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.

More on Apple vs Kindle for iOS devices

So, Apple vs the Amazon Kindle platform.  I brought this topic up a few days ago, I know, but it bears repeating now that representatives from Apple have come out to clarify their position and put an end to the speculation based mainly around the rejection of Sony’s Reader app submission to the Apple app store.

For those who haven’t been following the situation, Apple has apparently decided to start enforcing some of the rules regarding in-app purchasing that they have seemed uninterested in until this point.  As a result of this, Sony was unable to get its iOS Reader app published, and Amazon’s Kindle app, along with all the other eBook readers out there linked to a store, may be in some pretty serious trouble.  Up until now, the way things work has been for the Kindle app to send you to the website whenever you want to pick up something new to read.  It results in convenience for users and neatly bypasses the need to work within the app store infrastructure.  That part, I doubt Apple minds.  What they are objecting to is the fact that these sales, going through the website as they do, fail to make Apple any money.  So, new restrictions. Now, since Apple wants a 30% cut and Amazon is making as little as a 30% cut as it is on many sales (specifically those coming from its self-publishing authors), many people are foreseeing a problem.

Heading off many of the potential solutions that Amazon could have used to address the new restrictions, Apple reps have made clear that there can be no linking to outside stores from inside an app anymore, and definitely no marking up of in-app sales to dissuade their use.  Basically, anything you’re selling to users of your app had better be available through the app so that Apple can get its cut and it must cost the same or less than in any other store you operate.  Not good news for the Kindle platform.

It remains to be seen how Amazon is going to respond to this.  There really seem to be very few options.  The question may come down to a matter of how much of Amazon’s eBook sale numbers comes through Apple devices.  I would imagine it would have to be a large percentage to persuade them to raise prices across the board for eBooks, which is what would have to happen for Apple’s percentage to be accounted for.  But it is also highly unlikely that the numbers could be so low as to make pulling the app completely a viable option.  Simply forgoing their own percentage of the price on a product that many believe is already being sold at cost or below is the least likely scenario of all, in my opinion.  Short of withdrawing the app, it seems like any compromise in favor of Apple will have a negative impact on users of Amazon’s own Kindle owners and that seems like a silly choice to make unless it’s overwhelmingly necessary.

Maybe this is a move intended to bolster Apple’s unimpressive efforts to take over the eBook industry’s distribution network the way they have that of the music industry, but if so then at best this will be an uphill battle that will earn them no small amount of ill will.  With the eReader capabilities of the iPad in particular being a selling point for many people, all Apple may be accomplishing here is diminishing the value of their devices by causing problems with one of the most popular apps they have seen to date.