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Originally Posted by david_e
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Hi David, I do appreciate your pointing out that the original story was revised - it does clarify the immediate-term concern.
However, I agree with Maggie that it is the subsequent addition - the inclusion of Apple's statement from February 2nd - that is raising most of the concern.
Let me take you through what I understand, and if I've made an error in logic or understanding, I'd sincerely appreciate it being pointed out.
Apple has said that apps can continue to access content purchased outside of an app, but if they do, they are required to offer the ability to purchase the same content through the in-app purchase system.
This may be, worst case scenario that you can only offer content that is also available from Apple (and I hope this isn't the extreme they are moving towards) or just that you need to offer the content via Apple's purchase system, regardless of whether it's available in the iBookstore.
Now, does that read correctly? That is what I'm interpreting from Apple's statement.
Second premise is an assumption which may or may not prove correct in this case but is a current precedent for content: Apple charges 30% of the total sale when transactions are processed through the in-app purchase model.
Third premise: Amazon's acquiecence to the agency model has, for many titles, limited them to a total gross margin of 30% of the retail price of the book. That's before whispernet, advertising, overhead, etc.
And remember, just because you purchased a title on the iOs, it doesn't mean you won't also be downloading it to your other devices via whispernet - which is alway free to the user.
Fourth premise: If Amazon was required to offer in-app purchasing of titles, and Apple demanded 30% of the gross sale, Amazon would lose money on each in-app sale.
Fifth premise: If, as Apple claims, the in-app purchased mode proves to be much more popular with users, Amazon will operate on the iOs platform at a net loss, while simultaneously providing Apple, a bookstore competitor, with extensive customer information and their ebook buying history.
Sixth premise: Amazon would reluctantly have to depart the iOs platform, rather than maintain a loss while also providing key strategic business information to a competitor.
For Amazon, substitute B&N, Kobo, etc. Lather, Rinse, Repeat.
Now, this whole stack of cards stands or collapses on premise number 2, the 30% figure. And that's why I think Apple is being vague. If they think they can get away with killing the competition and making iBookstore the sole iOs ebook supplier, they'll happily do so. If, on the other hand, if they realize that would cause a huge backlash, which is has begun to, they'll like come out all innocent and present it as just a POS convenience service, at some rate greater than the usual POS margin of 2-3% but less than a crippling 20%. I vote for 5-10%, a figure the developer at Kobo already mentioned.
But, I'm still unsure if they worst case scenerio - 30% margin, Amazon goes away - might still be a likely path. Or if the notion of turning over strategic information might be even harder for Amazon to swallow.
And it's the uncertainty, now, in the past and presumably in the future, that makes me wonder if it's really as great as I think inside this walled garden, and if I should turn off my admitted default buy-next-iOs-release-product zombie mode, and start looking outside the garden. The fact that Apple seems to like changing the de-facto rules, often while denying that they're changing them, make this a platform with a certain risk and unpredictability, often seeming to turn on a whim. Heck, I bought the Google voice app... two days before they pulled it, and thereby pulled the update path to ensure it continued to work.
Don't get me wrong, I quite like my Apple products, but, like some foreign aid, they always seem to come with ideological compromises attached. I've worked with software companies before as a developer, but Apple has mastered the art of shortcomings as features, by playing them off as ideological principals. Like, for example, not supporting bluetooth keyboards in iOs for 3 years because it's "not the iPhone way."
