Is Apple getting too greedy?

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There has been much in the blogosphere recently about Apple’s new App Store Subscription policy which demands that publishers make their content subscriptions available for in-app purchase at equal or lower price the publisher offers anywhere else; e.g. direct sales.

 

For distributors and resellers - including all the eBook store vendors (Amazon, Barnes & Noble, and Sony) what this really means is that either they forego the entirety of their margin or else raise their prices by 30% to cover Apple’s inflated cut.

 

The specific terms as set out in the press release are:

 

"if a publisher is making a subscription offer outside of the app, the same (or better) offer be made inside the app"

 

Sony has already voted with its feet and removed itself from the Apple Stores, it looks increasingly likey that Amazon and Barnes & Noble will withdraw, alongside numerous media service providers - that offer subscription based services for video and music. For those that stay with Apple, users will know that they are paying a 30% premium for those services.

 

On top of this, we have the recent episode with Capcom’s iPhone / iPad App - Smurf’s Village, a game obviously aimed at children, but one with in-app purchases of up to $99 for a ’Wagon of Smurfberries’; an 8 year old girl unwitting purchased $1400 worth in a matter of hours. I have levelled similar criticisms at Facebook before for Petville.

 

For all of Apple’s retoric about customer protection and simplicity; when they should really have banned the Smurf Village app for being unethical and exploitative, they kept it in the store as it was such a big earner for them!

 

We also have Apple’s attempt to take over and monopolise all the advertising on its devices through the undoubted now ailing / failing iAd platform.

 

The bizarre thing is how many Apple fan-boys and girls seem to be in favour of Apple’s profiteering policies. If you read the comments on Gizmodo and Engadget there seems to be an unusually high number of persons that see nothing wrong with Apple operating in this manner. I am sure the European Union Commissioners will see it differently, and I cannot see why Apple won’t be facing down a number of anti-trust suites in the same way that Microsoft did. All Microsoft did was bundle IE as the default browser option for Windows. Apple does more than bundle, it totally ring-fences and monopolises its environment like no other. 

 

I am due to renew my iPhone contract in June, and I am having serious doubts about the wisdom of renewing my contract in the face of these likely limitations and price hikes.

 

As VHS proved, it’s the range and scope of the content that wins out in the end, not the quality of the device or playback. Apple might be in the lead at the moment - particularly with games, but I have a feeling that Android will soon catch up. Where there is more competition you get more choice and a better price. Apple fought hard to get the mass-market consumer - are they now looking to go back up-market by way of higher content pricing?

 

There’s a lovely field of market research called ’Conjoint Analysis’ - often deployed to explore price sensitivity and the ideal price point of a product or service. I am of course fascinated to see how this matter evolves. As a man of science and triangulation - I refuse to be held to ransom!

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