The most widely covered tech news today is based on a New York Times article reporting that Apple has rejected the Sony Reader App from the iTunes App store because it has in-app purchasing that by passes Apple’s store. A spokeswoman is quoted in the article saying that Apple is “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 only allowed method for in-app purchasing is via Apple’s store, for which Apple takes 30% of the purchase.
Amazon’s Kindle app and Barnes & Noble’s Nook app do not have in-app purchasing. The store options of these apps redirect to web sites to purchase books. According to the policy change, both apps will have to be changed to support in-app purchases, and there is much speculation about what Amazon and Barnes & Noble will do. While Apple may claim that in-app purchases are easier for users, basically Apple is forcing a situation in which they get a cut of all purchases made on their device.
Prior to 1968 nobody could buy a phone and use it on AT&T’s network. Everyone who had a phone leased the phone from Bell Systems, which was owned by AT&T. Every month AT&T was making money for use of their network, and on the equipment that people needed in order to use AT&T’s network. Apple’s app store approach seems to me to be very similar to what AT&T was doing prior to 1968, and in AT&T’s case, the government stepped in to force a change.
Of course, there is a big difference between AT&T in the 1968 and Apple today because back then AT&T was a monopoly. Apple does not have a monopoly on the smartphone, tablet, or personal computer market. However, it does have significant influence on all of those markets so the trend towards app stores combined with Apple’s actions are troubling to me. If Apple’s actions are accepted, who is to say that Microsoft’s app store won’t do the same thing?
A computer operating system vendor providing a closed system in which they make money on every application that runs on it is like an automobile manufacturer making money on every replacement part on a car. It’s one thing to provide an app store that makes it easier for people to purchase apps, it’s a whole other thing to make the app store the only way in which an app can be installed on a device.
In terms of controlling what one can install on a device, Google’s approach with the Android Market is much better than Apple’s. If an Android user chooses, they can aquire an app from a third party site and install it on their phone without using the Market and therefore not providing a cut of the sale to Android.