Apple Notches a Kill: Firing Line

Apple bests Amazon by negotiating a new pricing scheme for the iPad with book publishers.
By Matthew "Whiz" Buckley ,

NEW YORK (

TheStreet

) -- The dogfight ended with the adversary going down in flames, but the pilot ejected and lives to fight another day.

Add another kill for

Apple

(AAPL) - Get Report

.

Sunday night the e-commerce behemoth

Amazon.com

(AMZN) - Get Report

rolled over in the e-book pricing war.

For its iPad, Apple did an end-around and went directly to publishers, securing deals that allows the publishers to set the prices for

their

content. Now there's a novel concept.

Where Amazon went wrong can be summed up in a sentence pulled from a company statement: "Ultimately we will have to capitulate and accept Macmillan's terms because Macmillan has a monopoly over their own books."

Huh? Amazon needs to either ditch the intern that wrote that statement, or hire executives that understand capitalism and developing strategic relationships.

Amazon crammed the $9.99 pricing model down the throats of publishers and told them to like it. But Amazon failed to "check its six" (i.e., pay attention to what was behind it). If it had, it would have seen the Apple and its iPad closing at rapid speed and would have made better decisions.

Back at another airbase,

Google

(GOOG) - Get Report

Editions is sitting on the runway, and I'm sure Apple has this on their radar screen. Time to inventory the weapons and formulate potential strategies. It will be interesting to see how the e-book war plays out. (Subtle plug, or disclaimer: I have a dog in this hunt. My agent and I are looking for a publisher.)

As Amazon hangs in its parachute, I'm certain it's evaluating the lessons learned from this engagement. Charging more for first releases and bestsellers obviously will benefit Amazon in the long run. But the real benefit is that Amazon has learned an important lesson in dealing with potential business partners: Treat them as such. Apple saw an opening and exploited it, something it's rather adept at doing.

Firing line: Business conditions change rapidly, and the definition of "monopoly" sometimes depends on which side you're on. No matter what side you're on, you should be preparing for what the other is doing.

-- Written by Matthew Buckley in Orlando, Fla.

At the time of publication, Buckley was long Apple and Google.

Matthew "Whiz" Buckley is the chief strategy officer of

Options University

, a provider of options education for options traders of all levels. He is also the managing partner of

Check6 LLC

, a business-consulting firm specializing in leadership development, risk management and strategic planning for Fortune 500 companies and related organizations. Buckley flew the F-18 Hornet for the U.S. Navy. He's a graduate of TOPGUN, has close to 400 carrier landings and flew 44 combat sorties over Iraq. After leaving active duty, he worked as managing director of strategy at a Wall Street firm and CEO of a financial media company. He is an internationally recognized speaker and combined his experiences in the military and corporate America in his book "From Sea Level to C Level." Matthew "Whiz" Buckley is the chief strategy officer of

Options University

, a provider of options education for options traders of all levels. He is also the managing partner of

Check6 LLC

, a business-consulting firm specializing in leadership development, risk management and strategic planning for Fortune 500 companies and related organizations. Buckley flew the F-18 Hornet for the U.S. Navy. He's a graduate of TOPGUN, has close to 400 carrier landings and flew 44 combat sorties over Iraq. After leaving active duty, he worked as managing director of strategy at a Wall Street firm and CEO of a financial media company. He is an internationally recognized speaker and combined his experiences in the military and corporate America in his book "From Sea Level to C Level."

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