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iPad's eBook Impact

Rave reviews for the iPad's e-reader are quite promising for book publishers. Now a whole slew of gadget-owners who might not have bought a dedicated eReader like the Kindle, could be the new market for eReader apps and eBooks.

The iBookstore has negotiated a different kind of eBook deal with publishers than Amazon or Barnes & Noble. Publishers can choose between a number of fixed prices, though it seems Apple will set a ceiling for how much publishers can charge. Apple will take a fixed 30 percent of each sale, giving publishers higher margins than they've gotten from Amazon and the like.

Apple iPad
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Apple iPad

The fact that Apple is going to sell eBooks is huge. Forrester estimates that just two to three million iPads will be sold this year. But some 100 million people use iTunes, opening the door to an enormous potential market of people who might buy eBooks to read on their computers or iPhones.

And Amazon and Barnes & Noble are both working on apps for the iPad to sell books to read on that device despite the fact that they sell rival gadgets.

Five of the six major publishers are on board for Apple's new iBookstore, which will be available on the iPad as a free application.

Random House is still on the sidelines; the publisher tells me they're still in 'talks' with Apple (he chose to characterize them as talks rather than negotiations) and there's still a chance they could strike a deal by the product's launch on Saturday. One reason the publisher is protesting: concerns that because publishers will be able to set their own retail prices, the model could incite a pricing war.

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  • Working from Los Angeles, Boorstin is CNBC's media and entertainment reporter and editor of CNBC.com's Media Money section.