Apple denies claim that Sony Reader, Kindle in danger on iOS App Store - Page 9

You mean like when the cashier asks you "cash or credit"? Based on what others are saying, this only impacts the payment process since Amazon, for instance, does the fulfillment.

We agree 100% here.

I suspect we may find out more at The Daily event.

I have no "strange buying habits". I simply decide based on my perception of value offered for a price. If I don;t like the value proposition, I look elsewhere.

Did you bother to read the article? All I read was that an app could not require the user to purchase from an external vendor. If an outside source (like the Kindle store at Amazon) was made available, then the app would have to offer the same items from within the app. This would obviously allow Apple to make more money but it also makes such purchases less tedious for people who value simplicity (I don't, but I can understand why one might).

No one is required to participate unless they want to be in an app store that Apple runs. For instance, you could make an HTML5 web app that runs on iOS devices or apps that run native on webOS or Android. As a consumer even iOS apps with in-app purchase option would be fine with me if external options are also available (like the Kindle store). I like having both options.

It's actually Amazon and others who will set the price.

What I suspect will happen is that Apple will collect a small percentage for providing the payment processing. Amazon could likely leave prices as is and simply pay that processing fee to Apple since they would not be charged for that payment on their end. It might cost Amazon an addition 1% (I'll assume Amazon pays about 2% for their payment processing and Apple will charge 3%).

I would not be okay with that. But I would not allow it to shutdown my business (btw, I have run my own businesses for over 20 years).

But I don't think it comes to this. Apple is not going to ask for 30%. They want Amazon and B&N and Sony in their App Store. The problem is that people are assuming that Apple is absolutely intractable with regards to the cut they will take. I believe they will make a smart business choice which will look mostly look like business as usual except the customer will have a choice of "debit" (Amazon) or "credit" (iTunes).

And Apple isn't stupid. They want this content available through their App Store.

It's somewhat humorous that Sony is both victim and villain in this thread.

More like, "how would you like me to charge your credit card"?

I do understand anti-trust. The first thing to realize is that Apple is not the dominant player in e-books. The second thing is that Apple is not eliminating other avenues for purchase of the product.

I think the one thing you overlook is that the Kindle app is a merchandising platform and Apple would like to get a cut if you buy through iTunes (hell, let's be honest and admit Apple would really like a cut for all sales through the Kindle app). I don't think this is going to be much of an issue because i think Apple's cut is going to be reasonable.

What most amuses me is that Apple, once again, gets all kinds of free press and will again when they announce lower fees.

They brought it on themselves xD. My initial reaction to the news this morning was Sony was trying to stir up some FUD against Apple to make themselves look like the victim in the face of all the negative press they're receiving surrounding the PS3 jailbreak. If it weren't for the WSJ blog post, I'd still believe that right now.

Yes, it is.

Amazon has the option to simply not play in Apple's garden.

I made my money this morning so I get to play now.

I don't understand where all the hostility is coming from. It's very simple. If you have an app that accepts purchases from outside the App store (like Kindle, books from Amazon's website) there also must be a way to purchase them from inside the app. Yes, currently Apple takes 30%. The prices may be higher then buying them directly. It has a couple great advantages though. I don't have to give my credit card info to anyone else, make another account or deal with another website. I don't have to figure out how to get the purchase onto the iOS device. (Granted in some cases like Kindle it's pretty easy) You still have the choice to buy it directly and maybe pay less.

If my Aunt or Uncle downloaded the Kindle app, believe me, you do not want to have to explain that you have to go to Amazon to buy a book. I know it's crazy simple for the readers here, but they just don't get it. Requiring that in app purchases are available means the whole ecosystem is enclosed if the user chooses it to be. This is a good thing to have, but it's also good that it isn't the only system available.

For some online services that have paid accounts I'd love to be able to pay through the App store even if it is 30% more. Simplify my billing and avoid having to pass my credit card info to too many places.

That would be horrible if that's what Apple was saying but they aren't. What they are saying is that they want customers to be able to get your content and use your app without creating additional accounts or having to supply their credit card information. (It also means that people without credit cards that use gift cards can buy content) To support that they have to have an in app purchase system.

Apple isn't requiring that it be the only way to purchase content or that the prices are the same. It may not be fair for Apple to take 30% in all cases, but as a consumer I want the option to pay for any services or content from an app through the store, regardless of it is costs more or not. I don't EVER want to be required to hand over my credit card information for content/service destined to an iOS app.

Great Post!!! Whenever I buy ANY product, I don't chose the BEST one, I ALWAYS buy whatever product will allow the manufacture to make the most profit so that their stock price goes up!

No, you're not brainwashed, not much!

I'll tell you why - the iBookstore is 2nd rate. They have a fraction of the titles Amazon and B&N do, and without them the iPad is semi-useless as an ebook reader.

The Kindle and Nook apps greatly enhance the value of the iPad itself as an ereader - THAT is what Apple gets out of it. Apple is basically a hardware company - they make their money selling iPads, not ebooks. And they sell more iPads because Amazon offers a huge catalog of ebooks for the iPad without Apple having to lift a finger. Apple is a day late and a dollar short with their deficient ebook selection, and they should be GRATEFUL to Amazon for providing it for them. And you folks DO realize if Apple wants their 30%, it will just be tacked on to what YOU have to pay. Amazon's margins are too thin for them to be able to cut Apple in for 30% of what they currently charge.

But of course it still remains to be seen what will actually happen. At this point I have a hard time imagining Apple pulling this nonsense - are they really going to somehow recall the millions of copies of the Kindle app? Unlikely. I would keep a close eye on any future Kindle "updates" to be safe.

Half the people on this forum can't freaking read.

It won't make Kindle Books 30% more expensive, because you'll still be able to buy them on the Amazon website. There must have been at least 10 people who claimed that.

Ironic really; all these people complaining about books, who can't read.

I'm not sure you understood what was written.

Ebooks purchased via Apple would have an additional 30% cost imposed by Apple. Because of that cost difference, ebook sellers (such as Amazon) must EITHER:

A) Charge an additional 30% for ebooks purchased "In App" over the price of books purchased directly from the seller

OR

B) Raise the price of all ebooks to cover the additional cost of "In App" purchases

OR

C) Some combination of A and B.

I can't see Apple being at all happy about "In App" prices being 30% higher than direct purchases, so it's quite possible that may insist on "In App" purchase prices being the same as direct prices. If that happens, we'll either see option B put into playpunishing everyone who buys an ebook with higher prices, even if they never use an iDeviceor reader apps pulled from iOS.

Either way, higher costs for eBook sellers will be the inevitable result of "In App" purchases, and those costs will have to be covered by higher prices somewhere in the system. Even if Apple doesn't insist on equal pricing, it seems likely that option C will come into play, if for no other reason than preemptively trying to prevent Apple from getting ticked off at the lack of sales due to such a high price difference.

Knowing what you are talking about would help you understand why you are so wrong..

You are going a little far that the company MUST do one of those three things. They could negotiate with suppliers, authors or just eat the costs. As far as 30% goes, you'd actually have to increase the cost by about 43% to get the original cost after Apple takes 30%. If the original cost is $10 ($10 = x * 70%), x ends up being $14.29.

I don't think the companies would raise all prices. They'd just charge more in the app store. If people had no choice but to buy it from the App store they could do it at least. I have a feeling that it would help negotiate better terms with Apple. We'll see what Apple ends up doing.

Seems like this wording has a bazillion loopholes. For in-app purchases, couldn't a developer just put it someone very obscure in the app and have prices be really high. Even telling the user. Buy "in-app" for $100 or buy "from Amazon" for $5 This would make Apple look very bad. It seems like they will have to clarify further what this really means. As stated, the rules don't seem that scary for content providers. It says specifically that you must have the same "product" it says nothing of prices. In addition, it says nothing about 'in-app' purchasing must be easier in your app. Perhaps you could even just have a setting that changed all links to in-app purchases?

I think you can assume that Apple will require comparable pricing in the App Store.

However, I just can't see Apple doing anything that costs them content partners. In the absence of an effective iBookstore, Apple needs to have this content from other sources and it seems highly unlikely they will make any decision that damages those relationships.

This kind of thing was not what MS was penalised for, so there is no comparison. Even though MS and Apple both make an OS / patform, the closer comparison would be between MS and Amazon in this case...

What MS was not allowed to get away with would be as though Amazon said, "hey Apple, you know how the Kindle App helps you sell iPads? Well, you can't have it in your store unless you refuse the Sony or Barnes and Noble book apps. And you better not let me see you bundling iBooks on your home screen, either." Of course, an OS is just a little more critical than that.

Apple in no way dictates what Amazon or Sony or anyone else does on other devices or platforms. Amazon is perfectly free to make an Android app or its own web app and sell through any of the *fantastic and popular* Android stores, and through its own website, while continuing to sell books in the Apple Store.

I am sure MS would rightly protest if a licensee or certified technician were to try to bypass it's services and system and yet profit from his MS accreditation. If I had a PC, and I whined like others around here that it was my machine that I bought with my own money, therefore I can do what I like with it... Should I expect to be able to take up these software deals I hear about through spam, which I imagine involve pirated software? Should I be able to go to a licensed MS service dealer who can install Office on the side for 100 bucks and who keeps all the profit because he has access to MS serial numbers which he uses over and over again? Or is MS going to expect that the service rep is going to charge me full rate for Office and pass the appropriate amount on to MS? (in case you think I am equating MS own product with a third party book that is not Apple's, I'm not; I'm comparing the auspices under which the vendor is operating when running a particular app or service. The IT vendor may well provide cheap services on the side, and he may well supply Open Office or equivalent; but as long as he is operating as a MS-certified IT tech or reseller and that's why people come to him, then he should do right by MS according to his agreement as much as that might suck. The tech invests in MS training and certificates in order to build his business; Amazon invests in iOS SDK and App Store agreements in order to build theirs, rather than focusing on the pain of developing for a fragmented platform like Android, which has no viable store.)

Hey, why should I go through the channels that MS has set up when it is going to make the same product or repair service 10 times more expensive for me? Who the heck does MS think it is. Bad, bad MS. Every MS certified tech should slip me something under the table, it's my right to bypass the system. Hey, while I am at it, why don't I sue MS when the pirated software (viz a vis jail broken iPhones) causes BSOD and my PC crashes irreparably? (oh, yeah, probably because that is par for the course with PCs and MS would rightly have been out of business long ago IF THEY DID NOT HAVE A MONOPOLY ON DESKTOP PCs ACROSS ALL PC HARDWARE OEMs IN THE WHOLE WORLD! You do realize that PCs, which require an OS, are made by, get this, OTHER COMPANIES, don't you? They are not MS' OWN product! The fact that an OS is required and that MS had the monopoly, meant that MS could LEVERAGE this monopoly into other monopolies over office applications and browsers, etc. as well. They did not have to compete on merit. Whoa, who could imagine? I'd love to see how many negative comments that would have gotten if blog sites were around then).

Thank God for Apple, the one rebel in the bunch; personal computing might have always remained in the dark ages.

You are so right on...NOT completely though.

Android will dominate without a doubt.

However... NOBODY will be making any money on it except the carriers (PERIOD).

ALL books, movies, music, content, apps will be FREE for the user. They are now, and it won't change. What will change, but will be cracked as soon as it does, is that DRM will raise it's ugly head again.

Oh... and tell me again how Apple made a mistake with their "new" strategy after ~2001...?!

Apple will rightly so still be as you call it, "a Boutique". A very fine, desirable, and PROFITABLE one I might add. More than likely, the only PROFITABLE one of it's kind on the planet, as it is today.

Fanatics still justifying the loss of content on their owned devices, I see.

Seriously the loss of the Sony E-Reader harms you. And eventually it will harm Apple. The loss of Kindle will see a massive exodus. If it happens.

And what do Apple have to do to piss off some people? What if they put in a laser gun and shot every 5th user?


Apple is a monopoly supplier of iOS and Tablets. In both cases it produces Applications which compete with developers - iBooks vs Sony e-reader.

This is an uncompetitive act.

PLus arguing incoherently IN CAPITALS, and deflecting the issue at hand with nonsensical and irrelevant attacks on MS as a monopoly is not addressing the case here.

Making us all look bad. You are.

Its always useful to explain why people are wrong. Saying they are wrong without explanation is not a valid argument.

( he is, of course, right).

This seems quite outrageous. Selling content through a separate website that then gets downloaded into the app has absolutely nothing to do with Apple. Even if the app is free, developers still pay a yearly fee to have their app in the app store and it helps Apple sell more iOS devices.

To then require apps to offer in-app purchases through Apples systems and let Apple take a 30% cut (before tax!) is a joke. What have Apple actually done to deserve that money? Plus it doesn't even take into account what the profit margin actually is on the product. If it's lower than 30% then the store would be making a loss, or lets say Sony have a 40% profit margin on there books. Why should Apple get 3 times the amount in profit over Sony on something that doesn't even need to touch Apples servers.

They have enabled the customer to get to the content.

For instance, imagine that half of all Amazon's kindle books were actually purchased on iOS devices.

That's worth something to Amazon.

I agree it's not worth 30%. But that number is not carved into a tablet of stone.

C.

It's Apple they do whatever they like.

Absolutely. Sony charge nearer 70% to put content on PSN.

But if Apple charge Amazon 30% - then Apple would be making a lot more from the transaction than Amazon themselves.

So for Amazon, that would be unaffordable. They'd have no alternative but to withdraw from the iOS platform.

I don't think anyone would benefit from that happening. Apple, Amazon and consumers would all lose out.

The more likely outcome is that Apple is in the process of rolling out a more sophisticated revenue sharing model for large content providers.

C.

1. The could easily be the same, in-app or not - Apple would simply get 30% of the in-app price...there is no guarantee Amazon would raise in-app prices. BUT if they did...

2. DON'T BUY THE DAMNED BOOK IN-APP!!! How hard is this concept to grasp???

Really...WHO would pay a higher price in-app just for the convenience of not leaving the iOS/app??? Very few, and they would be idiots.

WHY is this an issue considering the customers have a CHOICE of which option to use when purchasing???

If the prices are the same, which may be enforced by Apple, then the cost is to the vendor. If the cost is different it seems like a useless rule.

If this does raise prices all around then people can just go back to printed books. Also (again) just don't make in-app purchases and then Apple won't make a penny. Simple solution.

The answer is simple - because their rules do not allow you to buy apps anywhere except iTunes.

Furthermore, they are not advertising in iTunes - not the products they are selling - only the app itself.

The problem is, this whole thing is a quagmire. No rule can fairly cover all situations. It makes a lot of sense to me, that bookstores provide and access app to their products, even periodicals that give access to members for offline purchases of memberships. They are merely providing access to an existing service. To my mind, it is not reasonable that Apple take a cut (certainly not 30%). These services are, after all, providing value to Apple by increasing the reading opportunities for iPad owners.

But what would happen if this were to take place in say a game. The developer could place the game for free, paying nothing to Apple, and then have all upgrade purchases done outside the appstore effectively having Apple distribute for them free. THAT would be taking advantage of Apple.

I would suggest the following resolution. Sony and Kindle, etc, sell their apps for $35, which come with $35 credit at the bookstore, and Apple releases them from in-app purchase rule. That way Apple gets something for distributing the app. Alternatively, they could come up with a policy of "recurring purchases" where an app that is for the purpose of accessing repeating purchases would have a different set of rules/tariffs. This would differentiate them from vendors where the in-app purchases are extensions of the product itself (i.e. a game, etc.)

If a substantial fraction of all Kindle sales were on the iPad... Would you still argue that Apple didn't deserve even a tiny cut?

C.

Simple, because the profits generated through agency model sales, such as those at Amazon, are insufficient (vastly insufficient) to cover the cost of another agency model layer on top (e.g. Amazon paying a 30% cut to Apple). Something will have to give if this is going to work, and the most appropriate course would be Apple, who announced that this cost was to cover expenses, recognizing that their role and expense in in-app purchases is not as appreciable, charging a smaller fee (perhaps more along the lines of a credit card transaction fee). This is a tough pill to swallow, though, as a look at the top grossing charts demonstrates that a fair amount of their income for the App Store will be coming from in-app sales (although in these cases it is through the sale of virtual 'Smurfberries', or whatever it is companies have found a way to peddle to their customers).

John Gruber came out this morning with some pretty good coverage of this.

If it really is this cut and dry (excepting the possibility that Apple has something viable in the works, such as might be announced or devised as soon as today) it could be construed as Apple attempting to force these competing services out or take such a share of their profits as to render their existence on iOS as little more than a value-added feature for them and a profit-maker for Apple instead. It is hard to see it from any angle as something positive for iOS users.


'Just go back to printed books' is not a commendable solution to this problem. It would be a shame to see the digital transition held up by greed or artificial roadblocks. And any effort to 'not make in-app purchases' will be fairly meaningless as the majority of users wouldn't be aware of such an interest on the internet, or wouldn't care enough to bother with it. They'll make whatever choice feels most convenient.


A cut may be appropriate, but probably more along the lines of what you usually see in referral bonuses. A 30% share in this industry is the sort of cut that a company in the place of Amazon or Apple—the one distributing the publishers' content—would take. There isn't enough profit for it to be applied a second time.

I think this is actually Apple's motivation.

If this works, iOS users will get a single billing model for all content. With a single account and a consistent robust interface.

It takes away the crappy and unpredictable aspects of paying for stuff online and would improve the user experience for typical consumers.

Of course if it drives content vendors away from the platform, that would be a disaster. But I don't think Apple are really that dumb.

C.

The interesting thing that folks forget is that Amazon has rather predatory rules covering ebook sales as well based on their market position. Hence Macmillan's rebellion and the 3 days where Amazon pulled all of Macmillan's titles...physical and ebook.

Funny that was about a year ago and the other shoe drops.

Zhu is right, two agency models don't play well together but allowing Amazon, Sony and B&N stores compete directly against iBooks on Apple's own hardware without compensation isn't too great for the ecosystem either.

The question, I guess, would be whether Amazon and B&N would allow the iBook store on their devices...assuming Steve would allow that in the first place. Amusingly, once rooted you can run the Kindle app on the Nook. That probably annoys the hell out of B&N.

What would be of value to all consumers is if ebook DRM was harmonized as opposed to completely balkanized.