Jim Dovey, formerly the Apple Platforms Team Lead for Kobo has posted a follow-up to his earlier post on the Apple subscription fee matter. (He wasn’t “former” when he posted the previous one, and subsequently had to take it down, though in a comment he cites Canada Immigration as the reason for his current ex-employment.) This time Dovey is careful to point out he doesn’t speak for Kobo, and lays out the process that led to the current state of things.

Vendors like Amazon, B&N, and Kobo, Dovey points out, spent millions of dollars developing their content-distribution systems, and operate on very tight margins. When Apple originally required vendors to fork over 30% of in-app purchase fees and the bookstores told them this was not feasible, Apple told them to redirect outside the app to sell content.

Then Apple decided to compete directly with these vendors, using private Apple-only APIs that competitors can’t—and that all apps that have anything to do with selling content must sell it in-app and give them 30%. This amounts to their entire revenue stream.

And he brings up another point I hadn’t seen mentioned elsewhere: Apple’s in-app purchasing system only allows an extremely limited number of purchasable items to be listed in an app’s catalog—3,000 or 5,000, depending on who you talk to. And bookstores like Amazon, Barnes & Noble, and Kobo have literally millions of titles.

At the end of the day, this is all about stifling competition for Apple. Their in-app purchasing wasn’t designed to handle this sort of thing. It copes with only very small catalogs, and was designed to enable small developers to easily make nuggets of content or functionality available for additional purchase. In fact, when it was first unveiled, free applications were NOT ALLOWED to use this: “free apps remain free” as Steve Jobs said when he announced it.

Those anti-trust investigations are starting to look more and more certain.


  1. I’m kind of scratching my head over what Apple figures this will accomplish…it’s not making me think “welp I guess I’ll just use iBooks now”, it’s making me think “gosh, a dedicated Kindle reader looks like a pretty good idea, and it’s about $400 less than an iPad”.

  2. When people make statements like “X will kill the i(product)’, I usually don’t give much credit to it. But this issue leads me to believe that Apple will kill the i(Product). If people are restricted to only purchasing books from the ibookstore, they’ll go elsewhere. Apple is actually taking the full cut from distributors.

    I understand that they want their slice of the meat, but they’d be better off having a better bookstore than trying to take someone else’s hard work and profiting from it.

    I’m disappointed and hope they will come to some collaborative place where the other vendors can make some dough and the consumer can keep reading on the one device.

  3. DensityDuck is right. Right now I’m using an iPhone 3GS with an aging Kindle 1, and I’m finding that a near ideal combination. The iPhone’s screen is great for almost anything but reading, and the Kindle is at its best for reading.

    One appeal an iPad had was all the ereaders than ran on it. But with that now in doubt, the Kindle’s likely to be my next upgrade. If my ereader will only buy from one online store, that store has to be Amazon.

    And yes, I have my gripes with Amazon, but in this matter its behavior has been much better. Amazon is earning its 30% slice of an ebook’s price with their store. Apple is simply practicing ‘do this or else’ extortion.

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