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Topic: Mobility

Amazon, others cave to Apple on in-app purchases today, HTML5 tomorrow

Summary: In-app purchase buttons have been disappearing from Apple iOS in recent days as some high-profile players---Amazon, Barnes & Noble and the Wall Street Journal---end direct sales from their respective apps. But the in-app purchase jousting is just beginning.

Larry Dignan

By for Between the Lines |

In-app purchase buttons have been disappearing from Apple iOS in recent days as some high-profile players---Amazon, Barnes & Noble and the Wall Street Journal---end direct sales from their respective apps. But the in-app purchase jousting is just beginning.

Recall that Apple changed its rules in February for content publishers on in-app purchases. If you linked to a store outside of the applications you had to include in-app purchases too so Apple could get a cut. Apple blinked a bit for newspapers and magazines. Jason Perlow predicted an judgment day for e-book apps, but was a few weeks too early.

Today looks like judgment day. The tally so far:

On the surface, the reaction is simple. What choice did these companies have? If you want to be on iOS you have to play by Apple's rules. And iOS is a big chunk of market share. It's not like you can walk away. Amazon said:

This update removes the Kindle Store button from the app. Customers can shop for 950,000 books in the Kindle Store by visiting Amazon.com/kindlestore in Safari or any web browser.

So is this over? Not quite. I suspect that more companies are going the way of the Financial Times and develop HTML5 apps and skip Apple's App Store entirely. These first moves by rival e-book players are likely to be trial balloons. You remove a Kindle Store button evaluate sales and let the metrics decide. Rest assured that if these e-book store giants didn't have an installed base they would have already ditched Apple's App Store.

In a few weeks, those metrics may tell Kobo, Amazon and Barnes & Noble that an app isn't worth the effort. Perhaps they all go HTML5 at some point. The writing on the e-book wall appears to be that content needs to come from iBooks.

Another wrinkle to ponder is that Amazon also has a tablet on deck. This tablet will feature Kindle apps---potentially natively on Android---and that move will make the Apple relationship contentious. In advance, Amazon is likely to push HTML5 sooner than later.

In other words, the strategy appears to be that it makes sense to cave to Apple now, monitor and then move to HTML5. These players will say screw iOS here's the HTML5 version. What remains to be seen is how joint customers will react. Today a few buttons disappear, but the back-and-forth is likely to continue. The end destination is likely to be HTML5. There could actually be an iOS exodus that's just starting. Will players like Netflix and Spotify---also caught in the in-app purchase skirmish---stick with crippled iOS apps?

Related:

CNET: Apple forces Amazon to alter Kindle app

Topics: Mobility, Amazon, Apple, Hardware, Mobile OS, Software Development

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  • RE: Amazon, others cave to Apple on in-app purchases today, HTML5 tomorrow

    Finally free from world's modern tyranny
    AdnanPirota
    Reply Vote

    • RE: Amazon, others cave to Apple on in-app purchases today, HTML5 tomorrow

      @AdnanPirota Just another reason my iphone and ipad are gathering dust. and my Xoom and hpc are rocking
      rparker009
      Reply Vote

      • RE: Amazon, others cave to Apple on in-app purchases today, HTML5 tomorrow

        @rparker009

        Smartphones and tablets need to go the way of the PC. HTML5 is the way to go...keep the web free regardless of how you interact with it. App stores are great but they shouldn't control how a user interacts or makes purchases. Freedom to purchase how, what and when should always be in control of the one spending the dollars!
        Rob.sharp
        Reply Vote

      • One suspects your concept of truth is sadly lacking

        That or the aforementioned dust gathering shiny Apple-toys are one of your more stupid or at least confusing expensive bits of retail therapy.

        That and what do you mean by hpc? Got a mainframe in your pocketses have you?
        ego.sum.stig
        Reply Vote

      • RE: Amazon, others cave to Apple on in-app purchases today, HTML5 tomorrow

        @rparker009

        Good for you. Exercise your consumer rights. That's how a free market works! ;-)

        As for me, iPhone/iPad are the best products I've ever used. When something better comes along I will use it. ...still waiting, but will use it when a compelling argument for me. Right tools for the right job. Fans and zealots step aside.
        ShamooToo
        Reply Vote

      • RE: Amazon, others cave to Apple on in-app purchases today, HTML5 tomorrow

        @rparker009 same here, but i actually sold the ipad since i love the blackberry playbook that much more. best buy will buy the 64gb for about $275. its a loss in the end but better than nothing
        kaylajazzmin
        Reply Vote

    • RE: Amazon, others cave to Apple on in-app purchases today, HTML5 tomorrow

      @AdnanPirota

      What do you mean finally? HTML has always been an option. Riding someone else's bandwagon and not liking it when the free portion is over is hardly an undue hardship. Even if it's inconvenient. When did these companies ever forget that they're in business? Oh that's right, they didn't - the fans did.
      ShamooToo
      Reply Vote

    • RE: Amazon, others cave to Apple on in-app purchases today, HTML5 tomorrow

      @AdnanPirota There are some valid views shared on this page which I agree with. <a href="http://www.uk-djs.net">Booking Agency</a> <a href="http://www.luvmp3.com">MP3</a> <a href="http://www.getadj.net">Get a DJ</a> <a href="http://www.gigsource.co.uk">Entertainers</a> <a href="http://www.mp3kick.com">MP3</a> Nice work everyone!
      mrswilliamson
      Reply Vote

  • RE: Amazon, others cave to Apple on in-app purchases today, HTML5 tomorrow

    This insane cash grab by Apple guaranteed that, from this point forward, I will never buy a book from iBooks or music from iTunes. They (Apple) weren't selling me the books, weren't hosting them, and weren't using their bandwidth to send them to me, so what exactly entitles them to 30% of every book I ever buy from Amazon? That is pure insanity. Sure, perhaps make Amazon charge $0.99 for the reader software, but taking a cut from every book ever sold? No logic whatsoever. This is obviously anti-competitive.
    BillDem
    Reply Vote

    • RE: Amazon, others cave to Apple on in-app purchases today, HTML5 tomorrow

      @BillDem Have to agree. I stopped buy from iTunes some time ago.....I buy the CD (or whatever) from Amazon (or whom ever) and then load it up. Not only do I no longer suddenly "lose" an album I bought, but I have my backup copy already in place, and playable on more than just an iPhone/iPod/iWhatever
      dabble53
      Reply Vote

    • Yeah, those filthy greedy $*%$ at Apple. How dare they

      shut down Amazon's selfless altruism. After all what could be more noble than Amazon putting a free App on the iTunes store so they don't have to pay royalties to Apple, then include in that free app a direct link to Amazon's store where they can selflessly collect THEIR 30% cut of any sold product. The nobility, altruism and pure social consciousness in Amazon's behavior is truly mind blowing, and makes Apple's greed all the more disgusting. H*ll, give us the pre-iBook days when Amazon was even MORE selfless, keeping a full 70% of all book sales.
      fr_gough
      Reply Vote

      • RE: Amazon, others cave to Apple on in-app purchases today, HTML5 tomorrow

        @fr_gough DO you seriously think that a margin on a book sold at an 30% discount is 30% profit? Technically, Amazon loses its shirt on most eBooks and bestsellers, like almost all book stores do. On a good day, the profits on pure books sales are relatively small to begin with.

        The problem that Apple has is that a lot of people can't afford to eat if they give away 30% of their sale price. Understand that this means that for ME to profit on an in-app purchase, I have to be charging GREATER than 30% margin. Very few industries are self supporting at these margins. Better to develop an app and sell the app itself, or create an HTML5 mobile web page and keep 100% of the profit. Apple is basically creating a scenario of artificial inflation which it does not have to compete with, allowing it to maintain an advantage in all sales situations. IF they decide to sell the widget you sell at 25% margin, you literally can't afford to compete with them.
        xianritchie
        Reply Vote

      • RE: Amazon, others cave to Apple on in-app purchases today, HTML5 tomorrow

        @fr_gough No one's forcing Apple to act like the Mafia and cordon off all access to the iPhone except if you pay tribute money. Open up access to the #$@@! phone and let people install whatever software they want from wherever they want. It's not generosity for Apple to initiate a naval blockade of iOS devices and then demand tribute money from anyone who wants to enter port. Make money on their own software sales, ok; but there's no justifiable excuse to make money off of other people's. And shame on people who agree to be extorted and create social pressure for others to do so as well.
        jgm@...
        Reply Vote

      • @xian

        Amazon takes at LEAST 30% of the selling price for any book they sell on their site.

        Amazon does NOT lose money on each sale of a book or they'd be out of business. Amazon makes enough money on ebooks to use the Kindle as a loss leader.
        fr_gough
        Reply Vote

      • @jg

        No. What is unethical is a company like Amazon exploiting the fact that Apple doesn't charge a royalty on free apps to use the iTunes store marketing and distribution machine to boost Amazon's bottom line.
        fr_gough
        Reply Vote

      • RE: Amazon, others cave to Apple on in-app purchases today, HTML5 tomorrow

        @fr_gough <br>You really need to revisit the $9.99 debacle with Amazon and publishers. A significant number of books I get frm Amazon now state "<i>price established by publisher</i>".<br><br>Big 70 to 30 % there <img border="0" src="http://www.cnet.com/i/mb/emoticons/wink.gif" alt="wink">
        rhonin
        Reply Vote

      • RE: Amazon, others cave to Apple on in-app purchases today, HTML5 tomorrow

        @fr_gough You forget Apple forced the free app thru the iTunes store - they don't allow "other stores"....
        rhonin
        Reply Vote

      • RE: Amazon, others cave to Apple on in-app purchases today, HTML5 tomorrow

        @fr_gough Nonsense. Amazon already gave Apple something of immense value: It made the iPad and iPhone part of the Kindle ecosystem. This cost Apple NOTHING, yet it increased the value of the iOS devices.

        Drive off dedicated apps and fewer people will view your product as something special among a sea of tablets and phones with more always coming along.

        So think a moment. What is going to cost Apple more in the long term. Losing the money they were never going to get from Amazon (much like the state of CA which has now lost the income taxes on the Affiliate earnings in addition to the fantasy money they factored into their fantasy budget) or losing the native Kindle App as soon as the Kindle HTML 5 app exits Beta. To Amazon iOS devices will be just another HTML5 platform with little or no device-specific feature support. Kindle accounts will just work and Apple loses prestige on top of money.
        epobirs
        Reply Vote

      • RE: Amazon, others cave to Apple on in-app purchases today, HTML5 tomorrow

        @fr_gough

        Thank you. Simply, thank you.
        ShamooToo
        Reply Vote

      • RE: Amazon, others cave to Apple on in-app purchases today, HTML5 tomorrow

        @fr_gough Why should they have to pay Apple royalties on their app (not give it away free)? People have been "giving away the razor and charging for the blades" for centuries. Besides, Apple's the bastard in the first place for forcing the use of their app store.
        pDaleC@...
        Reply Vote
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