Emails Reveal Why Steve Jobs and Phil Schiller Blocked In-App Purchase of Kindle Books

[Preclaro_tipo]

Are we talking about books?
Books???
What should Apple's strategy be now?
Steve and Company were deep into a war back then but it just doesn't make sense now. Apple lost the lawsuit regarding book pricing so from there on out there isn't a future profit for books.
Apple has a no amazon kindle library on iOS, is it true that there is an amazon library on Kindle on Android...what is apple gaining here?

Was there ever going to be any future where books become a revenue source? - Why is Apple fighting over books, it makes no sense.

Apple missed the bigger picture with books, once the pricing lawsuit was lost profit is gone from books. I've purchased books on iBooks because they had more audio visual features than other platforms. Only charge Amazon 30% for the value add they put on the book, if they sell a book that is identical to the printed book, no audio/visual, then they don't have a fee, or a modest fee of like $0.50 to $1.00 per book. At the same time, perhaps Apple could do a better job of showing their exclusive deals, additional book features and stop fighting over a fairly commodity-like product, like books.

Author preface video.
Recommendation videos.
large maps, drawings, interactive graphs
I think they could do so many things since Apple's 'reader' is an iPad and Amazon still has 'single purpose' (they are cool tech) Kindle readers.

 

[twinpeaks_sf]

Eddy Cue is about as poor a writer as I expected he’d be.

 

[Nykwil]

Business is only interested in one thing: $$$$$$

Not actually producing anything to "improve society"

 

[jgbr]

It is however very annoying you can not buy a kindle book from the amazon or kindle app on iOS. But it also does not mean that I go and buy something on Apple Books as after all, most people want book collections in one place.

 

[cocky jeremy]

I don't see the issue. If you sell something in someone else's store, they get a portion of it. Otherwise, why would they allow you to sell it?

 

[johnbalash]

Not surprised. This is one of the only clear cut examples of Apple conducting in anti-competitive practices whereas Amazon, Facebook, and Google have many more examples.

As a consumer, and comic book reader, I hate this walled garden when it comes to in-app purchases because I can’t purchase comics directly from the ComiXology app. I would like to see Apple change this policy.

 

[cocky jeremy]

I would like to see how all the nay-sayers at the forums the last days would run a business...

It's very easy to have opinions, it's another to build a company.

Don't you know, Apple is rich so they should just do everything for free.

 

[AxiomaticRubric]

If they think the negotiations with Amazon were bad, wait until they investigate App Store negotiations with Microsoft!

Oh wait. They won’t. 😒

 

[ElectricPotato]

What a f.....g mafia...

Steve Corleone: I'll make them an offer they can't refuse. You see, Eddie, we feel that e-books are going to be a big factor in drawing consumers into our ecosystem. (distant trumpet music)

 

[ThunderSkunk]

For all their nefarious schemes at global domination & total economic mastery, I think if I total all the in-app purchases I've made since iOS came out 13 years ago, I bought, I think, a Fieldrunners upgrade, a season of Final Space, and a Jason Lytle itunes album (bc unlike almost everything else I like, the artists are still alive and I want to support them). Everything else, my entire 5TB media library, all the TBs of movies and shows I've watched on my iOS devices have all been either free or pirated. I think if you're paying for services, out of convenience or ineptitude, you're still making the choice to do that.

 

[PaulpBenitti]

Two companies each trying to spend less money while making more money and they both want your money.

These emails don't appear damning at all. It looks like Apple wanting to enforce existing policy evenly which also happens to make them more money. Amazon benefited from the huge increase in the number of iOS devices and were getting a free ride.

The only thing it shows me is that the App Store polices (and changes to them) that Apple pretends publicly are very well thought out and evenly applied, are anything but. Here you have Schiller considering changing the rules/changing the application of the rules on a whim based on a commercial that hurt his feelings.

 

[Regbial]

I would like to see how all the nay-sayers at the forums the last days would run a business...

It's very easy to have opinions, it's another to build a company.

yeah, apparently you just have to be a petty, greedy, sociopathic, petulant child.

wow, much impressed...

 

[kyleh22]

Business 101.

 

[sparkinstx]

What's the lie here? Serious question, since we knew they dropped in-app Kindle purchases in 2011, and everyone assumed it was because Apple otherwise would require Amazon to pay the 30% cut.

The lie is that they treated all developers and app providers the same, when in truth they were offering special deals (like discounted fees) to Amazon (and probably others).

 

[deannnnn]

I think this just proves what we all know but nobody wants to admit -- that Steve Jobs was a dick.

 

[Regbial]

It really is fascinating to me how these big, serious businessmen with biiiig(ly) achievements and big expensive suits and big money and investments end up being .... children. Just an inch beneath the surface (or not even that..). ...just like everyone else..

 

[Rogifan]

I don't see the issue. If you sell something in someone else's store, they get a portion of it. Otherwise, why would they allow you to sell it?

Except there are lots of apps on the App Store that allow you to buy things where Apple gets no cut. If you download the Target app and launch it are you still in Apple’s ‘store’? In Tim Cook’s opening statement he said:

”The only apps that are subject to a commission are those where the developer acquires a customer on an Apple device and where the features or services would be experienced and consumed on an Apple device.”

I think it is a gray area around customer acquisition, especially when the only way to get an app on an iOS device is through Apple’s App Store (the folks at Basecamp say they don’t need Apple’s assistance at all in acquiring customers) but what Cook said here is flat out a lie because Apple created a whole app category just so companies like Netflix and Spotify could get around paying them a commission on services that can be consumed on an Apple device. And how should this work for services that are cross-platform? I do 99% of my Netflix consuming on my Roku smart TV, not on an Apple device. In 2008 Steve Jobs said Apple wasn’t looking to make money with the App Store. Yesterday Tim Cook crowed about Apple doubling it’s services revenues 6 months early. Clearly once Apple realized the App Store was a cash cow (and hardware growth started to decline) they decided to go all in on squeezing as much money out of it as they can get away with.

Don't you know, Apple is rich so they should just do everything for free.

84% of the apps in the App Store are free.

 

[KGBlacksmith]

does anyone have any market-share information regarding Kindle, iBooks, et all? number of users per platform, number of titles per user, etc?

I've got about 1,500 books on my Kindle; I've got about 20 books on iBooks. I'm wondering if Jobs et al were deluding themselves as to how great iBooks was going to be.

 

[I7guy]

...In 2008 Steve Jobs said Apple wasn’t looking to make money with the App Store. Yesterday Tim Cook crowed about Apple doubling it’s services revenues 6 months early. Clearly once Apple realized the App Store was a cash cow (and hardware growth started to decline) they decided to go all in on squeezing as much money out of it as they can get away with.

Maybe they weren't looking to make money, but it happened anyway. So Steve can downplay it and Tim can crow about it. Doesn't mean either was lying.

 

[KGBlacksmith]

Except there are lots of apps on the App Store that allow you to buy things where Apple gets no cut.

Apple does not get a cut of any of the following:

• Uber rides
• Starbucks orders (ditto Dunkin' Donuts, etc.)
• Amazon orders (aside from Kindle books)

The justification for this is the money a user spends does not deliver anything to be used within the app itself.

 

[CarlJ]

Isn’t it hard to compare physical and digital though? In many cases customers aren’t paying for an app that’s in the App Store. The app itself is free. Tim Cook himself said 84% of apps on the App Store are free. If I buy a magazine at Walmart and then decide to subscribe to the magazine to receive it monthly in my mailbox Walmart doesn’t get a cut of that monthly subscription fee I‘m paying.

An alternative analogy: there are, sadly, far too many people who will go to a brick and mortar store, examine all the items in some category (laser printers, or jackets, or something), test them, try some of them on, decide which they like best, and then go home and order the item from Amazon. They’ve used the store as a free showroom. The store still has to pay rent, and keep the lights on, and employ staff, and stock all those items, but they didn’t get the sale. The person walks away thinking themselves to be smart (and the attribute “unethical” rarely crosses their mind). Of course the online price is cheaper, because the online warehouse doesn’t have to pay for a storefront (at high mall rates) and salespeople and such. The people mentioned above use the retail store, in the cruelest sense of the word “use”. (No, I’m of saying every person who walks into a retail store is doing this, only that some are.)

There is a similar situation with the App Store: Apple naturally wants to make some money off the App Store - it costs them money to run, and they are a business. And, except for the few odd huge cases like the Amazon’s and Netflix’s, they can’t do anything that requires substantial manual interaction / negotiation with each developer, because they’re dealing with a million developers. So, they set an across-the-board rate, and require no outside payment systems, to make sure they get paid. Why? Because if they said that outside payment systems were fine, 95% of apps would switch to “free in the store with an IAP through us to ‘buy’ the app”. Each developer would make some more money, and Apple would make almost nothing, but their expenses for running the App Store would stay just as high. Kinda like the retail stores in the previous paragraph. So, that’s why Apple is such a stickler about all payments having to go through them - because if they open up any other method, the natural flow of the millions of developers and apps would be for all of them to switch to that other method that shifts more of the money to the developer.

Apple likes to make money, of course, and their angle on doing that is to make products and services that cater to the customer’s needs - easy to use, simple to understand, well supported (note that super-inexpensive wasn’t on that list). But sometimes Apple’s ironclad App Store policies are actively unhelpful to those customers - things like not just being unable to link to the company’s website to sign up, but not even being able to hint that “you can sign up on the web” - that is absolutely a bad customer experience.

A lot of their other policies can be argued to be expensive for the user but designed to provide a good experience - the signup one entirely fails the “good customer experience” test. But there’s still that problem of, if you simply tear up that rule, then millions of apps switch to “free to download, tap the in-app link to sign up on our website for a monthly subscription”, and the App Store income drops to zero, while everybody still expects the App Store to keep running. I don’t know what the solution is.

If you don’t change the fundamental mechanism, the question comes down to the percentages charged to the developer, same as in retail. Is 30% too high? Maybe. I’ve seen cogent arguments both ways (I’ve also seen a lot of enraged rants that basically any number you might name is too high - I tend to discount those). I think it could be a bit lower (20% maybe? I don’t know), but sales / marketing / economics is not my forte.

 

[Rogifan]

Maybe they weren't looking to make money, but it happened anyway. So Steve can downplay it and Tim can crow about it. Doesn't mean either was lying.

Tim is definitely lying with his explanation of who is subject to a commission. Or saying every developer is treated the same. I wish he’d just be honest and say yeah if you’re a big, important company that we need on our platform to make our hardware, software and services more attractive to users then you might be treated more favorably.

 

[I7guy]

Tim is definitely lying with his explanation of who is subject to a commission. Or saying every developer is treated the same. I wish he’d just be honest and say yeah if you’re a big, important company that we need on our platform to make our hardware, software and services more attractive to users then you might be treated more favorably.

This isn't binary, although I'm sure it can be argued that it should be. But it does seem like the app store has to change with the times, which makes it seem like there might be some inequality.

 

[Appleman3546]

Game set match? Shouldn’t be long now before regulation or antitrust verdicts on the app store

 

[aaronhead14]

This has been one of the biggest annoyances for me on iOS. I hate that I can’t just buy a Kindle book on my phone. It’s a simple thing that Apple intentionally blocks. Apple’s greed ruins the user experience.

Same problem with the Vudu app. You can’t buy movies in the app. It’s super annoying.

In fact, it’s the same thing with the Lightning connector. Apple cares so much about the money they make with MFI certification that they’d rather force users to use an inconvenient connector rather than just let them have USB-C, which results in a cleaner user experience.

Money-making is any company’s goal, of course. But you shouldn’t intentionally ruin the user experience! I’d argue it loses them money in the long run.