By JEFFREY A. TRACHTENBERG
HarperCollins Publishers is negotiating with Apple Inc. to make electronic books available for the introduction of a new tablet device from Apple, according to people familiar with the situation, posing a challenge to Amazon.com Inc.
HarperCollins is expected to set the prices of the e-books, which would have added features, with Apple taking a percentage of sales. Details haven't been ironed out.
It couldn't be learned whether Apple will sell the HarperCollins titles via a new e-book store or through its existing iTunes Store, which sells music, television shows and movies. Other publishers also have met with Apple, people familiar with the matter said. Apple declined to comment.
Apple on Monday invited reporters to a San Francisco event on Jan. 27 at which it is expected to unveil its tablet. As is typical with Apple, the emailed invitation was short on detail. "Come see our latest creation," the message said, below splotches of bright-colored paint surrounding a white Apple logo. But people briefed by the company have said Apple plans to introduce a multimedia tablet that it plans to ship in March.
Brian Murray, the chief executive of HarperCollins, said in December that e-books enhanced with video, author interviews and social-networking applications could command higher retail prices for publishers than current e-books. Many of the country's largest publishing houses are worried about the sale of new bestsellers for only $9.99 in the e-book format. New releases of enhanced e-books could sell for $14.99 to $19.99, a person familiar with the situation said. HarperCollins is a unit of News Corp., which also owns The Wall Street Journal.
The HarperCollins negotiations with Apple represent a direct challenge to Amazon, which dominates the fast-growing e-book market but which could face significant competition from an Apple tablet.
HarperCollins is one of several major publishing houses that are holding back e-book versions of some new hardcover best sellers. The HarperCollins account of the 2008 presidential election, "Game Change," by John Heilemann and Mark Halperin, was released in hardcover Jan. 11 but the e-book edition doesn't go on sale until Feb. 23. Enhanced e-books likely would be available for sale simultaneously with the hardcovers.
Amazon created the e-book market by making the $9.99 price for best sellers an integral part of its introduction of the Kindle e-book reader in November 2007. But the Kindle lacks color and video capabilities, two elements that are likely to be crucial to the future of enhanced e-books. Amazon could be shut out of enhanced e-books until the Kindle offers those features. The standard Kindle costs $259, however, while analysts expect Apple's tablet to cost about $1,000. A spokesman for Amazon declined comment.
Although publishers continue to receive approximately half the price of hardcover books, many in the publishing community expect that Amazon and other e-book retailers will eventually seek to pay publishers less. Publishers also worry that pricing new e-book best sellers at $9.99 persuades some consumers that all new books are only worth $10 or so.
—Yukari Iwatani Kane contributed to this article.
Write to Jeffrey A. Trachtenberg at jeffrey.trachtenberg@wsj.com
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