The App That Biting: Google Pulls 21 Dodgy Apps From Android Market

Given that collectively we are approaching 1 billion mobile apps on the market, it’s a surprise that you don’t hear about problems like this more often: Google (NSDQ: GOOG) has pulled 21 “counterfeit” apps from the Android Market that were given the name and appearance of popular Android apps, but actually contained malware that collected user information and potentially more. The news follows reports yesterday about Apple (NSDQ: AAPL) App Store users getting their accounts hacked, potentially through the use of iffy gift cards.

The news about the 21 apps was originally uncovered by an Android user called Lompolo on Reddit. The blog Android Police notes that Google pulled the 21 offending apps within five minutes of being notified aobut them, and is also pulling them remotely from users’ devices.

What was the issue? Apparently a publisher called Myournet posted 21 apps on Android, with some of them copying apps that are already popular downloads. The titles included Falling Down, Super Guitar Solo (pictured), Scientific Calculator and Photo Editor, as well as several titles with racier names to lure in the punters: collectively, Lompolo notes that the apps were downloaded between 50,000 and 200,000 times over the course of four days.

The apps were mocked up to look like their original counterparts, except that they also contained “‘rageagainstthecage’ root exploit” code to collect information such as device IMEIs, user IDs and country and language information. The code seems to be able to extract other details, although it’s not yet clear what.

The problem seems to be that while Google has pulled the apps, it may not be able to extract the code that would have gone onto the devices through those apps.

We have contacted Google to ask whether it has an official response to this story and will update the post as we learn more.

This is not the first instance of malware or hacking around apps—earlier this week we noticed reports of people complaining of unauthorised app purchases on their iTunes accounts—a problem thought to be connected to certain gift cards. As the app market matures, there will likely be more cases coming up like these. For what it’s worth, such cases do seem to be a vote in favor of smaller and more closed systems.

Financial Times may quit iPad without reader details

The Financial Times' publisher Pearson late Monday warned it might leave the iPad and iPhone if it couldn't get reader information. CEO Marjorie Scardino was adamant on an investors' call that Pearson was "still talking" to Apple but was concerned that its iTunes subscription rules wouldn't let her newspaper get demographic information to target ads. If it couldn't get what it wanted, it might jump ship to Android tablets and other platforms where that information was readily available.

"The important thing to remember is there are many, many tablets coming out and multiple devices," Scardino said. "If Apple are not happy to give us customer data then maybe we will get it somewhere else."

Apple has so far allowed a handful of information to go through, such as names and area codes, but is making it a strictly opt-in process that users can decline while still signing up. Publishers have vocally opposed the strategy since it creates a much less complete picture of readers, limited only to eager subscribers who wouldn't necessarily represent the majority of the reader base. Although not mentioned by Pearson's chief during the call, the 30 percent cut has also been contentious for publishers that didn't have the leeway in their business models to cede that much revenue.

The FTC is believed to be investigating Apple's policies for possible anti-competitiveness, mostly over terms that force companies to offer their best deal through iTunes and to prevent them from using any of their existing subscription systems or even acknowledging that they exist in the app.

The FT and other publications, if they refuse to accept Apple terms, are very likely to switch or stick to Android through Google's One Pass system or a method of their own. The approach hands publishers more customer information and also takes a much smaller cut of in-app purchases. They may also get a smaller but equally receptive base through the HP TouchPad. 

Spooked Publishers State Their Demands To Tablet Platforms

Some publishers, associations and academics who met Thursday to discuss new subscription plans from Apple (NSDQ: AAPL) and Google (NSDQ: GOOG) say they want the platforms to end censorship, work with them transparently, give them direct customer relationships and offer fairer business terms.

Publishers present included Dow Jones, Bonnier, Axel Springer, Schibsted, Telegraph Media Group and Le Monde. The statement below produced by the International Newsmedia Marketing Association (INMA), which called the meeting in London, is not a formal resolution, and those present were not necessarily unanimous, but it does capture the mood of the meeting, INMA Europe president Grzegorz Piechota tells paidContent:UK.

Startlingly, some at the meeting were under the impression the “30 percent” rate stated by Apple is exclusive of VAT, which, in many countries, runs up to 20 percent - they’re now fearing giving away 50 percent of their tablet subscription income. “How can you give up half of your revenue?,” Piechota asks.

But the commission rate was last on the publishers’ list of four requirements from platform gatekeepers. Chief was“censorship”, which Piechota says is “not negotiable”. They are perturbed by cases like that of Denmark’s Elkstra Bladet, which has been refused from iTunes Store because it features a semi-naked girl on its page nine, or the magazine about Android which has been denied iPad distribution - two cases European Parliamentarians raised with European Commissioners last month. “When a newspaper is published in a legal way, it is not the role of a platform provider to censor it or not,” Piechota says.

The bugbears raised in the meeting are rather trying to exert control over the stable door after Apple’s horse has bolted. But publishers - many of which feel out of the loop because Apple’s level of engagement has varied and is generally considered to have been insufficient clearly feel need to voice concern. They have many unanswered questions, so are trying to fill the vacuum with some requirements of their own; there is much confusion.

There are so many questions about what it really means,” Piechota says. “You can give apple’s press release to 50 publishers in the room and there are many different interpretations.”

Publishers INMA has heard from clearly favour Google’s One Pass, which has appeared more flexible than iTunes’. Although the market is young, can they really hope to talk Apple around at this late stage? “We still can sit together and talk,” Piechota tells paidContent.org.

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LONDON (17 February 2011) - INMA today hosted an invitation-only Roundtable on Tablet Subscriptions at the Park Inn Hotel at London’s Heathrow Airport, featuring nearly 60 representatives of the European media industry.

The meeting featured a robust and sometimes intense discussion of new app subscription plans by Apple and Google, the best ways to meet with such intermediaries, potential alternative subscription models, and the possibilities of HTML5. Meeting organisers described the mood of the audience as “optimistic yet realistic” and “frustrated by the unclear rules” and uncertainty of doing business with the biggest player in the tablet market, Apple.

News executives present at the INMA meeting expressed their admiration for innovative companies like Apple, Google and others. Publishers learn a lot from them about how to focus on customers, how to serve them better, and how to provide great experiences.

Publishers also understand that these are still the early days of the tablet technology, its commercial environment, and how the key relationships should work.

Meeting participants expressed a consensus to encourage competition among technology providers because it serves both users and content publishers. At the same time, there is a need for cooperation among publishers.

News publishers want to raise four key concerns to the technology companies. These themes emerged from the discussions at today’s INMA roundtable:

1. Censorship of content

Freedom of speech is the basis of the media’s existence. Publishers cannot agree with the practices of technology companies that interfere with editorial decisions on what to put into a digital publication. So we appeal to Apple to change its rules and practices that led to the rejection of apps in some European countries regarding content considered legal and appropriate in those countries.

2. Transparency in the framework

The development of apps is complex and expensive. Platform providers should assist all developers - including content providers - in the interpretation of guidelines to expedite the development process. These interpretations should be made publicly available so that others can better understand the requirements. Publishers encourage technology companies to devote resources needed to provide this assistance.

3. Direct relationship with customers

A direct relationship with customers is crucial for publishers so they can: a) provide products and services; b) set pricing policy, build bundles on their own and set prices dynamically; c) see if customers like the product, price, and the total experience; d) improve their products, services or policies accordingly; e) inform customers about existing and new products, services or policies.

4. Fair business partnership

Publishers also understand that this is an emerging market and therefore it needs time to develop and to see which business practices are the most valid ones for all involved. These practices should be discussed widely by all partners so they can work for everyone. We know this involves the economics of the digital marketplace. Yet publishers simply can’t afford to invest in new technology, products and services when the platform charges them 30% of total revenue - which in Europe, after VAT, can approach 50%.

Said Grzegorz Piechota, president of INMA Europe: “The publisher’s goal is to be able to provide their customers access to content on any device or a platform they wish for a reasonable price. Therefore, they don’t want to leave any platform, especially the one that is already popular and provides convenient payment systems. Before taking any antagonistic actions, publishers plan to talk to all technology providers, platform providers, and other stakeholders themselves and with the help of their associations.”

Added Piechota: “When talking about tablets, we used to focus on opportunities that this technology provides to deliver multi-media content and what kind of content should it be. Now it is high time to talk about business models and details of partnerships. We understand it is a new topic also for our partners in the technology sector.”

About INMA: INMA is the world’s leading provider of global best practices and marketing ideas for news companies looking to grow amid profound market change. The Dallas-based INMA is a non-profit organisation with nearly 5,000 members in 80 countries consisting of the world’s leading news companies. INMA has taken an industry leadership role on mobile and tablet developments with three tablet summits, a publication and a blog, among others.

Analysis: Why Apple’s New Subscription Policy Will End Up Hurting Apple, Too

Yesterday Apple (NSDQ: AAPL) announced its intention to tighten its hold on the payment for and the delivery of content through its successful iTunes platform. (I’ll leave off the I-told-you-so; oops, too late.) Apple will require that all content experiences that can be paid for in an Apple app must be purchasable inside the app, with Apple collecting its 30% fee. The app can no longer direct you to a browser or some other means for completing a transaction. Crucially, the in-app purchase offer must be extended at the same price as the same offer made elsewhere. Though the announcement of the subscription model was the triggering event, the policy extends to all paid content.

I do not believe this is where Apple will stop – I personally expect them to eventually deny the delivery of content paid for outside of the app without some kind of convenience charge. But my personal expectations are irrelevant here, because what Apple has done already is sufficient to make providers of content aggressively invest in alternative means to reach the market, especially for their subscription-based content.

Subscription content services are the lifeblood of the content economy. A full 63% of the money consumers spend on content of all types comes through a renewable subscription. (I’ll be publishing that data from a survey of 4,000 U.S. online adults as part of a bigger analysis next month.) Most of that subscription revenue goes to pay-TV providers, but 17% of it goes to newspaper and magazine publishers, including their online or app content experiences.

The economics of subscription content are simple enough: Keep your costs as low as possible to maintain an active base of subscriptions against which future content and distribution investments can be justified (and against which ads can be sold, if applicable). Subscriber certainty fuels the business; subscriber uncertainty undermines it. This is why one-off content businesses like movies and books are so dicey and blockbuster- or bestseller-dependent, because without the guarantee that the same million or so people who read or watched you last month will do so again next month, content investments are hard to justify.

Certainly Apple knew this when it responded to magazine publishers like Conde Nast that requested a subscription model for iPad content to stem the dropoff in interest its iPad magazine editions were experiencing. Apple has the industry over a barrel in this regard and you can’t fault the company for exploiting its advantage for economic gain. In this light, a 5% tax on content providers would seem like a fair exchange: Apple offers access to desirable customers and deserves a facilitation fee for making the delivery of the content possible (even if it doesn’t technically bear the cost of the delivery, the consumer does, paying a premium to own the device and funding the connectivity, either via 3G or wifi).

However, you can fault the company for choosing not to anticipate that seeking a 30% toll would bring any subscription model of any type to its knees. Remember, subscription content is priced as low as it can be to drive interest while paying off reasonable costs. Taking a 30% toll amounts to a massive increase in the cost basis of a content business that will kill it. There is not a subscription business alive that can bear that additional cost without passing the cost along to subscribers, even if the content is unique, which most content is not.

But a content provider can’t pass the cost along only to Apple’s subscribers, which would seem the one solution Apple could offer that would make economic sense but which Apple has specifically proscribed. In other words, if your subscription costs $5 a month even if you never access it on an Apple device, it must be offered for $5 a month through the Apple device as well, but with Apple culling out $1.50. What’s a content provider to do – pass the 30% tax on to all users to ensure that they don’t get killed by the uptake on Apple devices only to see subscriptions dwindle? Or keep the price low across the board and desperately hope that no one takes advantage of the iPad app they spent months developing?

None of this is Apple’s fault; I staunchly defend Apple’s right to price its products and services any way it wants. But it is shortsighted. Because now Apple has given every publisher, producer, and distributor in the business a reason to actively pursue alternatives to the elegant apps that Apple had hitherto taught us to depend on. I don’t really have to encourage my clients to add urgency to their already furious Android app development efforts. But it will also lead to non-app content experiences as well, most of them developed in HTML5 – Steve Job’s own panacea for the future of content delivery.

Whether publishers can feel betrayed, as some have suggested, is a matter for psychologists and ethicists to ponder. Perhaps it’s healthy that the content industries were able to so quickly see that Apple isn’t really a savior for their businesses after all. At least now they can make decisions based on market facts rather than market hopes. And if the sour taste in their mouths is good for anything, let’s hope it motivates them to get out there and show everybody that they still have content experiences to offer, content experiences we want, content experiences worth paying for.

Apple is going to Motor By Taking A Cut Of Renewals

Apple’s new rules don’t just apply to new content subscriptions but to all subscription-related transactions thereafter as well. That could put Apple (NSDQ: AAPL) on an escalator to sustained 30 percent commission, even from publishers who initially sign up subscribers by other means.

Sure; when the rules are enforced in June, readers who previously subscribed to a title on the web can still happily authenticate in the magazine’s app.

But, once that reader’s subscription is due for renewal next month, quarter or year, are they really going to put down their iPad and type their credit card details in to the website on their laptop… ?

Or are they just going to click one iTunes button on that same iPad? Like an unstoppable gravitational pull, subscription events will move from publishers to iTunesbecause Apple’s own method is inertia-less.

Steve Jobs said: “When Apple brings a new subscriber to the app, Apple earns a 30 percent share; when the publisher brings an existing or new subscriber to the app, the publisher keeps 100 percent.”

But it’s not just new subscriptions from which Jobs will take a 30 percent cut - it’s also weekly, monthly, bi-monthly, quarterly, bi-yearly or yearly renewals.

We’re not saying this is a wholly bad thing - many publishers will happily consent to giving away a 30 percent commission for the benefit of the new opportunity given to them by Apple…

But we are saying that instances in which publishers are so graciously allowed to keep 100 percent of the money they earn from direct sign-ups will wane in time, as Apple’s irresistable, self-anointed option becomes the default for many readers and allows it to claim a greater share of purchases.

Publishers may resort to targeting their subscribers with renewal notices via other channels, like email reminders.