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Wednesday, February 23, 2011

Arrogance of Apple never fails to amaze

apple-logoLast week Apple announced its plans to allow content providers to offer subscriptions to their apps, with a number of catches.  The biggest was the 30% cut Apple will take from all subscriptions, which when added to the fact that publishers must allow subscribers to sign-up through the app and are not allowed to redirect people to a website to sign-up along with not being able to charge more for purchases through an iOS device than they do elsewhere isn’t looking very publisher friendly.

Now first let me make a few things clear, Apple has every right to charge for this service and set down terms for publishers wishing to use their ecosystem.  What annoys me is the way they seem to think they can dictate how publishers do business outside that ecosystem. 

For example, many high street retailers have different (usually cheaper) pricing on their websites, its their business and if they want to charge different prices for their products/services through different channels then why not, the overheads for websites are very different to a bricks and mortar shop.  So why should Apple be allowed to tell content providers how much they can charge for a product or service available outside the Apple ecosystem.  If a provider wants to charge 10% or 20% or 30% more for subscriptions through iOS then why shouldn’t they.

Still not convinced, then let me put it another way. Take a subscription based service such as Spotify. £9.99 a month for its premium service which lets me sync playlists to my phone. Now if Apple take 30% of that price, Spotify’s share is down to £6.99, so in order to maintain their existing margins (ignoring tax) they need to increase the price £14.27.  Remember under Apples rules Spotify can’t charge less on their website than through the Apple App store, and this is where the Apple terms start to effect not just the publishers, but the consumers too.  Take me as an example, I don’t have an iPhone, I have an Android phone.  Should Spotify wish to still provide its services to iOS users, it is people such as me who are penalised with a 43% price hike despite. So the question is, Apple be able to force me to pay more for a service I use, despite me having my usage of the service having no link to Apple?

Around the same time Google launched One Pass, a similar service with lower (10%) fees and non of the trappings that come with Apple’s subscription service. Hopefully publishers will take a stand and refuse to provide there services on iOS devices while Apple maintains its current stance.  I understand why Apple want to do things this way, they want total control of their ecosystem and users to become so reliant on it they don’t move to alternative platforms.  If publishers take a stand, users may choose to make the switch to Android, WP7, WebOS or Blackberry when they suddenly find the apps they want are no longer available on iOS. Remember last year Apple wanted its next iPhone to have an integrated SIM, but a carrier revolt soon put an end to that idea. Publishers should follow that lead and stand against Apple.

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