Apple to book readers: Our way or the highway

July 27, 2011: 7:20 AM ET

Over the weekend, the Kindle, Nook and Google Books apps got crippled. Thanks, Steve.

Source: SplatF

"The fact is," Steve Jobs famously told the New York Times in 2008, trying to convince them that Amazon's (AMZN) Kindle was a nonstarter, "that people don't read books anymore."

What Jobs really meant, we discover three years later, is that people don't get to read books on his iPads or iPhones unless they buy them from his iBookstore.

In the past few days, Apple (AAPL) made good on the threat it issued in February when it revealed its so-called "subscription model." Publishers and book resellers that wanted to do business on the App Store had to fork over 30% of every sale or take their business elsewhere. Putting a button on an app that took readers out of the App Store to make a purchase -- as Amazon, Barnes & Noble (BKS) and Google (GOOG) had been doing -- would, as of June 30, no longer be permitted. (See: Steve Jobs to pubs: Our way or highway.)

Profit margins being what they are in the book business, 30% was never going to fly. So rather than abandon the App Store entirely, the major third-party book-buying apps -- Kindle, Nook, Kobo, Google Books etc. -- disappeared and came back with their easy-to-use buttons removed. (See SplatF's Kindle screenshots, above.)


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