Reason #1453 Why I Don’t Like Apple’s Mobile Platform
I’ve said this many times before (and it looks like I’ll be saying it again) — Apple’s iOS platform is a walled garden. Just like Facebook now and AOL before it, you can only play in the garden if you follow all of Mr. Jobs’ rules. And if they change the rules? Well, you can stay and suck it up or you can take your ball and go home. Those are the only two choices you have.
The latest victim to the every changing whims of Cupertino is iFlowReader. In their open letter, they announce not only why they are ending the app but are closing the entire business (the letter and my thoughts after the jump):
The crux of the matter is that Apple is now requiring us, as well as all other ebook sellers, to give them 30% of the selling price of any ebook that we sell from our iOS app. Unfortunately, because of the “agency model” that has been adopted by the largest publishers, our gross margin on ebooks after paying the wholesaler is less than 30%, which means that we would have to take a loss on all ebooks sold. This is not a sustainable business model.
…
We sent a letter to Apple VP Philip Schiller in September 2009 to confirm our business model. Apple told us they couldn’t guarantee anything – submit the application and they’d let us know after submission. We submitted our new iFlowReader app Apple in November of 2010 and they approved it a few days later. After approval, we made substantial additional investments in licensing fees, integration fees, and server fees so that we could open our ebook store on December 2, 2010. Two months later, Apple changed the rules and put us out of business. They now want 30% of the sale price of any books, which they know full well, is all of our profits and more. What sounds like a reasonable demand when packaged by Apple’s extraordinary public relations department is essentially an eviction notice to all ebook sellers on iOS. After over three years of developing products for iOS during which we had over six million downloads of our BeamItDown iFlowReader products, Apple is giving us the boot by making it financially impossible for us to survive. They want all of the eBook business on iOS and since they have the unilateral power to get it, we are out of business and the iFlow Reader is dead.
We put our faith in Apple and they screwed us. This happened even though we went to great lengths to clear our plans with Apple because we did not want to make this substantial investment of time and money blindly. Apple’s response to our detailed inquiries was to tell us that our plans did not infringe their rules in any way, which was true at the time, but there is one little catch. Apple can change the rules at any time and they did. Sadly they must have known full well that they were going to do this. Apple’s iBooks was already in development when we talked to them and they certainly must have known that their future plans would doom us to failure no matter how good our product was. We never really had a chance.
Apple Plus
I believe that if iFlowReader had developed for both iOS and Android, they might have had a chance to survive. Google’s subscription commission is a third of Apple’s. I’m not diminishing the problems of cross platform development, but I think it would have made a difference.
To me, single sourcing a sales channel is akin to single hosting your enterprise application. It works fine as long as the single source doesn’t screw up or actively screw you over. Looks like iFlowReader encountered version #2.
Where This Is Going
ESR put out a nice bit of analysis on this earlier today. As you can see from the graph, Android is gaining like gangbusters, RIM is swan-diving and Apple is holding steady. What I can see as the best case for Apple is that they hold on to their 25% of the market; I think it far more likely that they will fall to a percentage more like the PC vs Mac market dividing lines; a world where Apple posted a 23.7% increase in Mac sales in Q4 2010 and was still outsold by Toshiba alone — let alone the combined PC vendors.
Apple will remain a niche player, very good at design and slick as all get out, but a niche at best.
And before the fanboys get their slings & arrows at the ready, history is on my side. Jobs released the Mac and set the computer world on it’s ear. Apple dominated — for a few years and then it was back to the MS ascension. Same drama, just substitute Google and Larry/Sergey for MS/Gates.
– Update –
I sent an email to iFlowReader asking about a port to Android. Their response is below:
We have had an amazing number of requests for us to port the app to other platforms, release it open source, etc. We are interested in selling the technology but porting it would be very involved and our investors are not up for starting over on another platform. We actually cannot release it open source because it uses Adobe’s RMSDK which restricts us from doing that.
This response came back almost instantaneously, so I suspect lots of people have asked.
Related posts (autogenerated):
