Inside Amazon.com’s Love-Hate Relationship with Book Publishers

e-Books: Averting a Digital Horror Story
Amazon.com’s growing might and the sizzling success of the Kindle has publishers terrified. Hachette, Harlequin, and others are fighting back

By Spencer E. Ante

On Christmas Day, for the first time in its history, Amazon.com (AMZN) sold more digital books than the old fashioned kind. It was a watershed moment for the book industry—but it’s scaring the hell out of traditional publishers. Even though they make the same amount on sales of both kinds of books, they see Amazon’s digital dominance as a looming threat to their business, and with good reason. Their big worry: Amazon will end up with the same kind of pricing power in books that Apple has in music, and that the book industry will suffer the same kind of bruising decline.

One goal for publishers is to dilute Amazon’s power. Hachette is selling e-books through more than a dozen partners, including Sony, Apple, and small retailers such as Fictionwise. By partnering with multiple outlets, publishers hope to regain control over pricing and gather purchasing data that could fuel future sales. They’re unhappy Amazon has dropped the price of some new digital best-sellers to as little as $7.99, compared with $35 for hardcovers. Hachette and Simon & Schuster plan to delay the release of certain digital books for several months to avoid undercutting the sale of best-sellers. “We are giving away the family jewels,” says David Young, chairman and chief executive of Hachette Book Group, which publishes authors Malcolm Gladwell and Walter Mosley.

Publishers are typically paid about half the hardcover’s retail price, whether a digital book or hardcover is sold. But Amazon has been pushing to pay them less, and many publishers think cheap digital books will open the door to lower industry revenues in the future. Amazon, for its part, says publishers’ concerns are overblown. “We are selling a lot of books for publishers. We feel like that relationship continues to be a good one,” says Ian Freed, Amazon’s vice-president for the Kindle business.

Read the rest of the feature and see pictures here at Businessweek.com

Windows Mobile 6.5: Not So Hot

Check out this review and video of Microsoft’s new mobile operating system from our gadget guru Stephen H. Wildstrom

Windows Mobile 6.5: Call It ‘Windows Immobile’
Microsoft’s upgraded smartphone software shows improvement, but doesn’t even come close to challenging Apple’s iPhone

By Stephen H. Wildstrom

The last time Microsoft delivered a major upgrade to its smartphone software, Windows Mobile 6, in early 2007, Apple’s iPhone was still five months out on the horizon. You can tell how radically Apple changed expectations about smartphones if you pick up any Windows Mobile handset today. The software seems positively quaint.

On Oct. 6, Microsoft released a significant upgrade, Windows Mobile 6.5, on HTC handsets from AT&T and Verizon Wireless. Unfortunately the results fall far short of what Microsoft requires to get back into the top tier of mobile communications. And it won’t get another shot until version 7.0, a complete overhaul that should appear in late 2010.

Windows Mobile 6.5 sports a new screen design that eliminates just about all vestiges of the Windows desktop interface. In its place is a home screen inspired by Microsoft’s latest Zune media player and an iPhone-like grid of applications.

These changes help, but they don’t go far enough. The biggest problem with the design is that it has to work on a broad range of handsets. There are WinMo phones with touchscreens and physical keyboards, such as the European version of the HTC Touch pro2, which I used to test the software. There are also handsets with keyboards and no touchscreens, and those with touchscreens and no keyboards.

Read the rest of the story here.

Verizon Wireless Unveils the Blackberry Storm

So RIM unveiled its new touchscreen phone yesterday and the reviews are coming out.

The bottom line: It’s no iPhone killer but it is a very good phone with an innovative new screen that gives users the sensation of pressing a button. The entire display is actually a giant button covered with a sheet of thin glass. WSJ Walt Mossberg was not totally impressed with the technology but he gave the phone a thumb’s up.

Other advantages: It does have a stronger battery than the iPhone, though. It has a higher resolution screen. And Storm’s camera is much better than the iPhone’s, at 3.2 megapixels, versus just 2 megapixels for the Apple device.

BW tech columnist Steve Wildstrom reviewed the phone. His bottom line:

“What’s my choice? I’m an e-mail guy, working in an environment that supports BlackBerry but not corporate mail on an iPhone, so it’s a no-brainer. But to get the best of both worlds, I also have an iPod touch, which isn’t a phone but runs most of those cool iPhone programs.”