Gruber on iOS In-App Purchases

http://daringfireball.net/2011/02/oceania_in_app_purchases

by kyleslattery • 15 years ago

39 61 15 years ago

dsuriano• 15 years ago

I wonder what this means for services like Netflix. Will the Netflix app be required to offer an in-app purchase for Netflix service?

stcredzero• 15 years ago

That's a pretty stupid move on Apple's part, IMO. All everyone has to do is 1) put in the in-app purchase and 2) mark it up 43%.

There are people out there who are going to pay the 43% premium because it's slightly more convenient. Most people will be "smart shoppers" and "go to the Amazon page".

Then again, what are they doing? Think about it. They're looking oppressive, but in exchange they get better UX. Most people will circumvent it for better prices, but that doesn't tarnish Apple's UX image. In doing this, they're just following their current policy.

msbarnett• 15 years ago

Supposedly the "Agency Model" that most publishers have moved to in their dealings with Amazon guarantee the publishers 70% of the purchase price of the book.

In which case marking the book up with a 43% premium wouldn't change anything; Apple would still eat 30% and the publishers would eat the other 70%.

apress• 15 years ago

For most ebooks (those from all of the big 5 publishers except Random House), agency pricing means only publishers -- not Amazon, Sony or Barnes & Noble, can change or set the prices. And, as already been noted, publishers also get 70% of the price they set. So 30% to Apple equals nothing for anyone else...

antidaily• 15 years ago

Hush... don't give them any ideas!

euroclydon• 15 years ago

This is going to be nasty for nasty for Apple if they push it too far, and they may already have. I wouldn't be surprised to see an AG get involved. Either an app can prompt you to buy books in Safari or not.

cageface• 15 years ago

Gruber hardly ever gets this close to criticizing Apple. I guess there's a line which even the most ardent Apple defender isn't willing to cross.

I'm still waiting to hear more from Apple's side on this but if it turns out that they really do feel they can be this capricious and selectively self-serving in their enforcement of the rules there's no way in hell I'd consider building a business on their platform, no matter how lucrative it might be in the short term.

jsnell• 15 years ago

That's funny, I thought it was just the opposite. It's amazing how far out of his way Gruber was going to avoid any criticism beyond the harmless dig at the rules changing without the rules having been changed. He even went so far as to suggest this would actually improve the user experience!

And Amazon did specifically get critiqued for strong-arm tactics in that post, so it's not like he was just in a cheerful mood and didn't want to say anything negative about anyone.

ubernostrum• 15 years ago

Gruber hardly ever gets this close to criticizing Apple.

This comment reveals a level of self-delusion that's perhaps unhealthy. Especially seeing as Gruber has a pretty long history of strongly criticizing Apple's policies for the App Store...

ugh• 15 years ago

It’s baffling to me that some people really think that Gruber never criticizes Apple, not even from a position of ignorance (“I don’t read much Gruber writes anyway but it seems to me that he hardly ever gets this close to criticizing Apple.”) but from a position of authority (“Gruber hardly ever gets this close to criticizing Apple.”).

I have seen harmless headlines than the one Gruber uses for this article called “linkbait” on HN.

kjksf4• 15 years ago

Gruber's commentary on Microsoft abusing monopoly power over access to Windows customers (http://daringfireball.net/linked/2006/05/01/msft-goog):

“Who, us? Abuse a monopoly in one area to ram something down our customers’ throats so as to build a new monopoly that damages our leading competitor? What would ever make you think we’d do that?”

Gruber's commentary on Apple abusing monopoly power over access to iPhone/iPad customers:

"This sucks for Sony because, for now, they’re locked out of the App Store. It sucks for Amazon and Barnes & Noble too, if I’m right that, going forward, they’re going to have to offer in-app purchasing as an option. But you can’t say it’s surprising that the rules are evolving toward more money for Apple while improving the experience for users"

See, when Apple does, it's "to be expected". When Microsoft does it, let's unleash the outrage.

If Apple is successful in forcing Amazon to fork over 30% for iOS-originating Kindle purchases, then they don't even need to improve their iBooks business - they would get as much money from Amazon for each book sold as they would get directly from a publisher and either destroying Amazon's margins or causing the books to cost 30% more.

Neither option is good for customers and the sooner government steps in and clips Apple's wings the better. Personally I don't want to see more abuse from Apple and enforced toll-roads for access to users of Apple made (but owned by people who purchase them) devices.

It is becoming clearer and clearer that Apple is not satisfied with making bunch of money the ethical way and will use every means available to make even more money unless someone with an ultimate stick steps in and delivers sound beating.

davidedicillo• 15 years ago

Apple is far from having a monopoly, as the Android users and Apple hater keep reminding us. Microsoft at the time I think had 90% of the market or something ridiculous like that. Amazon is free to take its app to the other 100 tables presented at CES.

kjksf4• 15 years ago

I can't wait until the day competition from Android will force Apple to be less arrogant and abusive but we both know that day has not yet arrived. Apple has 99% of tablet market and probably ~50% of smartphone market.

The important figure is that it's 85 million devices as of April last year (http://www.tipb.com/2010/04/08/50-million-iphones-sold-35-mi...).

Do you actually argue that it's ok for Apple to forbid competitors like Adobe, Mozilla, Sony or Amazon from having the same access to 85 million (and growing) users of iPhone/iPad as Apple has? Is it a function of market share?

The cause => effect in those situations is simple. Those who have enough market share to impose abusive terms, do. Whether it is Microsoft with Windows, Apple with iOS or telco companies collecting outrageous fees, they do it because they can. A 90% market share is not necessary.

In all cases it limits competition and as an end result hurts users who pay higher prices and don't get to use innovations that the gatekeeper doesn't like.

recoiledsnake5• 15 years ago

Scary scenario: Lets say Apple and MS get to 50% share each on desktops/laptops. Won't that mean they could do whatever abuse they want to without scrutiny just because none of them is a monopoly?

>But you can’t say it’s surprising that the rules are evolving toward more money for Apple while improving the experience for users — that’s win-win from Apple’s perspective.

How is it an improvement to be unable to read the books you've already bought or movies you have already rented on the iDevices?

Even Microsoft didn't pull such shit for Netflix on the Xbox 360. And the consoles are subsidized for a big loss which was to be made up by purchases by the customers.

Apple makes a profit on every iDevice sold, every iApp sold, through iAds and on the $99/year developer fee. No wonder they're literally swimming in cash but still pull such new shit for even more control and money. If Microsoft did something like this with Windows, they would have more money than what the US has in circulation, which is probably where Apple is heading.

At some point the industry is going to tell Apple to get lost and stop supporting the iDevices which is going to hurt Apple, which coupled with Android's rise might push Apple into a niche like on the desktop.

jordanroher• 15 years ago

Apple may not have a monopoly on the raw number of physical devices in the world (except tablets), but aren't they "winning" from a profits perspective? Isn't that what Gruber has celebrated for years: that Apple makes more money selling one phone than any other company on Earth? That they're beating Microsoft and Google at the only game that matters to a corporation, the bottom line? But since the global market share of iOS devices is less than 50% + 1, Apple can do absolutely anything they want?

Sorry for all the questions. But Apple can't have it both ways: either they're a plucky underdog fighting tooth and nail against the big boys, or they're in a dominant position and have some responsibility that comes with leadership. Specifically, not jerking around other companies with fickle, frequent policy changes.

Samuel_Michon5• 15 years ago

There's no Kindle app for Barnes&Nobles' Nook or Sony's Reader, there's no iBooks app for Amazon's Kindle either. Apple is the only ebook reseller that allows other ebook resellers on its platform. It's to be expected that Apple wants to charge the other ebook resellers for the privilege.

How much Apple wants to charge publishers and distributors is unclear, but I have a feeling that we'll find out more at tomorrow's launch of The Daily [1].

[1] http://edition.cnn.com/2011/TECH/mobile/02/01/the.daily.peek...

Kylekramer• 15 years ago

Google is also in the ebook business. I doubt they are going to try to take a percentage of Amazon or B&N's sales.

lukeschlather2• 15 years ago

Those who bought the Nook or Reader knew that from the outset. This isn't a move against Amazon - I expect that Amazon isn't going to lose any sleep over pulling their app from the Apple App Store. This is (would be should Apple enforce this against established players) a move against people who bought Apple products expecting certain services to be provided, much like Sony's decision to remove the OtherOS feature from the Playstation.

Only unlike Sony's removal of the OtherOS feature, Apple doesn't need people to buy Apps through them to turn a profit.

GHFigs4• 15 years ago

the sooner government steps in and clips Apple's wings the better

What exactly do you want the government to do?

kjksf4• 15 years ago

If you look at Microsoft's anti-trust case (http://en.wikipedia.org/wiki/United_States_v._Microsoft) government imposed several rules on Microsoft e.g. required them to publish all protocols and APIs (e.g. Exchange protocol) so that other can create interoperable implementations. They were forbidden from doing different OEM pricing (so they couldn't strong arm OEMs by requesting that they pay more for a Windows license unless they make some concession in favor of Microsoft) etc.

More generally: "the Settlement's requirements were primarily designed to ensure there were stringent oversight procedures and explicit requirements to prevent Microsoft from engaging in "Predatory Behavior" or other practices that might form a "Barrier to Entry"".

It's not hard to identify Apple's 'predatory behavior' that creates 'barrier to entry' that could be rectified by government imposed rules.

One such 'predatory behavior' that creates 'barrier to entry' is inability to sell (or give away) applications that are not approved by Apple. Solution: Apple needs to allow installation of applications without approval by Apple. Technical solution: sideloading, third party stores like on Android.

Another 'predatory behavior' is the rule under discussion i.e. Apple disallowing all forms of commerce other than iTunes (which results in 30% tax to Apple). Solution: the rule needs to go away.

There are more predatory rules in the app store agreement (like inability to write interpreters which means no Firefox for iPhone) but they wouldn't be important as long as the biggest predatory rule was eliminated: inability to install apps that are not approved by Apple.

kevin_morrill2• 15 years ago

If you don't like Apple's product, then don't buy them. It's pretty offensive when you say, "the sooner government steps in and clips Apple's wings the better". You're talking about the government seizing someone's property and completely violating my ability to freely associate with whomever I want on my own terms.

mortenjorck• 15 years ago

There's a problem with the apparent user experience logic here. By all indications, what Apple really wants (aside from a 30% cut that Sony, Amazon, and Barnes & Noble will gladly give them in hell) is for users to have a single (iTunes) login to purchase any kind of content inside apps.

Problem is, a single login is impossible. In any of the ebook cases, users will have to log in twice: Once to authenticate for iTunes, and once to authenticate with the ebook store – otherwise their new purchases remain orphaned on the iPad and their existing library is stranded in the cloud.

So, there goes the UX angle. All that's left is the financial angle Apple can't possibly expect the other ebook retailers to cave on. This, then, leads ultimately to the possibility that Apple simply wants them off the App Store. Which decreases the value of the iPad for anyone invested in those ecosystems. Maybe Apple never wanted them as customers, anyway?

SoftwareMaven3• 15 years ago

Apple doesn't care nearly as much about being the single login as it does about being the single currency for digital goods.

pedanticfreak2• 15 years ago

It's downright ridiculous if section 11.2 is applied universally. So does Apple get a cut of Cisco's WebEx contracts whenever a customer decides to fire up the free iOS app? Does Apple get a cut of OverDrive's contract to deliver eBooks and audio books to local libraries if someone downloads the iOS app? This doesn't even make sense.

Are Netflix and Hulu going to hand over 30% of their subscription fees to Apple if the user wants to fire up the service on an iOS device? Is that even feasible?

Are the Apple tax examiners going to look for login screens and reject apps based solely on that now?

No, probably not. It's probably just a cover for Apple to beat up on its competitors (Amazon, Barnes and Noble) and to let everyone else (Netflix, Hulu) get a free pass. Much like how Apple singled out Adobe yet allowed Appcelerator and UNITY to continue without pause.

brudgers2• 15 years ago

If a user uses the IRS's Tax App, should Apple get a 30% cut?

pedanticfreak2• 15 years ago

I'm not sure about the IRS, but I know for a fact non-profits have been in a bind with Apple for years for just that reason. Apple wants 30% of the donations. Or rather, Apple will not allow credit card transactions that do not go through in app purchase.

Every charity wants to arm its people with an iPad or send out a free iPhone app to collect donations. Ever notice how there aren't any?

nhangen• 15 years ago

My concern is this - does this nullify my ability to use Feint or Urban Airship instead of Apple's iAP? If so, that freaking sucks, and it might be the deal breaker for me.

I love native apps, and I love Apple, but more than anything, I like choice and ease of use.

cletus• 15 years ago

Let me point out a major inconsistency in Apple's position.

You can buy music from Amazon. You can load that into iTunes. You can then play it on your iPhone/iPad/iPod.

Why can't you do the same for Kindle (etc) books?

For Apple to take this position is terrible for the users. iBooks for example has nothing in Australia (beyond Project Gutenberg). Literally, nothing.

For Apple to deny a user access to Kindle books that Apple doesn't themselves offer just because they didn't get their 30% cut is simply ludicrous.

Gruber bashing is popular here but let me just quote one part:

> Translation: We haven’t changed the rules, but what used to be allowed is no longer allowed.

Doesn't sound like Apple apologism to me.

I'm really disappointed Apple is playing semantics on this one, arguing their vague rules haven't changed, just that how they've decided to interpret them and the enforcement steps they're taking, have.

One could argue Amazon might accept a smaller cut but that is a real problem for Apple. They sell a significant amount of iTunes credit through retail channels and that is sold at a discount of probably 15-30% (eg in Australia you can always find some big retailer selling 2x$20 for $30 or better although better is much rarer).

So Apple could decide to take a smaller cut and make a loss on that with retail iTunes credit hoping that the people who pay through credit card balance it out but I have trouble believe that'll happen, particularly since I can't see Amazon accepting anything more than 10%, if that.

Samuel_Michon5• 15 years ago

"You can buy music from Amazon. You can load that into iTunes. You can then play it on your iPhone/iPad/iPod. Why can't you do the same for Kindle (etc) books?"

When you buy music from Amazon, it's in MP3, a format that iTunes supports natively. For ebooks, Amazon uses the proprietary Mobipocket format, which only their Kindle app can read. Apple's ebook reader app uses ePub, as do most other ebook resellers, like Barnes&Noble. That's why ebooks bought through Barnes&Noble work just fine in Apple's iBooks.

lukeschlather2• 15 years ago

>Doesn't sound like Apple apologism to me.

There's just a hint:

>It’s hard to imagine Amazon accepting a 70/30 split from Apple. But I can’t see Amazon pulling their iOS Kindle apps, either.

In Gruber's mind, Apple isn't responsible if the iOS Kindle app gets pulled, Amazon is.

Jonnyrealed• 15 years ago

This is eerily similar to the situation that Android phone manufacturers face from the carriers—either let Verizon et al get their cut and impose their restrictions or don't get access to their network. Verizon is routinely critizied for sticking their fingers in others' pies. On the other hand Apple gets accused of "improving the experience for users".

enjo• 15 years ago

Serious question: Is it within the terms to charge extra to make the 30% back?

nwjsmith• 15 years ago

Does anyone know what mechanism Sony's app uses for book purchases? Is it all in-app? That seems a clear violation of the rules. The Kindle app doesn't work this way, all purchases are done through the browser.

Until this is clarified (by Sony or Apple preferably), how can anyone get all uppity about this?

Maybe Sony's app blatantly violates the existing rules.

ghshephard4• 15 years ago

Does anyone else find it ironic that much of the Apple store is powered by one-click purchasing, a patent that Apple licensed from Amazon?

Jeff Bezos must be kicking himself over that one.

Samuel_Michon5• 15 years ago

Not as much as the U.S. Patent and Trademark Office is kicking itself over granting that patent, I imagine.

Gruber on iOS In-App Purchases

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