There are a lot of issues with ebooks (DRM and incompatibility, fees to stores, and so on), but there are issues with the physical book world too. The government has been taking an anti-trust position against Apple's bookstore. There may well be merit based on collusion between publishers and Apple, but based on size the anti-trust position doesn't hold as Amazon is enormous by comparison.
Apple was big enough to force Amazon to dramatically increase the cut to the author to match Apple's. Also if the book is large, Apple offers a much better deal. some interesting comments here - I was surprised by Amazon's download volume charge. Of course having a book on Amazon's store gives access to a larger audience.
Amazon's initial author royalty was just 35%. To make $7,I'd need to sell my books for $20. It wasn't until Apple's looming arrival that Amazon upped that to 70%, matching the App Store. Amazon's 70% royalty, however, comes with a catch. Amazon also charges authors a "download fee". The fee is currently $ 0.15 per MB. With my 1GB sized media-rich books, my download fee would be $150 per book.
That's right. $150.
So to earn my $7, I would need to sell the book for $160 with $150 in delivery costs payable to Amazon and an additional $3 to Amazon for its cut of the royalty. Looking at this page, it looks as if Amazon has an option where they will waive the delivery cost if I agree to give them 65% of the sale. Both of these options are a raw deal for us authors.
Apple serves up my 1GB book and takes 30% of my sale. There is no wonky accounting and I get my $7 for every $10 book. Moreover, Apple earns that $3 by developing my publishing tool, keeping the lights on at the iBooks Store, and covering the cost of serving 1GB sized books to every customer.
(hat tip to Craig)