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2011-02-02

Apple changes in-app purchase policies: an analysis

By now you have probably heard about it: Apple has rejected Sony’s Reader app on the following grounds.
We have not changed our developer terms or guidelines. 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. [Official statement by Apple.]
This post analyses the pros and cons of this decision and provides related reading.
Points in Apple’s favor:
  • Competitors are even worse. Sony and Amazon are the two companies who are most immediately affected. Both companies don’t even allow third-party apps on their devices and Amazon has a tight hold on content: It works really hard so that publishers go exclusively with Amazon. IIRC, before Apple’s iBooks, exclusivity was required for participating in the Kindle store.
  • Commercial apps can’t expect to be hosted for free. Letting Apple host a commercial app for free and making money with it through other channels is not entirely fair to Apple. The free hosting was intended for apps that are completely free and selflessly offer something to the community.
Points against Apple:
  • Pretending that nothing has changed. It is a change from previous policies, because whatever may have been in the developer terms wasn’t enforced before and now is.
  • Badly communicated. This move fits the “Apple as a control freak” trope too well. Just look at the headline of the original story: “Apple Moves to Tighten Control of App Store”. Whenever Apple’s actions fit this pattern, it makes everyone nervous and Apple should have communicated the move better. On the other hand, Sony directly going to the media did not make this easy on Apple.
    • Apple’s devices are made more attractive by 3rd party apps and thus every app helps Apple make money. App developers thus deserve better communication.
  • 30% is too much. The effort of implementing in-app purchasing and Apple’s 30% cut make it too costly for smaller companies to comply with this rule.
  • Why force developers? In-app purchasing should be attractive enough for app developers on its own merits, without forcing them to use it.
  • It’s not good for users. Superficially, forcing developers to support in-app purchases is good for users. Except that it’s not if prices have to be raised to offset the costs.
Two possible solutions:
  • An app has to pay for its hosting if it is not truly free.
  • “change the terms of in-app content purchases to be more akin to a credit-card processing fee” [source]
Related reading:
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