Apple versus Amazon
As reported on THE INTERNET, Apple is locking down in-app purchases for content-based apps. In a nutshell, developers will have to enable purchases available elsewhere in the app as well, and for the same price. This means Apple gets a cut, and the content provider loses 30 per cent. Apple argues this rule has existed since the start of iOS IAPs, but it’s just not been implemented for apps like Kindle and Spotify, and claims it’s not out to ‘kill’ such products.
Peter Steinberger on why Apple’s not being entirely truthful about its plans:
Setting up IAP is a pain. Keeping it in sync with your library is even worse. And there are also limits – IAP allows up to 3500 items – Amazon Kindle currently has about 2.5 MILLION items.
So not only is this likely impossible for Amazon from a commercial standpoint—its razor-thin margins don’t allow for Apple to take 30 per cent of any purchase—but it’s literally impossible using Apple’s current infrastructure. (Note: Amazon itself is no angel, since its margins have a tendency to put small publishers out of business, and it used to demand up to a 70 per cent cut—something a lot of people and pundits appear to have forgotten. This post isn’t about defending Amazon from the ‘evil’ of Apple.)
In other words, Apple’s reportedly giving Amazon until June 30 to totally change the way it deals with Kindle, but it’s impossible for Amazon to comply. This is about getting Kindle off of iOS, because it competes with iBooks. Thing is, Kindle being booted off iOS won’t make people switch to iBooks—it’ll make people buy Kindles. And time people are using their Kindles is time they’re not using their iPads and iPhones, potentially reducing the likelihood of them making purchases.
More importantly, I believe Apple is making a bad move in turning Amazon into an enemy. Amazon has already revealed plans for an Android store, and unlike the various kinds of shambles available elsewhere, Amazon will do it properly. In other words, it’ll be like Apple’s App Store, but for Android. Additionally, Amazon now owns Lovefilm, which European Apple TV owners were hoping would become the bundled Netflix equivalent outside of the US. If Apple and Amazon start butting heads, Lovefilm will instead become part of Amazon’s arsenal in creating an Apple-like ecosystem on Android that has the potential to hit iOS hard.
Interesting points on Apple vs. Amazon – I’ve been debating getting a kindle and/or an iPad recently (http://iam.andyhawkes.co.uk/talking-myself-out-of-a-kindle-and-an-ipad) and the new Google “One Pass” system with its cross-platform scope and comparatively reasonable 10% fee makes for an interesting situation overall.
iOS may be the epicentre of shiny must-have gadgets at the moment, but with Android now shipping more smartphone units than Apple and the new crop of Android 3 (Honeycomb) tablets drawing near it will be interesting to see if they can take a noteworthy chunk out of Apple’s touchscreen-device pie.
I don’t think in the short term share really matters. There’s such a massive market for the taking that everyone’s share is going to mushroom, with iOS at the lead through Apple’s marketing. Long-term, though, Apple needs to take care not to alienate the content providers that make the platform what it is. As for Android and Google, I think there are shocks to come there later this year regarding openness and patents, but for now Apple’s handing its competition great press, simply by being greedy and overreaching.
On what to buy, it depends what you do. If you read a lot of long-form writing, the Kindle is undoubtedly better for that than the iPad, along with being substantially cheaper. The PDF import also works very well, according to Mrs G. (She was also one for the tactile nature of books, but no longer cares, because on her Kindle she now has loads of books whenever she wants them.) The iPad’s better for everything else (games, web, productivity, video, music), and so it depends if you need a device for those things. Personally, I’m gravitating towards the iPad being a replacement for laptops going forward—at least if Apple doesn’t screw everything up.
Unlike all other bloggers you nailed the real reason fo Apple’s move here.
I believe the iBooks will be a huge beneficiary of Kindle’s departure as iBooks will become the only means for publishers to reach iOS audience.
As for the risk of turning Amazon into an enemy, well, the already are! So it is smart to kick the off before iIS grows irreversibly dependent on them.
Btw. This move means Apple is kicking Netflix off the AppStore as well.