Knocking Down Apple’s Walled Garden: HTML5 vs. iOS Apps

Today Amazon launched an HTML5 browser version of its market leading eReader application, Kindle. Called Kindle Cloud Reader, it’s a direct response to the 30% cut of sales that Apple now takes from in-app purchases and subscriptions via iOS apps. The 30% Apple toll hits businesses like Amazon hard, because the margins on book sales are slim enough as it is.

The HTML5 Kindle site appears to be optimized for the iPad. It’s accessed from the Safari browser in the iPad, so it routes around Apple’s App Store. That means Amazon doesn’t need to give Apple 30% of an eBook sale. Because the HTML5 site is very close to the functionality of the iPad Kindle app, this is going to have huge ramifications for Apple. Yes, Apple’s walled garden has just been structurally weakened. I’d go as far as to say that it’s a matter of months, not years, before Amazon pulls its iOS Kindle app from the App Store.

In order to understand why Apple’s walled garden is probably going to go the way of AOL’s walled garden from the dot com era, we first need to acknowledge the sophistication and promise of HTML5.

HTML5 is the latest version of HTML, the browser markup language of the Web. It’s an increasingly popular way to deliver interactive experiences in browsers across devices: PCs, smartphones, tablets and more. We named HTML5 one of our top trends of the first half of 2011, because of the impact it is having on the App ecosystem.

Apple’s iOS platform (for iPhone, iPod Touch, iPad and Apple TV) has the most apps. But Android is fast catching up – indeed, Amazon itself runs an Android app store.

Apple’s App Store is a classic walled garden. Apple controls what apps are approved, just as AOL used to control what content its users could access on the Internet.

Earlier this year Apple took what it probably thought of as the next logical commercial step in its walled garden strategy: take a healthy slice of the action of in-app purchases and subscriptions. After it, Apple likely reasoned, companies are using the iOS platform to make a lot of money – why not take a commission from that?

Apple’s 30% toll may turn out to be a huge mistake, because it looks like it underestimated just how sophisticated HTML5 sites can be.

How Good is Kindle Cloud Reader?

After taking the Kindle Cloud Reader for a spin, my conclusion is that it’s very close to the functionality of the iPad app version, including being able to read offline. The main issue with Kindle Cloud Reader is that you cannot make new notes and highlights from the site – which is going to affect many readers (myself included, I tend to highlight a lot within eBooks). Jacqui Cheng from Ars Technica did a thorough review and noted some other pros and cons, but they are mostly minor things.


A side-by-side comparison; Kindle iPad app is on the left, Kindle Cloud Reader on the right.

The bottom line is that while the Kindle Cloud Reader isn’t quite as good as the iPad Kindle app yet, it soon will be. The addition of notes and highlights can’t be that difficult. When Kindle Cloud Reader gets on a par with the iPad app, I’m willing to bet that Amazon will pull the iOS app from the App Store.

Some of you may protest that Amazon wants to keep as many options open as possible, because ultimately it just wants people to use Kindle and buy books. But for many users – and I include myself in this – it doesn’t matter what form the Kindle takes on the iPad. As long as it works at least as well as the iPad app version. If Amazon suddenly added the ability for me to create new notes and highlights from the HTML5 version, then pulled the iPad app from the App Store, I’d simply switch to the HTML5 version without blinking.

Most Kindle users on the iPad would do the same. They won’t care about the iPad app disappearing, so long as they have just as good a user experience on the HTML5 version. Judging by the high quality of Kindle Cloud Reader, which certainly surprised me, that day isn’t far away.

Should Apple be concerned about that? You bet. It’s going to end up being a very large hole in its wall, caused by companies wielding HTML5 sledgehammers. Amazon has struck one of the first blows. Other media companies are actively experimenting, too, such as Financial Times and Fortune magazine.

Let us know in the comments if you think Kindle Cloud Reader will soon replace the iOS Kindle app, or if you think the two will continue to exist together.

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