Sony eReader owners won’t have an iPad or iPhones app for their devices any time soon, and iPad Kindle app users better enjoy the product while it lasts. This is thanks to a new App Store policy created by Apple to ensure that they get a cut of the revenue that competing eBook companies are generating through their iPhone and iPad apps.
The policy came to light, after Sony spoke to the New York Times Monday and revealed that their eReader iPhone app was rejected by Apple because consumers were directed back to Sony’s website to purchase ebooks rather than completing the sale inside the app.
The Times states that the policy change will ensure that Apple receives a standard 30 percent share of any transactions that take place within these applications. This means that Sony, Amazon, and Barnes & Noble will all need to design applications that have in-app sales so that Apple can skim their cut of any purchases that occur on iPads or iPhones.
“We have not changed our developer terms or guidelines,” Trudy Muller, an Apple spokeswoman, said about the policy. “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.”
One analyst says that Apple’s change of heart signals a change in the way Apple views its product lines: “This sudden shift perhaps tells you something about Apple’s understanding of the value of its platform,” said James L. McQuivey, of Forrester Research. “Apple started making money with devices. Maybe the new thing that everyone recognizes is the unit of economic value is the platform, not the device.”
McQuivey is likely correct in his assertion. While devices, or hardware, are typically low margin products that generate little money for a retailer, software and accessories often have much higher margins. The more money that Apple can make off their competitors, the more they can shave off the cost of their hardware in order to make prices more appealing to customers.
Unfortunately, this kind of greed may cause manufactures to simply scrap plans for iPhone and iPad apps, leaving device owners out in the cold. They would instead concentrate on Android and Windows Phone 7 apps that had no such requirement.
There is also a chance that Apple could expand this new policy to other types of applications, instead of limiting it to ebooks. That may depend on how much backlash the company receives regarding the ebook decision. Hopefully, a compromise can be worked out to somehow minimize the losses for manufacturers and consumers.
