This looks good. But, in general, we've seen competing with Apple on their own platform (ibooks, which have read-aloud capability now) as perilous. Your price points are great, however, and in that way, you are certainly cheaper than ebooks, or buying multiple book apps over time. Can you make money in the long run? What do you think your advantages are vs ibooks?
I think it in the way that I am offering an experience, not just books. Eventually there will be more interactivity/minigames/puzzles based on the stories, etc, things that iBooks will not be able to offer.
The idea is to 1. Entertain 2.Keep busy and 3.Educate your kids. Having all in one simple to use app offers major advantages.
eg. The music track player feature (something that I decided to put as a nice extra), is getting a lot of usage.
iBooks is more for traditional type of literature. Kids stories tend to go beyond normal image/text combo.