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MacRumors
May 11, 2011, 12:23 PM
http://images.macrumors.com/im/macrumorsthreadlogo.gif (http://www.macrumors.com/2011/05/11/iflow-reader-ios-ebook-store-shutting-down/)


http://images.macrumors.com/article-new/2011/05/iflow_reader_ipad.jpg


BeamItDown Software, the company behind the popular iFlow Reader eBook application and store for iPhone (http://appshopper.com/books/iflow-reader) and iPad (http://appshopper.com/books/iflow-reader-hd), has announced (https://www.iflowreader.com/Closing.aspx) that it will be closing down as of May 31st, citing Apple's recent enforcement (http://www.macrumors.com/2011/02/01/apple-now-requiring-ebook-applications-with-external-purchases-to-also-offer-in-app-purchasing/) of policies forcing content providers to offer content via Apple's in app purchasing mechanism at the same prices offered elsewhere. With that mechanism resulting in Apple taking a 30% of revenue, BeamItDown Software has determined that it is not possible for small eBook sellers to operate profitably given the squeeze of in app purchasing requirements and the agency model increasingly used by publishers that fixes sales prices.The crux of the matter is that Apple is now requiring us, as well as all other ebook sellers, to give them 30% of the selling price of any ebook that we sell from our iOS app. Unfortunately, because of the "agency model" that has been adopted by the largest publishers, our gross margin on ebooks after paying the wholesaler is less than 30%, which means that we would have to take a loss on all ebooks sold. This is not a sustainable business model.BeamItDown goes on to describe the steps it took during the development and rollout of the iFlow Reader application as it sought to ensure that it was on the right side of Apple's terms and conditions at a cost of over a million dollars.We put our faith in Apple and they screwed us. This happened even though we went to great lengths to clear our plans with Apple because we did not want to make this substantial investment of time and money blindly. Apple's response to our detailed inquiries was to tell us that our plans did not infringe their rules in any way, which was true at the time, but there is one little catch. Apple can change the rules at any time and they did. Sadly they must have known full well that they were going to do this. Apple's iBooks was already in development when we talked to them and they certainly must have known that their future plans would doom us to failure no matter how good our product was. We never really had a chance.BeamItDown's closure at the end of the month means that users who purchased content through the company's store will need to ensure that their content is backed up and downloaded to their computers for viewing through alternative software should the iFlow Reader software cease functioning on future versions of iOS, as the application will no longer be updated.

Article Link: 'iFlow Reader' iOS eBook Store Shutting Down (http://www.macrumors.com/2011/05/11/iflow-reader-ios-ebook-store-shutting-down/)



liphonearth
May 11, 2011, 12:32 PM
I smell a class-action lawsuit.

With the volumes that iphone and ipad are now selling and have installed user base, and the fact that they also have a vehicle to sell the content that these users were forced-out of selling, this may well be considered an anti-trust/monopoly move.

I have a kindle and I have an iphone and ipad. The kindle app allows me to use the iOS device when in a pinch, but I prefer reading on the Kindle..

It will tick me off if Amazon is forced into the same corner, but it seems to me, that Apple, by this policy, is over-stepping.. and I'm normally an Apple fan.

T

iSee
May 11, 2011, 12:35 PM
Ouch. That's too bad.

I can't really say Apple is "wrong" though, at least not from a business perspective. What Apple did was squeeze a middleman off of their platform -- one that was in direct competition to itself. Apple is trying to be the one big middleman between content producers and content consumers -- they don't want to leave room for anyone else.

I smell a class-action lawsuit.

With the volumes that iphone and ipad are now selling and have installed user base, and the fact that they also have a vehicle to sell the content that these users were forced-out of selling, this may well be considered an anti-trust/monopoly move.

I have a kindle and I have an iphone and ipad. The kindle app allows me to use the iOS device when in a pinch, but I prefer reading on the Kindle..

It will tick me off if Amazon is forced into the same corner, but it seems to me, that Apple, by this policy, is over-stepping.. and I'm normally an Apple fan.

T

No, not monopolistic. E.g., the answer to just this one question should make that clear:

Can you buy books from the iBooks store on your Kindle?

spazzcat
May 11, 2011, 12:51 PM
So they couldn't be going out of business because they had a fail business model based on being the middle man? They only had a ~4,000 books? Forget where I read that info and their pricing was the same as the big players. Amazon has close to a million books and iBooks over 100,000 books.

liphonearth
May 11, 2011, 12:54 PM
No, not monopolistic. E.g., the answer to just this one question should make that clear:

Can you buy books from the iBooks store on your Kindle?

The Kindle is not made for with the same general expectation as an iOS device. It does one thing. That is an Apples and Oranges argument.

Can you buy Amazon books and iBooks on your mac? Yes. Would it be OK for Apple to take 30% of any of your purchases through your web browser on your computer or on your iphone or iPad?

Asking 30% of the purchase price of an app is one thing. 30% of all transactions on an iOS device thereafter is highway robbery, and the users of iOS are going to pay for it, either through higher prices or less choice. It is not in the best interest of Apple to enforce this model.

It's anti-trust territory. The fact that they once allowed it and then stopped it will only strengthen the case against them.

iFlow should be able to remove the purchase capability and sell through the web, but the way the police NOW reads, if you can buy it through the web, you must sell it through the APP (I believe for the same price) which forces people to add a commission for Apple if they want to participate on the platform. Its an inequity that is too steep and is predatory toward competitors who were doing business in another market (not computer hardware sales) prior to Apple getting into the book selling market.

Kindle's iOS and MacOS readers do not have sales capability and I agree that if they did Apple could require a commission (although it should be much less than 30%) To require, however, that the app does have sales capability so that they can make a commission forces people to sell through iOS which is in itself manipulative and predatory.

Mark my words, there will be a class-action suit if this stands.

Let the consumer decide should be the motto of the free market. This is taking the choice (of where to buy books) away from the consumer and will encourage gouging on the part of publishers.

I'm an Apple fan, but I think they are over-reaching in this case.

liphonearth
May 11, 2011, 12:58 PM
So they couldn't be going out of business because they had a fail business model based on being the middle man? They only had a ~4,000 books? Forget where I read that info and their pricing was the same as the big players. Amazon has close to a million books and iBooks over 100,000 books.

That very well may be the case. They might be doing this for a lawsuit of their own.

If Amazon is forced to do this, though, fecal matter will hit the rotating blades. If they aren't, iFlow will have grounds for their own lawsuit.

Stibble
May 11, 2011, 01:13 PM
:apple: Apple becomes Microsoft....who will become Apple ? :apple:

2 Replies
May 11, 2011, 01:25 PM
:mad:
Said it before and I'l say it again,
Apple's forcing of everyone to use THEIR store mechanism with their taking a SIZABLE chunk of the profits (such as the 30% called out here) is an EXTREME conflict of interest and is VERY MUCH a monopolistic practice.

The shutting down of this alternative store is just more evidence to that end.

As an iOS device owner and a stock-holder... I am VERY displeased. :(
Cometition is a GOOD thing Apple, and forcing everyone to adhere to your facist rules and regulations is doing nothing to further competitiveness, foster creative competition or drive the cutting edge of technology, ...but it is all about GREED.

BC2009
May 11, 2011, 01:28 PM
Asking 30% of the purchase price of an app is one thing. 30% of all transactions on an iOS device thereafter is highway robbery, and the users of iOS are going to pay for it, either through higher prices or less choice. It is not in the best interest of Apple to enforce this model.

It's anti-trust territory. The fact that they once allowed it and then stopped it will only strengthen the case against them.


It is not highway robbery, nor is it likely in anti-trust territory. Game consoles such as Wii, PlayStation and XBOX have been doing this sort of thing for years. In fact they take a much bigger cut and that is the reason Sony can sell that PS3 Blu-Ray player for such a low price -- they make their money on the games and the content you can purchase through the device.

The thing is that some folks viewed the iOS devices as computers since Apple was a computer company (until they dropped "Computer" form their name), but Apple wanted to position iOS devices as application consoles. The line is certainly blurry, but there is plenty of precedent showing that Apple is being far less greedy than their predecessors in the "console" arena.

What really stinks for these guys is going to great lengths to play by Apple's rules and then having those rules change in a way that destroys your ability to do business. It's never a good idea to all your eggs in one basket.

Apple wants to put a tax on everything coming through iOS. And in case your are paying attention, Google made the Chrome browser and Chrome OS so they can one day put a tax on everything served to you via the web. Everybody wants to be the "middle man" because that is where the money is. The problem with being a small middle man is that you eventually get squeezed out. If you are a small player, it is sometimes better to be a content producer than a middle man unless you have a great niche and maybe some patents to protect your business model.

saxofunk
May 11, 2011, 01:36 PM
Apple's new business model to ride on the backs of others' work is dissapointing. They are cutting away any chance for small scale developers of iOS and now Mac Apps to try and make very much money from their apps. Perhaps it will be decided eventually that this is anti-competitive practice, but I fear that until congress steps in, nothing is going to change.

Small White Car
May 11, 2011, 01:36 PM
As an iOS device owner and a stock-holder... I am VERY displeased. :(
Cometition is a GOOD thing Apple, and forcing everyone to adhere to your facist rules and regulations is doing nothing to further competitiveness, foster creative competition or drive the cutting edge of technology, ...but it is all about GREED.

lol Yeah. And Walmart gets a cut of everything sold in Walmart.

What facists!

This is no different. "But it's their own separate bookstore!" Yeah? You think those McDonalds in Walmarts pays Walmart to be there? You'd better believe it. You don't want to pay Walmart? Build your McDonalds outside in the parking lot.

You wanna run a bookstore and not pay Apple? Build your own device. That's what Amazon did and they seem to be doing well, so you can't claim it's impossible.

EDIT: Mind you, I don't think Apple's making the best choice here. I'd do it differently than they are. But they're doing the exact same thing thousands of other companies do. To call it evil or facist or illegal is really silly. It's perfectly normal.

ciTiger
May 11, 2011, 01:38 PM
This was bound to happen sooner or later, let's see how this plays out...

xxundrclssherox
May 11, 2011, 01:40 PM
If this really does kill off Kindle, Nook, and CourseSmart, I'm going Android!
I bought my iPad as an e-reader for Textbooks, and if CourseSmart makes textbooks unavailable for iPad I'm DEFINITELY selling mine and getting an Android Tablet. This is absolute crap, I can't believe that Apple has gotten so greedy over the past few years. Jailbreaking will go completely mainstream after all these companies decide to leave, I would pay extra for a Kindle App through Cydia if that's what it takes to get more than the craptastic iBooks store. iTunes is okay, App Store is fine, but making iBooks the only e-reader app on iPad will definitely kill this.

I see either a lawsuit or a drop in iPad sales, or people buying them, noticing no Kindle store or Nook store and returning it. The major difference between Kindle, Nook, etc and iPad is the iPad costs $499 MINIMUM, compared to Kindle's sub $200 price and Nook Color's sub $300 price(and that's with Android!). I'm not excited about this move, if this is Jobs idea I can't wait for him to leave, maybe we'll get someone that TRULY cares about his customer base, not someone that says he cares and then asks us to throw money at all our Apple Product.

Straight up Monopolistic, Apple will face Antitrust legislation eventually just like Microsoft did, they're becoming who they were fighting in the first place. Enough is enough.

swarmster
May 11, 2011, 01:40 PM
I have to say, I'm really confused by what exactly the problem was, and their bitter little message didn't really clarify.

Did iFlow sell books online? Why? Do they have any other target devices? If you have to match prices of your other venues, why not just get rid of the web store? Did anyone even use it?

Alternatively, why not get rid of the IAP option? Let users access their purchased books, but go through the web to buy more. Like Amazon.

Are they even complaining about the 30%, or is it the competition from iBooks? They bring up iBooks as if they wouldn't have even bothered if they knew it was coming.

It also kind of sounds like it's the book publishers that raised rates on them? And the new agreements the publishers are offering are not something iFlow can afford? I'm not sure what this has to do with Apple.

It's hard to get a handle on who did what here, and the vitriol isn't helping.

rdowns
May 11, 2011, 01:44 PM
So what? They have a flawed business model. Their words will come back to haunt them if they sue.

We put our faith in Apple and they screwed us. This happened even though we went to great lengths to clear our plans with Apple because we did not want to make this substantial investment of time and money blindly. Apple's response to our detailed inquiries was to tell us that our plans did not infringe their rules in any way, which was true at the time, but there is one little catch. Apple can change the rules at any time and they did. Sadly they must have known full well that they were going to do this. Apple's iBooks was already in development when we talked to them and they certainly must have known that their future plans would doom us to failure no matter how good our product was. We never really had a chance.

Madmic23
May 11, 2011, 01:45 PM
Like I've said before, this is exactly the same as if Microsoft were to force Apple to give them 30% of every song sold on iTunes on a Windows PC using a "Windows Payment System."

Doesn't make much sense, does it?

xxundrclssherox
May 11, 2011, 01:45 PM
lol Yeah. And Walmart gets a cut of everything sold in Walmart.

What facists!

This is no different. "But it's their own separate bookstore!" Yeah? You think those McDonalds in Walmarts pays Walmart to be there? You'd better believe it. You don't want to pay Walmart? Build your McDonalds outside in the parking lot.
[/I]

The difference between Walmart charging others and Apple is Walmart doesn't charge an entire 30%! This is an overwhelming cut, and will either lead to $20 books or a huge loss of competition.

We as consumers need to speak out about this, or do something. Jailbreaking the iPhone/iPod touch led to the app store in the first place, we can do something about this too

swarmster
May 11, 2011, 01:50 PM
The difference between Walmart charging others and Apple is Walmart doesn't charge an entire 30%! This is an overwhelming cut, and will either lead to $20 books or a huge loss of competition.

We as consumers need to speak out about this, or do something. Jailbreaking the iPhone/iPod touch led to the app store in the first place, we can do something about this too

You're right, Wal-Mart only takes 27.1% on average.

http://finapps.forbes.com/finapps/jsp/finance/compinfo/Ratios.jsp?tkr=wmt

Target, though, charges 30.9%. So maybe you should picket there?

http://finapps.forbes.com/finapps/jsp/finance/compinfo/Ratios.jsp?tkr=TGT

Small White Car
May 11, 2011, 01:51 PM
It's hard to get a handle on who did what here, and the vitriol isn't helping.

Basically the old, old model was this:

Author -> Publisher -> Store
(Store meaning a real-world brick store.)

All 3 of those got a cut of the price.

The 'Author' and 'Publisher' part havn't changed. But what is 'Store?' It used to something like 'Borders.' Then it was www.Amazon.com along with the postman.

What is it now?

Well, at first it's something like Amazon on the Kindle or Apple on the iPad. Ok, that's fine. But then what about iFlow?

They see it like this:
Author -> Publisher -> iFlow

Apple sees them like this:
Author -> Publisher -> iFlow -> Apple

In other words, iFlow wants to replace Apple in the chain and Apple says "Uh uh. You're free to come in and play WITH us, but we're not losing our cut."

iFlow says "Well, it's too crowded now. We can't make money with four people in the pool."

And Apple says "Tough cookies. We never told you to come get in the pool with us, did we?"

That's the basic idea. SOMEONE is gonna act as the store. The question is, who? Apple says that if it's not them you really should be selling on non-Apple devices.

The secret here is that Apple sees, long term, it looking like this:
Author -> Apple
and
Author -> Amazon
and
Author -> Google

That's their master plan. They're trying to cut 3 down to 2. They're sure as heck not interested in turning it into four. That's backwards from their perspective.

foobarbaz
May 11, 2011, 02:03 PM
Hey content industry: Get rid of DRM and you can keep 100%.

Let software makers compete with software makers and content sellers compete with content sellers. No more having to use the app that comes with the content.

peetyrd
May 11, 2011, 02:06 PM
lol Yeah. And Walmart gets a cut of everything sold in Walmart.

What facists!

This is no different. "But it's their own separate bookstore!" Yeah? You think those McDonalds in Walmarts pays Walmart to be there? You'd better believe it. You don't want to pay Walmart? Build your McDonalds outside in the parking lot.

You wanna run a bookstore and not pay Apple? Build your own device. That's what Amazon did and they seem to be doing well, so you can't claim it's impossible.

EDIT: Mind you, I don't think Apple's making the best choice here. I'd do it differently than they are. But they're doing the exact same thing thousands of other companies do. To call it evil or facist or illegal is really silly. It's perfectly normal.

How about this example. Airport space is very expensive. Have you ever been to a Mcdonalds at an airport? Theres no dollar menu and all the food is twice as expensive. What if the airport told Mcdonalds that they had to have a dollar menu and charge the same as every other Mcdonalds outside of the airport? It wouldnt be profitable. Apple should let the developers charge what ever they want for their apps.

Small White Car
May 11, 2011, 02:08 PM
How about this example. Airport space is very expensive. Have you ever been to a Mcdonalds at an airport? Theres no dollar menu and all the food is twice as expensive. What if the airport told Mcdonalds that they had to have a dollar menu and charge the same as every other Mcdonalds outside of the airport? It wouldnt be profitable. Apple should let the developers charge what ever they want for their apps.

Another great example. Exactly right.

swarmster
May 11, 2011, 02:14 PM
Basically the old, old model was this:


That doesn't really answer my question. I understand that Apple charges for people to sell stuff through their store (IAP pretty clearly goes through their store). What I don't understand is iFlow seems to be acting like this has never been the case?

If they've found out their business model was poor, why not raise prices, or do like Amazon does and sell books outside of the reader app?

What changed in this situation that is making them so angry?

OllyW
May 11, 2011, 02:18 PM
What changed in this situation that is making them so angry?

Click this link (http://www.macrumors.com/2011/02/01/apple-now-requiring-ebook-applications-with-external-purchases-to-also-offer-in-app-purchasing/) from the first post.

peetyrd
May 11, 2011, 02:18 PM
That doesn't really answer my question. I understand that Apple charges for people to sell stuff through their store (IAP pretty clearly goes through their store). What I don't understand is iFlow seems to be acting like this has never been the case?

If they've found out their business model was poor, why not raise prices, or do like Amazon does and sell books outside of the reader app?

What changed in this situation that is making them so angry?

The problem is the sellers cant raise prices. Read the original article. The sellers have to sell at the same price in the app store as they sell everywhere else. Apple says its now against their policy. Basically, apple is telling the sellers how much they can sell their content for. That is RIDICULOUS.

swarmster
May 11, 2011, 02:31 PM
Click this link (http://www.macrumors.com/2011/02/01/apple-now-requiring-ebook-applications-with-external-purchases-to-also-offer-in-app-purchasing/) from the first post.

The problem is the sellers cant raise prices. Read the original article. The sellers have to sell at the same price in the app store as they sell everywhere else. Apple says its now against their policy. Basically, apple is telling the sellers how much they can sell their content for. That is RIDICULOUS.

I understand recent events (as un-clarified as they are); what I don't understand is how they apply to iFlow. I'm admittedly unfamiliar with their product, and the article and their site is unclear, which is mostly why I'm asking, I guess.

As far as I can tell from their site and rant, they came into being solely as an iOS bookstore app? Why can't they raise prices then? What are their other venues that they have to match prices with? Why can't they just open a web-based store and dump the IAP part of their reader?

rdowns
May 11, 2011, 02:31 PM
How about this example. Airport space is very expensive. Have you ever been to a Mcdonalds at an airport? Theres no dollar menu and all the food is twice as expensive. What if the airport told Mcdonalds that they had to have a dollar menu and charge the same as every other Mcdonalds outside of the airport? It wouldnt be profitable. Apple should let the developers charge what ever they want for their apps.

This might be the most absurd example I have ever read here.

Daveoc64
May 11, 2011, 02:49 PM
This might be the most absurd example I have ever read here.

It's actually a pretty good example.

Apple is forcing content sellers to sell content through iOS with a 30% cut in income when it is purchased that way.

If I go to McDonald's in a location like an Airport I expect them to charge me more.

MacObsessed
May 11, 2011, 03:05 PM
Why can't they just open a web-based store and dump the IAP part of their reader?

If you read the link, you'll find that, according to Apple's newly enforced rules, if they offer something through another avenue, such as a web-based store, then they MUST also offer it through IAP at the same price. Given that IAPs are much more convenient, people will naturally utilize that avenue, which would force some content providers to either sell at too low of a margin, or raise their overall prices beyond a competitive range.

pmz
May 11, 2011, 03:07 PM
I see nothing wrong with Apple 30% or 50% or 70% if they want to on their own devices/platform.

I find it absurd that Apple insists on content being the same price as offered elsewhere, where the Apple-cut doesn't exist. Simply so that Apple can appear to customers as having the same prices as elsewhere.

Such B.S. The example re: McDonalds in an Airport is extremely relevant.

iSee
May 11, 2011, 03:07 PM
Don't get me wrong.
I think this is a *horrible* idea by Apple. But it's not monopolistic.
They *are* forcing competetors off of the iOS platform...
And that is very bad for consumers like me.

In fact, Apple's new policy is *why* I am not going to buy an iPhone once I'm ready to replace my 3GS and why I'm not going to buy an iPad when I'm ready to replace my 1st gen one -- Apple is in the process of locking out my content from the device.

The fact that I have a choice, though, shows how Apple doesn't have a monopoly.

What Apple is doing here is saying it's all or nothing. You get everytjhing from Apple on Apple device, etc, or you have to get off the platform entirely.

It's a dumb idea, IMO. At the end of the day, I want my stuff where and when I want it, wherever I purchased it from. If Apple devices won't do that I *will* get something else.

pmz
May 11, 2011, 03:08 PM
This might be the most absurd example I have ever read here.

YOU are absurd. That example is 100% exactly the same thing.

swarmster
May 11, 2011, 03:36 PM
If you read the link, you'll find that, according to Apple's newly enforced rules, if they offer something through another avenue, such as a web-based store, then they MUST also offer it through IAP at the same price. Given that IAPs are much more convenient, people will naturally utilize that avenue, which would force some content providers to either sell at too low of a margin, or raise their overall prices beyond a competitive range.

If you read the link, there is a lot of conjecture there that people seem to be taking as fact.

11.2 Apps utilizing a system other than the In App Purchase API (IAP) to purchase content, functionality, or services in an app will be rejected
–Apple’s App Store Review Guidelines

According to that long-standing rule, I assume the iFlow app was using IAP for its app's purchases. In which case, they've always been charged 30%.

If they suddenly need to avoid that 30% (it sounds like because publishers re-negotiated?), why don't they remove in-app purchasing from the app and create an online store people can go to in a browser to add to an online library (not through the app)? This is what Amazon does.

I haven't seen any confirmation that this is changing. In fact, in that linked article it says "Apple's made no change to its App Store Guidlines" and a quote from an Apple spokesperson only references apps that allow you to make purchases:

"We are now requiring that if an app offers customers the ability to purchase books outside of the app, that the same option is also available to customers from within the app with in-app purchase."

2 Replies
May 11, 2011, 03:48 PM
lol Yeah. And Walmart gets a cut of everything sold in Walmart.

What facists!

This is no different. "But it's their own separate bookstore!" Yeah? You think those McDonalds in Walmarts pays Walmart to be there? You'd better believe it. You don't want to pay Walmart? Build your McDonalds outside in the parking lot.

You wanna run a bookstore and not pay Apple? Build your own device. That's what Amazon did and they seem to be doing well, so you can't claim it's impossible.

EDIT: Mind you, I don't think Apple's making the best choice here. I'd do it differently than they are. But they're doing the exact same thing thousands of other companies do. To call it evil or facist or illegal is really silly. It's perfectly normal.

Thousands? That's quite the statement. Name them.
In terms of phones, Apple is the only one acting that way.
WinMo phones have LONG been able to sync WinMo apps onto the device. Apps that could have just been downloaded from any crappy website. It was an option long before the PDA software made the jump to Windows smartphones.
Even Motorola dumb-phones such as the Razr, (unless locked down by companies like Verizon) can be connected to a computer and have java apps installed via USB.
Microsoft is not only not against jail-breaking of WP7, they encourage it. So if another company wants to create and offer another WP7 app store for users, they can. (And it'd be a great idea too.)
Android already has MANY app stores available to its users, in addition to the ability to just install an apk manually. (Hell, you can put all your apks on dropbox or a static webpage and install them.)

I'm not saying that there's a problem with Apple getting a cut of the apps they sell through their store.
It's that they use their iOS to enforce the Apple app store to be the SOLE app content hub on their iOS that is the issue.

Also, your McDonalds in a Walmart example is WAY flawed.
No iOS apps run INSIDE the app store. They run on the iOS operating system (which is not an app distribution service... it's an operating system).

Apple is using their iOS to force iOS developers to use their app store. It's a fact.
Apple doesn't just provide their store as a means of app distribution, they use their control of iOS to enforce it as the SOLE means of app distribution.
Sure, users can jailbreak and install Cydia... but apple will with any further updates break any jailbroken iOS device. Apple is vehemently AGAINST jail-breaking of iOS, and so also vehemently against allowing of any non-appstore provided content.
It's as if Microsoft would uninstall any and every NON-IE webbrowser installed on a computer when a user chooses to apply a Windows OS patch/update.
And not only that, it'd be as if Microsoft was ALSO against the installing of any programs on Windows that weren't downloaded via IE.

And yes, Amazon Kindle do allow the users to purchase books from Amazon's store, but Amazon DOES NOT impose their store as the SOLE content distribution hub for content to be consumed on their device.
In FACT, (and if you owned one, you've know what you're talking about) Kindle owners can ALSO purchase books on a publisher's individual website (TOTALLY separate from Amazon's store) then transfer those eBooks onto their kindle without Amazon getting a single red penny.
This is NOT the case for iOS devices.
Hell, if setup correctly users could even make those purchases ON a kindle (through the on-device web-browser), and have the eBook emailed to their kindle email. Thus auto-delivering the content OTA to the Kinda via Amazon's whisper net. REF (http://www.amazon.com/gp/help/customer/display.html?nodeId=200505520&#email)

If it's not monopolistic for Apple to force everyone using their iOS to use their store... then wanna explain why MS was charged with monopolistic practices NOT for forcing everyone to use IE, but merely including it with their OS?
Or maybe you'd prefer to explain how users can purchase and install iOS apps without having to jail-break, use iTunes or the app store?

Try not to be such an Apple apologist next time.

liphonearth
May 11, 2011, 04:35 PM
I see nothing wrong with Apple 30% or 50% or 70% if they want to on their own devices/platform.

I find it absurd that Apple insists on content being the same price as offered elsewhere, where the Apple-cut doesn't exist. Simply so that Apple can appear to customers as having the same prices as elsewhere.

Such B.S. The example re: McDonalds in an Airport is extremely relevant.

So, by your analogy, if you use the firefox app or the opera app to purchase something through the web on your iOS device, Firefox and Opera or the vendor must pay 30% commission to Apple?

Don't you see the problem?

I have no problem with a commission on the actual app, but the ongoing (passive on Apple's part) taxation of goods and services cannot be 30% and work in the eco chain. A manufacturer, for instance needs to make a 50% profit in order to cover development and manufacturing costs. It might be able to afford a 30% commission, once.. but twice, and on the sales price, not cost?

It's draconian, and yes Apple can do it.. but its wrong... immoral even.. and it will not stand without eventual court action, or if not that, at the cost of the user experience and their ability to have choice.

marshzd
May 11, 2011, 05:21 PM
How about this example. Airport space is very expensive. Have you ever been to a Mcdonalds at an airport? Theres no dollar menu and all the food is twice as expensive. What if the airport told Mcdonalds that they had to have a dollar menu and charge the same as every other Mcdonalds outside of the airport? It wouldnt be profitable. Apple should let the developers charge what ever they want for their apps.

This example is only half accurate. The McDonald's either has to have a dollar menu and charge as much as every restaurant outside, or raise its prices so they are higher than the other competitors like Airport Food Express (a fictional food corporation owned and run by the airport) that are also located inside the airport. Which has the exact same food recipes and tastes the same, but the color of the packing is different.

peetyrd
May 11, 2011, 05:52 PM
This example is only half accurate. The McDonald's either has to have a dollar menu and charge as much as every restaurant outside, or raise its prices so they are higher than the other competitors like Airport Food Express (a fictional food corporation owned and run by the airport) that are also located inside the airport. Which has the exact same food recipes and tastes the same, but the color of the packing is different.

I dont think you quite get it. Mcdonalds has stores everywhere in which they either own the building or lease the space. #1(Big Mac) Value meals go for say, $4.99.

In an airport, Vendors are paying an astronomical price to lease the space. Why, because its an airport, its a closed environment, and they can sell the space for what ever they choose to. So in order to still make a profit, Mcdonalds has to make a #1(Big Mac) Value Meal, $7.99.

In the case of Apple, Developers, Publishers etc... have to give apple a 30% cut of what ever they sell. So naturally, to keep profits, you would think that content would come at a 30% increase. Apple is saying NO to price increases. They say if you sell content for $X dollars some where else, you have to sell for $X dollars in the App store.

Is this even legal? Can Apple really tell someone else what they have to sell their stuff for? If the airport told Mcdonalds that they had to sell their Big Mac Values Meals at $4.99, Mcdonalds would probably say, See you later like iFlow.

Whati
May 11, 2011, 06:14 PM
Maybe I am missing something, but I dont see anything about product pricing. The original message says that you cannot offer product outside the AppStore and make them available on an ios device. Except if you offer the same product from within the AppStore.

Can anyone tell me where I can find the price statement?!

jglavin
May 11, 2011, 06:32 PM
Don't get me wrong.
I think this is a *horrible* idea by Apple. But it's not monopolistic.
They *are* forcing competetors off of the iOS platform...
And that is very bad for consumers like me.

In fact, Apple's new policy is *why* I am not going to buy an iPhone once I'm ready to replace my 3GS and why I'm not going to buy an iPad when I'm ready to replace my 1st gen one -- Apple is in the process of locking out my content from the device.

The fact that I have a choice, though, shows how Apple doesn't have a monopoly.

What Apple is doing here is saying it's all or nothing. You get everytjhing from Apple on Apple device, etc, or you have to get off the platform entirely.

It's a dumb idea, IMO. At the end of the day, I want my stuff where and when I want it, wherever I purchased it from. If Apple devices won't do that I *will* get something else.Ding ding ding.
That's the way a lot of people will see it. It's not monopolistic but if they continue down the path they are going to hurt the platform.

spazzcat
May 11, 2011, 07:01 PM
Don't get me wrong.
I think this is a *horrible* idea by Apple. But it's not monopolistic.
They *are* forcing competetors off of the iOS platform...
And that is very bad for consumers like me.

In fact, Apple's new policy is *why* I am not going to buy an iPhone once I'm ready to replace my 3GS and why I'm not going to buy an iPad when I'm ready to replace my 1st gen one -- Apple is in the process of locking out my content from the device.

The fact that I have a choice, though, shows how Apple doesn't have a monopoly.

What Apple is doing here is saying it's all or nothing. You get everytjhing from Apple on Apple device, etc, or you have to get off the platform entirely.

It's a dumb idea, IMO. At the end of the day, I want my stuff where and when I want it, wherever I purchased it from. If Apple devices won't do that I *will* get something else.

I just subscribed to New Yorker today. It was great not having to get my credit card out or fill out forms. I clicked one button. I agreed to give my info to them, so I had to create a user name for their website. This isn't how it worked before, and new way is much better for me as the customer. If tomorrow I don't want it anymore, one click and it stops.

Ding ding ding.
That's the way a lot of people will see it. It's not monopolistic but if they continue down the path they are going to hurt the platform.

The problem you are not seeing is the big boys are now start to support Apple's new model. The ones that have all the content.

appleguy123
May 11, 2011, 07:04 PM
Will this affect non-ebook apps in the future? A lot of apps make you go to a web browser or other means which are not in app purchases to make purchases.
-Amazon app
-audible
-ebay
-groupon
-Dropbox
-HBO Go

I understand recent events (as un-clarified as they are); what I don't understand is how they apply to iFlow. I'm admittedly unfamiliar with their product, and the article and their site is unclear, which is mostly why I'm asking, I guess.

As far as I can tell from their site and rant, they came into being solely as an iOS bookstore app? Why can't they raise prices then? What are their other venues that they have to match prices with? Why can't they just open a web-based store and dump the IAP part of their reader?

It's because the publishers set the prices on the books.

peetyrd
May 11, 2011, 07:37 PM
Maybe I am missing something, but I dont see anything about product pricing. The original message says that you cannot offer product outside the AppStore and make them available on an ios device. Except if you offer the same product from within the AppStore.

Can anyone tell me where I can find the price statement?!

It has to do with in-app purchases. If a company sells an ebook for $5.99 somewhere, they can't sell the ebook as an in-app purchase for $8.99. Even though apple takes a 30% cut. It would make sense for those distributors with very low profit margins to need to raise prices in order to stay profitable given 30% will now go to Apple. Price manipulation? I think so.

ChrisA
May 11, 2011, 07:54 PM
So basically the people who have nothing to offer but delivery of some other person's content will all disappear? So what? Who cares?

If this were a publisher or an author it would be to bad but they were selling the same books at the same price as others.

bretm
May 11, 2011, 09:36 PM
Apple's new business model to ride on the backs of others' work is dissapointing. They are cutting away any chance for small scale developers of iOS and now Mac Apps to try and make very much money from their apps. Perhaps it will be decided eventually that this is anti-competitive practice, but I fear that until congress steps in, nothing is going to change.

Pretty dense folks-

Apparently with this agency model thing, they're all selling books around the same price. SOOOOOO - if Apple is selling books, and these guys give away their book app and sell their books on their own website, who is taking advantage of who? Let's see... these guys invested a million bucks on an app and a business. Apple invented the whole darn environment where their business could even exist! And so Apple would be making nothing off these guys, AND they'd be competing for Apple's business. So Apple is supposed to let them ride Apple's coattails for free? Apple didn't care until they deemed it neccessary to enter the book market to sell ipads. Without a built in, decent, consistent book experience to compete with Amazon, they would lose enormous sales to those that decide not to buy an iPad because it doesn't really have a great book experience. The truth is, it was probably focused more on Amazon not riding their coattails. Not iflow. If Apple hadn't pushed them out, Amazon would have for sure.

They had a bad plan. They knew Apple could change the rules. That's part of the contract. Did Apple breach a contract? No. Is Apple a Monopoly? Not even close. Why don't these guys just port the concept to android if it's so awesome? Cuz it's not that awesome or original. Neither is Apple or Amazon. Just evolution. Could Apple have handled it better? Perhaps. Perhaps given a 1 year grace period where the commission ramps up slowly, or even offer some sort of grandfathered in deal. Did they need to handle it better? No. It's just a little blip that will pass and won't affect their margins, user base, stock price, profits, etc.

bretm
May 11, 2011, 09:52 PM
I dont think you quite get it. Mcdonalds has stores everywhere in which they either own the building or lease the space. #1(Big Mac) Value meals go for say, $4.99.

In an airport, Vendors are paying an astronomical price to lease the space. Why, because its an airport, its a closed environment, and they can sell the space for what ever they choose to. So in order to still make a profit, Mcdonalds has to make a #1(Big Mac) Value Meal, $7.99.

In the case of Apple, Developers, Publishers etc... have to give apple a 30% cut of what ever they sell. So naturally, to keep profits, you would think that content would come at a 30% increase. Apple is saying NO to price increases. They say if you sell content for $X dollars some where else, you have to sell for $X dollars in the App store.

Is this even legal? Can Apple really tell someone else what they have to sell their stuff for? If the airport told Mcdonalds that they had to sell their Big Mac Values Meals at $4.99, Mcdonalds would probably say, See you later like iFlow.

And McDonalds probably would take it somewhere else if they couldn't make a profit in the airport. But it wouldn't be illegal.

In this case, the Airport itself decided to get in on the deal and buy it's own McDonalds franchise. And they really don't care about the other McDonalds franchises. They're happy to rent space to them and take a portion of their profits. But they don't want them to be able to sell cheap mcdonalds in the parking lot and bring it inside.

And if you're gonna sell it outside AND inside, you can't jack the prices inside to cover the rent, and whisper to customers that it's cheaper outside international concorse. But don't drink the water.

WTH? :0

Stridder44
May 12, 2011, 12:07 AM
Damn it Apple. Come on, you're better than this.

Blue Fox
May 12, 2011, 12:30 AM
I think some things need clarifying (or at least, someone needs to answer my question).......

The reason why Apple charges 30% is because Apple is hosting the app on Apple Servers. Requiring the developer no needed expense to add servers on their own.

Now my question: Does the in-app purchased content reside on the Apple servers? For example, if I in-app purchase a book from iFlow Reader, is the e-book being downloaded from Apple's server or iFlow's servers?

If the content is on Apple's servers (which I believe it is), this alone will explain why Apple is charging a 30% cut, no? If the company doesn't have to invest for servers/bandwidth/upkeep, then what is so horrible about giving a 30% cut to Apple for hosting it on their servers just like the App? Servers and bandwidth are expensive, I'm sure it would cost companies a ton more than 30% if they had to invest in their own equipment and bandwidth.

And I don't believe the "fair pricing" is anything horrible either. A lot of developers were amping-up prices specifically for iOS users because they know there is no other way for iOS users to get the content (whereas it was cheaper on other platforms). I know this is not the only reason, but simply one of many scenarios where Apple's enforcement of this policy is a benefit.

And I'll also say, if iFlow can't maintain its business based on the fact that it has to give a 30% cut to Apple for in-app purchases, then it seems to me that business was struggling before Apple started enforcing this.

OllyW
May 12, 2011, 02:38 AM
So basically the people who have nothing to offer but delivery of some other person's content will all disappear? So what? Who cares?

Doesn't the iTunes Store offer delivery of some other person's content? ;)

If the content is on Apple's servers (which I believe it is), this alone will explain why Apple is charging a 30% cut, no? If the company doesn't have to invest for servers/bandwidth/upkeep, then what is so horrible about giving a 30% cut to Apple for hosting it on their servers just like the App? Servers and bandwidth are expensive, I'm sure it would cost companies a ton more than 30% if they had to invest in their own equipment and bandwidth.

If I remember correctly to back when the story first broke a few months ago, no.

It's only the app itself that is stored on Apple's servers.

tobyx
May 12, 2011, 04:11 AM
Now my question: Does the in-app purchased content reside on the Apple servers? For example, if I in-app purchase a book from iFlow Reader, is the e-book being downloaded from Apple's server or iFlow's servers?

Only apps itself are hosted on and downloaded from Apple's servers. In-app purchases (and subscriptions) need server infrastructure outside of Apple to process the purchase, deal with things like restoring old purchases, and of course downloading content. Apple only processes the payment in this case.

t

PinkyMacGodess
May 12, 2011, 05:48 AM
So I just wonder... Was this essentially an Apple beta test for their iBooks program?

liphonearth
May 12, 2011, 10:32 AM
Pretty dense folks-

No. Is Apple a Monopoly? Not even close.

In the world of tablet computers, Apple is on shakey ground. The moment a company captures over 50% of a market, they fall under anti-trust scrutiny. The fact that Amazon was selling books electronically before iBooks, and the fact that Apple allowed their app in the first place, and may deny it in the future, MIGHT give the impression that Apple is forcing their platform users to stop giving their money to one company and give it to them instead.

Couldn't it be argued that Amazon customers bought an iPad because they could use it to read their Amazon content? If Apple then disables that feature, isn't that bait and switch.. forcing iPad owners to either repurchase their content through iBooks or to also buy an Amazon reader?

If the iBooks app suddenly starts reading Kindle books, then the argument is over.. Amazon would probably be fine with it...

I agree that the iFlow model was ill-conceived and probably would've failed without this policy, but the policy reaches farther than ebooks.. and the term Shylock comes to mind.

alent1234
May 12, 2011, 11:17 AM
How about this example. Airport space is very expensive. Have you ever been to a Mcdonalds at an airport? Theres no dollar menu and all the food is twice as expensive. What if the airport told Mcdonalds that they had to have a dollar menu and charge the same as every other Mcdonalds outside of the airport? It wouldnt be profitable. Apple should let the developers charge what ever they want for their apps.

a lot of manufacturers already tell retailers how to sell their products and what prices to charge. it's legal.

liphonearth
May 12, 2011, 11:22 AM
a lot of manufacturers already tell retailers how to sell their products and what prices to charge. it's legal.

Apple is not a manufacturer in this case. They are the middle-man. In the case of Amazon and iFlow, however, they are a direct competitor, and that is what makes this story news.

andiwm2003
May 12, 2011, 09:49 PM
apple seems to be well within their right to do this and force companies to pay 30% for using the iOS platform.

While I will stay with the iPhone and iPad due to the lack of good competitors I will definitely not buy anything that locks me into the apple platform.

I will not buy books through iBooks,
I will not buy movies through iTunes
and I will not buy expensive Apps.

I don't want to end up with a lot of investment in a platform that ends up being way to restrictive for my taste.

rols
May 13, 2011, 12:39 AM
If you read the link, there is a lot of conjecture there that people seem to be taking as fact.

11.2 Apps utilizing a system other than the In App Purchase API (IAP) to purchase content, functionality, or services in an app will be rejected
–Apple’s App Store Review Guidelines

According to that long-standing rule, I assume the iFlow app was using IAP for its app's purchases. In which case, they've always been charged 30%.

If they suddenly need to avoid that 30% (it sounds like because publishers re-negotiated?), why don't they remove in-app purchasing from the app and create an online store people can go to in a browser to add to an online library (not through the app)? This is what Amazon does.

I haven't seen any confirmation that this is changing. In fact, in that linked article it says "Apple's made no change to its App Store Guidlines" and a quote from an Apple spokesperson only references apps that allow you to make purchases:

"We are now requiring that if an app offers customers the ability to purchase books outside of the app, that the same option is also available to customers from within the app with in-app purchase."

No I don't think iFlow was selling content via IAP, they (like amazon) were selling it via a web page, whether that page was linked from inside the app and popped up automatically in MobileSafari I don't know.

Either way from the agreement

"11.13 Apps can read or play approved content (magazines, newspapers, books, audio, music, video) that is sold outside of the app, for which Apple will not receive any portion of the revenues, provided that the same content is also offered in the app using IAP at the same price or less than it is offered outside the app. This applies to both purchased content and subscriptions."

That talks about any content sold outside the app. It doesn't specify how it's sold, just that it's content, it was sold and you can read/play it on the App. A strict reading of that says that if you build a pure reader with no IAP, not even a handy button which links you to mobilesafari to take you to a webpage to buy content, you still have to add IAP to your app and allow the same content to be purchased at the same price in the app.

To reduce it to absurdity, if your model was to keep content on a server and access it via an app and the only way you could add content was to go down to your local 7-11 and hand over money and they secretly upload the content to the server, no web store, nothing, you still have to make that content available via IAP.

This - to my personal reading - means that Amazon's Kindle app falls foul of the rule. You can access content which you purchase outside (via amazon's website) so it must provide IAP for the same content at the same price. Just removing the 'link to amazon website' is not enough.

As I say, that's my interpretation of those rules from reading them.

gglockner
May 13, 2011, 12:58 AM
I'm reading a ton of misinformation in this thread.

First, the analogy with McDonald's is totally off the mark. With an airport, you have two options: pay the airport price, or bring food with you that you purchased outside the airport. With the iOS device, it's not possible to import outside content. In fact, if you could, the app would be in violation of the app store rule 11.2 that's quoted in this thread.

Some people say the answer is to remove in-app purchases and make the content downloadable from outside the app. Again, this is why Apple has rule 11.2. If you think I'm reading rule 11.2 too broadly, consider the following scenario: developer offers a free application in the iOS App Store, but the application can be unlocked through a download from another source -- imagine an unlock code that you would purchase on the web. So this would completely bypass the sales through the iTunes store as well as Apple's in-App purchase mechanism. Apple collects nothing in revenue.

I agree that this is an obnoxious policy that is bad for consumers and bad for developers who invest in building great iOS apps. Nevertheless, although I'm not a lawyer, I have real doubts that you could convince a court that Apple has a monopoly. Apple built the platform, and they have right to run the iOS platform and the iTunes store as they wish. If you don't like it, there is an ever growing list of alternatives from Google, Microsoft, RIM and (soon) HP.

That said, I've written before that there is a simple solution to this problem: Apple needs to make an exception to rule 11.2 for content providers who make their content available for multiple devices. In other words, if you can install additional content to the App - beyond just unlock codes - then Apple should not prevent you from downloading that content from sources besides in-App purchases. This protects Apple from developers who want to do a deliberate end-run around the iTunes store, while making people able to use their external content inside the iOS Apps.

gglockner
May 13, 2011, 01:04 AM
I really like what Rols said here, and I think we're stating the same thing in two different ways.

Although I fully agree with your interpretation, the only thing that's tough to digest is that if Apple does force others like Amazon to offer content through in-App purchase, the extra commission to Apple will make Amazon unable to support Kindle for iOS. And I think everyone will lose under that scenario, which is why I think Apple needs an exception for cases like Amazon.

Alternately, if Apple plays hardball on this, I expect Amazon will withdraw the Kindle app for iPhone and replace it by a web app with offline cache, thereby completely bypassing Apple's rules.

caspersoong
May 13, 2011, 03:11 AM
Well, less small eBooks Stores will confuse less people at least.

pedrofp
Jun 5, 2011, 01:31 AM
Either way from the agreement

"11.13 Apps can read or play approved content (magazines, newspapers, books, audio, music, video) that is sold outside of the app, for which Apple will not receive any portion of the revenues, provided that the same content is also offered in the app using IAP at the same price or less than it is offered outside the app. This applies to both purchased content and subscriptions."

rols,

Can you tell me precisely what document this is from? Or even perhaps provide me with a copy. I've found it & will be using it in a submission to the ACCC.

This issue is of great interest to me because I am developing an app with a content model very much like that of e-books (though the content is not books) & that clause will impact my business model. It is also at risk of violating fair trading laws in Australia, where I am, & I would like to use it in putting a case to the ACCC (Australian Competition & Consumer Commission) in whose jurisdiction this lies.

Cheers, Pedro :)

rols
Jun 5, 2011, 11:23 PM
rols,

Can you tell me precisely what document this is from? Or even perhaps provide me with a copy. I've found it & will be using it in a submission to the ACCC.

This issue is of great interest to me because I am developing an app with a content model very much like that of e-books (though the content is not books) & that clause will impact my business model. It is also at risk of violating fair trading laws in Australia, where I am, & I would like to use it in putting a case to the ACCC (Australian Competition & Consumer Commission) in whose jurisdiction this lies.

Cheers, Pedro :)

Go to the developer center and search for "app store review guidelines" for iOS. That's the document.

twilson
Jun 6, 2011, 07:20 AM
Like I've said before, this is exactly the same as if Microsoft were to force Apple to give them 30% of every song sold on iTunes on a Windows PC using a "Windows Payment System."

Doesn't make much sense, does it?

No it makes no sense, because Microsoft aren't SELLING anything. Apple is the payment gateway (middleman) for iTunes (the content they have the right to sell), and you can't interfere with that.

dexthageek
Jun 9, 2011, 07:25 AM
I am guessing that with the revised guidelines. iFlow Reader can stay in business! That is good news for them!

Never used the product, but as a small business owner I hate seeing other companies forced to close their doors.

Good Luck Guys!!