Apple rewrites rules on selling content via apps

The Bookseller - 01.02.11 - Graeme Neill

Apple has moved to block third party app developers from selling content, such as e-books, via their apps but outside of the app store, leading to speculation that it wants a cut of digital purchases, even when they are made via apps such as the Kindle app. But others have suggested that Sony was thwarted after it attempted to include access to its e-book store within the app itself, rather than via a web browser.

The New York Times reports that Apple rejected Sony's iPhone app, which would allow people to buy and read e-books bought from the Sony Reader Store. The move raises speculation Apple is targeting companies such as Amazon, who sell content via their own apps. The fallout could also hit retailers such as W H Smith, or Waterstone's. Apple takes a 30% cut from payments the go through the app store.

Steve Haber, president of Sony's digital reading division, told the New York Times all future in-app purchases would have to go through Apple. He said: "It’s the opposite of what we wanted to bring to the market. We always wanted to bring the content to as many devices as possible, not one device to one store."
Apple and Amazon refused to comment

James McQuivey, consumer electronics analyst at Forrester Research, said: "This sudden shift perhaps tells you something about Apple’s understanding of the value of its platform. Apple started making money with devices. Maybe the new thing that everyone recognizes is the unit of economic value is the platform, not the device."

The TechCrunch blog notes Amazon's e-book offer has much greater flexibility than Apple's, allowing users to read books across numerous devices. It said: "But instead of beating Amazon on price or features, it looks like Apple might just cut them off. Or force them to use in-app payments, which give Apple a 30% cut and would kill Amazon’s margins."

But a piece on ZDNet said the problem was unique to Sony. It argued: "There’s a key difference between Sony’s Reader app and Amazon’s Kindle app that seems to have escaped the attention of many tech pundits. Unlike the Kindle app, which uses the web browser to redirect users to the Amazon website to make purchases, Reader had greater built-in access to Sony’s ebook store."