Apple's new App Store rules affect Amazon's Kindle

Amazon must remove link to Web e-bookstore from app, offer in-app purchases so Apple can take its 30% cut

Apple today unveiled the details of its App Store subscription plan, and confirmed that it will demand its usual 30% from publishers who sell content within their apps.

The new model will affect Amazon.com and other booksellers with iPhone, iPod Touch or iPad applications, an Apple spokeswoman said.

"Our philosophy is simple -- when Apple brings a new subscriber to the app, Apple earns a 30% share," said CEO Steve Jobs in a statement Tuesday. "When the publisher brings an existing or new subscriber to the app, the publisher keeps 100% and Apple earns nothing."

Jobs, who is on an indefinite medical leave, is reportedly still heavily involved with company decisions, working from home and conferencing with other executives by telephone.

Publishers and content sellers must remove any links within their apps to outside-the-App Store purchasing options, Apple said, a requirement that means Amazon.com must eliminate the link to the Kindle Store that it currently provides in its iPhone, iPod Touch and iPad apps.

Subscriptions and other digital content can still be sold outside the App Store -- thus sidestepping the 30% cut -- said Apple, but the company will now demand that if that's the case, the app also include in-Store purchases.

"Apple does require that if a publisher chooses to sell a digital subscription separately outside of the app, that same subscription offer must be made available, at the same price or less, to customers who wish to subscribe from within the app," Apple's statement read.

For periodicals such as magazines and newspapers, publishers can set the length of a subscription to weekly, monthly, bi-monthly, quarterly, bi-yearly or yearly. Consumers select a subscription period, then click to order, which dings the credit card associated with their iTunes account.

"Apple processes all payments, keeping the same 30% share that it does today for other In-App Purchases," the company said.

Later Tuesday, Apple spokeswoman Trudy Muller confirmed that those rules apply not only to newspaper and magazine publishers, but also to content sellers like Amazon.com, which offers a Kindle app for the iPhone, iPod Touch and iPad.

To meet Apple's guidelines, Amazon must remove its "Shop in Kindle Store" link from its Kindle application. That link, which opens the iOS browser and displays Amazon's Web-based e-bookstore, is currently the easiest way for Kindle app users to purchase new books.

Amazon did not immediately reply to a request for comment on the new rules, or answer questions about how customers will be able to buy books and whether it will continue to offer an iOS e-reader.

Sans the "Shop in Kindle Store" link, users can still purchase books outside of the App Store -- on Amazon's Web site, for instance, or through a non-Apple Kindle app -- then have them loaded to an iPhone or iPad.

Amazon must also implement Apple's single-click in-app purchasing of content; Apple would skim 30% off the top of all such purchases, however.

Apple did not specify a deadline that developers must meet to modify their existing apps, and Muller did not reply to a follow-up question asking for that date.

The latest news adds to the controversy sparked earlier this month when Sony announced that Apple had rejected its e-reader app. At the time, Sony said it had "reached an impasse" with Apple over its in-app purchasing rules.

The first publication to announce that it would offer in-app subscriptions was News Corp., which launched its all-digital The Daily newspaper on the iPad two weeks ago.

After The Daily's launch, several analysts and pundits predicted that Apple would debut in-app subscriptions today because the newspaper's two-week free trial -- sponsored by Verizon -- was to expire on Feb. 15.

Gregg Keizer covers Microsoft, security issues, Apple, Web browsers and general technology breaking news for Computerworld. Follow Gregg on Twitter at @gkeizer or subscribe to Gregg's RSS feed . His e-mail address is gkeizer@computerworld.com.

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