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Apple is aggressively moving to make the iPad cheaper and cheaper to build while eyeing the situation where tablets in general, and iPads in particular, are nearly ubiquitous. When you understand these trends, the iBooks Author / iBooks 2 / iTunesU App strategy for education makes a lot more sense.

"We told the publishers, 'We'll go to the agency model, where you set the price, and we get our 30%, and yes, the customer pays a little more, but that's what you want anyway,'" Mr. Jobs was quoted as saying by his biographer, Walter Isaacson. The publishers were then able to impose the same model across the industry, Mr. Jobs told Mr. Isaacson. "They went to Amazon and said, 'You're going to sign an agency contract or we're not going to give you the books,' " Mr. Jobs said. The Justice Department believes that Apple and the publishers acted in concert to raise prices across the industry, and is prepared to sue them for violating federal antitrust laws, the people familiar with the matter said.

"Let's look at some of the current e-textbook providers and how they compare on key points."