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Posted at 1:26 PM ET, 02/ 1/2011

Apple bans Sony e-reader app; are others next?

By Rob Pegoraro

Apple rejected a Sony e-reader app for allowing customers to read books purchased outside of Apple's App Store. So says a New York Times story that describes a major change in how media companies can do business with customers on Apple's mobile devices:

The company has told some applications developers, including Sony, that they can no longer sell content, like e-books, within their apps, or let customers have access to purchases they have made outside the App Store.

Thumbnail image for app_store_icon_vignette.jpg

That's not how iPhone, iPod touch and iPad software works today. While Apple's App Store rules ban programs that sell new "content, functionality or services" to users outside of its App Store, Apple has long allowed applications to send a user to Apple's Safari browser to make a purchase.

Amazon, Barnes & Noble and Google's e-book reader programs all work along those lines. Sony's would have used that same model.

The Cupertino, Calif., company has also tolerated apps that rely on subscriptions purchased elsewhere, such as the Hulu Plus and Netflix video-viewing programs or Ongo's newspaper browser (which debuted the day after that site launched, despite worries by its executives that Apple would hold up the app).

Or consider AT&T's Navigator app, which bills subscription fees of $9.99 a month or $69.99 a year directly to your AT&T account.

Amazon, B&N and Google representatives have not answered e-mails requesting a comment, while an AT&T publicist said she'd look into this issue. Ongo spokesman Dan Gould wrote that "Apple has not shared any concerns regarding Ongo's subscription process."

Apple, for its part, has begun providing a statement that it's not banning outside-the-app purchases but now requires that programs match any such external option with an App Store transaction. A post at the Loop, a blog written by veteran Mac reporter Jim Dalrymple, quotes Apple as follows:

"We have not changed our developer terms or guidelines," Apple spokesperson, Trudy Muller, told The Loop. "We are 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."

That need not be a problem for individual iPhone users, who will--in theory--get a faster, simpler way to enhance an application with a new feature, service or subscription. But it could be less palatable to app publishers, who will only keep 70 percent of each App Store in-app transaction (PDF) and will also have to watch as Apple learns more and more about their customers.

Even in the case of a new, iPad-only venture such as News Corporation's The Daily--to be introduced tomorrow--will media companies welcome Apple inserting itself between them and their customers after years of doing otherwise?

(That group includes the Post Co., which plans to charge for a subscription to its iPad app.)

Forrester analyst James McQuivey gave a simple verdict in a blog post today: "At Forrester, our call is clear: this is a mistake."

Calling it "fundamentally at odds with the pro-consumer revolution Apple started," McQuivey wrote that this move will only steer business towards other tablet platforms, starting with Google's Android. It may also get Apple a closer look from regulators, deserved or not: "The FTC is going to get quite a few phone calls on this one."

What's your take on this? Does it matter to you how you pay to upgrade or extend an iPhone app as long as the transaction is completed as advertised? How far do you think Apple will go in pushing this change?

By Rob Pegoraro  | February 1, 2011; 1:26 PM ET
Categories:  Apple, E-books, Mobile  
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Next: Movie-industry study: Unauthorized video sharing shrinks if viewers have legal options

Comments

Oh yeah, this just screams "anti-trust enforcement".

BTW, when is the Post coming out with an Android app? If the BBC and NPR can do it I don't see why the WaPo can't.

Posted by: wiredog | February 1, 2011 2:05 PM | Report abuse

Also, way off-topic here. My Sharp Aquoos won't tune in channel 4.1 anymore. 4.2 and 4.3 come in fine, but not 4.1. On Cox Fairfax. The Insignia in the kitchen picks 4.1 up fine. I tried rescanning (and now get Sci-Fi HD), but no joy. Weird, since the channel number has no relation to its frequency.

Posted by: wiredog | February 1, 2011 2:09 PM | Report abuse

What's next? The end of the world as we know it, that's what! :-)

Apple has already issue a rebuke to this rumor. Writing an article based on another article is rather sloppy journalism.

Posted by: ahtohg | February 1, 2011 2:37 PM | Report abuse

What's next? The end of the world as we know it, that's what! :-)

Apple has already issued a rebuke to this rumor. Writing an article based on another article is rather sloppy journalism.

Posted by: ahtohg | February 1, 2011 2:38 PM | Report abuse

Apple is denying this. Where did NYT dig up this story? Will they run a retraction?

Posted by: CafeBeouf | February 1, 2011 3:10 PM | Report abuse

Just one more reason to NEVER BUY APPLE !!!

Posted by: thomasmc1957 | February 1, 2011 3:54 PM | Report abuse

I see the Apple fanboys are out in force.

Apple is "denying" this but in a very backhanded way that actually confirms Rob's blog post.

Additionally, according to Wired, Apple is now saying that material purchased via Apple store apps cannot be viewable elsewhere. Meaning that a Kindle book purchased through Apple would not be usable on a PC, Blackberry, Kindle, etc.
That will definitely get Apple unwanted FTC attention. Personally, I hope it's judged illegal.

James McQuivy's right, this is bad for customers and very bad for Apple. I had thought about moving from an Android smartphone to a Verizon iPhone when my contract is up. Not anymore simply based on principle. I think a lot of people will make this same decision.

I'm not surprised Apple made this move. Amazon is hammering the iBooks store in purchases because the "buy once, read everywhere" strategy is just better for consumers. It looks as if Apple wants to make it impossible for Amazon, Sony or B&N to make any money through Apple devices. Thanks to Jobs, the "agency model" pricing means Amazon, Sony and B&N have to pay 70% of an agency model priced e-book to the publisher. Now Apple wants the other 30% because they can't win an e-book war with Amazon simply fighting on equal terms. Customers have already decided the Amazon experience is better.

Posted by: CJMARTIN04 | February 1, 2011 3:58 PM | Report abuse

If this is true, users need to rise up like the Tunisians and Egyptians and let Emperor Jobs know that we will bring him and his company down. Even if those who drink his Kool Aid everyday don't bother to object, the rest of the market will go to other makes of tablets. The iPad may be the leader in this category, but it is no longer the only player in town.

Posted by: patrickgama7 | February 1, 2011 4:15 PM | Report abuse

Meh. What e-books I do get, I get for free from DC Public Library.

Posted by: edgeonyou | February 1, 2011 5:31 PM | Report abuse

I am getting ready to make the change to a so-called "smart phone" this year. The more I read about Apple, the more I am determined to avoid them. I think my alternative is Google, correct? Are they trying to monopolize everything like Apple is?

Posted by: MagicDog1 | February 2, 2011 1:42 AM | Report abuse

The iPhone is the gift that keeps on giving.... to Apple.

Smart people go Android or 7.

Posted by: antispy | February 2, 2011 7:17 AM | Report abuse

Apple refuses to learn from their past. They are showing the beginnings of making the same mistakes all over again. I'm a devoted iPhone user and have been since it was released but now I'm starting to get turned off by their insistence on maintaining control.

Posted by: tvannoy13 | February 2, 2011 7:21 AM | Report abuse

Every starving small business bends over backwards to do everything they can to make their customers happy.

But when an American company gets successful, it hits a point where arrogance and greed take over and management gets the.. peculiar... idea that it's best for them to prevent their customers from doing what they want to do and forcing their customers to do what they don't want to do--and pay for it.

And it happens over and over. I've NEVER seen a company go bankrupt because they helped the customers too much, but I've seen company after company lose market share by deciding that rather than give customers a good product for their money, they decide it's more efficient to beat him up as he walks in the door and steal his wallet.

They don't even stop doing it when it starts to sink them.

I don't know about other industries, but EVERY SINGLE TIME this happens in IT, it marks the peak of the company's success and its slow descent into irrelevance. IBM, wordperfect, and Microsoft immediately come to mind, and now Apple.

The clearest example is probably IBM's microchannel. They thought they'd sell 25,000 PCs, so they let Boca do it the right way. But when the PC took off, specifically because the BIOS and bus specs were published, "management" got involved and made them do it the wrong way. They deliberately crippled the AT, figuring power users would be forced to buy expensive unix machines. Instead, they bought Compaqs. Now IBM doen't even make PCs.

I wish I knew what happens around conference tables on the upper floors. Does anyone say "excuse me, but don't you think we'd make more money by helping the customer do what he wants than preventing it?"

I guess rich people can be stupid too. And if they have common sense when they're poor, their unrestrained, near-psychotic greed clearly makes them stupid.

I sincerely believe that when greed becomes self-destructive, it's literally a kind of mental illness similar to obsessive-compulsive disorder.

As always, the ones who suffer most are the users.

--faye kane, homeless brain
More of my smartmouth at http://tinyurl.com/kanecave

Posted by: Knee_Cheese_Zarathustra | February 2, 2011 7:55 AM | Report abuse

@ Wiredog....AMEN!!!!
When ARE you guys @ the Post going to create a app for the Android??? What are you waiting for???? Come on....get with the program...please????

Posted by: rufpyt66 | February 2, 2011 8:31 AM | Report abuse

I love Apple's technology, but I will never buy their products for this very reason. Imagine Microsoft dictating which apps could or could not run on _your_ PC. Better yet, imagine that all digital media purchases had to go through Microsoft, who demanded at 30% cut. Further imagine Microsoft restricting your digital media to their devices.

Posted by: david08054 | February 2, 2011 10:17 AM | Report abuse

The interesting aspect of this as a recent but still obligated Iphone owner, If Apple / ATT are fundamentally changing the terms and conditions of the device will that eliminate my requirement to stay with ATT for the 2 years, since the utility of the device will be impaired post sale. I will be happy to join in the class action lawsuit on that change.

Posted by: TDSTim | February 2, 2011 10:48 AM | Report abuse

It is time to stop the monopoly of the cyber nazi Apple mob.
That's the reason I don't buy their products. In my laptop I upload WHATEVER I want to not what the cyber nazi allows me to.

Posted by: analyst72 | February 2, 2011 10:52 AM | Report abuse

I own a Sony reader. The Sony readers are more expensive but I think the quality is higher than other manufactures.

Sony has a reader store. I download many free ebooks to my reader using Sony software. In many cases Sony has inexpensive versions of the ebooks I download for free. I would be appalled if the Sony software interfered in any way with my download of free ebooks to my reader.

Apple really needs to quickly reject the idea that programs on Apple devices should be used to generate more revenue for Apple.

Posted by: bsallamack | February 2, 2011 11:34 AM | Report abuse

Oh yeah, this just screams "anti-trust enforcement".
--- --- ---

I prefer a closed system. Look at the viruses on Windows based computers, thousands a year, and a few that are very very dangerous. Android even has viruses now, but not the iPhone (unless it's jailbroken which voids the warranty and prevents upgrades).


Android Trojan found grafted to gaming apps
The most sophisticated Trojan for Android smartphones yet. That's how security firm Lookout describes "Geinimi," a nasty piece of malicious software it has just discovered grafted on to downloads of some popular Android gaming apps. -- http://tinyurl.com/23bbxjy

How to tell if an Android app is malware
http://www.msnbc.msn.com/id/40204815/

Software released for attacking Android phones
Two security experts said on Friday they released a tool for attacking smart phones that use Google's Android operating system to persuade manufacturers to fix a bug that lets hackers read a victim's e-mail and text messages. "It wasn't difficult to build," said Nicholas Percoco, head of Spider Labs http://tinyurl.com/22r9saw

Posted by: kkrimmer | February 2, 2011 11:42 AM | Report abuse

Adios Apple...gonna go where a greedy hardware vendor doesn't control my content and purchasing options.....

Posted by: josephfranklyn | February 2, 2011 5:38 PM | Report abuse

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