As iFlow Reader app closes, harsh words for Apple

Update 5/12: CNET has posted an expanded Q&A with BeamItDown co-founder and iFlow Reader developer Dennis Morin.

Some interesting news from the world of e-reading apps in the land of iOS: BeamItDown is shuttering its iFlow Reader app on May 31, saying "Apple has decided that it wants all of the e-book business in iOS for itself and it has has made mid-game rule changes that make it impossible for anyone but Apple to sell e-books at a profit on iOS."

Just like the Kindle, Nook, and Kobo apps for iOS, the iFlow Reader app for iPhone and iPad has an integrated e-bookstore. Apple has reportedly set a deadline of June 30 for developers to alter their apps to reflect the new terms for subscriptions in the Apple Store, which requires companies to give Apple a 30 percent cut on sales their apps generate.

In the past, e-reading apps like iFlow, Kindle, and Nook have avoided paying the cut by sending customers to a Web-based interface outside the app. Starting in June, however, Apple has said it will require developers to sell content from only within the app.

Fear of reprisals from Apple has kept most companies mum on the looming issue, but the folks at BeamItDown Software who make the iFlow Reader let their anger--excuse the pun--flow freely. It is one of the harsher public condemnations of Apple we've seen.

Here are some of the juicer quotes from the company's announcement that it would be shutting down the app:

Five of us spent nearly a year and a half of our lives and over a million dollars in cash and sweat equity developing the iFlowReader app...What sounds like a reasonable demand when packaged by Apple's extraordinary public relations department is essentially an eviction notice to all ebook sellers on iOS...We put our faith in Apple and they screwed us...It was the American dream that we all strive for. Sadly, the America that we thought we were working in turned out to be a totalitarian regime and the dictator decided that he wanted all of what we had. Our dream is now over.

The company also was extremely critical of the "agency model" for selling e-books, saying that it was created by Apple and basically fixed prices on e-books. "All sales agents are required to sell books at the same retail price, which is set by the publisher," BeamItDown said in its blog post. "No one can sell at a different price. All sales agents get a 30% commission on the sale of a book. No one gets a different deal. Prior to the agency model, publishers typically offered retailers a 50% discount. The key point here is that all sellers now get a 30% commission and Apple now wants a 30% fee, which is all of our gross margin and then some."

The post goes on to explain to iFlow customers how to save their purchased e-books and provides a link to complain directly to Apple execs Steve Jobs and VP Phil Schiller via email.

What does this mean for the Kindle, Nook, and Kobo apps on iPad and iPhone? Hard to say at this point because no one from Amazon or Barnes & Noble is saying anything regarding Apple and its apps (we've asked high-level execs from those companies about the June 30 doomsday deadline, but as expected, they declined to comment).

While BeamItDown says that it had more than 6 million downloads of its iFlowReader iOS products over the last three years, it's a minor player in the e-book space. Obviously, if Amazon and Barnes & Noble decided to pull its Kindle and Nook apps from iTunes, Apple could expect a huge amount of complaints from users who expected to be able to read their e-books (bought from those stores) on Apple devices. In their negotiations with Apple, large companies like Amazon and Barnes & Noble have a lot more leverage than BeamItDown, so it remains to be seen whether Apple will stick to its guns and truly lay down the gauntlet or come up with a more palatable number for profit sharing that all sides can accept.

Of course, complicating matters is Barnes & Noble's entry into the tablet space with the Nook Color and strong rumors that Amazon will release its own Android-based tablet very soon.