Letters from Steve: iOS Subscription Rules Created for Publishers

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An e-mail reportedly from Apple CEO Steve Jobs may be offering some clarity on Apple’s iOS subscription policy — an iOS developer wrote Mr. Jobs expressing concern over whether Apple would be applying those new rules to software-as-a-service (SaaS) apps, and the reply he said he got back from Mr. Jobs said in no uncertain terms that they were intended for the publishing industry.

There has been much ado made over iOS subscriptions in the two weeks since Apple introduced its plan earlier in February. Publishers aren’t happy because Apple won’t give them customer data, and music and book services, as well as SaaS app developers (Box.net, Dropbox, Readability, and others) were concerned that their business model couldn’t accommodate a 30% cut going to Apple.

In a piece examining the story, MacRumors published an e-mail exchange between an unnamed iOS developer and Apple CEO Steve Jobs. The developer wrote Mr. Jobs asking for clarity on the situation, saying:

Hello Steve,

As a full time iOS developer, I am concerned (and confused) withe the new App Store guideline regarding “Apps offering subscriptions” (section 11.12).

Most of the iOS apps I have developed, as a contractor for other businesses, have been free apps that had login screens to allow the user access to some amount of private data. and/or service. These businesses have all been well established companies that sell some kind of service to their customers (Software As a Service companies) and the iOS app was merely another “portal” for their users to access their data/services (in many times, in a limited i.e. “mobile” fashion)…. for example; SalesForce. I am concerned that most of these businesses will choose to not develop an iOS app for their customers if the IAP & subscription policy was in place.

Would these type’s of free apps be still be allowed in the App Store or will they now be expected to use IAP?

Mr. Jobs has often responded to letters from fans, critics, developers, and reporters, and many (if not most) of those responses have quickly made it to the Internet. Such was the case this time, according to the unnamed developer, who received this reply from Mr. Jobs:

We created subscriptions for publishing apps, not SaaS apps.

Sent from my iPhone

One would think that Apple will make some sort of official clarification of this policy at some point, but if this letter is from Steve Jobs, it would seem that Dropbox and even the larger enterprise services like SalesForce are not part of Apple’s plans to bring in subscription revenue.

As for Readability, if the company’s app was rejected for violating the subscription policy, it would seem that Apple considers the app a publishing app, and not an SaaS app, so long live the opportunity for debate between pro and anti-Apple partisans.

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3 Comments

Tripel3

Maybe not fully on topic, but publishers are used to distribution costs for printed publications. For printed magazines and newspapers the distribution costs are a relatively high part of the overall costs, paying for transport, and for the network of the distributor - those costs may well be 30% of the sales price if not more, the 30% Apple wants, maybe that’s how Apple estimated to start with 30%.

One would expect distribution costs via internet to be lower, which is the case, but it seems normal to me to pay for the investments of the distributor. It’s all a matter of the quality of the network and competition. If the market works, Apple will probably have to lower the 30%. Publishers can set up their own distribution system, go to another distributor. It’s always been like that.

Apple is delivering a quality network, user experience, etc. I don’t find it strange that they want to make money with that. If the market does not agree, Apple will have to adapt to competition.

Bosco (Brad Hutchings)

If the market does not agree, Apple will have to adapt to competition.

This is such an interesting line that I’ve seen a variation of hundreds of times in the past week. It’s trying to be a really polite way of saying “this is not a legitimate thing to debate—the market will decide, not us talking about it”.

It’s funny, because debate, reaction, and strong sentiments are just as much a part of that “market” as eventual buying and selling decision. The statement is coming from such a position of weakness too, not the typical pro-Apple arrogance. If you were confident and arrogant (and I mean that in a good way), you’d be pointing out how Time, Inc. greeted this new subscription model with flowers, just like the people of Iraq. But, they didn’t, and you know something is amiss when the criticism emerges from so many corners.

But Tripel3, the underlying problem here is that to get on these iOS devices as an app, you must use Apple as a distributor. Most all of these skirmishes are just the consequence of that playing out.

jfbiii

The criticism doesn’t stem from anything amiss. It stems from greed and an unearned sense entitlement enhanced by a lack of shame.

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