Amazing how entitled the EU thinks they are where they can pass a law for themselves, but feel they should be allowed to take 20% of a companies global revenues for any infraction that only exists within their market.
It’s no different than Apple or Google making their developers pay a hefty fee. They have the bargaining power to get their developers to pay on their terms and the EU has the bargaining power to get Apple and Google to pay on its terms. Entitlement and fairness have nothing to do with it. It is just business.
The $99 fee to be a developer is “hefty”? And then if I develop a free app, Apple gets nothing. How is that hefty at all?
I think mtm is including the 30% commission in that statement.
And if one's perspective is that the 30% is just a fee that doesn't bring any benefits, then that's reasonable: losing a third of one's revenue to a third party for no perceived benefit is a bad deal.
However, that 30% pays for a lot. It removes the friction from the buying process; users know that they can easily delete an app they don't want and that Apple is going to side with them if they request a refund from the developer. It's hard to measure just how much this has affected the market for mobile software and digital services in a manner that everyone will agree with, but as a rough estimate we can just look at the reported revenues - and I don't have figures to hand, but I'm guessing it's now more than 100x what it was in 2008. This is, of course, a communal benefit rather than an individual benefit, so there is very little recognition of its value by those viewing the landscape through the lens of the software developer.
The 30% fee also pays for hosting, data transfer, payment processing, reporting services, malware scanning and a bunch of other annoying little things that lots of people think they can do by themselves for less money. This is where I have some sympathy for the arguments being put forth but respectfully point out that not everyone shares that viewpoint. Still, if there is competition for those services that a significant portion of the developer community would like to take advantage of, that's probably worth promoting and Apple should not be restricting developers from seeking alternatives.
Then again, part of the 30% fee also goes to the app review and code signing process. Digitally signing the application bundle would be worthless without the review, so those cannot be separated. Code signing is a security measure enforced at the OS level; it's perfectly reasonable for Apple to do that but it comes with the cost of added complexity and trust issues. Paying for it via the store's commission is an efficient approach. App review feels like a process that should be a per-app fee but that could mean several hours of a reviewer's time at something in the region of US$150 per hour... I think rolling that into the 30% commission is reasonable.
It's worth remembering that Apple is operating at a huge scale with the App Store. By aggregating their costs and apportioning them over a very large number of developers Apple is able to massively reduce the per-developer cost of those services and spread their risk; in return they make a significant profit. AWS does the same thing; purportedly the margins are in the 60% range for Amazon and yet developers love the service because they think they're getting a bargain.
I think developers need to be reminded that setting up a business is an expensive process and that all those costs used to be payable up front; the trade-off for being able to start the business at a lower up-front cost is that you have to pay more later on.
Well… I guess Nintendo, Sony, and Microsoft had better get ready to have the steam and epic stores on the consoles soon. And the GameStop app too, selling digital hand me downs cheaper than the digital versions from the companies themselves.
In other words, the EU is full of it. Destroyers of the successful is their job description.
In the current Apple App store, the fees collected from the apps which cost money are covering the cost of ("subsidizing") Apple's work providing free services for all the developers who don't pay any fees because they don't charge anything for their apps. This won't work for free apps on third party app stores, because Apple won't agree to be subsidizing those free apps. Therefore the whole idea of a "free app" on a third party app store won't exist, because Apple will charge a flat fee for every download from third party app stores. Of course, the third party app store owner could pay Apple the per app download fee to allow for free apps on their store.
Also, it's worth noting that one of the many services that Apple provides for free are the ability for those apps to communicate with Apple's online servers. There are many APIs that Apple provides which are not only free to incorporate into an app, but communicate with Apple's servers for free services, like push notifications. All that would be gone for any apps on third party app stores, because Apple would either block those APIs from being compiled with apps on other app stores, or would be able to detect that the app was downloaded from a third party app store and block free access to their online services.
I worry that companies like Google or Facebook will tell their partners not to use Apple's app store, or those partners will have to pay more for all the services they get from them. The could spell the end of the Apple App store.
In the current Apple App store, the fees collected from the apps which cost money are covering the cost of ("subsidizing") Apple's work providing free services for all the developers who don't pay any fees because they don't charge anything for their apps. This won't work for free apps on third party app stores, because Apple won't agree to be subsidizing those free apps. Therefore the whole idea of a "free app" on a third party app store won't exist, because Apple will charge a flat fee for every download from third party app stores. Of course, the third party app store owner could pay Apple the per app download fee to allow for free apps on their store.
Also, it's worth noting that one of the many services that Apple provides for free are the ability for those apps to communicate with Apple's online servers. There are many APIs that Apple provides which are not only free to incorporate into an app, but communicate with Apple's servers for free services, like push notifications. All that would be gone for any apps on third party app stores, because Apple would either block those APIs from being compiled with apps on other app stores, or would be able to detect that the app was downloaded from a third party app store and block free access to their online services.
I worry that companies like Google or Facebook will tell their partners not to use Apple's app store, or those partners will have to pay more for all the services they get from them. The could spell the end of the Apple App store.
Apple knows very well what the DMA/DSA are about. They were involved in industry consultation.
A major pillar of that is the notion of 'gatekeepers' and activities that harm choice and competition.
Anything Apple does that veers away from that goal will be investigated and if they are found to be deliberately placing obstacles in the way of choice and competition, they have a lot at stake.
EU fines are designed to both punish and deter.
I doubt they will want to be on the hook for something like that.
I remains to be seen what they are changing in order to comply with the directive, but after having been involved in the consultation phase they know exactly what the EU is aiming for. They may play for the absolute minimum compliance but that will be playing with fire. The ball is now in Apple's court.
Amazing how entitled the EU thinks they are where they can pass a law for themselves, but feel they should be allowed to take 20% of a companies global revenues for any infraction that only exists within their market.
It’s no different than Apple or Google making their developers pay a hefty fee. They have the bargaining power to get their developers to pay on their terms and the EU has the bargaining power to get Apple and Google to pay on its terms. Entitlement and fairness have nothing to do with it. It is just business.
No. It’s not just business. No one force at the point of a gun developers to do business with Apple or Google. Developers look at the costs va the benefits and choose (or not) to do business and follow those rules.
That’s not how it works with the EU or any government. The EU or other government (see S Korea for examples) uses the threat of force to gain compliance and can force fines for non-compliance. That is not business. And we already have examples when a company does not comply. There have been numerous examples of government raids on Apple or Google or other big business offices and you can bet your bottom dollar there were either armed agents on scene or the raid party had access to armed backup if necessary.
I’m business, when you have that kind of relationship, it’s the mafia or Al Capone or a S American cartel you’re doing business with and I can assure you not voluntary if you’re not a criminal yourself (think protection rackets)
In the current Apple App store, the fees collected from the apps which cost money are covering the cost of ("subsidizing") Apple's work providing free services for all the developers who don't pay any fees because they don't charge anything for their apps. This won't work for free apps on third party app stores, because Apple won't agree to be subsidizing those free apps. Therefore the whole idea of a "free app" on a third party app store won't exist, because Apple will charge a flat fee for every download from third party app stores. Of course, the third party app store owner could pay Apple the per app download fee to allow for free apps on their store.
Also, it's worth noting that one of the many services that Apple provides for free are the ability for those apps to communicate with Apple's online servers. There are many APIs that Apple provides which are not only free to incorporate into an app, but communicate with Apple's servers for free services, like push notifications. All that would be gone for any apps on third party app stores, because Apple would either block those APIs from being compiled with apps on other app stores, or would be able to detect that the app was downloaded from a third party app store and block free access to their online services.
I worry that companies like Google or Facebook will tell their partners not to use Apple's app store, or those partners will have to pay more for all the services they get from them. The could spell the end of the Apple App store.
Apple knows very well what the DMA/DSA are about. They were involved in industry consultation.
A major pillar of that is the notion of 'gatekeepers' and activities that harm choice and competition.
Anything Apple does that veers away from that goal will be investigated and if they are found to be deliberately placing obstacles in the way of choice and competition, they have a lot at stake.
EU fines are designed to both punish and deter.
I doubt they will want to be on the hook for something like that.
I remains to be seen what they are changing in order to comply with the directive, but after having been involved in the consultation phase they know exactly what the EU is aiming for. They may play for the absolute minimum compliance but that will be playing with fire. The ball is now in Apple's court.
I'm confused by your position. Are you saying Apple has to provide free online services for software distributed on third party app stores that use Apple's online services? Or how are you proposing that Apple get paid for those services? Or are you saying Apple has no right for compensation for its services? Please clarify what you think.
Be prepared for more lawsuits against Apple when people lose performance and battery life when malware prevention is installed. Oh, yes false advertising as Apple will not be able to uphold privacy for third party app stores.
Hopefully they introduce this as an option made available through a built in Jailbreak tool. The phone asks if you would like to jailbreak to enable third party app stores with a list of all the risks, and if you select no then you don’t have to worry about BS malware and scam apps.
avon b7 said: A major pillar of that is the notion of 'gatekeepers' and activities that harm choice and competition.
The EU never bothered to prove that the App Store had actually harmed "choice and competition". Turning iOS into a clone of Windows/Mac will just increase prices and have no impact whatsoever on competition. It will primarily benefit all of the billion/trillion dollar developers that had entrenched themselves on Windows/Mac and then freaked out when the iOS model helped smaller non-legacy developers be more successful.
I've been thinking a lot on this and I believe we will not see much negative fallout if this were to happen. The App Store will still dominate. There may be more options, but they would just cater to small niches where there is enough profitability to stay alive, but would never take over the App Store. Most of those niches probably wouldn't cut in to App Store revenue since they would be primarily new markets or be an alternative for apps that were already monetized outside of the App Store. I don't see the iOS App Store becoming like the Mac App Store with most distribution happening outside of it. If it does lose apps, I think it will be mostly subscription based apps that already don't use IAP for the subscription.
Third party stores generally don't succeed, so probably not a lot to worry with store fragmentation or security because the app you want isn't on the store. Many tried and failed to build an alternative to Google Play. Even for games, Steam leads because it is entrenched and gamers know it will always be there. It is really hard to build loyalty if not entrenched or the platform owner. Particularly because you will need to go to the platform's store to get first-party apps, so you are faced with either just using the platform store or having to use multiple stores. There may be some niches where it is nice to have side-loading as long as it can be turned off or restricted. Allowing side loading might also help Apple reduce the number of garbage apps on the store since there would be an alternative. I like the App Stores democratization of the app market where both small and large developers can succeed, but I think it is taken a little too far and set the bar to entry too low.
The biggest issue might be from large companies that want a store specific to their company. I could see Microsoft or Adobe doing this. They would likely not get any other developers on board, but it might be the only place to go for their apps. Although it is annoying to switch stores and sign in to more accounts, there are only a handful of companies large enough to get away with this.
I could see Steam succeeding on iOS if they chose to target that platform. Steam likely wouldn't take away from Apple's gaming sales that are mostly targeting casual gamers, but it might take over the game market for more serious gamers. In some ways that might be an advantage to Apple because they have not been able to attract non-casual gamers to their platforms and this might make game developers more likely to release on the App Store if they can also target Steam. Gaming culture pretty much revolves around Steam and there is a fierce loyalty by gamers. Steam likely would have the opposite affect on casual gamers since you are too immersed in gaming culture on their store. Epic would certainly try to make a store for iOS, but I would not bet on it succeeding. Their PC store barely stays relevant and that is only because of the massive amounts of money they put in to free giveaways and timed exclusives. The Epic store will fail as soon as they stop subsidizing it. Nintendo could probably succeed with their own store on iOS, but that would be a big departure for Nintendo. However, Nintendo has often flirted with targeting mobile with their IP and if they could create their own store they might go all in. Nintendo is the only company with enough IP of their own that could be adapted to mobile. I'm not sure if that would hurt Apple since these games probably would never come to the App Store under other circumstances. Nintendo would want to own the whole experience and I think they could get away with it.
Apple's store fees are not too high for non-subscription apps and a third party store would need comparable fees to stay alive. Epic Stores 11% fees are not likely sustainable either unless the goal is to break even and not generate any revenue. Essentially the only way a third party store can compete is by going cross-platform and offering many of the same apps or games on competing platforms. That would generate value for cross-platform users. Any third party store would also need to be entrenched enough that you know you will not lose all the software you purchased because the store collapses.
A large company like Microsoft could potentially create a store for apps that work on both Android and iOS. Most paid apps are single platform, therefore it would probably be mostly casual games. This would only really appeal to users that want to switch back and forth between platforms regularly or are in a mixed platform household. This might be the biggest threat to App Store revenue, but most users are pretty loyal to their platform and this would require them to use two stores. They would also need to learn about the alternative store since it wouldn't be pre-installed. That is probably a step too far for average iOS users. If anything, this might be worse for Google that has less platform loyalty and outside phone vendors that could pre-install alternative stores. If Google loses revenue sources for Android, that may make it more difficult for them to compete with Apple.
Apple's fees might be too high for some subscription apps and this might drive some of those apps off the store if they were forced to use IAP. The way reoccurring revenue is accounted for is much different than single purchase apps and games. Companies can live on tighter margins because they know a stable amount of money is coming in each month. The 15-30% becomes much more of a barrier since it can be the difference between profitability and losing money. Particularly if their competitors or other platforms they are on might not be paying the same fees. Apple probably isn't making much on these apps already since the same dynamics that might drive them off the store also drove them to avoid IAP.
In the current Apple App store, the fees collected from the apps which cost money are covering the cost of ("subsidizing") Apple's work providing free services for all the developers who don't pay any fees because they don't charge anything for their apps. This won't work for free apps on third party app stores, because Apple won't agree to be subsidizing those free apps. Therefore the whole idea of a "free app" on a third party app store won't exist, because Apple will charge a flat fee for every download from third party app stores. Of course, the third party app store owner could pay Apple the per app download fee to allow for free apps on their store.
Also, it's worth noting that one of the many services that Apple provides for free are the ability for those apps to communicate with Apple's online servers. There are many APIs that Apple provides which are not only free to incorporate into an app, but communicate with Apple's servers for free services, like push notifications. All that would be gone for any apps on third party app stores, because Apple would either block those APIs from being compiled with apps on other app stores, or would be able to detect that the app was downloaded from a third party app store and block free access to their online services.
I worry that companies like Google or Facebook will tell their partners not to use Apple's app store, or those partners will have to pay more for all the services they get from them. The could spell the end of the Apple App store.
Apple knows very well what the DMA/DSA are about. They were involved in industry consultation.
A major pillar of that is the notion of 'gatekeepers' and activities that harm choice and competition.
Anything Apple does that veers away from that goal will be investigated and if they are found to be deliberately placing obstacles in the way of choice and competition, they have a lot at stake.
EU fines are designed to both punish and deter.
I doubt they will want to be on the hook for something like that.
I remains to be seen what they are changing in order to comply with the directive, but after having been involved in the consultation phase they know exactly what the EU is aiming for. They may play for the absolute minimum compliance but that will be playing with fire. The ball is now in Apple's court.
I'm confused by your position. Are you saying Apple has to provide free online services for software distributed on third party app stores that use Apple's online services? Or how are you proposing that Apple get paid for those services? Or are you saying Apple has no right for compensation for its services? Please clarify what you think.
We cannot know exactly what changes they will make. My position is that those changes will have to be very much in line with what the DSA/DMA require as Apple is privvy to what is laid out in the directives and how to implement them.
You made some absolute affirmations that we can't really see as absolute until the technicalities are implemented. For example server side communications and push services, free apps etc.
System APIs are called by the applications which are compiled for iOS. It is the apps that will or won't use those APIs. Third party app stores can easily host free apps. Third party app stores will probably operate in the same way Apple's does. I can imagine some new APIs being made available in that respect specifically for the stores.
App curation, app management, payment processing, support etc will be handled by the stores. It will be interesting to see just how much platform integration is opened up. For example, will Google or Huawei be able to port their own GMS/HMS platforms to Apple devices along with their stores?
There is no reason to think Huawei would want to bring its store and HMS platform to iOS devices so that is just hypothetical, but Google?
avon b7 said: A major pillar of that is the notion of 'gatekeepers' and activities that harm choice and competition.
The EU never bothered to prove that the App Store had actually harmed "choice and competition". Turning iOS into a clone of Windows/Mac will just increase prices and have no impact whatsoever on competition. It will primarily benefit all of the billion/trillion dollar developers that had entrenched themselves on Windows/Mac and then freaked out when the iOS model helped smaller non-legacy developers be more successful.
The EU didn't have to 'prove' anything. One of the pillars of this legislation is its ex ante nature.
The main idea is to reset the balance and level the playing field as opposed to ex post and going on to investigate problems after they have appeared. Solutions that often sit in courts for years while companies continue their practices, further entrenching their market positions.
This legislation is up front (or as up front as it can be) by saying, 'look, these are the rules from now on. Time to comply with them'.
Some things may be black or white. Others will be Grey. Inevitably, some problems will require case by case solutions within their own situations.
Being a gatekeeper though means you have extra duties.
Since nobody is forced to use a third party App Store this is a good thing. Personally I believe that iOS (and iPadOS) are much more important for security than the App Store and that the App Store is more about policy (and money).
A good thing except it's a distraction for Apple to support, and you can be certain Apple's reputation will take a hit each time something goes wrong for users of these third-party app stores.
avon b7 said: A major pillar of that is the notion of 'gatekeepers' and activities that harm choice and competition.
The EU never bothered to prove that the App Store had actually harmed "choice and competition". Turning iOS into a clone of Windows/Mac will just increase prices and have no impact whatsoever on competition. It will primarily benefit all of the billion/trillion dollar developers that had entrenched themselves on Windows/Mac and then freaked out when the iOS model helped smaller non-legacy developers be more successful.
The EU didn't have to 'prove' anything. One of the pillars of this legislation is its ex ante nature.
The main idea is to reset the balance and level the playing field as opposed to ex post and going on to investigate problems after they have appeared.
The EU wants to turn iOS into a Windows/Mac clone. All that's going to do is help the same billion/trillion dollar developers that dominated Windows/Mac. Part of the reason Apple chose the model they used for the App Store is to avoid playing Legacy Entrenchment: the Sequel on iOS. But the EU is too ignorant of the actual history of Windows/Mac and iOS to care. iOS is what "leveled the playing field" not Windows/Mac. Just look at gaming on iOS: one of the most common criticisms is that all of the entrenched franchises on Windows aren't also entrenched on iOS (otherwise known as the "where are all the AAA games" complaint). That's essentially what Epic/Microsoft are complaining about with iOS as well. They dominate gaming on desktop and are frustrated that they don't dominate gaming on iOS as well...especially since mobile gaming now generates more revenue than desktop/console combined.
With third party app stores it makes it possible for developers to leave one and go to another. I don't see comments about the impact this has on consumers. Will the app get updates? Does the consumer have to buy the app again from the new store? I realize a developer can do a number of things to move customers but that requires resources and cost money. And if they aren't in the Apple App Store I'm assuming its because they don't like Apple's commision structure or data privacy policy.
It begins. Prepare for malware on your iOS devices.
I am not so sure about that. I assume that Apple still can require a technical approval for an iOS app, even if it is distributed by another app store. This technical approval will include, among other things, a list of security restrictions. Apple can no longer impose its own payment engine, but it could impose strict security requirements for competing payment engines before these engines are allowed to communicate with iOS devices.
AFAICT this does NOT require Apple to give up control or fees. An "App Store" will be a new class of app that can be distributed by Apple. And you can bet (just like the 3rd party payments) that Apple will charge fees. Ie: if you want to have an App Store then 30% of your revenues will go to Apple.
I've long said this is a no-brainier for Apple. There absolutely should be choices in App Store because the Apple one is full of rubbish. There is a market for a real decent curated App Store where consumers (eg: parents of young children) can get a curated selection of Apps and better support. I would happily pay more for this. And I would expect the App Store fees for these other app stores to be significantly higher - 70% to 150%. The same as retail. You go to a physical store that sells software (effectively curated) then that shop will be charging at least 200% of the wholesale price.
And just like Apple require social media apps to enforce content moderation, they will require app stores to require content moderation and if the App Store fails to do at least as good a job as Apple, then they will get banned as an App Store until they fix their content moderation.
So no, there is little security risk and little economic impact for Apple with 3rd party app stores.
And lastly - I don't want Apple Music and I'm absolutely sick and tired of seeing it everywhere on my iPhone - no other app can stick advertising in general settings or the music app or on the startup/registration screen and Apple have been absolute idiots about it. I tick the box that says NO and I should not see that advertisement again. But they just have to try and upsell it to be on every new screen on the device and every time I install an update. It's about time some authority told them this is effectively unfair competition. They can keep doing it and let others advertise that way too or stop doing it themselves.
avon b7 said: A major pillar of that is the notion of 'gatekeepers' and activities that harm choice and competition.
The EU never bothered to prove that the App Store had actually harmed "choice and competition". Turning iOS into a clone of Windows/Mac will just increase prices and have no impact whatsoever on competition. It will primarily benefit all of the billion/trillion dollar developers that had entrenched themselves on Windows/Mac and then freaked out when the iOS model helped smaller non-legacy developers be more successful.
Apple should give the EU a regional iPhone/iPad Europe is only 23% of the world.
AFAICT this does NOT require Apple to give up control or fees. An "App Store" will be a new class of app that can be distributed by Apple. And you can bet (just like the 3rd party payments) that Apple will charge fees. Ie: if you want to have an App Store then 30% of your revenues will go to Apple.
I've long said this is a no-brainier for Apple. There absolutely should be choices in App Store because the Apple one is full of rubbish. There is a market for a real decent curated App Store where consumers (eg: parents of young children) can get a curated selection of Apps and better support. I would happily pay more for this. And I would expect the App Store fees for these other app stores to be significantly higher - 70% to 150%. The same as retail. You go to a physical store that sells software (effectively curated) then that shop will be charging at least 200% of the wholesale price.
I'm not sure that the alternative "App Store" app would need to be distributed by Apple. In fact I think Apple would want to avoid that. Most likely you would just pull a notarized app off a website like it works on macOS. It is possible Apple will add a stronger verification option then macOS has (which might be a paid service), since macOS essentially just checks that the app came from a verified developer, wasn't modified by a middle man, and that the developers verification wasn't revoked. Apple's paid verification could certify an app doesn't hurt your privacy, send unencrypted communications, etc. Sort of the app equivalent of certifying food is organic.
I somewhat agree on your second point, but I don't think that it will enable that in third-party stores. I think it will allow those things in Apple's first-party store. I think this could allow Apple to make the store a more curated experience since people have other places to go. Right now I think Apple feels they need to accept virtually everything because there is no alternative. Retail software pricing is dead, so no stores could charge that much. Alternative stores all charge about the same as Apple for non-subscription content, so for most apps and games there wouldn't be a compelling reason to switch. I hope that the App Store remains very welcoming and supportive to small developers, but that doesn't mean Apple needs to accept everything equally going forward. I think third party stores will be rare since they can't make it unless they have a very entrenched user base. It is really hard to make them work. Particularly if the store needs an editorial staff to curate content. Most paid app side-loading will probably be for single cross-platform apps that uses a subscription that you buy on a website.
Despite Apple's fears, I think it is more then likely Apple will actually see a services revenue increase and market share increase from this. It would help make the App Store more focused and discoverable. It will create a sense of goodwill that may cause more people to evangelize the platform. It will eliminate one of the reasons some Android users, including coveted developers and power users, stay away from Apple products. Companies that are currently at odds with Apple would be more likely to partner with them. Apple still controls the whole stack and for years have been carefully sandboxing parts of the operating system, so they should be able to do this without hurting the positive sides of the walled garden too much.
I haven't read all of the proposed legislation, but it feels like in some areas Apple may be going beyond if all the rumors are accurate. Particularly if they open this to the US too. I personally think Apple should have embraced this to control the narrative a few years ago, but if they push beyond a bit past what they are required to do they may still be able to do that. It may also help Apple lead the conversation when legislation inevitably comes to the US. At first I thought they might do the minimum and continue to fight this in court, but I'm inclined to think they decided to embrace it instead with the amount of engineering effort suggested.
AFAICT this does NOT require Apple to give up control or fees. An "App Store" will be a new class of app that can be distributed by Apple. And you can bet (just like the 3rd party payments) that Apple will charge fees. Ie: if you want to have an App Store then 30% of your revenues will go to Apple.
I've long said this is a no-brainier for Apple. There absolutely should be choices in App Store because the Apple one is full of rubbish. There is a market for a real decent curated App Store where consumers (eg: parents of young children) can get a curated selection of Apps and better support. I would happily pay more for this. And I would expect the App Store fees for these other app stores to be significantly higher - 70% to 150%. The same as retail. You go to a physical store that sells software (effectively curated) then that shop will be charging at least 200% of the wholesale price.
I'm not sure that the alternative "App Store" app would need to be distributed by Apple. In fact I think Apple would want to avoid that. Most likely you would just pull a notarized app off a website like it works on macOS. It is possible Apple will add a stronger verification option then macOS has (which might be a paid service), since macOS essentially just checks that the app came from a verified developer, wasn't modified by a middle man, and that the developers verification wasn't revoked. Apple's paid verification could certify an app doesn't hurt your privacy, send unencrypted communications, etc. Sort of the app equivalent of certifying food is organic.
I agree on your second point. I think this could allow Apple to make the store a more curated experience since people have other places to go. I hope that it remains very welcoming and supportive to small developers, but that doesn't mean Apple needs to accept everything equally going forward.
The smaller developers will then get the shaft under the new system.
Comments
And if one's perspective is that the 30% is just a fee that doesn't bring any benefits, then that's reasonable: losing a third of one's revenue to a third party for no perceived benefit is a bad deal.
However, that 30% pays for a lot. It removes the friction from the buying process; users know that they can easily delete an app they don't want and that Apple is going to side with them if they request a refund from the developer. It's hard to measure just how much this has affected the market for mobile software and digital services in a manner that everyone will agree with, but as a rough estimate we can just look at the reported revenues - and I don't have figures to hand, but I'm guessing it's now more than 100x what it was in 2008. This is, of course, a communal benefit rather than an individual benefit, so there is very little recognition of its value by those viewing the landscape through the lens of the software developer.
The 30% fee also pays for hosting, data transfer, payment processing, reporting services, malware scanning and a bunch of other annoying little things that lots of people think they can do by themselves for less money. This is where I have some sympathy for the arguments being put forth but respectfully point out that not everyone shares that viewpoint. Still, if there is competition for those services that a significant portion of the developer community would like to take advantage of, that's probably worth promoting and Apple should not be restricting developers from seeking alternatives.
Then again, part of the 30% fee also goes to the app review and code signing process. Digitally signing the application bundle would be worthless without the review, so those cannot be separated. Code signing is a security measure enforced at the OS level; it's perfectly reasonable for Apple to do that but it comes with the cost of added complexity and trust issues. Paying for it via the store's commission is an efficient approach. App review feels like a process that should be a per-app fee but that could mean several hours of a reviewer's time at something in the region of US$150 per hour... I think rolling that into the 30% commission is reasonable.
It's worth remembering that Apple is operating at a huge scale with the App Store. By aggregating their costs and apportioning them over a very large number of developers Apple is able to massively reduce the per-developer cost of those services and spread their risk; in return they make a significant profit. AWS does the same thing; purportedly the margins are in the 60% range for Amazon and yet developers love the service because they think they're getting a bargain.
I think developers need to be reminded that setting up a business is an expensive process and that all those costs used to be payable up front; the trade-off for being able to start the business at a lower up-front cost is that you have to pay more later on.
Also, it's worth noting that one of the many services that Apple provides for free are the ability for those apps to communicate with Apple's online servers. There are many APIs that Apple provides which are not only free to incorporate into an app, but communicate with Apple's servers for free services, like push notifications. All that would be gone for any apps on third party app stores, because Apple would either block those APIs from being compiled with apps on other app stores, or would be able to detect that the app was downloaded from a third party app store and block free access to their online services.
I worry that companies like Google or Facebook will tell their partners not to use Apple's app store, or those partners will have to pay more for all the services they get from them. The could spell the end of the Apple App store.
A major pillar of that is the notion of 'gatekeepers' and activities that harm choice and competition.
Anything Apple does that veers away from that goal will be investigated and if they are found to be deliberately placing obstacles in the way of choice and competition, they have a lot at stake.
EU fines are designed to both punish and deter.
I doubt they will want to be on the hook for something like that.
I remains to be seen what they are changing in order to comply with the directive, but after having been involved in the consultation phase they know exactly what the EU is aiming for. They may play for the absolute minimum compliance but that will be playing with fire. The ball is now in Apple's court.
Third party stores generally don't succeed, so probably not a lot to worry with store fragmentation or security because the app you want isn't on the store. Many tried and failed to build an alternative to Google Play. Even for games, Steam leads because it is entrenched and gamers know it will always be there. It is really hard to build loyalty if not entrenched or the platform owner. Particularly because you will need to go to the platform's store to get first-party apps, so you are faced with either just using the platform store or having to use multiple stores. There may be some niches where it is nice to have side-loading as long as it can be turned off or restricted. Allowing side loading might also help Apple reduce the number of garbage apps on the store since there would be an alternative. I like the App Stores democratization of the app market where both small and large developers can succeed, but I think it is taken a little too far and set the bar to entry too low.
I could see Steam succeeding on iOS if they chose to target that platform. Steam likely wouldn't take away from Apple's gaming sales that are mostly targeting casual gamers, but it might take over the game market for more serious gamers. In some ways that might be an advantage to Apple because they have not been able to attract non-casual gamers to their platforms and this might make game developers more likely to release on the App Store if they can also target Steam. Gaming culture pretty much revolves around Steam and there is a fierce loyalty by gamers. Steam likely would have the opposite affect on casual gamers since you are too immersed in gaming culture on their store. Epic would certainly try to make a store for iOS, but I would not bet on it succeeding. Their PC store barely stays relevant and that is only because of the massive amounts of money they put in to free giveaways and timed exclusives. The Epic store will fail as soon as they stop subsidizing it. Nintendo could probably succeed with their own store on iOS, but that would be a big departure for Nintendo. However, Nintendo has often flirted with targeting mobile with their IP and if they could create their own store they might go all in. Nintendo is the only company with enough IP of their own that could be adapted to mobile. I'm not sure if that would hurt Apple since these games probably would never come to the App Store under other circumstances. Nintendo would want to own the whole experience and I think they could get away with it.
A large company like Microsoft could potentially create a store for apps that work on both Android and iOS. Most paid apps are single platform, therefore it would probably be mostly casual games. This would only really appeal to users that want to switch back and forth between platforms regularly or are in a mixed platform household. This might be the biggest threat to App Store revenue, but most users are pretty loyal to their platform and this would require them to use two stores. They would also need to learn about the alternative store since it wouldn't be pre-installed. That is probably a step too far for average iOS users. If anything, this might be worse for Google that has less platform loyalty and outside phone vendors that could pre-install alternative stores. If Google loses revenue sources for Android, that may make it more difficult for them to compete with Apple.
Apple's fees might be too high for some subscription apps and this might drive some of those apps off the store if they were forced to use IAP. The way reoccurring revenue is accounted for is much different than single purchase apps and games. Companies can live on tighter margins because they know a stable amount of money is coming in each month. The 15-30% becomes much more of a barrier since it can be the difference between profitability and losing money. Particularly if their competitors or other platforms they are on might not be paying the same fees. Apple probably isn't making much on these apps already since the same dynamics that might drive them off the store also drove them to avoid IAP.
You made some absolute affirmations that we can't really see as absolute until the technicalities are implemented. For example server side communications and push services, free apps etc.
System APIs are called by the applications which are compiled for iOS. It is the apps that will or won't use those APIs. Third party app stores can easily host free apps. Third party app stores will probably operate in the same way Apple's does. I can imagine some new APIs being made available in that respect specifically for the stores.
App curation, app management, payment processing, support etc will be handled by the stores. It will be interesting to see just how much platform integration is opened up. For example, will Google or Huawei be able to port their own GMS/HMS platforms to Apple devices along with their stores?
There is no reason to think Huawei would want to bring its store and HMS platform to iOS devices so that is just hypothetical, but Google?
The main idea is to reset the balance and level the playing field as opposed to ex post and going on to investigate problems after they have appeared. Solutions that often sit in courts for years while companies continue their practices, further entrenching their market positions.
This legislation is up front (or as up front as it can be) by saying, 'look, these are the rules from now on. Time to comply with them'.
Some things may be black or white. Others will be Grey. Inevitably, some problems will require case by case solutions within their own situations.
Being a gatekeeper though means you have extra duties.
I somewhat agree on your second point, but I don't think that it will enable that in third-party stores. I think it will allow those things in Apple's first-party store. I think this could allow Apple to make the store a more curated experience since people have other places to go. Right now I think Apple feels they need to accept virtually everything because there is no alternative. Retail software pricing is dead, so no stores could charge that much. Alternative stores all charge about the same as Apple for non-subscription content, so for most apps and games there wouldn't be a compelling reason to switch. I hope that the App Store remains very welcoming and supportive to small developers, but that doesn't mean Apple needs to accept everything equally going forward. I think third party stores will be rare since they can't make it unless they have a very entrenched user base. It is really hard to make them work. Particularly if the store needs an editorial staff to curate content. Most paid app side-loading will probably be for single cross-platform apps that uses a subscription that you buy on a website.
Despite Apple's fears, I think it is more then likely Apple will actually see a services revenue increase and market share increase from this. It would help make the App Store more focused and discoverable. It will create a sense of goodwill that may cause more people to evangelize the platform. It will eliminate one of the reasons some Android users, including coveted developers and power users, stay away from Apple products. Companies that are currently at odds with Apple would be more likely to partner with them. Apple still controls the whole stack and for years have been carefully sandboxing parts of the operating system, so they should be able to do this without hurting the positive sides of the walled garden too much.
I haven't read all of the proposed legislation, but it feels like in some areas Apple may be going beyond if all the rumors are accurate. Particularly if they open this to the US too. I personally think Apple should have embraced this to control the narrative a few years ago, but if they push beyond a bit past what they are required to do they may still be able to do that. It may also help Apple lead the conversation when legislation inevitably comes to the US. At first I thought they might do the minimum and continue to fight this in court, but I'm inclined to think they decided to embrace it instead with the amount of engineering effort suggested.