If Amazon chooses to sell books as a loss leader to sell more of it's devices, then why shouldn't it be allowed to do so? Apple argued one way when they had market share (mp3 players) and is now arguing the opposite because they are late to market (eReader). Again, only the consumer is guaranteed to lose in this one.
i don't disagree with you about whether or not amazon should be able to sell ebooks differently; but until amazon, as the retailer, is able to convince either the publisher or the author that their way is better, the publisher will choose the best option for themselves (and, presumably, for who they represent). i do wonder, though, even if amazon agrees to "price" books at the contract rate, if they won't simply continue selling ebooks at a lower price and just take the loss (nevermind that this could be construed as a monopolistic ploy to undercut a new competitor). what the article i linked to posited was that the customer will still come out ahead by paying lower prices, publishers will make more money, which will then be passed on to writers and apple and amazon will also increase their revenue. now, when bricks-and-mortar stores close, and everyone has a kindle, an ipad or whatever google will call theirs, then come back to me about the ebook pricing schemes.
as for competition, if the ebook, when it is first released, costs $17.99, and the hardback costs $25.00, there's an immediate savings of $7 for the consumer, on every book. if you want something now, i.e., demand is high, then, under competitive pricing schemes, suppliers should be able to price a good higher in order to maximize profits but not reduce demand (equilibrium). that's how a market works. of course, in reality, these prices aren't set by the market, but by contracts between retailers and suppliers so that each are guaranteed a certain amount of money per transaction. further, if the dynamic pricing models are accurate, if you wait until demand cools off, online prices could still drop whilst the book in the store would still remain the same.....saving the consumer even more. this already goes on between amazon and bricks-and-mortar stores since amazon has lower overhead costs and is able to take losses on products to gain market share.
this isn't necessarily an apple vs amazon issue, rather, this is the publishing world playing two competitors off each other to try to maximize their profits. you can be mad at apple all you want for stifling competition or whatnot, but if apple is willing to give the publishers/suppliers a higher piece of revenue, then that's what they'll do. then, when people stop buying ebooks at $17.99, and wait for prices to come down, prices will come down. . .
