Apple Requiring eBook Apps With External Purchases to Also Offer In App Purchasing

[klittle32]

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Lots of comments here saying that Apple takes a 30% cut of all transactions made within apps. I don't think this is accurate. I buy things all the time using the eBay and Amazon apps on my iPhone and ipad. I don't believe apple takes 30% every time I purchase an item using these apps, both of which have in-app purchasing.

Or am I misunderstanding what you guys are saying?

 

[grmatt]

I'm sure I don't know the whole story, but this really seems ****** on the surface.

 

[iStudentUK]

"And we'll see why 2011 will be like 1984."

If you'd told me this would happen 6 months ago I would have laughed. I wonder what will happen next-

• Compulsory email signature saying 'sent from my iPhone'?
• Mac App store becomes the only way to get programmes on Mac?
• Steve Job's birthday is permanently added into iCal?

Apple is getting silly now.

 

[gglockner]

BTW, anyone who says "Amazon should just add 30% to the purchase price of an in-app book" is terribly naive. You're forgetting that Amazon has to now modify the iOS app to conform to the latest policy. That is definitely not free, and it's something all iOS developers have to worry about.

 

[Small White Car]

It's interesting that the totally closed models generate less anger than the hybrid model.

C

Because you're seeing a clash between the 2 halves.

Amazon has plopped themselves down on one half of the device. Apple has claimed they'll soon drag them over the line, kicking and screaming.

People are pretty ok with both halves. Things get messy when you try to force something over that line, though. That's what's going on here.

 

[mashkina]

Ein? Apple doesn't provide the Credit Card Service, doesn't store the books, doesn't sell them and doesn't deliver them

So, why you are then buying it in the iPad and not elsewhere?

 

[logandzwon]

I can see both sides of this.

On Apple's side, it sucks that a company can release a free app and use Apple's infrastructure to deliver it, but not pay for any of it.

On the other hand, sucking away 30% from every single purchase just seems like too much.

Keep in mind Apple is handing all the financial work for that 30%. Merchant transaction alone can be as much as 20% in some cases, not counting all the ridiculously high standards your systems need to meet for Visa and MasterCard to even let you take on-line transactions. 30% is pretty reasonable.

 

[OllyW]

BTW, anyone who says "Amazon should just add 30% to the purchase price of an in-app book" is terribly naive.

They are also rubbish at maths.

As I've already mentioned, you need to add 43%.

 

[Solamar22]

Doing the Math

So lets say that Kindle app remains. Lets say they must offer an option for in app purchasing via Apples store where Apple gets 30% and Amazon 70%. So Amazon raises the prices to cover the increment:

- Buy a book on Amazon.com: $10

- Buy the same book on Kindle app: Amazon raises the price by 42.8% to 14.28, so they still get the $10 when getting 70%.

Am I doing the math right there?

(OK, I am late to the party. Apparently the 43% has been mentioned.)

 

[graywolf323]

this effects quite a few apps

it really does seem anti-competitive since it effects Apple's competitors

e.g. Amazon with the Kindle, Barnes & Noble and the Nook, Audible.com with all the audiobooks, etc.

 

[jclardy]

If this is true and Amazon will have to allow IAP for all of its books inside of the app then I think it could be the gateway to Apple becoming a payment processor.

With all the NFC rumors and such, it would make sense for Apple to accept payments from everywhere, especially inside its own eco-system. On websites that take payments you could have iTunes along with Paypal, Google Checkout, and Amazon payments.

I don't really care, as long as the Kindle app stays in the store.

 

[BornAgainMac]

All someone like Amazon need to do is raise the price of the in-app purchase version of the book by 30%.

And put a big banner by the old buy button that says 'Click here to buy the book at 30% off!'

I agree. That is how they should do it.

 

[alent1234]

Keep in mind Apple is handing all the financial work for that 30%. Merchant transaction alone can be as much as 20% in some cases, not counting all the ridiculously high standards your systems need to meet for Visa and MasterCard to even let you take on-line transactions. 30% is pretty reasonable.

if i use my iphone to buy groceries it does not cost apple anything in credit card fees. same with amazon, google books or any other digital non running code product i may buy somewhere else

this is like windows xp activation. the law of large numbers finally caught up to apple just like it did to Microsoft 11 years ago. apple is now looking at every penny they can find to bring in more revenue

if apple is a hardware company that doesn't care about anything else, what's the point of this?

 

[Oletros]

So, why you are then buying it in the iPad and not elsewhere?

Ein?

 

[manu chao]

I'm so getting tired of the Apple Gestapo.

How can I love and hate a company so much at the same time?

Yeah, cause making rules that benefit your company and shareholders at the expense of your competitors is exactly the same as murdering millions of innocent people. Great analogy

This is just part of the general problem that the less affected a country was by most atrocious actions of the Nazi regime, the more likely it is that Nazi terms are used in criticism of others. I doubt that in Israel it would be socially acceptable to terms like Gestapo for anything that it is not on the same level of evilness.

 

[Carniphage]

Agreed, in the end Apple might have to give up some of its simplicity and charge different levels depending on product category. Every reseller/shop already does this today with different margins on different products, even in businesses where the original producer sets the price (eg, newspapers) and subscription medicine (at least in a number of European countries subscription medicine has to be sold at the same price everywhere).

This is what I'd do.
I'd force every vendor to go through the in-app purchasing model.
And charge a flat 30% on everything.

BUT

I'd offer a tapering royalty for volume. So a mega vendor, like Amazon would end up with a much lower effective royalty rate. Perhaps only a percentage point or two.

This would reward the big players for supporting and promoting iOS.

C.

 

[Gemütlichkeit]

lol @ all the people flipping out and making a big stink in the thread last night.

Again, it's just business.

 

[saxamoophone]

The irony here is that many of the folks on this site fully understand how some of this works and the value Apple brings to Kindle and Sony.

1) Amazon takes a 30% cut of books they sell for download to their Kindle. You are saying Apple should not get the same revenue for providing the same service? Maybe Amazon/Sony should take the price cut since Apple is the one providing the Credit Card service and marketing the app through their App store (which is WAAAAYYYY bigger than any of their markets).

2) If there had not been a Kindle App for Ipad, I would NEVER have bought a Kindle book from Amazon as I would never have bought a Kindle reader and don't like to read on my laptop. I have no stats (since Amazon doesn't release them), but I would be shocked if they don't sell almost as many Kindle downloads for Ipad as they sell for their own Kindle Readers.

3) To they guy who asked about Skype credits being bought through the store. Funny example, I wanted to try that out the other day, but I opted not to set up a skype credit card account and so I did not buy any minutes. If it had been an in-app purchase, I would have bought it in a heartbeat. Instead, they got none of my money.

4) To the guy who mentioned giving away games for free and then doing in app purchases - Apple takes 30% of in app purchases as well. That is the whole point. Then I don't have to screw with setting up an account with that manufacturer to buy their .99 doo-dad.

5) Aggregated services like this are the reason I use Amazon/The App Store on other large sites. What would it be like if 50 sites were offering iPhone apps for sale and I had to sign up for each of them to buy some exclusive app I wanted. Sometimes I find stuff a dollar or two cheaper than Amazon on other sites, but I buy from them anyway because I have an account and Amazon prime. Same thing goes for in App purchases.

6) People would buy more products from Kindle and Sony if they were handled through the itunes store and their revenue would go up. It becomes an impulse purchase. I work at a company that sells downloaded software. The #1 barrier to purchase is account set-up.

Great points. But my main problem is the lack of choice. I already paid apple for their "services" through the iPhone cost.

If I want to go through their AppStore for the "ease" of everything, great!

But I should have the option of going directly through Amazon, downloading the App from them, and using their payment options.

HTML5 is not the answer to *everything* .

I'd like to think there would be an alternative besides just not *buying* an Iphone/Ipad.

 

[Oletros]

Keep in mind Apple is handing all the financial work for that 30%. Merchant transaction alone can be as much as 20% in some cases, not counting all the ridiculously high standards your systems need to meet for Visa and MasterCard to even let you take on-line transactions. 30% is pretty reasonable.

My God, when you buy a kindle ebook through Safari on Amazon, Apple doesn't do anything. The financial work is done by Amazon/B&N/etc

 

[saxamoophone]

lol @ all the people flipping out and making a big stink in the thread last night.

Again, it's just business.

And we all know the consumer is never the one hurt .

 

[Tampa Tom]

If you want to see real evil...

I'm so getting tired of the Apple Gestapo.

How can I love and hate a company so much at the same time?

....check out Google. Google is so evil they just may be the end of the human race.

 

[Taselcult]

Does anyone know if this applies to just book apps (per the quote) or to all "purchases relating to an app"? The rules are only viewable for paid dev members. If it's all apps Netflix, Sirus/XM, Guardian/NY Times are going to have to give customers the option to buy subscriptions to their companies services via Apple, and pretty sure they aren't going to want the chance for apple to take 30% of their entire revenue stream...

It's like saying a mall gets 30% of all revenue a store makes just because they are there. Doesn't seem right when put in brick & mortar terms.

 

[Rodimus Prime]

How about if we all don't take this so personal. If Apple decides that they would rather risk losing the Kindle, Nook, etc. apps, that's a business decision on their part. If Amazon or B&N decide that they don't want to pay a premium in profit for the right to sell in the Apple store, that's a business decision on their parts.

And my decision will be made with no emotion, also. If I can't use Kindle on my iPad, I will sell it and buy an Android tablet.

Umm Amazon and B&N having to give apple 30% of the revenue would mean that Amazon and B&N be losing money for every sell threw those devices since they only get 30% cut of the price of the book. So that 30% goes Apple. Amazon and B&N receive nothing and have to pay to host the book, track that it has been sold and so on.

This is pure Apple greed and if they push it I could smell law suits. Not because of Ebook stores but because iPhone, iPad are so huge and the only way to get on them is to go threw the App store. No side loading this make an issue in terms of anti competitive.

 

[Carniphage]

Because you're seeing a clash between the 2 halves.

I think you are right. People are completely tolerant of fixed function devices, being locked down tighter than nuns knickers.

But they don't accept it from more flexible devices.

This is interesting. Not at all sure how this will pan out.

C.

 

[wingsabr]

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So do in app and offer lower price on amazon. Done...