HomeNewsReviewsVideoINQdepthBlogsJobsDownloads store Chips Hardware Software Communications Week to date Chips Hardware Software Communications Hardware Software Features Opinion Polls White papers Boffin Watch Numb Thumbs Friction Friction Apple kills an ebook company with its pricing greed Will cease trading this month By Spencer Dalziel Wed May 11 2011, 14:15
EBOOK SOFTWARE COMPANY Iflow Reader has said it's shutting its doors because of Apple's inflated pricing structure.
The small e-reader software company developed its Iflow Reader for use on Apple's shiny Ipad and Iphone devices. But the company said that it will go out of business at the end of May because Apple greedily changed its pricing policies "in the middle of the game".
This isn't just implied by the long sign-off that Iflow Reader staff wrote on the company's web site. It is a direct finger pointed at Apple for introducing an agency model pricing structure that means any ebook seller has to give Jobs' Mob 30 per cent of the selling price of any iOS app.
Like a lot of big companies, Apple wants to own the end to end product, which includes hardware, software, content and distribution. That kind of approach is stifling competition, killing innovation and making smaller developers go bust.
"Apple has made it completely impossible for anyone but Apple to make a profit selling contemporary ebooks on any iOS device," wrote the incensed and soon to be unemployed software team at Iflow.
"We are a small company that thought we could build a better product. We think that we did but we are powerless against Apple's absolute control of the iOS platform," they added.
Apparently Apple created the agency model to siphon off 30 per cent of gross margin and developers can't choose the price points of their products. Prices of ebooks are decided by the publisher instead, which is also Apple. The math means that Iflow Reader would lose money on every ebook it sold.
Apple's cut-throat pricing policy is exactly the same model used on Amazon's Android app store, which is also killing off games development by smaller software companies. μ
Comment on this article Flame Author Print Tags: AppleShare this:
del.icio.us 
Digg 
Facebook 
Linkedin 
reddit! 
StumbleUpon 
Twitter 
Share Related articles Apple denies that 'app store' is a generic term Amazon’s Android Appstore still offends Apple Friday, 20 May 2011, 09:15 AM Read more Apple's IOS holds a massive lead over Google's Android The Ipod Touch is the key Thursday, 21 April 2011, 15:33 PM Read more Apple's IOS 4.3.2 gets jailbroken within a week The Ipad 2 holds out a bit longer Tuesday, 19 April 2011, 11:03 AM Read more Apple's Ipad 2 rivals will fail, says analyst firm Jobs chalks up another fan Friday, 11 March 2011, 15:16 PM Read more The Iphone 4 failed to increase Apple's smartphone market share Drops the call and the ball Wednesday, 2 February 2011, 11:59 AM Read more Apple shoots itself in the foot with the Ipad Fanbois buy mirrors instead of Macs Wednesday, 26 January 2011, 17:32 PM Read more < Previous article| Next article > Comments Can't decide if article is more stupid or dishonest A failure of a company is a failure of a company. Apple's cut is for a vast distribution network, and quibble if you like, but every channel has its costs. The company failed because their product was unable to differentiate itself, promote well enough, and find a market, much like many other companies. Their failure to create a compelling product and find a market is their own, and sniveling about Apple just underlines their inability to compete or accept the consequences of their own failure.
posted by : Eric Mellon,?15 May 2011 Complain about this comment Apple has become IRSFor those of you blaming iFlow for their demise, you should read interview with founder: http://reviews.cnet.com/8301-18438_7-20062030-82.html
It's an eye opening read that illustrates the absolute totalitarian control Apple has over marketplace. The fact that other developers will not speak as candidly is another sign of fear of Big Brother, Apple.
posted by : Bob,?12 May 2011 Complain about this comment no suprise there theni'm suprised at articles like this. It's as if Apples greed has only just started or only just been discovered.
i'm suprised that any intelligent company does business with Apple at all.
i'm not suprised that another company got screwed by Apple - you know that any company that puts 'no suicide' clauses in it's work contracts is going to have no integrity
goodbye Iflow, you were to stupid to exist
posted by : sarah,?12 May 2011 Complain about this comment @Aaron:Your contribution to this - let's call it a discussion - being what? Are you working for BeamMeUpScotty-Software?
Reading all comments I think nobody here says there's no responsibility on Apple's part. You'd have to have Stockholm syndrome to think that, since it really was the change in policy that caused their demise. But from reading their sob-story I conclude that the company made unreasonable decisions at numerous points.
The very first being to sell on iThings and iThings only. Why not, say, Android? The fastest-growing and soon to be #1 smartphone OS. Maybe because statistics show that iThing-users spend much more money on their devices? Here's to being too greedy.
Then, to continue anyway even though Apple explicitly said they don't guarantee anything and have a history of arbitrarily changing their policy and booting apps out of the AppStore. And still not thinking it might be a bad idea to bet everything they had on Apple.
And last but not least, just now to simply give up. If what they're saying is true, that their reader-app really is that good and well recognized, why give up so soon?
My thoughts are based on what BeamThing software are saying on their closing-page. I don't think I'm being unreasonable here. And if all of what's written on their page is true, it just means they're some company that made wrong decisions and went bust.
yep, I agree with the comments that point the blame at iflow.
They can say all they want that they tried to "clear" it with Apple. By their own statement Apple told them they can't guarantee anything. Iflow went ahead and did it anyways...that's their responsibility and their gamble!
It's obvious Apple did not single them out....did they expect Apple to make a special exception just for them? Why don't they blame the publishing companies for signing on? They all decided to go a different route, and they all signed on....sucks for iflow, but that happens in business. Maybe next time they'll think about how they can secure their business BEFORE they throw the time/money into it they claim they did. Apple actually warned them...
posted by : richard,?12 May 2011 Complain about this comment There we go again...What kind of a business model is that?
So all they were doing was selling ebooks through a single channel - apps on Apple's iThings - where they compete with so many other companies that do exactly the same. Their business was completely dependent on a third party that straight forward told them there were no guarantees.
And now that things have changed, they simply give up. No backup plan.
I guess I know why they're so pissed. They couldn't find anyone dumb enough to invest with that business plan and had to use their own money instead.
posted by : riDDi, 12 May 2011
Aah was just hoping when a jack-ass comment like this would be surfacing... And it did! Way too soon than I estimated though.
posted by : Aaron,?12 May 2011 Complain about this comment Amazon pricing policyIs that the retailer of the app sets the price and the author/publisher has no control of it. This is COMPLETELY different from the above situation. The publisher is setting the price (and it's untrue that all agents get the same percentage under the agency model or that they had to sign an agency deal) and retailers have no control of it.
posted by : Steve T,?12 May 2011 Complain about this comment What kind of a business model is that?So all they were doing was selling ebooks through a single channel - apps on Apple's iThings - where they compete with so many other companies that do exactly the same. Their business was completely dependent on a third party that straight forward told them there were no guarantees.
And now that things have changed, they simply give up. No backup plan.
I guess I know why they're so pissed. They couldn't find anyone dumb enough to invest with that business plan and had to use their own money instead.
posted by : riDDi,?12 May 2011 Complain about this comment Apple rumoured to make a TV set!Does this mean a TV license will cost ￡189.15 per year for the Apple television if it uses IOS?
posted by : Alan Denman,?11 May 2011 Complain about this comment What did they expect?If you lie down with dogs, you will get up with fleas.
posted by : Anonymous Coward,?11 May 2011 Complain about this comment Amazon may kill smaller devs...But no one is forced to load apps from amazon store.
posted by : J,?11 May 2011 Complain about this comment iOS ereaders only is a risky venturSeriously, an e-reader company failed and they blame Apple? Ereaders apps are a dime a dozen (actually apps like Kindle are free) and there is no compelling reason why anyone would pick this particular ereader and ebooks over any other ereader.
I just read the article and I don't remember the company's name, so I guess their advertizing sucked.
Nutron Jack used to say, "if you don't have a competative advantage, don't compete". An ereader on iOS only = fail.
posted by : mike,?11 May 2011 Complain about this comment
Most read Most commented Most watched Playboy launches fully uncensored on Apple's Ipad Nokia chooses Qualcomm to power its first Windows Phone devices Apple denies that 'app store' is a generic term Nokia picks ST-Ericsson chips for 12 Windows Phone devices China’s great firewall creator gets hit by a shoe Tablets are a 'fad' like netbooks, says Dell No leniency for Gary McKinnon Mozilla is mulling plans to get users off Firefox 3.5 Intel invokes Linux to calm fears of Windows 8 on ARM Microsoft calls Intel's Windows 8 claims 'factually inaccurate' and 'misleading' 
Samsung Galaxy Tab 10.1 review Samsung's 10.1in tablet takes a pop at Apple and comes off well
Acer Iconia Tab A500 video review Acer's Honeycomb tablet gets our critical eye cast over it
Advertisement Subscribe to INQ newsletters INQ DailyThe most important breaking news each day
InqBOT WeeklyA roundup of the best from the INQ, every Monday
INQpressions Reviews FortnightlySoftware and hardware reviews, every other Friday
Click here to sign up Existing user Existing User Please fill in the field below to receive your profile link. Email : Sign-up for the INQBot weekly newsletter Click here INQ White papers DatabasesNetwork managementSecurityService oriented architectureStorage Search Advertisement INQ Jobs Technical Support Speciali Technical Product Support S... Read more Search
INQ Poll Google has announced Chromebook laptops Will you buy a Chromebook?
Yes, I just browse the web and use Gmail anyway Yes, it's an inexpensive laptop, cheap at the price No, I prefer to keep my documents on my own PC No, I'd rather buy a tablet What's a Chromebook? View other polls HomeNewsReviewsVideoINQdepthBlogsJobsDownloads store
c Incisive Media Investments Limited 2011, Published by Incisive Financial Publishing Limited, Haymarket House, 28-29 Haymarket, London SW1Y 4RX, are companies registered in England and Wales with company registration numbers 04252091 & 04252093 SEARCH :
Site Credentials: About usTerms & ConditionsPrivacy policyAbout Incisive MediaSitemap Follow us: Youtube Twitter Facebook Linkedin Business & Technology websites: Technology Reseller Channel IT News Information Science Search Engines Online Marketing Trading Technology Technology for the Sell Side Buy Side Technology Find Chartered Accountants Business research resources: B2B Web Seminars Business Technology Video Whitepapers Products: Software Reviews Hardware Reviews Download Reviews Investment Market IT websites: Investment Technology Trader IT Financial IT Intelligence Find out what you are worth: IT Salary Calculator Salary Calculator Search for a job: IT Jobs IT Job Search Engine Computer Hardware Jobs Job Search Engine Recruitment Agency A-Z Directory: All | ABCDEFGHIJKLMNOPQRSTUVWXYZ Accreditations: Digital Publisher of the Year 2010 
No comments:
Post a Comment