free with my new contract. And the only reason I have an iPad is that I bought it second hand from a chap who wanted to upgrade to an iPad2.
        the only new apple stuff I have ever bought are iPods for my kids as birthday presents.
        Having said that I must also say that my iPhone and iPad have revolutionised how I work with all my first, and second, drafts done my on iPad and iPhone. So the apple stuff is good, just overpriced.

  2. Is that the sound of a nail being driven into a coffin that I’m hearing?

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