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March 9th, 2011

The Apple iPad is a wonderful device. The first model was a beautiful design and the new version is even slicker. My husband loves his iPad 1. But one thing about the iPad is, it's the ultimate walled garden. Actually, it's more of a domed garden, because you can't even fly into it. Pretty much all Apple devices are. Apple sells the hardware and the software for not only their desktop machines but their mobile devices, too. They control access to the platform completely. If you want to put an app on your iPhone or your iPad, not only does someone have to create it, Apple has to allow them to sell it through the app store.

Apple has always censored what can appear in the app store. It can't be too naughty and it can't be something that helps or even mentions their competition. And now they have decided that in addition to controlling what apps can be sold, they will require that all apps that sell content on other platforms have to sell it from within the iOS app, too. Okay, that doesn't sound too bad. But wait! Retailers also have to give Apple a cut of anything sold within an app. A very deep 30% cut. And not only that, the product can't be sold for more on the Apple platform than it is on other platforms. So, Amazon and Barnes & and Sony can have eReader apps, but they have to provide for a way to purchase content from within the app (as opposed to by taking the reader to a browser) and they have to price that content the same or cheaper than it is from other sources.

I happen to think all corporations are, by nature, greedy. Amazon and Sony and Barnes & Noble aren't in business for fun. They all want to make as much money as they can. Jeff Bezos is certainly no Mother Teresa. Even publishers are under more pressure to make money, now that they are mostly all owned by huge parent corporations instead of rich, book-loving, old-money philanthropists. Their boards of directors want to see dividends paid to shareholders. That's what capitalism is all about.

But by creating a platform that requires retailers to pay such a high toll, Apple has gone one step farther. Apple has made their platform pretty much inherently unprofitable for everyone but themselves. It's almost spiteful. Like, “How dare those other vendors sell more content than we do! We'll show them!” And they have. They've shown everybody. When you buy an Apple product, you'd better hope that what you want to use it for is something Apple will let you use it for. And that the books you want to read aren't too naughty for Steve Jobs.



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