Can Amazon Sidestep Apple’s App Store Tax?

Given the prominence of the Kindle vs Apple situation in news lately, namely that Apple has decided that all purchases going through their devices via the app store must pay a 30% fee, there’s been some question of whether or not Amazon’s Kindle platform will have much of a future on iOS devices going forward.  Nobody can see Amazon giving up what we all assume to be a significant, even if not a majority, portion of their user base in order to avoid complying with the new terms, but at the same time it seems unlikely that paying the fee on ebooks that must already be selling for very near cost is an option either.  Quite the dilemma.

It occurred to me however, and I’m sure I’m not the only one or even the first, that the solution is already in the works on Amazon’s side.  Around the time of the launch announcement for Google’s eBook store, we had news that the Kindle for the Web service was being expanded into something more than just a means for previewing books pre-purchase.  Not much has been heard since then.  Now, while it is true that Apple can probably manage to enforce a competition reducing policy on their own devices using their app store, in spite of what any rumors about anti-trust investigations might be saying, it is unlikely that they would be audacious enough to start blocking access to on their browsers or those browsers that might be available to users in an app store at any given time.

At last report, the existing Kindle for the Web books read pretty well on the iPad and need only slight tweaks for the iPhone. I do doubt that this was some sort of master plan anticipating the current situation.  Maybe I’m underestimating Amazon’s foresight.  Maybe I’m overestimating Apple’s deviousness.  Whatever the case may be, this seems like a great time to be rolling out a platform independent reading app that just happens to be laying around waiting to be used.

Really, this may well be the way things go in terms of non-dedicated eReaders in the future.  I don’t know how I feel about that.  While it will ensure that no matter what you happen to be holding in your hand at any given time, I can’t imagine that a browser-based solution will bring quite the same immersive reading experience that things like the existing Kindle app manage to provide.  Tablets, and PCs in general, are already at something of a disadvantage compared to the Kindle thanks to the screen differences.  Still, one would have to expect that the ability to avoid app store disputes like this one, added to the already impressive potential ability to run on anything connected to the internet, will make it worth further emphasis for Amazon.  I’m hoping that it doesn’t cause them to give up on their device-specific app line, though. It adds a certain something that gives the Kindle platform an edge over all the rest for many people, even when the comparison doesn’t involve an eReader.

7 thoughts on “Can Amazon Sidestep Apple’s App Store Tax?

  1. The web app doesn’t really strike me as a viable substitute, simply because requires a web connection. People frequently don’t want to be burning their battery on wireless just in order to read a book, and even if they did, not all iPads have 3G or are always used near a wifi hotspot. An eReader isn’t really that useful if you have to make sure you’re connected to a network just to flip the page.

    Perhaps I’m missing something, but it seems to me that Amazon could simply charge 30% extra if you buy using the app store, thus creating a strong incentive for people to buy it through their website instead. After all, Apple isn’t (by my reading, anyway) banning the ability for people to purchase content through alternative means; only requiring all in-app purchases to be made via their API/the app store.

  2. @Micah, Amazon cannot charge an extra 30% in app for three reasons. One, Apple stipulates that the developer cannot sell their product cheaper outside of the app. Two, they can’t even choose to charge an extra 30% overall in many cases, because the agent model that Apple created (and consequently got forced onto Amazon) stipulates that the publishers determine the price. And three, even if Amazon could increase prices, it doesn’t matter as in most cases, (also beginning with the agent model) their cut is only 30% anyways, and if Apple is taking 30% off the total sale price, than Amazon is getting exactly zero dollars regardless of the price of the book. Raising prices would only raise profit for Apple, not Amazon. In order to even consider continuing to offer their app under Apple’s rules, they would need to create all new contracts with the publishers, and Apple has essentially told the publishers that if they change their contract with Amazon, then they don’t get to sell their books on iBooks. It’s adding all these things together, that I hope that they actually get charged with something this time around.

  3. Perhaps I am misunderstanding the problem, but I thought Apple’s gripe is if you can purchase content through the app, you need to use their in-app purchase system, thus requiring 30% to go to Apple.

    Last time I checked, you can’t purchase ANYTHING through the Kindle app. I’ve only bought a single Kindle book through my iPhone, and I was required to purchase it through Safari.

    As I understand it, Apple has no problem with content purchased through other means that is synced (like any other kind of data that syncs) into the app after purchase.

    Although, feel free to tell me I have misunderstood the developer terms or point me to where I can find the correct information. Thanks

  4. @Elle, Apple doesn’t have a problem with premium content purchased outside the app – as long as the content can *also* be purchased using In-App Purchasing. If the content isn’t available through IAP, then you can’t access it from the app. This is what got the Sony e-reader app rejected.

  5. @Elie, That used to be the process. But starting in April, Apple is requiring all developers to sell anything that they sell outside the app, INSIDE the app at the lowest price available elsewhere. Developers who do not comply will be booted.

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