Information systems organizations and strategy chapter 3

Chapter 3 Information Systems, Organizations, and Strategy 103 INTERACTIVE SESSION: TECHNOLOGY IS THE IPAD A DISRUPTIVE TECHNOLOGY? Tablet computers have come and gone several timesdistribution. Amazon has committed itself to offering before, but the iPad looks like it will be different It the lowest possible prices, but Apple has appealed has a gorgeous 10-inch color display, a persistent Wi publishers by announcing its intention to offer a Fi Internet connection, potential use of high-speed tiered pricing system, giving publishers the opportu- cellular networks, functionality from over 250,000nity to participate more actively in the pricing applications available on Apple's App Store, and the thir books Apple has agreed with publishers to ability to deliver video, music, text, social networking charge $12 to $14 for e-books, and to act as an agent applications, and video games Its entry-level price is selling books (with a 30% fee on all e-book sales) just $499. The challenge for Apple is to convince potential users that they need a new, expensive gad- arrangement, but worry about long-term pricing get with the functionality that the iPad provides. This expecttions, hoping to avoid a scenario where is the same challenge faced by the iPhone when it readers come to expect $9 99 e-books as the standand was first announced. As it turned out, the iPhone rather than a book distributor Publishers like this Texthook publishers are also eager to establish was a smashing success that decimated the sales of themselves on the iPad. Many of the largest textbook traditional cell phones throughout the world Will the publishers have struck deals with software firms like iPad do likewise as a disruptive technology for the ScrollMotion, Inc to adapt their books for e-book media and content industries? It looks like it is on its aders. In fact, Apple CEO Steve Jobs designed the way iPad with use in schools in mind, and interest on the The iPad has some appeal to mobile business users, but most experts believe it will not supplant part of schools in technology like the iPad has been strong ScrollMotion already has experience using laptops or netbooks It is in the publishing and media industries where its disruptive impact will first be felt the Apple application platform for the iPhone, so the company is uniquely qualified to convert existing iles provided by publishers into a format readable by The iPad and similar devices (including the Kindle the iPad and to add additional features, like a dictio- Reader) will force many existing media businesses to ry,glossary, quizzes, page numbers, a search func- change their business models significantly. These companies may need to stop investing in their traditional delivery platforms (like newsprint) and increase their investments in the new digital platform. The iPad will spur people to watch TV on the go, rather than their television set at home, and other hit products from Apple, consumers are more to read their books, newspapers, and magazines online rather than in print tion, and high-quality images Newspapers are also excited about the iPad, which represents a way for them to continue charging for all of the content that they have been forced to make available online If the iPad becomes as popular as likely to pay for content using that device. The successes of the App Store on the iPhone and of the Publishers are increasingly interested in e-books Tunes music store attest to this But the experience as a way to revitalize stagnant sales and attract new readers. The success of Amazon's Kindle has spurred media reason to worry. The iTunes music store growth in e-book sales to over $91 million wholesale changed the consumer penception of albums and in the first quarter of 2010. Eventually, e-books could music bundles Music labels used to make more account for 25 to 50 percent of all books sold Amazon, the technology platform provider and the largest distributor of books in the world, has exercised its new power by forcing publishers to sellpreferring to purchase and download one song at a e-books at $9 95, a price too low for publishers to profit. Publishers are now refusing to supply nevw books to Amazon unless it raises prices, and Amazon are unread is starting to comply of the music industry with iTunes also gives all print money selling 12 songs on an album than they did selling popular singles. Now consumers have drastically reduced their consumption of albums, time. A similar fate may await print newpapers, which are bundles of news articles, many of which Apple has also approached TV networks and movie studios about offering access to some of their top shows and movies for a monthly fee, but as of yet the The iPad enters this marketplace ready to compete with Amazon over e-book pricing and