john gibson

Apple is going to win this case as Epic's case was not a good one and I think that is hinted at strongly by the questioning.  I do think as a result of what was exposed in this trial that if not now there will be government intervention to address the anti-steering rules and possibly the lack of competition on payment options.

Best case for everyone (including Apple in the long run as it would make the platform better) is if 3rd party payment processing was allowed and the anti-steering provisions Apple engages in removed for digital content. I would have no problem if they kept things as-is for games.  There is no justification for Apple getting 30% for non app related products and services where they are providing nothing but the forced payment processing.  If that went away the Apple platform would be greatly improved for consumers.  Consumers wouldn't be paying 30% more for services like Spotify subscriptions and the awful user experience of downloading an app like Netflix and app makers being banned from being transparent with users would be fixed.  Apps that cannot offer any product where the industry is on the agency model (comics, ebooks, etc...) would finally be available to purchase on iOS.  If Apple was forced to compete for payment processing and as a result were only making as much as say Stripe was instead of 30% that would surely be a short term hit but all the additional commerce they would earn by digital content that can't be sold on iOS today would make up a good chunk of that. 

GeorgeBMac said:

john gibson said:

mylovino said:

Apple has simplified software development and consumption in so many ways, and all the developers and customers both benefit from the large customer base Apple has created with their entire ecosystem, if at the end a judge is not balancing out cost versus benefits in light of the underlying economic system, it would be a really strange result. I lived through the evolution of development environments, remember times when licensing an IDE was a really expensive exercise and software distribution required high production and distribution costs, it is really bizarre that Epic tries to further increase their margin by challenging the „partner“ which adds the whole ecosystem they benefit from with billions of dollar.

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Imagine if other stores tried to implement the same rules the App Store has and it becomes clear how outrageous some of the policies are.  Tim Cook used the strawman argument:

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You mean like if i set up a fresh produce stand in a Krogers -- and then complained that their policies weren't fair to me?

Not sure if you were trying to make the point for me or if it just a happy accident choosing Kroger as the answer to your questions is absolutely yes.  The Kroger grocery chain has engaged in some egregious business practices over the past several years.  Suppliers rightfully complained.  Courts and state governments got involved and Kroger had to make some changes in the way they do business.  The difference is there aren't a lot of Kroger fans running around defending Krogers behavior.

mylovino said:

Apple has simplified software development and consumption in so many ways, and all the developers and customers both benefit from the large customer base Apple has created with their entire ecosystem, if at the end a judge is not balancing out cost versus benefits in light of the underlying economic system, it would be a really strange result. I lived through the evolution of development environments, remember times when licensing an IDE was a really expensive exercise and software distribution required high production and distribution costs, it is really bizarre that Epic tries to further increase their margin by challenging the „partner“ which adds the whole ecosystem they benefit from with billions of dollar.

Epic is absolutely the wrong company to be bringing this case but lets face it, it probably takes someone a little crazy / reckless to take on the most valuable company in the world that has the power to destroy the businesses of other companies that are reliant on being available on mobile devices.

I have no problem with Apple collecting a decent-sized commission on apps and they absolutely did/do provide value.  Where the whole argument for Apple falls apart is for digital content or external services.  Their IDE, their APIs, etc... have nothing to do with the creation of things like eBooks, videos, dating services, online classes, etc...  They don't provide discovery like they do with an app.  They don't host the digital content like they do with apps. They don't provide the distribution or storage for digital content like they do with apps.  But they still feel entitled to 30%.  

Imagine if other stores tried to implement the same rules the App Store has and it becomes clear how outrageous some of the policies are.  Tim Cook used the strawman argument:

“It would be akin to Apple down at Best Buy saying ‘Best Buy, put in a sign there where we are advertising that you can go across the street and get an iPhone.'”

Of course, no one was saying that app developers should be allowed to put in their App Store listing alternative ways to purchase.  But Apple goes further and prevents a companies app from doing so.  So imagine for a moment that Best Buy had Apple's approach.  You go to a Best Buy and buy an iPad.  Apple couldn't offer you the option to sign up directly from Apple for iCloud or Apple Music or any other service - for as long as you use that iPhone you'd have to go back to Best Buy to get any of those services.  Everyone recognizes that would be insane but for some bizarre reason we will go as far as defending the same behavior when Apple does it.

hmlongco said:

john gibson said:

hmlongco said:

As pointed out, Apple reviews and validates app submissions. Apple handles all orders, merchant services, payment processing fees, customer service, returns, reserves, and downloads.

Apple provides the store, the marketplace, and access to millions upon millions of validated, credit card paying customers who can and will buy your product at the click of a button.

So what's a "fair" price for all of that?

Try getting a product into Target or WalMart or Best Buy and tell me just how much profit one of those stores is going to want to skim off the top. Closer to 50%, actually, and that's after you've actually paid to build and produce and ship them a physical product.

So again, what's fair? 20%? 15%? 10%?

Tell someone a CD costs $20 and people will whine that it's not $10. Make it $10 and someone else will whine that it's not $5 and that $10 is totally "unfair".

The problem is that pretty much ANY number you name is going to be seen as unfair by someone else who just wants more money going into their pockets and not yours.

I'm an Apple developer and I think Apple is being more than fair.

Could Apple do better? Sure. More consistency is the review process. Paid app updates. There are lot's of things that Apple could do.

But 30%? Not a problem.

That is an Apples to Hand Grenades comparison about a physical good vs app store.  If Apple was charging 30% to distribute physical goods then maybe it'd be an apt comparison.  The right comparison is what does stripe, or shopify or charge.  I'ts nowhere near 30%.  Apple is only able to charge 30% because they are part of a duopoly and Apple owns 2/3 of the mobile app market.  Any potential competition that could lead to lower prices is eliminated.

If they solved the consistency problem and eliminated the application of unwritten rules that would go a long way towards appeasing most complaints as at least then everyone would be on a level playing field.

john gibson said:

Apple is only able to charge 30% because they are part of a duopoly and Apple owns 2/3 of the mobile app market.  

If they solved the consistency problem and eliminated the application of unwritten rules ...

Starting with the later point first, AFAIK all of the rules are written down in the developer agreement. There may be some inconsistencies in applying them from time to time and Apple could do better with this, but rules are applied by human beings and human beings have been known to make mistakes. Shocking.

Back to the first point, according to Apple and other sources about half the revenue generated by the app store goes to maintaining the store, process, fees, and so on, so cutting that to 15% doesn't really work. And as I pointed out in my comment, part of the discussion boils down to what people think is "fair" and that's always a moving goalpost.

So here's the thing. Companies exist to make money. They propose a price for a good or service and people either buy or they don't. If they think the price is fair they buy. If they don't, then they don't and the company has to either attempt to adjust prices or give it up and try something else. The market decides what's "fair".

Apple has the most successful app store on the planet. They have millions of developers who've made billions ($155B) of dollars from it. 

Seems to me that, by and large, the system is working and both Apple and Apple's developers are profiting from the experience.

They aren't though if we take what they explained to to reporters is accurate.  In https://www.protocol.com/apple-hey-rejection-letter:

"If an app is paid for by a company and managed by an administrator — think Salesforce, HR services, all the things no regular person ever pays for and are run entirely by IT departments — that app doesn't have to require in-app purchases."

There is nowhere in the App Store Guidelines  where anything like that rule is documented.  I hope you would agree that needs to be fixed, that developers should be able to trust that they won't be rejected for rules that don't exist in the App Store review guidelines.

I don't know what the right percentage is and I would have no problem if it remained 30% if there were alternatives.  If an app could opt out of the AppStore and be charged for review and distribution only + a healthy markup to keep their margins at a nice level that would be a good solution.   I think that would resolve the pending antitrust concerns they have upcoming for sure in the EU and likely in the US as well.  That gets around any safety / piracy concerns and lets others compete on payment processing / marketing /etc... 

Short of that, I think they should go back to the process they had before (and apparently still do with business apps if we assume the rule mentioned in the protocol article are accurate) where as long as there are no mentions on how to sign up in the app it's fine.   

On the last point, I don't think it is working when I read John Gruber or Ben Thompson.  It sounds like there is a ton of unrest out there but that developers are scared to speak up out of fear of retribution from Apple. 

arlomedia said:

Rayz2016 said:

But I tell you what. If you don’t think the App Store is helping you find paying customers then pull your apps, rewrite them for Android and reap the benefits of the larger markets. 

My apps are already available on both platforms. Being told to simply abandon iOS is pretty unrealistic considering the size of its customer base and the enormous investments I've already made in that platform. I also don't see how telling developers to leave helps Apple or its customers.

I'm so tired of all the "free market" or "go somewhere else" arguments, all of which ignore the simple fact that iOS customers are not allowed to install apps from anywhere else. That breaks any comparison or analogy that has been made with other business models or forms of retail sales. I don't believe the 30% commission is the cost of hosting apps, "marketing" them or providing quality control. It's an arbitrary amount that Apple has set because they can, because there is no alternative to deliver products to customers who use their platform.

But clearly the focus here is defending whatever Apple has decided to do rather than looking realistically at areas that could be improved.

Great point.  I think opinions might change if more people paid attention to where Apple is now instead of still thinking of them as a scrappy underdog.  The are part of a duopoly and they own 2/3 of the mobile app market.  Things that are acceptable when you are an upstart fighting against bigger rivals in a competitive market cease to be acceptable when one is part of a duopoly and owns as large a percentage of the market that Apple does.