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Apple blocks Sony e-book app. Is Kindle next?

By Julianne Pepitone, staff reporter


NEW YORK (CNNMoney) -- Apple is tightening its App Store policies on e-books -- a move that has the stalled the release of Sony's e-reader app and threatens trouble ahead for Amazon's popular Kindle app.

The New York Times reported Monday night that Apple (AAPL, Fortune 500) had rejected Sony's Reader app for the iPhone because users would make their purchases in a browser rather than Apple's in-app payments system -- cutting Apple out of the sales stream.

Sony (SNY) said in a prepared statement that it has "opened a dialog with Apple" but has "reached an impasse at this time."

A note posted on its website fills customers in on the dispute: "Unfortunately, with little notice, Apple changed the way it enforces its rules," Sony wrote.

Other e-reader apps -- including those for Amazon's Kindle and Barnes & Noble's Nook -- open up Web browser windows when users wish to purchase e-books. It's unclear whether those apps, which are already available in Apple's App Store, will be affected by Apple's apparent clampdown.

Amazon (AMZN, Fortune 500) and Barnes & Noble (BKS, Fortune 500) did not respond to requests for comment.

Apple said in a statement Tuesday that it had "not changed our developer terms or guidelines."

But Apple also signaled that it has decided to interpret its rules more strictly.

"We are now requiring that if an app offers customers the ability to purchase books outside of the app, that the same option is also available to customers from within the app with in-app purchase," the company said.

That's a significant change -- and one likely to be controversial with Amazon, which has been aggressively building out its Kindle platform and touting its "read anywhere" portability. The company said last week that Kindle e-books now outpace both its hardcover and paperback sales.

Sony's feud with Apple came to light just as Apple is stepping up its visibility as a player in the media market.

On Wednesday, Apple will participate in News Corp.'s New York launch of its new iPad-only newspaper, The Daily. To underpin the new venture, Apple is adapting its App Store model to support recurring subscription payments. The Daily is expected to sell its subscriptions for 99 cents per week.

- Fortune.com's Philip Elmer-DeWitt contributed to this report.  To top of page

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