Apple's subscription controversy is all about perception

Apple's new in-app content controversy hit at a bad time and the impact will be about perception not the actual terms.

The Motorola Xoom launches later this week. Whether you think the Xoom is somewhat overpriced at $800 or not, it is first true competitor to the iPad – shipping in a similar (slightly larger) form factor with a similar set of specs and the first true tablet-designed mobile OS outside of Apple's iOS on the iPad. The Xoom is only the first real competition that the iPad will face. That was made clear last week with the range of Android tablets shown at the Mobile World Congress (not to mention HP's TouchPad and RIM's PlayBook).

While BestBuy begins accept pre-orders for the Xoom, Apple remains surrounded by controversy over its newly announced subscription system and the stringent requirements that system will place on any app developer that delivers content to iPad and iPhone users. I'm not going to get into arguing whether Apple's updated terms are fair, good, or bad. That's been covered all over the web during the past week, though Frédéric Filloux at The Monday Note has written the best level-headed piece on the issues that I've seen thus far (truly an excellent piece that I recommend to everyone, regardless of your feelings on the issue).

Setting aside any feelings about Apple's decision to move forward in this way, the question I find myself pondering is this: What impact will this controversy have on the tablet landscape in 2011 and beyond?

I can hear all the iPad owners and Apple fans claiming it won't have any impact, but I'm not sure that attitude is entirely realistic. While tablets have many uses, media consumption is the primary one for many people followed by Internet browsing and gaming. If, six months from now when these new terms take effect, a large number of content providers disappear from the App Store, will the iPad be as attractive to consumers?

Right now, the iPad has a dominant position by being the first tablet of its kind on the market. Till now, there hasn't been anything that truly competes on a major scale except the Galaxy Tab, which is smaller and doesn't offer a true tablet experience. That has given Apple tremendous market position and the ability to dictate terms as strongly as it wants.

Six months from now, there will be a crop of Android tablets with specs that are more than adequate for any of the basic media, Internet, and gaming uses where the iPad currently excels. Those tablets will be able to access apps from multiple stores (though most users will probably stick to Google's Android Market) that don't have Apple's heavy-handed control placed on them.

The Android story so far has shown that if most consumers want an iPhone but feel they can't get one or it doesn't quite offer something they want (largely, but not entirely, because of AT&T), they're more than happy to opt for an Android phone. It's entirely reasonable to think that will hold true for iPad vs. Android tablets. And that isn't even considering HP's TouchPad or RIM's PlayBook.

Access to content could replace the question of a carrier when it comes to reasons consumers might opt for Android over iOS. What if Netflix, Hulu+, Kindle, Nook, Rhapsody, Pandora, and other media apps were suddenly absent from the App Store? That list includes a couple of the apps I use most on my iPad. Add to that magazines and newspapers that don't want to play ball with Apple. That'd make me reconsider another iPad and I'm a longtime Apple customer – and that hesitation has nothing to do with whether Apple is right or wrong. It's about what I want and have to expect from a tablet.

The question goes even further as a public relations problem. Apple hasn't done much to defend itself from complaints. Those complaints have been aired very publicly. If someone who isn't particularly tech savvy is in the market for a tablet to watch movies from Internet sources, read books, or subscribe to magazines, the sheer mania around Apple's move will probably leave an anti-Apple taste in his or her mouth. It may not matter whether any of the major content apps or publishers leave the App Store or not. After all, as any longtime Apple user or fan knows, once some inaccurate information about the company is out there, it tends to stick in the public's consciousness for quite a while.

Ultimately, the bigger result of this entire situation isn't going to be about right or wrong, fair or unfair. It will come down to what perception does it leave in the general public's mind about Apple, the App Store, and the iPad. A bad public image as a result could easily be co-opted by any major tablet maker (and some will probably capitalize on that better than Motorola).

Ryan Faas writes about personal technology for ITworld. Learn more about Faas' published works and training and consulting services at Follow him on Twitter @ryanfaas.

This story, "Apple's subscription controversy is all about perception" was originally published by ITworld.

Copyright © 2011 IDG Communications, Inc.

Shop Tech Products at Amazon