Apple had gone on for years defending its singular price model for the iTunes Music Store (which now utilizes a three-tiered strategy) as being in the best interest of consumers–that consumers want songs priced at $0.99. With books in its iBooks Store, set to launch on its iPad tablet, Apple is going a different strategy with publishers than the company had done with record labels. The Cupertino, California software company is encouraging book publishers to price books as they see fit. This time, though, Apple’s deal with book publisher Macmillan has led to the rising prices of digital books, set between $13-$15, on the competing Amazon Kindle. Macmillan wanted pricing flexibility on the Kindle as it has with the iBooks Store. Amazon often sets bestsellers at $9.99.

According to AppleInsider, which quoted the Wall Street Journal,

“Amazon, the leading e-book seller in the world, now faces the prospect of publishers demanding the same terms they receive from Apple,” the Journal wrote. “People familiar with Amazon’s action said the move by the online retailer, which targets not only e-books but hardcover and paperback titles, signals its unhappiness with the prospect that e-book prices may rise in coming months as a result of Apple’s e-book debut.”

Amazon had pulled all of Macmillan’s books from its store, both print and digital editions, when the pricing war broke out. The digital bookseller later re-instated books, with higher prices on digital books and instead gave consumers control: readers now have the option to choose to purchase Macmillan ebooks or boycott the higher prices and punish the publisher.

Apple CEO Steve Jobs had said in a previous interview that he had anticipated that iBooks pricing will match the Kindle. At this point, it could either mean that digital books on the Kindle will go up in price to meet the iPad’s pricing or that iBooks pricing may get reduced over longer-term negotiations to meet the Kindle’s pricing. It had been speculated before that Amazon took a loss on some of its digital books sales on the Kindle in an effort to appease publishers who want to charge a price higher than the $9.99 standard and gain market share in a nascent digital books ecosystem. Jobs also mentioned in the same interview that publishers had been withholding titles from the Kindle because they’re displeased with Amazon.

By giving pricing control over to the publishers, Apple is hoping that publishers would choose the iPad ecosystem over the Kindle ecosystem, or at least offer the same titles on both. However, if Macmillan versus Amazon has any precedents, we may see competition between Kindle and iBooks set higher prices, all thanks to Apple.

At this point, it’s unclear whether Apple will make its digital books available on the iPhone. Amazon has stated previously that it hopes to make its Kindle software available on more mobile devices; it already has a PC and iPhone client and a Mac software edition to read Kindle books is in the works.

(via: AppleInsider)