Apple Needs to Stop Killing Innovation

I love Apple as much as the next guy.

I couldn’t be happier with my iPhone 4S and my MacBook Pro.  So before the Apple fanboys start flaming me, let me assure you: I’m one of you.

That said, Apple’s policy that “apps can read or play approved content that is subscribed to or purchased outside of the app, as long as there is no button or external link in the app to purchase the approved content,” is busted.  The policy stems from the fact that Apple claims a 30% cut of all transactions conducted through their payment system… now the only payment system in town.

The latest victim of this practice is wholast week, had their app pulled from the App Store because it “allowed the lonely to pay for Match subscriptions with a credit card through an external link rather than using the in-app purchases system.”  Apple was pissed it didn’t get their 30% cut, so it had the app pulled in accordance with App Store policy.

Apple’s stance on their popular App Store has long been “our store, our rules.”  Developers and brands hoping to have their wares stocked on Apple’s virtual shelves must play by those rules or risk having their product pulled.  It makes sense if you think of the App Store as a brick and mortar marketplace.  Certainly, Best Buy can choose what it will and won’t carry – that’s their prerogative.  If you don’t like it, stock your product somewhere else.

Except, in the case of iOS, which generates over 60% of mobile traffic, there is no “somewhere else.”  The only code that can run on the device is approved and sold through the App Store.

This means, Apple’s argument boils down to the fact that Apple deserves 30% of all commerce that runs through its hardware!

This is akin to Dell claiming rights to 30% of commerce conducted through its laptops or HP claiming 30% of all contracts printed on their printers.  It’s absurd.  And it’s bad for consumers.

Consumers, who thought they bought into the biggest, most advanced mobile app ecosystem in the world, are paying the price.  They’re paying it by way of less innovation and opportunity in the marketplace.  Brands are hesitant to launch ecommerce platforms through the iPhone because they don’t want to lose 30% of their sales.  They either don’t launch apps, launch crippled apps, or mark up prices to compensate.

As a marketer in the digital space, anything that’s bad for consumers and bad for innovation is a big frowny face in my book.  Unfortunately, I don’t see this being resolved any time soon.  Lawsuits will undoubtedly last decades (and by then the industry will have moved on) or Congress would need to invoke the Commerce Clause and do some regulating (don’t hold your breath.)

So in the meantime, we can only just make some noise and hope Apple does the right thing here.

I love Apple.  But I hate this practice.