Apple holds a quarter of e-book market, Eddy Cue says

But Barnes & Noble is neck-and-neck with the electronics giant and sometimes surpasses Apple's market share in digital books, the high-level Apple executive said during testimony in court.

Apple's iBookstore sells about a quarter of all digital books in the market.

NEW YORK -- Apple sells about a quarter of all e-books in the market, a high-level executive at the electronics giant said Monday.

Eddy Cue, Apple's senior vice president of software and services, estimated that Apple holds a 25 percent share of the market, about on par with Barnes & Noble. He noted the two companies often flip the ranking, with Barnes & Noble sometimes having a higher share than Apple.

"I believe it's close," Cue said in his testimony Monday during Apple's e-book pricing trial. "At different times, we go back and forth."

The Department of Justice earlier Monday presented an e-mail from Cue from October 2010 -- about six months after iBooks launched -- that called Apple's digital bookstore a failure. Cue said in the e-mail that until Apple had Random House books in the iBookstore, it couldn't succeed. At that time, he estimated Apple controlled 20 percent of the e-book market share.

"I agree that we have failed with the book store," Cue said in October 2010. "There is no answer in sight because Random House [doesn't] want to go agency and is [in] bed with Amazon. Until we get them, we can't succeed."

Apple ultimately reached a deal to add Random House titles to iBooks in early 2011, a year after the store first launched. However, the DOJ argued that Apple forced Random House to become an iBooks partner by threatening to not approve a Random House app in late 2010.

"We weren't threatening," Cue said. "We said no."

"Random House wanted to create apps that are books," Cue added. He noted that would confuse consumers, and Apple "wasn't motivated or excited with partnering with someone in the book business who didn't want to be in our bookstore."

The DOJ presented an e-mail from Apple executive Eddy Cue that called iBooks a failure. U.S. Department of Justice
Cue on Monday also disputed DOJ comments that iBooks isn't more successful because consumers perceive Apple caused e-book pricing to rise. He said he considers iBooks a success, but he'd "like it to be more successful."

The Justice Department, which initially sued Apple and a handful of the nation's largest publishers slightly more than a year ago, contends Apple forced publishers to move to a model that artificially inflated the prices of digital books and hurt consumers. Apple has argued that it wasn't trying to change the industry and that it was only trying to secure the best deal for itself.

The two sides have been making their arguments in court during the three-week trial. Cue testified over the past couple days, and the DOJ rested its case following his testimony Monday. Closing arguments are scheduled for Thursday.

 

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