Brief:

• Apple is working on an updated version of its iBooks reading application for iPhones and iPads as part of an effort to challenge Amazon in the e-book market, according to Bloomberg. Apple last month hired Kashif Zafar, a senior vice president from Audible — Amazon's audio books business — to lead its renewed push into e-publishing.
• The redesigned app will have a simpler layout to highlight books a user is currently reading, along with a redesigned digital store that resembles the updated App Store that Apple packaged in iOS 11, which was released last September. The test version of the app has a new section called "Reading Now" and a special tab for audiobooks.
• The e-books app will be part of iOS 11.3, which Apple is readying for a spring debut by giving software developers a test version of the update. The e-reader's name will change to "Books" rather than "iBooks," as Apple is increasingly dropping the iconic "i" from the names of its services, such as "iMessage" that's being renamed to "Message." Similarly, iTunes and iTunes Podcasts were renamed to Apple Music and Apple Podcasts.

Insight:

Apple's reentry into e-books is likely to create a more competitive environment for the category in the months ahead and comes as the company finds itself increasingly going head-to-head with Amazon and Google in areas like digital assistants, smart speakers, music and more. Apple's return to the e-books game comes five years after the U.S. Department of Justice sued the tech company and book publishers for conspiring to raise the price of electronic books. Apple in 2016 was fined $450 million to end the antitrust suit after the Supreme Court refused to hear the case. Critics of the ruling, which included Sen. Chuck Schumer (D-NY), said it strengthened Amazon's monopolistic control of the e-books market.

Amazon commanded about 83% of the U.S. e-book market early last year, compared with 74% in October 2015, according to AuthorEarnings data cited by Bloomberg. After Apple's major legal setback, the company shifted to focus on developing Apple Music, App Store sales and movie rentals. CEO Tim Cook is under pressure to boost the company's services revenue to $50 billion by 2021 from $30 billion last year, which makes the e-book market an inviting space to dive into as the company could provide a jolt of competition in an area where Amazon currently dominates.

Apple's marketing strategy in this arena differs from Amazon's in that the iPhone maker sells content like books, music and movies to make its pricey mobile devices more attractive to consumers, as Apple makes most of its money from its hardware. Amazon, on the other hand, sells devices like Kindles or Echo smart speakers at cost, or even a loss, as a way to get consumers onto its e-commerce platform, where Amazon makes most of its money. Meanwhile, Google started promoting audio books on Google Play to get into the arena.