Apple Trying To Run All Content Sales Through Its Own Sales System

from the that-might-not-go-over-so-well dept

Apple continues to make the iPhone/iPad app platform as obsessively controlled as possible. The latest are reports that Apple is starting to block other apps that sell content within their apps — i.e., no more Kindle purchases on your iPad. The story is that Apple now wants all such purchases to go through Apple’s cash register, so it gets a cut. Of course, that just seems like another opportunity for folks to seek out alternative solutions, such as via web apps, which Apple can’t block. This seems like the sort of move that could backfire on Apple. It’s no secret that the company likes to control such things, and to force everything through its own gateway and payment systems (where it gets to take a cut), but if it keeps doing things like that it’s going to piss off an awful lot of potentially useful partners.

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Comments on “Apple Trying To Run All Content Sales Through Its Own Sales System”

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Anonymous Coward says:

Pissing off potentially useful partners

I wonder if Apple figures that its closed-system strategy has already pissed off all the people that it’s going to, so everything from this point forward is pure profit. Like how Al Capone wasn’t worried about law enforcement agencies getting pissed off about his latest round of bootlegging (not a great comparison, I know).

rooben (profile) says:

Kindle doesn't do in-app purchases

Read the article.
CNET is saying not just In-App purchases, but any purchase that can be downloaded on the device (so that could be books, VOD, who knows)
Now, THAT would really suck – so this would bring us back to 2003 where I could buy an app for my Treo, but then had to download it to my PC and sync it.
That kinda thing would make me want to look for another tablet (i love my iPad).

Chris says:

Apple content controls

All this because they blocked the Sony ereader app, there not going block kindle or anyone else. Apple stopped the Sony app because you could by content directly from it, kindle, nook and barnes n noble apps all direct you to there websites in safari for purchases. The apps there self only sync purchases with the iOS device. How many consumers do think care about Sonys terrible e-reader anyway.

AdamR (profile) says:


“Is it any surprise that Android phones now outsell them like 2-1?”

The only reason why Android based phones is out selling the iPhones is Apple decided long ago to sign exclusive deals with one carrier per region. In the US it’s AT&T while Androids are available from AT&T, Verizon, T Mobile, Sprint, etc. Now that Verizon is getting the iPhone Android lead will shrink.

Mark says:

Build in the "Apple tax"?

As Jim D mentions, it appears that Apple will require that content sold *outside* of the App/AppStore also be available via the AppStore. I’m waiting to see if anyone has found language (or if Apple alters the language in the near future) in the AppStore TOS to prevent content sellers from making outside content available with a ~43% markup (to make the same amount of money after the 30% cut Apple takes). This, paired with a note that the price reflects Apple’s AppStore requirement/cut of profits and it’s available cheaper elsewhere would likely rally significant support against Apple.

x – x*.30 = 10 = x(.7)

Nick Coghlan (profile) says:

Control of market

Because antitrust laws are based on how you define the market. Yes, Apple are control freaks, but they don’t dominate any reasonably defined market sufficiently to be realistically vulnerable to antitrust complaints.

If people don’t like Apple’s controlling nature, they can opt for friendlier ecosystems like Android or pure web apps.

Frawgie (profile) says:

Control of market

Why file a lawsuit at all. They will hang themselves with their own greed-soaked ropes in due time.

Besides, there are other choices, just don’t buy an i-device. get a droid, get a droid tablet, buy a nook or even a kindle.

As much as I would like to have an iPad, I just can’t bring myself to put out the money for it. I would likely get more use out of the droid tablet and a droid (angry birds!)than I ever would out of the iPad or an iphone.

Alphageek (profile) says:

Not enough data yet...

It’s a fuzzy situation with the comments from both SONY and Apple leaving lots of room for semantic interpretation. So until both of them come clean with a detailed picture of what’s going on rather than quoting ambiguous statements in press releases we still don’t know exactly what the situation is.

But a few points worth reviewing here:

@Anonymous Coward: re: “Why haven’t anyone file antitrust lawsuit against them now? I’d think this is a severe manipulation of market (by forcing everyone to trade in their app store) using rules bonded on the device.”

Because, despite the mindshare of the iPhone, it hold a trivially small proportion of the overall mobile phone market, and only a respectable part of the smartphone market ref.

Antitrust is used when a company (or consortium) abuses it’s dominant or monopolistic position to force others out of the market. In no stretch of the imagination could Apple be considered in a dominant position by our current standards of defining markets. Even if you are defining the market in terms of eReading devices Amazon tells us that they’ve sold millions of Kindles, plus all of the other competing devices, including Android devices.

Then there’s the question of gatekeeping or curating a marketplace. Right now you can’t buy iBooks, Barnes and Noble, Fictionwise, etc. on a Kindle. An outright ban could be considered even more prejudicial and closed than asking for a cut. Likewise you can’t buy Kindle books on your SONY and so on.

Noting of course that there are a pile of other products where the manufacturer acts as the gatekeeper and takes a cut of everything offered for their platform. Think xBox, PS3, Wii, all of whom require that developers go through their sales and distribution channels.

The other side issue about the openness or lack thereof of a platform which is of particular interest to the very small segment of the population that reads Engadget, Techdirt, Slashdot etc. It’s a philosophical issue. The overwhelming majority of the population (the “normals”) just want something that works, is attractive, easy to use and obvious to discover, is reliable, has good after sales service etc. These are the important factors, not whether the underlying technology ascribes to some kind of openness.

And at the end of the day, it’s just business – everyone’s in the game trying to monetize as much of their product chain as they can. Witness all of the posturing last year with Amazon and the publishers where everyone tries to take home as much of the pie as they can get their hands on.

Is this particular case a _good_ business decision? I personally don’t think so (at least not at the current rates), but from a “normal” user perspective, in app purchase is about as friction-free as it gets where the current Kindle style jump out to the web and purchase and then back to the app is kludgey and strange.

@ Anonymous Coward 2 “eh, shouldn’t buy that DRM stuff anyway… right? right?”

That’s where we should all be complaining. Which is why I buy all of my eBooks via Amazon and Kobo, strip the DRM and put them all into Calibre for reading in Stanza. This current morass of incompatible formats and platform/store/device specific DRM is a royal PITA. Shout out to Baen Books for selling in multiple formats and without DRM.

Chris Rhodes (profile) says:


I think there will be a spike in iPhone sales as people who wanted an iPhone but really like Verizon will snap them up, but overall, I’d expect most sales to take the form of a steady leeching of customers to Verizon from AT&T as peoples’ current contracts expire (while this represents a temporary increase in phone sales, it isn’t an increase of the customer base, just a shift).

Meanwhile, Android will keep selling huge numbers of devices from multiple manufacturers on every network out there. They aren’t going to slow down at all.

leichter (profile) says:

Is it legitimate for Apple to do something like this? There’s plenty of precedent. Apple views their store as … like a store. Try going into a Walmart, setting up a booth, and selling books or CD’s or whatever. You want to sell at Walmart? You use their system: You deliver stuff wholesale, they get it out to consumers. Start an auction on Ebay, then make side deals with people to sell stuff without Ebay getting its cut, and they’ll close your account (and perhaps go after you if for what you owed) if they find out. A real estate agent gets paid even if you find a customer yourself. (I bought my first house based on a newspaper ad. The seller was pissed that he had to pay the broker, who had absolutely nothing to do with the sale, his 3% – but the contract with the broker required it and is quite enforceable.) In a way, Apple is being more open here than Walmart would be: It’s as if Walmart said “sure, set up your booth – but you also have to let us sell your books/CD’s at the same time.”

Is it a good idea for Apple to do this? We’ll see. Sony and Amazon and Barnes and Noble are certainly pissed about it, but realistically, if you’re an Apple customer, this is unlikely to hurt you – and in fact it probably makes it more convenient for you. (The only way you as a consumer get hurt is if Sony and Amazon and B&N decide to drop their apps entirely. That seems unlikely – Apple didn’t make this move until it was offering a market so large that they would find it difficult to walk away. But Amazon in particular is no pushover – they’ll certainly bargain hard. We have certainly not heard the last word on how this will actually work.)

????????????????????????????????????????????????????????– Jerry

Jakomi Mathews (profile) says:

Why Apple Will FAIL

We all know Apple with Steve ‘Dictator’ Jobs at the helm are control freaks. We also know that history has proven open systems ALWAYS win over closed ecosystems. The irony being the CEO who should realise this Steve Jobs – is they same CEO at the helm who already lost the battle once. Obviously Steve is an ignorant leaner…

Checkout an interesting analysis on this topic here:

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