Does Apple really want to be such a sore loser?

Apple is making headlines again. I am sure you have heard the buzz that Apple this week rejected Sony’s eBook reader application for the iPhone. Yeah, quite the bummer, I know.

Instantly after it became known that Apple rejected the app people began to discuss the ramifications of that move. It would seem at this point that Apple rejected the app in an attempt to curb in competition for their own iBookstore. It does go a little deeper, however. The issue in question here is that Apple does not want distribution channels to cut them out of the revenue stream. When readers buy books through the Kindle app on the iPhone for example, they buy them directly from Amazon and Apple is seeing not a cent of that transaction.

Apple, with a bit of a sore loser attitude here, wants to change that and the rejection of the Sony reader was based on that issue. Somehow, Sony will have to find a way to channel sales through their reader app through iTunes to make sure Apple will make some money also. They become a middle-man all of a sudden. A quantity no one had counted on, and it certainly won’t make them popular among the distributors or the publishers, especially when this procedure will trickle down to Amazon’s Kindle reader software also — and it will, there I have no doubt.

As an author I am paying Amazon already to sell my book, now I will have to pay Apple on top of it if a reader buys a book through the iOS Kindle reader. Not a very pleasant prospect. If you take a 99 cent book, for example, Apple will take 30% off the top of that, leaving 70 cents for Amazon. Amazon then takes a whopping 70% off the top of that, leaving a ridiculous 20 cents to be paid to authors.

If you take a $2.99 eBook, for example, the monies paid to authors will be a mere $1.46, instead of the $2.10 they would otherwise receive. Notice, how in all these transactions Apple would be to make more money than Amazon, actually, given current royalty structures.

Like I said, Apple is not going to make a lot of friends with this, I guarantee it. And hey, why stop there? An eBook reader is nothing more than a specialized web browser – eBooks are based on on HTML formats – and as such, the purchases themselves are nothing more than web transactions. So, why stop here? Why not force all web transactions to pay its dues to Apple? Imagine how much money you could make if you would skim of monies on top of every transaction initiated through an iOS device… or, what the heck, every Mac even? Yeah, corporate greed is a glorious thing…

A move like the one Apple just initiated is not entirely surprising, however. In their own way, Apple completely botched the iBooks launch, and now comes the knee-jerk reaction to keep stockholders happy. It doesn’t happen very often that the company gets things really wrong, but occasionally it happens, and while iTunes dominates music downloads, their ebook effort simply never took off.

The reasons are manifold, as you’d expect. While they got the royalty thing right — essentially forcing Amazon’s hand to match their 70% rate — the iBookstore as a whole is very publisher and reader-unfriendly.

The fact that you need special software to upload an industry-standard ebook to the store is highly detrimental to the process, especially since it requires an Apple computer. Being a Mac user, for me that is not a problem at all, but I have many author friends who do not take kindly to it — and I can certainly sympathize.

The approval process could be called tedious at best, and it can easily take four weeks for a book to finally show up in the iBookstore. Compare that to Amazon’s, Barnes&Noble’s or Kobo’s 24-hour turn-around and you can easily see that Apple is simply not playing in the same league here.

The same is true for the user experience. In Amazon and Barnes&Noble you can search for books based on a wild range of criteria. In fact, Amazon in particular, has a search engine that compares favorably to Google. With such powerful tools at consumers’ hands, people will always find what they are looking for. And should you be out of luck, you will always stumble across countless other exciting books.

In the iBookstore you are shit out of luck of you don’t know exactly what you’re looking for. Apple’s search engine does not even allow you to search for partial titles the last time I checked and all too often a search will come up with zero results. Can you imagine all the lost upsell potential that authors are missing here? Or, to put it differently, Apple makes the discovery of authors impossible. For a reader looking for something to read that means that the odds are you won’t find anything, unless you knew what you were looking for going in.

Another major drawback is the fact that Apple has no way to browse books and search for titles on a desktop computer. The iBookstore is strangely isolated, restricted to access from an iOS device. I honestly do not understand the logic of it, as it extends even further. What looked like an oversight at first has become the harsh truth of iBooks – the fact that there is not even a software reader for Macs or other desktop computers.

Sinking their teeth into the channels that DO make money might seem like a smart move at first, and I think it is only a matter of time until they will target Amazon, Barnes&Noble and Kobo with similar prejudice.

Right now, Apple is trying to flex their muscle a bit. Whether they hope for other book publishers to pull out of the iOS altogether so that Apple can sell more books through the iBookstore, or whether they simply want to cash in on other people’s success, is anyone’s guess.

I would really much rather see them put some effort behind the iBookstore and improve it on all fronts, instead of trying to put the squeeze on others, because ultimately it will hurt everyone. Going head-to-head against Amazon can easily turn into a PR nightmare for Apple, and even if it doesn’t explode in their faces, the customers will be the ones who suffer, either because they won’t have access to books or the convenience of accessing their Kindle books anywhere any long should Amazon decide or to remove the Kindle app form iOS platforms — or have it removed. The book publishers will be angry at them and potentially boycott heir iBookstore altogether, or whatnot.

At this point, I think Apple will have to tread very carefully and not rush into things. Instead of toying with the idea of restricting or penalizing competition, maybe it would actually be a better idea to improve the overall iBooks experience for both authors and readers, and try to turn it into their own money-making success instead of leeching money off others. Once the Amazon experience is no longer 500% better, I am sure more people would turn to the native implementation of the iBooks.


9 Replies to “Does Apple really want to be such a sore loser?”

  1. Michael

    Good post from an author’s perspective. But I think you have a few small details wrong about what the Kindle and B&N reader apps do. Right now when you want to buy an eBook from either retailer from their reader software you are directed into a web browser to make the purchase. What Apple’s terms say, and they are now moving towards enforcing is if an app maker, such as Amazon, offers external purchasing they also now have to offer in-app purchasing. So the end-user can “choose” how to buy the eBook. Good for the consumer and good for Apple. Not necessarily good for the retailer like Amazon, since the consumer will usually choose the easiest way to make the purchase which would be in-app which benefits Apple more than it does the retailer.

    Frankly I agree with you that the way Apple is handling this doesn’t look good for them. And the way it is being reported sounds like Apple is trying to grab all the marbles when they aren’t. They are trying to do what is good for their customers and for the company. Which is understandable even though we might not agree with how they are handling it.


  2. Guido

    The option to “chose” will most likely be temporary only. In 6 months Apple might decree that all purchases have to be made as in-app transactions only, putting an end to it. I think we can all see that coming.

    As I said, it is not necessarily good for the consumer because companies like Amazon might decide that it’s simply not worth it to share revenues with Apple and remove the purchase ability from their Kindle app altogether.

    I am a huge Apple fan but what they are initiating here is taking them in into pretty murky waters in my opinion.

  3. Michael

    I completely agree with your murky waters comment.

    However the the Kindle app does not currently offer in-app purchasing from Amazon. According to the rules Apple says they are now enforcing Amazon will have to add in-app purchasing which will mean Apple would get a cut of the sale.

  4. Guido

    Yes, which is exactly what I’ve been criticizing and that’s why I made the small math examples. That is costing ME money and I am not too happy about it.

    I think, I would almost wish Amazon would take all purchasing out of the Kindle app altogether and make it simply a reader. Period.

  5. Alex

    Apple’s always been a bit shady, it’s its bright exterior that blinds people to this. I’ve never understood the big deal about their products. The design is great, and their GUI is beautiful, but why pay twice the money for the same thing but only more beautiful? And why all they restrictions they impose? It sure isn’t in the best interest of the consumer, only in theirs.

    I already expected them to try leech from the book sales of others. First they bring the I-pad out, get people to buy it, and once they have had their massive sales, they start with imposing their will (greed) on others.

    Them being like this, I wouldn’t know why a publisher would empower them by publishing with them. What’s next? Are other e-reader producers going to charge for the use of their reader?

    If Apple get his way, I think for authors/publishers to keep their income steady will increase the e-books prices. So why would I as a consumer buy a piece of hardware that would make using it the way I want it, more expensive? It doesn’t make sense, and I think such practices must be punished by the consumers, but people tolerate too much, and especially with Apple’s goody too shoes image.

  6. Guido

    Alex, while you can certainly have your opinion, I have to admit that I disagree with virtually everything you are saying.

    Apple products are across the board superior to virtually anything else in the market, and I – like many others – are more than happy to pay a premium for the quality we get in return.

    As for the eBook situation. As a consumer you couldn’t care less, really. In fact, the move to enforce in-app purchases can be seen as a good one because it will make it easier for consumers to buy books. It is only their back-end business partners who will take a financial hit by that maneuver.

  7. Erick

    I just stumbled upon this and have two different views.
    Alex, I agree with you in saying that apple is quite shady and a bit overpriced. The GUI is awesome and is very functional. However i agree with Guido in saying that Apple just flat out makes a product. I use it at church to rout our worship band through a Mac Book Pro with a program called starstrux and i sounds great…….. doesn’t work on Windows 7. It becomes quite annoying because i wish i had an OS that worked with practically everything………… Then I found Ubuntu and it is dream.. and it’s free!!!!
    (if you haven’t heard of Ubuntu seriously check it out!)

  8. Guido

    I have actually found the Mac to do everything I could possibly ask for – and it does so a whole lot better than any Windows machine ever will.

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