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Apple Cracks the Whip. Will Its Business Partners Rebel?

With the announcement of the iPad 2 expected on March 2, Apple (AAPL) continues to refine its approach to turning its iPhone and iPad ecosystem into the world's largest mint. But some of its partners in the iOS and even Mac financial circles have begun to chafe.

Whether it is taking chunks of subscription revenues or cutting into its own consultants' network, Apple has begun to antagonize the very people that buttress its strategy. As more phones running Google (GOOG) Android keep shipping and Microsoft (MSFT) and Nokia (NOK) ramp up their partnership, this could be a foolish move.

Apple has long depended on independent consultants to help small businesses with their Mac needs and had an official network of certified consultants. As TUAW reported, Apple now plans to force consultants to work through an intermediary instead of by getting referrals directly from Apple stores. That intermediary, OnForce, will set prices for various types of support work and then ask consultants to bid for the business.

Consultants won't be able to set their own prices and won't be able to get referrals directly from Apple stores, a change in a ten-year-old practice. Furthermore, the consultants must pretend to be OnForce reps, and as such aren't allowed to market their own businesses. As Steven Sande wrote:

As a longtime member of the Apple Consultants Network and a blogger here at TUAW, I've received emails from a number of ACNs across the country who are concerned about this turn of events. Some members who have signed up with OnForce have reported getting pushed out of Apple support work by uncertified consultants with no Mac or iOS experience. Others say that the OnForce accept / decline process, combined with the electronic paperwork after the support call is finished, is taking much longer than their own in-house processes took -- at much less pay.
It's the service equivalent of Apple pushing software sales through iTunes. Everything becomes about Apple and there is less room for third party companies to determine their own strategic directions. If Apple starts a small business retail service at its stores, as is rumored, that would put even more of a wedge between it and the small resellers that cater to such business.

Some app developers rebel
The company Arc90, developer of the Readability web service, wrote an open letter to Apple after learning that its Readability iOS app was rejected for its subscription plan. The service strips ads out of web pages. The company now has a subscription service in which it pays 70 percent of what it collects to publishers to make up for the lost ad revenue. But, a subscription is a subscription, and not just something that a publisher wants to collect.

Screenshot sharing service TinyGrab has said it will drop plans for an iOS app. Music service Rhapsody has already said that losing 30 percent of its revenue to Apple would be "economically untenable" and indicated that it would drop app support for iPads and iPhones.

One developer emailed Steve Jobs, asking about how widely the subscription approach was to apply. Reportedly, Jobs replied, "We created subscriptions for publishing apps, not SaaS [software-as-a-service] apps."

Whatever that means.

Business partners in the dark
And that's the problem. Couldn't Apple be bothered to make all this clear to its business partners? Given the mounting evidence of the company's direction -- now expanded to selling software for Macs (not exclusively, but, really, will people buy some way other than the most convenient?) -- what else are they supposed to think?

And why should any of Apple's business partners assume that a change today will be around next year, or even next month? As Apple craves greater control and certainty of its business model, it creates more uncertainty and less control for its business partners.

Even though Apple may talk about bringing customers to the partners, it might remember that without those content and app partners, there will be no lock on consumers, who will go elsewhere. And there are plenty of other companies ready to welcome them.


Image: morgueFile user pdell, site standard license.
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