Amazon Didn’t Cave and Give Apple 30%

Amazon Didn’t Cave and Give Apple 30%

Remember when Apple announced they were going to be taking 30% of every “in app” sale?  I speculated then that it could be a conflict of interest for Apple.  To paraphrase myself (more details if you click the link)… it seems counter-intuitive to BOTH create unreasonably high prices for the most successful app makers (potentially forcing them to stop producing usable apps) AND try to gain market share by making your platform the most popular.  Well, Amazon didn’t blink.

Over the weekend they removed the purchasing option from their apps for both iPhone and iPad.  This way they comply with Amazon’s rules (you can’t sell anything in your app without giving Apple 30%), they still have the apps, but all you can do is login and read.  It will be an interesting experiment to see how that hurts sales (either for Amazon or for Apple or for both).

In addition to having an Amazon App that’s now inferior to the Droid equivalent, Apple will also have to contend with Amazon’s latest e-reader/tablet.  It has two cool features; a textbook rental program for students (following the old Microsoft hook them while they’re young strategy) and a free cellular network called Whispernet that will allow the tablets to sync without paying for Verizon or AT&T.  It creates a compelling alternative to other tablets for people who are serious readers.  Apple’s tablet is dominant for now but it’s about to be facing a two front war from the direct competition of Android (maybe a little from RIM and Windows too) and now significant substitute competition from Amazon.

Note: I’m not in the serious reader category, but if you are and have an opinion you’d like to offer, I’d love to hear it in the comments or in a guest post.