• Apple kills an ebook company with its pricing greed

    BOOK 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.

    Source: The Inquirer