Tuesday, July 26, 2011

More Reasons Apples New App In-Purchase Policy May Hurt Them

Check out this article in Wired Magazine. Apple is only opening the doors to other means to not use an Apple app.

"No Soup (I mean No Book) For You"

If your used to buying your e-books off your iPad, the process has gotten trickier. But if you are a Nook or Kindle owner, purchasing new books off your devices, but sometime reading them on your iPad or iPhone, there should be nothing to worry about. It's just that Apple doesn't want to enable purchase behavior without getting a piece of the pie. And at a 30% piece, Amazon, Barnes and Noble, and others have decided to remove the purchase feature from their respective apps. So if you were previously buying through the app, the process has gotten a bit more cumbersome, as you have to go into the website; if your buying off your e-reader, you just won't notice.

Does Apple have a point? Well it is their store and there is a cost for the convenience. They are the Wallmart of App Stores with little competition at the moment. At the same time, a 30% piece of the sale may also sound awfully high, especially for simply being a pass through. How will consumers react? If they find a comfort level by going through the website, it may also enable individual content producers to recognize an opportunity to create a unique value proposition by going direct to the web. And should more and more content companies find value in marketing directly to the consumer, and consumers find satisfaction from this approach, Apple may have initiated a big sea change, all for a 30% short term margin. It is these strategic decisions that make Apple and other companies constantly re-evaluate their processes so as to understand consumers changing purchase behavior. Hopefully Apple is paying close attention to the repercussions of this app strategy.