Everyting's under control, Captain!

Growth in the number and variety of portable devices spurs growth in content demand and, as a result, increases the stakes in the battle for owning the marketplace for content-related transactions. So far, Apple has been a dominant player in this space and it seems like neither Google, nor HP can seriously challenge Apple's position. In February of this year, Apple announced a new in-application sales policy for iOS–compliant devices that forbade external payment and subscriptions links. In short, all transactions have to happen within the application itself.

From a CNN report:

Apple's goal is to steer more of the revenue for content purchases through its own in-app payment system, which typically nets Apple a 30% cut of the sales.

On Monday [July 25, 2011], Amazon updated its Kindle apps for Apple devices to remove the "shop" button that sent consumers to Amazon's site to buy digital books.

Hulu changed its iPad app last month to remove a link to its website.

..the Google Books app disappeared from the App Store last week. Sony's Reader app has been unavailable since February, when Apple booted it because of an external link.

For Stanford CSP BUS74-75 students: You can see how Apple successfully shifted its business model axis from Source-Tool to Distribution-Control. Owning iTunes, first as a free PC application, then as a cloud service that includes AppStore and other marketplace entities, is an essential part of this strategy. Note that Microsoft (xbox) and Facebook have implemented similar in-game purchasing policies earlier.

tags :business, model, control, distribution, system, evolution, apple, google, information, market, transition, games