Apple sets deadline for Amazon's Kindle app to change - They want 30% per book

First off, if you trace the article to its source, you'll end up on a WSJ article that says something slightly different:<p><a href="http://online.wsj.com/article/SB10001424052748704775604576120531458250932.html?mod=WSJ_hp_LEFTWhatsNewsCollection" rel="nofollow">http://online.wsj.com/article/SB1000142405274870477560457612...</a><p>As far as we know, Apple has not directly set a deadline for Amazon. In fact, there's no knew information other than the date: meaning there's still a lot of questions about the subscription rates and the actual requirements Apple will have in place.<p>Personally, I can't see how a 30% fee for what amounts to little more than payment processing can stand. It's one thing to charge the fee for app distribution and marketing in the store. It's another to handle on billing at which even 10% would seem rather high.<p>I don't see this lasting. Either publishers will charge an extra fee on iPad users and/or Apple will be taken to court for anti-trust, probably in Europe first.

Thus why you should only buy ebooks where you get easily transferrable formats, like unencumbered PDF or ePub.<p>I'm a big fan of O'Reilly's multi-format approach. This is the correct end-run around proprietary stores.<p>Regarding this issue in particular, I don't see the problem with Amazon and others kicking their users out to Safari to do purchases, and thus as the purchase wouldn't happen "in app" it wouldn't be covered by this.<p>Not as smooth of a purchase experience, but not impossible to deal with.<p>The other alternative would be to tack on a 30% surcharge on any books bought directly through the app.

The discussion here at least seems to ignore one thing: 30% will not happen because that would mean Amazon would make -no- profit and still incur expenses. The agency model under which the vast majority of Amazon's ebook sales are done has a requirement from the publisher's that they get 70% of the sale price, regardless of what said sale price is. If Amazon jacks up the price for iOS sales, then they get 70% of that, and Apple gets the other 30%. Not going to happen. Personally, I'd bet on Apple announcing sometime in the near future a drastically reduced cut for in-app content purchases, more like a payment processor's cut, I.E. 5% or less.

What if Apple started demanding 30% of all sales transacted on every device they produce? What makes an iPhone so different from a MacBook?

I've used Apple's in-app purchase system and it has sone serious limitations. First, it's limited to about 3000 SKUs. Second, there is no way to automatically import (or update) the product information. So, from a technical perspective, Amazon simply cannot use IAP - it's far too limited.

It's not clear what this means: a) Amazon has to provide a way of purchasing content via the apple store (and presumably can do so at 30% markup). Meanwhile, books that you purchased to read on your computer, kindle, android phone, etc. is still available to you on your iDevice at no additional charge. b) Amazon is not allowed to transfer content that the user has already purchased. Users have to repurchase all content through the apple store and the only advantage of the kindle app is if you like the reading experience and syncing with your existing devices.<p>If it's (a), then ok. I wouldn't purchase through them, but some people might do so for the convenience (instead of starting safari and purchasing it that way). If it is (b), then as soon as there is a credible android tablet, then it's likely to be goodbye to the iPad for a number of book users. The advantage of Amazon is that while the content has DRMd for the end user, they can read it on a variety of devices. Also, the selection is excellent (not perfect, but for light reading, pretty good). I don't see Apple winning the content war on this one. I suppose Amazon could make a web-based kindle service (again, DRMd) that would could be logged in through one's amazon account and used through Safari. The experience wouldn't be as good, but it would still let people read content on an iDevice and screw Apple.

Amazon just closed an entire distribution center in Texas because Texas wanted to take 6.25% in tax. Apple wants 30%? I doubt this will go un-protested by Amazon.

The first thing that comes to my mind... This will be a huge sell argument for Android: "Buy Amazon books 25% cheaper than on Apple phones".

Well that's one way to attempt and make your eBook store competitive.

Maybe it's time for an HTML5 based Kindle app. From a customer point of view I wouldn't care as long as the functionality is the same.<p>However, a main issue with this would be the limit space available via HTML5 databases on the ipad - afaik something like 25 megabytes.

This article is incorrect, as far as I am aware.<p>Apple has implemented a policy where by everyone who sells something through their app needs to provide the same set of products and services through In-app purchases. That means that the kindle app <i>can maintain</i> their current store but must also implement an in-app purchase alternative, powered by apple, and thus with Apple's 30% tax applied to it.

Pretty greedy isn't it?

I'm wondering if the OS X Lion edition is going to have these encumbrances as well.

is it me or is 30 a robbery? I feel like Im watching goodfellas and any italian mafia movie where the mob asks for unfair piece of the business so they can protect you from unwanted guests...

Dear Apple, quit being douchebags, I love my iPad, please don't make me go out and buy a kindle as well which is what I will end up doing if Amazon pulls out of the App Store.

How will this work for O'Reilly books I purchase in pdf format? How can Apple stop me from reading it without blocking all non-DRMed pdfs?

So, what do HN recommend that Amazon do now? Or at least expect them to do.<p><pre><code> * Leave the app as-is. (With what specific motive?) * Jack up the prices. (Perhaps they'll include a notification when the user is on the relevant purchase page.) * Leave the prices as-is and take the 30% hit. * Let Apple kill the app.</code></pre>

It's interesting watching rivalries/standoffs develop between companies that didn't seem likely to happen - who would've thought in 2006 that Amazon and Apple would be at each other in 2011?<p>That was before the iPhone or Kindle came out, never mind the iPad. Interesting to see how these things develop.

If true, I think the market will make some obvious adjustments. In-app content will be vastly (%30?) more expensive than "out-of-app" purchases. Apple will counter with more reasonable rates. The end result will mean nothing has been lost and that app content will be more accessible. As with similar Apple initiatives (music, apps, etc.), users may find themselves more eager to pay for content at the end of the day.<p>Apple are canny about their relationships with content owners - I'm hesitant to believe that they'd attempt a flagrant "Apple tax". Many of their most important products - the iPhone comes to mind - have a relatively small slice of their market. In this atmosphere, it would be untenable to risk losing important content sources with exorbitant fees.

Here's the actual source article, which has much more information:<p><a href="http://online.wsj.com/article/SB10001424052748704775604576120531458250932.html" rel="nofollow">http://online.wsj.com/article/SB1000142405274870477560457612...</a>

I still think this whole thing only applies to apps that let you shop/browse internally and then whisk you away to Safari to coplete the payment. And apple's reason for objecting to this is to protect users from fraudulent payment gateways. Just one customer who had their credit card ripped off after making a 'purchase on an iPhone app' would be extremely damaging to the reputation of the whole iOS ecosystem.

This is clearly legal, as Apple don't have a monopoly.<p>But also clearly not in my interest as a putative Apple customer. (Alas, I fear I am not in Apple's target market.)

Yet another demonstration of the folly of purchasing DRMed media. Why subject your ability to read your books to the possibility of bizarre, irrelevant problems like this? It's like O'Reilly had a falling-out with Barnes &#38; Noble and suddenly I can't read a book that's been sitting on my shelf for a year. Is the convenience really worth it?

Of course this is legal or Apple wouldn't be doing it.<p>But it strikes me as an unnatural state of affairs. This idea that I can make a computational device, then <i>own the right for you to put material on that device</i>, is technically correct -- if you think of the iPad as some huge proprietary version of a CD player.<p>But if you think of it an extension of your brain -- as a prosthesis which helps you share commonly understood experiences in common formats, which it is -- then Apple is basically saying it has control over what you <i>think</i>. That it deserves a cut for any experience you have.<p>Certainly it's still more of a player than a mind-extension device, but this line will get more and more blurry. It's already making many uncomfortable. My belief is that some sort of change in law is required to clear up this confusion. An iPad is not a record player.

The whole article is complete speculation.

<a href="http://tctechcrunch.files.wordpress.com/2010/05/img_2196.jpg" rel="nofollow">http://tctechcrunch.files.wordpress.com/2010/05/img_2196.jpg</a><p>- Vic Gundotra

Who cares about Amazon, they've got volume. While this one precedence might instantly bump Apple's revenue, it means that indie developers that deal with licensed/purchased content without in-app transactions will also have no choice but comply and take into account Apples 1/3rd.