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How will Apple's subscription policy shake out?
- Thread starter ra4oasis
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They might be too big right now but if enough of them choose to take a stand against it. I think they know apple will loose enough market share to hurt them bad. And without these apps those wonderful iDevices are nothing more than expensive paperweights.
At the end of the day, apple is not a content creator, just a delivery platform. Without providers they're sunk. If apple starts seeing people pull out of the platform, they'll change their terms. 30% is excessive especially since google is offering a similar plan but only charging 10%
How this will turn out? In two years from now, it Apple won't matter anymore. There is a FLOOD of Android tablets coming and it is only a question of time when Apple will fall back into the insignificance they came from.
Yes, iOS is big TODAY and Apple is currently ahead of the pack. But it won't stay that way. An entire industry is mobilizing, and they all want a piece of the cake. They're late to the game and they do not YET have anything on the market that is good enough to really compete with the iGadgets. But it's plain and simple idiotic to assume that it will always be like this. Android 3 is almost available and the hardware for it will quickly follow. The sheer mass and variety of Android tablets will push back Apple's market share.
That's the beauty and power of industry standard platforms. If Apple's management wouldn't play the same old snobbish elitist card again and again, they could own this market and its distribution channels. But they rather watch Google (or Microsoft) take over instead of licensing their software platform to others. The same old mistake. Especially since the iPad and iOS -- ARE -- targetted at the masses of users, and not just at the upper middle-class as Macs are.
And no, Apple is NOT making the money with selling the iPad hardware. They make the money through the iTunes store and the AppStore, the hardware is just a vehicle for them to deliver the client. So they would be better off by licensing iOS to everybody, because in the end, everybody would be using their store.
Anyway. It doesn't matter. There are more important things.
Yes, iOS is big TODAY and Apple is currently ahead of the pack. But it won't stay that way. An entire industry is mobilizing, and they all want a piece of the cake. They're late to the game and they do not YET have anything on the market that is good enough to really compete with the iGadgets. But it's plain and simple idiotic to assume that it will always be like this. Android 3 is almost available and the hardware for it will quickly follow. The sheer mass and variety of Android tablets will push back Apple's market share.
That's the beauty and power of industry standard platforms. If Apple's management wouldn't play the same old snobbish elitist card again and again, they could own this market and its distribution channels. But they rather watch Google (or Microsoft) take over instead of licensing their software platform to others. The same old mistake. Especially since the iPad and iOS -- ARE -- targetted at the masses of users, and not just at the upper middle-class as Macs are.
And no, Apple is NOT making the money with selling the iPad hardware. They make the money through the iTunes store and the AppStore, the hardware is just a vehicle for them to deliver the client. So they would be better off by licensing iOS to everybody, because in the end, everybody would be using their store.
Anyway. It doesn't matter. There are more important things.
Would that be anything like the flood of mp3 players from thousands of suppliers that made the iPod completely insignificant?
Your anti-Apple bias is showing again. The fact that there will be an explosion of Android tablets is the reason iOS keeps its lead. None of the Android makers will be able to garner much market share and the product won't be profitable for them. Android tablets won't make any meaningful gains until there is a shakeout of manufacturers.
EDIT: The issue of distribution will also bite a lot of them in the ass. When your only retail relationships are with carriers, you don't end up on the shelves of where most people buy their tech.
How many models will Best Buy stock? WalMart? Target? Certainly no more than a handful each. Where are people going to be able to see the 140 announced and NOT SHIPPING Android tablets?
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The government is also looking into this.. gonna sit back and watch this one with a bag of popcorn
It's a gamble on both sides ether way.. just waiting to see who gonna fold first, hopefully its apple.. who is getting too cocky now-a days and need to be put tin their place
It's a gamble on both sides ether way.. just waiting to see who gonna fold first, hopefully its apple.. who is getting too cocky now-a days and need to be put tin their place
This is simply not possible. Let's say you have a widget that costs you $7. You sell this widget for $10, because that is the price you are contractually obligated to sell it for. The remaining $3 covers your overhead, the cost of maintaining and delivering the stock of that widget, plus a small amount of profit.
Now, a new restriction comes along that you must give $3 on every sale of said widget to a third party. So of the $10, you're giving $7 to the manufacturer, and $3 to an unrelated entity. Leaving you with $0.00 to cover your overhead, stocking, and delivery expenses, let alone offering a profit.
You are now contractually obligated to lose money on every sale you make, and there is literally nothing you can do except stop selling. Which is exactly where Amazon and Barnes & Noble are under the new rules. They have exactly two choices--lose money on every book sale to an iOS user from now until the end of time, or stop selling on iOS. There is no middle ground.
Rhapsody is even worse off, since their widget costs them $8, they sell it for $10, and still have to pay the $3. So their losses on the sale alone are now $1, even before overhead and expenses are considered. Yes, they do have the option of raising prices--$14 would get them back to roughly the same margins they had before, but they'd have to foist that increase on everyone, and that would cost them a LOT of customers. $12 is the breakeven point, where they make no profit before expenses are considered. The only smart move for them is also to exit the space.
Netflix is likely in about the same boat, but I don't have specific knowledge of what their widget costs as I do for the others, so I can't make an accurate example.
Apple will charge as much as they can, but they won't squeeze out the content providers. They will ultimately have to vary the cost by industry. But they will work down from high, rather than up from low. In other words, they will overestimate what they can take and only begrudgingly adjust it down the minimum necessary to prevent Amazon, Netflix, etc. from leaving.
30% will remain the standard but the big companies (Kindle, netflix, etc.) will cut special deals with apple for a lower rate that we will never hear about. Apple will cut a special deal before they will let a company like Netflix leave.
I think content providers will avoid in-app purchasing and just offer stuff in web stores. Don't "link" to the stores, just tell people to go to www.xyzbookstore.com or whatever to buy their stuff. OR offer only a select set of items in the in-app store, and offer the complete selection in the web store.
It is not ideal (because in-app purchasing is easier) but I think that is what many will do.
Now, there is supposedly a clause that if they sell outside the app, they have to also offer in-app purchase (and at the same price), but how is Apple possibly going to police that for every single app in the app store? They are going to comb through each in-app store of thousands of apps and compare it to the corresponding web marketplace to make sure all items match up exactly???
Ultimately, this does seem destined for a battle of wills between Apple and the content companies.
It is not ideal (because in-app purchasing is easier) but I think that is what many will do.
Now, there is supposedly a clause that if they sell outside the app, they have to also offer in-app purchase (and at the same price), but how is Apple possibly going to police that for every single app in the app store? They are going to comb through each in-app store of thousands of apps and compare it to the corresponding web marketplace to make sure all items match up exactly???
Ultimately, this does seem destined for a battle of wills between Apple and the content companies.