I’ve seen a lot of chaff talking about how Amazon‘s bypassed Apple‘s App Store Subscription restrictions on buying direct from their Kindle app by releasing their new Kindle Cloud Reader, just as Barnes & Noble did with their Nook app and Kobo, Inc. did with their Kobo app. For reference see articles in PC World’s Amazon Kindle Cloud Reader Joins Uprising against Apple App Store and CNET’s News Kindle Cloud Reader Web app rebuffs Apple.
I think everyone’s hyperventilating for no reason. Here’s why. It comes down to one simple reason that most people seem to willfully ignore. How often do businesses allow another business into their retail space to sell similar items?
Short answer, not very often, if ever. And definitely not for free.
Apple has settled on collecting 30% of every sale that occurs through any of their devices, be it software, subscriptions, music, books, you name it. It’s not an unreasonable markup by any means for a retailer. It helps Apple cover the costs of digital distribution (servers, cables, etc.) and provides a huge benefit to their customers by enabling them to find and purchase items conveniently through Apple devices with a single click. This easy access to customer money has other companies salivating with greed and envious because they don’t have the same access. That in turn makes them a little bitter at Apple’s success.
Somehow, Apple is supposed to be different. Apple initially didn’t allow anyone to write standalone apps for the iPhone. Web apps were the only game in town, but device specific apps were not. Why? Because Apple hadn’t planned on doing that. Once the iPhone became a hit, developers began demanding access to the iPhone APIs in order to write more efficient and specific apps, ones that weren’t well suited for doing via web apps, like games.
Apple responded by releasing many months later an iPhone SDK that allowed developers access to the APIs they needed to create standalone apps for iOS. Developers responded and today there are a reported 425,000+ apps in the iOS App Store.
However, once Apple released the iPhone APIs and allowed developers to create and distribute their apps, they had no idea what kind of apps would be created. My guess is that they hadn’t really given much thought to monetizing apps beyond the initial sale through the App Store. Apple is good, but they aren’t omnipotent or prescient, just a highly innovative and industrious company working hard to make great products for people to buy and enjoy.
However, it became evident that developers had other ideas and soon you saw apps with in-app purchase capabilities for expanded levels and new items in games, magazines subscriptions, and of course, book purchases in the Kindle app. I think Apple then saw they had a problem here.
So, what’s really going on?
Really, its simple. No company would allow a similar company to sell items in their stores without due compensation. Does Target allow Sears or Kmart to hold sales within Target stores of their own merchandise? Does Starbucks allow Seattle’s Best Coffee to sell their drinks at the same service counter? Are you shaking your head yet? You should be, because that’s the same situation Apple found themselves in. The correct answer is no. You wouldn’t see that, unless there was some co-marketing deal in place that helped both companies make a buck.
But, here was Apple with some of the best selling devices on the planet, the iPhone and later the iPad, allowing other companies to sell their goods and services through the hottest storefront in the world for free. Would any other company allow that? Does the Kindle device allow people to purchase books via iBookStore or Nook? Does the Nook allow people to purchase books via Kindle or iBookStore? No and no, they don’t.
So Apple clarified their subscription licensing stance and businesses that were profiting from their position in Apple’s storefront, had to begin paying for the privilege or get out. Those businesses that were making a killing at Apple’s expense then began complaining the loudest about how unfair Apple was being.
As always, the Apple haters are out in force seeing the move by Apple to protect its storefront as an assault on their ability to use a device they purchased in any manner that desire (see the comments in any of the above linked articles for examples). Apple is evil for charging others to use their services, as if every other company in the world is freely offering the same capabilities and benefits.
There are many freetards in the world that think everything related to software and even most hardware should be free, totally ignoring the fact that it costs money somewhere in the system to make their latest technological wet dream happen. Raw minerals don’t dig themselves out of the ground, nor magically transform into the specific materials needed to create the hardware their favorite software runs on. Nor does the software magically appear on a device and operate efficiently without countless hours of manpower to create the specific code required to interact with the hardware. People don’t live in a vacuum. They need food, water, and shelter to sustain them, and that comes from being paid to perform some form of work in which they can be paid in order to survive to create, purchase, or operate the devices.
That Amazon responded with their Kindle Cloud Reader shows that intelligent companies can respond to changing market conditions quickly and positively. I’m sure Amazon knew they had a free ride with the Kindle app linking to their Kindle store and were shaking their heads and wondering why Apple was doing them such a favor. When Apple finally realized what was happening and modified their terms, Amazon simply moved their reader to a web app, as recommended by Steve Jobs, and continued servicing their customers in the best manner they can. The Kindle Cloud Reader is a nice replacement for the Kindle app, one I plan to use more of in the future.
In the end, both companies win. Amazon has more control of their web app then they did servicing several variations of the Kindle app, and Apple remains in control of the storefront and customer experience on iOS devices.
Exactly as it should be.
UPDATE: Found one reason to not like the Kindle Cloud Reader. Seems it has to phone home in order to let you view any of your Kindle purchases, even the ones you specifically downloaded before leaving Wi-Fi range.
