As the saying goes, if you can’t take the heat get out the kitchen, which in this case is the App Store. At least that’s the feeling left with one iOS App developer who plans to close its doors at the end of the month after failing to turn a profit in its 18 month run. BeamItDown Software had high hopes of flourishing on iOS with its e-book reader, but with Apple’s 30 percent take it simply couldn’t survive selling books at a loss.
“We put our faith in Apple and they screwed us.” – BeamItDownSoftware
Problems began for BeamItDown Software’s iFlow Reader when Apple changes its policy for in-app purchases. Previously, apps were only subject to Apple’s 30 percent commission when initially purchased. For apps like iFlow Reader, which sell e-books within the application, charging this same commission for subsequent purchases inside the app has proved to be a business killer. It doesn’t take a rocket scientist to realize a reseller would find it hard to survive if it needed to sell products at a margin greater than 30 percent just to break even.
In the brick and mortar business model or even a traditional online business, a standard commission for credit card transactions is on average five percent. This pales in comparison to Apple’s 30 percent slice of the pie. Now it’s time to chime in. Since Apple changed its in-app purchase policy after iFlow Reader entered the market, should Apple grandfather the company into the original store policy? Or is this simply the assumed cost of doing business? Sound off.
via Cellular-News
