Apple has had a bad week. What was supposed to be a triumphant week with the introduction of News Corps's The Daily, a new iOS subscription service, and the first pre-orders of the Verizon iPhone has turned into what can only be called disappointing and confusing week. The issues started Tuesday when news broke that Apple had rejected the Sony Reader app on the basis that it violated Apple's guidelines. The guidelines in question address the ability to purchase content for an iOS app without going through Apple's in-app payment system. Apple's in-app system works the same as the rest of their store, where Apple takes 30 percent of the revenue. While this works fine for developers of specific apps, it isn't a system at all suited to newspaper or magazine subscriptions. And it really isn't a system that works for e-book retailers who already operate on thin margins.
What's been unclear up to this point is how exactly the Sony Reader App worked. Did it actually connect and make purchases possible in-app or did it boot the user into a browser where they could make their payment and have the content sync after the purchase. In reality, it doesn't seem to matter. Apple responded to Jim Dalrymple with the following statement:
We are now requiring that if an app offers customers the ability to purchase books outside of the app, that the same option is also available to customers from within the app with in-app purchase.
The problem with this position, of course, is that Apple has been allowing apps that violate this policy for some time. Some pretty notable apps, for that matter. The Amazon Kindle app is one of the most popular on iOS, particularly on the the iPad where it has led many to use the iPad as an e-reader. Kindle users have always enjoyed the fact that the Kindle app syncs with their other devices, making the reading experience seamless no matter what you're using. The Kindle app by default allows you to purchase content through the iOS browser, a less-than-perfect system but one that people could live with. Apple's renewed focus on its guidelines would put Kindle purchases on the iPad in jeopardy. Amazon itself only takes a 30 percent cut from the ebooks it sells, meaning that the standard in-app purchasing system would eat up all of that margin.
Something will have to give, either in Apple's demand for 30 percent or Amazon's pricing of e-books on iOS. Raising book prices would be a disaster and confusing for consumers since many use the same book on their Kindle and their iPad. How can Apple enforce pricing without messing with Amazon's ability to sync? They could insist that the Kindle app not give users the option to buy new content, but that would be harmful to users, Amazon, and ultimately Apple.
The timing of the app's rejection seeme dot make sense since Apple was set to help present the release of the new News Corps. product The Daily. The Daily is a new iPad-specific app that functions as a digital magazine, downloaded daily and full of news articles and videos. The app looks good, but is severely flawed. It is laggy in many spots and even crashes upon certain actions. Even if the performance were up to par, it's questionable whether this app makes any sense. It's not updated as the day goes on and not all of the content is able to be shared. Without a totally open system to be linked to, The Daily does exist on an island, despite assertions to the contrary. It's a old business and product model, formed in the heyday of an old medium, trying to be relevant in a new world.
In addition, the disappointment of the app is only the start of the letdown. Apple's new subscription service doesn't seem to be new at all. News Corp. admitted that their cut of the subscriptions will be 70 percent, the same as with any other App Store purchase. There was no talk about a new model, and when asked about the Sony reader controversy, Apple's Eddy Cue emphasized that Apple wanted to ensure that customers can get content "both from our device and our App Store, and from other websites and ways that they get them." That's in line with the rumor that Apple might require that content be made available through the App Store as well but is hardly an ideal scenario because of the pricing concerns listed above. It's also poor implementation to have two places for people to get their content, and again draws into question whether a button that takes you to a web store in Safari will be allowed.
While Apple makes plenty of decisions that are controversial, few have ever been this hard to rationalize or understand in context. The inconsistency between what they're allowing Amazon to do vs. what they're allowing Sony is troubling, as is the very idea that Apple might hinder the progress of cross-platform apps that manage content outside the app store. I suspect that Apple may be the one to change its policy in this case because it's the only "real" solution, though that would be uncharacteristic for a company that so notoriously likes to control their ecosystem.