Business Strategy in Action, or Reaction, Both, or Neither

Apple vs. Kindle vs. publishers, oh my. Do you know the background? It’s all over the web. And I posted here this week about how Apple and Amazon.com and Macmillan are wrapped up in an ebook battle. And it gets better. As I write this, Wednesday evening, the news is that Amazon gave in and put Macmillan back into the mix, but at higher prices. But I just checked the site and my favorite Macmillan book, Thomas Friedman’s Hot, Flat, and Crowded, is listed there as available through third parties only. So go figure.

I’m fascinated with all of this. Really, business strategy in action. Consider these questions, and ask yourself: if you were Steve Jobs, or Jeff Bezos, what would you do?

1. Does Apple Computer block the Kindle app on its new iPad? The iPad runs iPhone apps, and the Kindle iPhone app works great. But does that mean iPad users can buy Kindle books for their iPad for $9.95, while Apple’s iPad iBooks cost $14.99?

Apple can block the Kindle app, of course. But what will users say about that? Apple users tend to take Apple as some public resource. They’re incensed when Apple acts in its own business interest instead of the public good. Would cutting off the competition be worth the dark side mask?

1. Is Amazon.com seriously going to cut off its nose to spite its face? They took all Macmillan books off of Amazon.com because of a pricing and revenue share argument related to the iPad. But doesn’t that hurt the Amazon.com business proposition? Don’t we all go there to find the world’s largest inventory? And now they say they’re giving in, putting Macmillan back, and at the higher prices it demanded. What does that do for the Kindle pricing ceiling at $9.99? What happens to the $5 differential on iPad between a Kindle book and an iPad book?
2. Do publishers gain by fighting either format, or either channel? Now Macmillan books are playing second fiddle at Amazon.com. It’s hard to tell from here, but it’s been presented as Macmillan squaring off against Amazon.com for a larger share of the revenue. That’s a bold move. Would you do it? How would you feel if you were a Macmillan author?
3. What about Sony, or Barnes and Noble? These other ebook readers that were seriously planning to compete… are they just blown away? What can they do?
4. Does this mean ebooks are finally for real? I’ve liked ebooks for more than 10 years now, read them on an early Rocket ebook reader, on a PDA, on a Kindle, and on my iPhone, as well as on a number of laptops. Are they finally going to get to critical mass? That would be nice.
5. Do smart buyers wait for all of this to sort out? Remember the Sony Betamax format vs. VHS? You don’t want to invest on the losing side here, right? I finally bought Blue-ray HD after HD DVD lost the battle.

I’m enjoying the spectacle. I’ve got the Kindle, I’ve got the iPhone with the Kindle app on it, and I’ll probably buy an Apple iPad for its entertainment value, form factor, and long batterly life. For ebooks the iPhone Kindle app is still my favorite, so I’ll probably use the Kindle app on the iPad too, when I get it — if Apple doesn’t block it, that is. I don’t see how the bells and whistles of the new iBook reader can be worth the extra $5. But, since it’s not shipping for a few months anyhow, I’m going to wait and watch.

And I’m especially watching the strategy play out. Several of these big players can make bold decisions that will cut off competition and annoy the hell out of buyers. Is that the way it’s going to go?

(Image credit: from Mashable’s recent post on the eBook War)