Apple's App Store subscription rules spark anti-trust concerns as developers rage - Page 5

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Not true. If the publisher sends the customer to iTunes, then the purchase is made via iTunes and Apple gets their 30%. Only if the publisher makes the sale completely outside of iTunes do they keep 100%. In that case, the app must then fetch the content from the publishers servers itself. iTunes does nothing.

If it stopped there, I'd have no problem. But Apple is telling the publisher how much they can charge outside of iTunes. If they know their content costs $7 to produce, they need to charge $10 through iTunes just to break even. But then Apple also tells them they need to charge $10 outside of iTunes. Great for the publisher, they just made an extra 43% profit. But who is paying that? You, the customer! You are now paying $10 for something that is only worth $7, all because Apple is being greedy.

The publisher might have been willing to sell it to you for $8, but Apple won't let them. There should be no restrictions on what the publisher charges on their own web site. And if Apple's in-app functionality is so great that customers are willing to pay extra for it, great. But if the publisher is willing to sell it to me for $8, and I'm willing to go through the hassle of going to their web site to get it in order to save money, that should be my choice, not Apple's.

If Apple then finds out that most people are willing to go outside to get the content and save money, then they should reduce their 30% commission to be more competitive. Eventually things would reach an equilibrium where the Apple commission is worth the convenience of in-app purchases (and I don't think that equilibrium point is anywhere near 30%).


Once again, a complete failure to understand the real issue here. It's not about Apple dictating the sale price in iTunes and what their commission would be. It's Apple dictating requirements for what the price is outside of iTunes. Apple never told the music industry that they couldn't sell their CDs for less than Apple charges for the music. You were free to go buy your music from elsewhere, for whatever price you could get it for, and put it on your iPod.

Apple had no say in what price you paid for your music outside of iTunes, even if it was destined for your iPod. And they should have no say in what a publisher charges for the content outside of iTunes now, either. I have no problem with requiring the in-app fucntionality be included in all those apps, to give the customer the choice and convenience. But to again use the example above of content that is worth $7, if one distribution channel (iTunes) costs me $3, and another distribution channel (my own web site) costs me $1 to handle the transaction, then I should be able to set prices accordingly: $10 on iTunes and $8 on my own web site.

And if Apple finds that too many people want to save money and go to my web site, then they need to lower their commission.

No, Apple is telling the publisher if you want to play in my sandbox you cannot undercut the price you charge in my sandbox to intentionally drive business out of my sandbox.

This is pretty much similar to manufacturers having contracts with retailers that they will not undercut the retail price on their own manufacturer website. It has previously been done via private and confidential contracts where one party has always tried to get the best possible deal with each individual partner. No equivalency or built-in fairness ensured at all.

The fact people have been blind to standard business practices doesn't make the practices suddenly wrong, it only illuminates how ignorant of those business practices people have been happy to be over the years.

The precedent is all over the place already, people are just getting up in arms because they finally saw it and it was Apple making the new market -- in the open with the same terms for everyone!!! No smoke filled room contracts where a big dollar company can get a deal a small guy could never manage under the old paradigm (Think Wal Mart). Oh the humanity! Equal treatment!!!

Apple is already making money on content, in a way (and not a small way) - a lot of people are/would buy Apple device because there is such content available. Number of iOwners would be significantly lower without Kindle, Netflix, Rhapsody... content.

I think antitrust here is not in Apple demanding 30%, but in:

• Apple demanding price being the same with and without their 30% margin
• Apple not letting both purchase options being available from within the app (press one button to purchase within the app, press another button to go to web page)
• Apple not letting publishers put web link in the app, for alternative way to purchase

And it is my opinion that those 3 demands are very anti-competitive.

Nothing related to anti-trust issues though. Only thing close is #1, and there it's completely reverse of what anti-trust statue covers. It's only when you fix price to keep it high that it becomes an anti-trust issue, not when you demand suppliers to keep the price low.

I think Apple had an existing model for revenue sharing for apps and figured that subscription content was not so different. I think Apple is mistaken and will ultimately adjust its cut.

As far as other retailers like Amazon, I am not sure what to think. The iBookstore is a very pale imitation of the Kindle Store. Apple may see forcing the other apps out as a way to encourage publishers (Random House, in particular) to do business in the iBookstore. I think that Apple really needs these apps as "anchors".

Have you ever looked through the iBookstore? There is a reason that the Kindle Store is important to Apple's media universe. These parties should pay to have access to Apple's customers but 30% is pretty stiff.

One day later... and have you taken a look at AAPL stock today? 363.13. The market sees this completely different than all of the Doom-Boys here.

A note about HTML5 and the future of the web and mobile devices is in order.

First, you do realize that Apple and Google are the only companies that really know what the future of mobile computing will look like in the next few years, don't you? Why? Because they are the ones right now, today, in their labs, working on the new browsers and OS's that facilitate that future.

Did you know that Chrome OS is on track, and while I won't get into details, will be based on HTML5 and selective caching of web-apps and documents, so that you can work completely "off-line"?

Do you think that Apple is not doing the same with iOS, and very possibly, MacOS?

You keep on hearing about the cloud, but do you know that it actually will happen and will work for a huge majority of people... especially those with mobile devices?

Have you also read that it very will could be as soon as this Summer or Fall? With Chrome OS, also possibly with Apple's iPhone Nano rumor of not having any storage?

The lesson here is that we're all talking and discussing about what we know today about iOS and other OSes, and what news has been released and bloggified and FUddled with to create readers, click-thrus and ad $$$'s.

However... what about tomorrow, or a few months from now, or next year.

You know who already knows what that looks like? Apple and Google engineers, and they're under NOD and proud of it, and you're not gonna hear anything about it until Apple, SJ or Sergei are ready to tell ya... like when it's actually working. (Unlike a Seattle-based behemoth we all know and ____!?)

To prove my theory: did you really imagine this day, and where we're at with mobile technology, 1 year ago...2...3?

Last point. There are some Americans that claim (rightfully as it is now) that cloud-only will never work. Well unfortunately, you Ami's are no longer the world leader in infrastructure. Here in Europe, including Eastern Europe as well, and even large swaths of Africa, Asia, India... are all enjoying ubiquitous full-coverage internet connections.

Let's add to that painful truth, that the few areas that don't have coverage at the moment, are getting full-blown LTE (50mb) this year, because their countries governments saw fit to make it a requirement for the providers to serve "uncovered areas" FIRST, when auctioning off the new spectrum.

That's how you build an infrastructure, so that an entire countries citizens can be "future-enabled" and enjoy growth in services and innovations... like "cloud computing".

Add to that the advances in OSes that we don't know about yet, and you have a future where a huge majority of people with full-blown PCs and dedicated installed software, will go "cloud" and "internet" instead, because it's far cheaper and easier to manage.

Apps as they are now, will be good for some things, but HTML and ubiquitous Internet will definitely take over many of the functions of those Apps, and will come as paid subscription models... just like one Bill Gates envisioned years ago.

As for larger software like games, photo-manipulation, movie editing, etc., these will surely be Apps for quite a few years to come. However an eBook reader like Kindle? A streaming service like NetFlix or Hulu? No. Those will all be web apps in the future. The App store for Apple and for Google is only a stop-gap solution for those services, because their respective OSes aren't ready for selective and secure (important for DRM) cache management... yet.

To summarize:
Amazon, Netflix, Hulu... will eventually leave the App Store, not because of Apple's policies towards them, but because they won't truly need Apple... or Google... or MS... at all any more, to make their services work and available to any device with a browser... including TV's, microwave's (think recipe overlays), picture frames, automobile displays... whatever has an embedded browser.

I can't tell - I'm not familiar with US laws. But it seems some people of authority - professors etc. - do have some concerns.

Time will tell.

And here we are, 14 hours after your post and Apple is down over 1% to $358.30.

Now some of this is likely due to heightened concerns about Steve's health. But I suspect a fair amount is a rational response to the subscription uproar and the dropping of Google's 'One Pass' as a competitor.

This issue has not fully played out yet.

You are referring to the professors in the WSJ article you linked to earlier? The ones that listed the issues for and against anti-trust problems and said any one of the several Apple counters to an investigation were probably enough to satisfy the FTC?

Those professors?

Let a little sunshine in and play with all the facts please, not just the facts convenient for your position. I already called you out on this point yesterday, and here I'm at it again.