Apple is a demanding host and thus far, its sheer brilliance and the power it has accumulated through the iPhone and iPad have given it an immense negotiating advantage over its rivals. In exchange for superb services and the promise of attracting droves of new customers, Apple demands a sizeable reward. However, in the case of the Financial Times, Apple may have overestimated its position. As it turns out, the Financial Times will pull its iPad and iPhone apps off the App store market after a disagreement over the control of data collected through subscriptions.
Recently, Apple began forcing major firms to go through its own App store when selling subscription apps. This gives Apple full control over the ownership of valuable data about customers while also giving it a 30% share of all the revenues earned through the apps. Buoyed by the success of the iPad, Apple even launched its own subscription service for magazines, newspapers, music and videos but did not get a very enthusiastic response from major publishers because of the concern regarding ownerships and revenues.
Apple cannot be accused of being greedy because the evidence clearly shows that publishers who have manage to introduce apps for the iPhone and iPad have seen sales increase significantly. For instance, the iPad now accounts for almost 25% of FT’s total sales and is a major source of new subscriptions. More importantly, FT’s digital subscriptions increased by 34% to around 230,000 in the first half of this year. Mobile devices were responsible for 25% of the increase while accounting for 22% of the FT.com traffic.
However, FT did not leave Apple without a credible alternative plan. The company recently rolled out a web-based version of its mobile app that allows users to sign up on the website and then use the mobile web browser of any device (e.g: the Safari browser of the iPhone and iPad) to sign-in and view the content. The experience is very similar to that of a native app. In addition, FT also plans to roll out an app for the Android platform.
Overall, the disagreement has not soured the relationship between the two companies. FT even promised to keep using the App store apps in the future. However, if there is a lesson to be learned here, it is that Apple’s power over its clients is steadily weakening as new technological alternatives become viable and its rivals become stronger. Apple would be wise to take note.