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With this update, we're providing specific information about Amazon's objectives.
A key objective is lower e-book prices. Many e-books are being released at $14.99 and even $19.99. That is unjustifiably high for an e-book. With an e-book, there's no printing, no over-printing, no need to forecast, no returns, no lost sales due to out-of-stock, no warehousing costs, no transportation costs, and there is no secondary market -- e-books cannot be resold as used books. E-books can be and should be less expensive.

The Amazon Books Team

With this:

It seems like the iOS market is so huge that it should be able to support lots of iOS-only indies.
But with how prices have fallen — how people are now accustomed to not paying anything until they’re hopelessly addicted and need the $4.99 packet of imaginary things that will get them to the next level — I can’t recommend to anybody that they quit their job to just write their own iOS apps.
There’s a downside to this beyond just the vague feeling that it’s a shame that iOS developers have to supplement their incomes — it’s that any rational developer aware of the economics will not be able to make as big an investment in iOS apps as they would if they could expect their effort would be rewarded.
Consumers win in terms of quantity of choices and low prices, but not in terms of quality.

Brent Simmons

Amazon is right to an extent, but the duplicity in their approach makes the message harder to swallow.

Publishing is a system geared towards making books better: a publisher (especially an indie) takes a specific risk and when an author wins, so does the publisher, the bookseller, and the reader.

But I can't imagine Amazon will do anything but relentlessly drive the price of books—both physical and digital—down and in doing so, creating a publishing industry more akin to the App Store. In this model, the vendor is more like the only casino in town where risk for them exists only in aggregate and—fuck you—the house always wins.

It's possible this has nothing to do with any specific market or individual company's actions. Maybe this downward spiral is an immutable fact of nature for digital products. Maybe, but then why has this pressure been less pronounced for Mac and PC apps? Is it because consumers have been long accustomed to paying higher prices for individual titles? Is it because apps on those platforms are not confined to a single all-encomassing gatekeeper?

Really, I don’t know. But I do know that quantity isn't everything and Amazon's populist schtick can only last so long.