Gift cards are among the most popular items given out as presents during the holiday season. Apple (AAPL) has certainly reaped success from its iTunes gift cards, selling them both online and in retail stores to millions of customers for music downloads.

So no wonder Apple is now selling gift cards for iBooks, its e-bookstore platform, in its own stores and also in places like Target (TGT), according to a report by iLounge.

While the obvious reason for Apple to start doing this is to grab more of the buying power from brand-new iPad owners, the less obvious rationale is to bump up sales directly from the iBookstore -- which lags very far behind other e-retailers, as multiple publishing sources have told DailyFinance throughout the summer and fall.

When the iPad first became available in the spring, it -- and the iBookstore -- was seen as a way for publishers to change the terms of how they approached and sold e-books. Whereas before, retailers like Amazon (AMZN) were selling e-books via a wholesale model, paying 50% of the hardcover list price and then selling e-books to customers at a loss, the arrival of Apple on the scene caused five of the six biggest book publishers to switch to an agency model, with retailers taking a 30% cut of the (much) lower digital list price.

Retailers could instead make a profit off e-book sales, even if author royalties dropped. Amazon may not have been happy to switch to agency terms, but they complied -- and still hold the dominant e-book market share. Barnes & Noble (BKS), thanks to its own e-reader, Nook, has comfortably settled into second place for digital market share, with Kobo, stocked by Borders (BGP), and Sony (SNE), also battling it out. And what of the iBookstore? They aren't much of factor, as one example illustrates all too well.

iBookstore Not "Much of a Factor" in the Race for e-Book Market Share


One New York Times bestselling writer of commercial fiction, in the opening week of her most recent book, sold 140,000 print copies and 50,000 digital editions -- typical numbers for a top-selling writer these days. Where things became more interesting was in the break-down of digital books: 30,000 e-books were sold through Amazon, for a 60% digital share. Approximately 13,000 e-book sales were for the Nook (26%) with just 3,000 e-copies -- 6% for digital, or 0.016% of overall sales -- emerging from the iBookstore. (Sales through Sony were also low, but higher than through the iBookstore.)

These are fairly hard numbers, but other phrases bandied about by publishers, agents and authors include "negligible," "barely a blip" and "hardly on the radar." It was one thing for early sales on the iBookstore to be small -- less than one e-book downloaded per iPad sold for the device's first week on sale -- but continued lagging market share poses a number of questions for Apple. (A spokesperson for the company hadn't answered DailyFinance's request for comment, due to the time zone differences. We'll update with a response accordingly.)

Is the iBookstore platform something Apple takes seriously, or is it happy to cede e-book sales to retailers like Amazon and B&N, which allow their customers to read their books through apps developed for Apple's devices? If the iBookstore is worth all that much to Apple, then what will happen when the current agency model contract is up in April, and what sort of negotiating power will publishers have if they want to alter terms in their favor -- especially if Apple wants terms more to its liking?

Adding the iBookstore gift cards may reinforce that Apple understands it can, and should, sell more books through its own store platform. Customers may well bite, but it may not be enough to make the iBookstore a real player in the e-book sales game.


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euftisemery1

The problem with the iBookstore is that it is anal in regards to the content that they will allow upon it. I own a iPhone4, iPad, iMac and MacBook. I'm also an established author. So when Apple announced the iBookstore I was very excited. That excitement was dashed quickly, however, when the iBookstore approved only two of my books for sale on the store. I write erotica, and Apple felt that my covers and images inside of the books were just too much for their little hearts to take. Two months later, the ibookstore informed me that upon...second thought...they were removing my book "I'm Shy...", from the iBookstore because the cover was just too hot for them to handle. I published a new book yesterday but with the flakiness of the iBookstore I'm not the least bit concerned with publishing any new work there and I encourage all of my readers to read my work on Amazon's Kindle and Barnes and Noble's Nook. I'm not the only publisher feed up with the iBookstore doing this. And there are many readers who realize that it's a very good chance that they won't find the book that they are looking for at the iBookstore. Euftis Emery

November 15 2010 at 10:45 AM Report abuse rate up rate down Reply
jackwperry380

It doesn't surpise that Apple is having issues with it's bookstore. They neverf seemed to be agressive in this space. They allowed competition on the iPad for eBooks. Kindle, Nook and Kobo all have active Apps. Compared to the iTune music store. No other player was allowed in. So, Apple controlled that environment. It is much different being in a competitive market than one that is not. It seems like Apple iBookstore was built for a monolopoly but ended up being wiped out by competition.

November 15 2010 at 10:03 AM Report abuse rate up rate down Reply
aebstbchi

Apple iBook selection is the problem. I look there first for an iBook, since the Apple iBook software is very nice. Almost always, the book I want isn't available - so then I turn to Amazon.

November 15 2010 at 10:01 AM Report abuse rate up rate down Reply