Apple Accuses Spotify of 'Resorting to Rumors and Half-Truths', Sets Record Straight on App Rejection

[cmaier]

That's absolutely true.

But it also doesn't cost Apple nearly $4 a month to process a credit card in their automated payment system.

This is actually genius. Apple lets companies like Spotify and Netflix set up shop in their App Store... and lets them handle the monumental task of streaming their heavy media to their customers.

And then Apple gets $3 or $4 a month to process the credit card and provide a few app updates during the year.

Work smarter... not harder.

Apple also designs the operating systems, provides the sdks that are used to build the apps, etc. If you look at the lines of code, most will be in sdk routines apple wrote. Apple has to get people to buy the phones so Spotify has people to sell the app to. It's not like Apple has nothing to do with the success of the Spotify.

 

[falainber]

Sure they can. They can invest billions of dollars and create their own phone and platform and get people to buy those instead of iPhones. What Spotify wants to do is get free access to apple's hard work. It's like if i spent a ton of money wiring up the town for internet, and you come along and demand free access to the wiring I installed.

Well, this platform would not exist without Qualcomm's hard work (and not just them) Do they deserve a cut too?

 

[Michael Goff]

Spotify does not want to use Apple payment system either and have their own. The counterpart of the Apple software in this case is LG's or Samsung's software. None of them charge you for Netflix subscription either. In all of these cases the customer already payed for this software when s/he purchased the device. Any way you look at it there is simply no justification for Apple to charge for subscriptions.

Subscriptions on their store using their IAP API means they get money. If you want outside of that, sell the sub on the web.

 

[Michael Scrip]

They also provide the only access to iOS devices. So that's also something.

Yep... it's like an access fee.

I'd be curious to know what all Apple does with their cut.

Apple gets about $4 a month from Spotify customers who signed up in the iOS app. I would imagine about 70 cents of that is the credit card fee. And if the person downloads the app... that's a few cents of bandwidth. And the app is sitting on a server or multiple servers... that's a few cents.

So the rest much be the "access fee"

Like I said... genius!

 

[falainber]

Apple also designs the operating systems, provides the sdks that are used to build the apps, etc. If you look at the lines of code, most will be in sdk routines apple wrote. Apple has to get people to buy the phones so Spotify has people to sell the app to. It's not like Apple has nothing to do with the success of the Spotify.

And I thought that I pay for it when I buy an iPhone. Was I wrong?

 

[Michael Goff]

Well, this platform would not exist without Qualcomm's hard work (and not just them) Do they deserve a cut too?

Once Qualcomm sells the modem, they don't do anything more. They don't compare to Apple, that is maintaining the entire system.
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Yep... it's like an access fee.

I'd be curious to know what all Apple does with their cut.

Apple gets about $4 a month from Spotify customers who signed up in the iOS app. I would imagine about 70 cents of that is the credit card fee. And if the person downloads the app... that's a few cents of bandwidth. And the app is sitting on a server or multiple servers... that's a few cents.

So the rest much be the "access fee"

Like I said... genius!

They also provide 4 or so years of free iOS updates to users.

 

[Michael Scrip]

Apple also designs the operating systems, provides the sdks that are used to build the apps, etc. If you look at the lines of code, most will be in sdk routines apple wrote. Apple has to get people to buy the phones so Spotify has people to sell the app to. It's not like Apple has nothing to do with the success of the Spotify.

No doubt.

But that's why Apple sells phones and computers that happen to be running that software.

 

[cmaier]

And I thought that I pay for it when I buy an iPhone. Was I wrong?

Yes you are wrong. Your phone gets free os updates, and costs less than it otherwise would, because Apple can make money from App Store sales and subscriptions.

 

[falainber]

Subscriptions on their store using their IAP API means they get money. If you want outside of that, sell the sub on the web.

And that's exactly what Spotify is trying to do but Apple prevents them (as I understand the logic of some of the peopke here because they have the right to do so because they designed SDK).

 

[Michael Scrip]

They also provide 4 or so years of free iOS updates to users.

But isn't that paid for by the selling of the hardware it runs on? Apple makes a pretty penny from iPhones!

I know you're talking big-picture here.

I was talking about one app and one subscription. But, yes, it's all related.

 

[falainber]

Yes you are wrong. Your phone gets free os updates, and costs less than it otherwise would, because Apple can make money from App Store sales and subscriptions.

Cute. As if we did not know that Apple makes enough money to do all that and then keep hundreds of billions of dollars in the bank.

 

[Michael Goff]

And that's exactly what Spotify is trying to do but Apple prevents them (as I understand the logic of some of the peopke here because they have the right to do so because they designed SDK).

They're stopping in app adverts, yes. But imagine if you needed a Spotify account and people were then sent emails from that. Or maybe they added a social element where you linked to a social account and they sent messages via that.

 

[jkeating2005]

So...what you're saying is Spotify has the right to complain when it piggybacks on the App Store and expects to pay nothing? You don't think Apple puts in the time, engineers, and cash to make the App Store what it is? How do you think Spotify got so many subscribers?

The problem with this is Spotify has no choice but to "piggy back" off of the app store. I'm sure if users could visit Spotify's mobile site, sign - up, click an install banner, and listen to music they would be happy. That would be avoiding the App store and Apples servers all together. Thats the way it should be. Monopolizing on a mobile store and not allowing 3rd party installs is the problem.

 

[Michael Goff]

But isn't that paid for by the selling of the hardware it runs on? Apple makes a pretty penny from iPhones!

I know you're talking big-picture here.

I was talking about one app and one subscription. But, yes, it's all related.

Yes and no. I mean, Samsung sells their phone for about the same price and you're lucky to get 2 years of updates.

 

[falainber]

They're stopping in app adverts, yes. But imagine if you needed a Spotify account and people were then sent emails from that. Or maybe they added a social element where you linked to a social account and they sent messages via that.

And? Are you saying that only Apple should be allowed to do it because they are somehow special? What if Verizon, AT&T and others aga8n decide that it's their platform and all their customers should use Verizon pay and give them 30% cut for everything related to their "platform"? 30% to Verizon, 30% to Apple, 30% to Cisco, 30% to Qualcomm. Then we would have real fun!

 

[Michael Scrip]

Yes and no. I mean, Samsung sells their phone for about the same price and you're lucky to get 2 years of updates.

I think we're getting off-topic from the App Store and subscriptions. But since we're here... do you think income from the App Store ever reaches the iOS development team?

I don't know Apple's corporate financial structure. I would imagine the App Store is... cough... walled-off.

But that's not what I was talking about anyway.

Here's my point about Apple's cut:

I can buy an app for $10 and Apple gets $3. That $3 is allotted to cover the storage, the bandwidth, the updates, and the credit card fees when I purchase the app.

But with a subscription app... Apple is getting paid every month. They're getting paid 12 times a year... but I don't see that they're doing 12 times the work.

Like I said... genius!

 

[Michael Goff]

And? Are you saying that only Apple should be allowed to do it because they are somehow special? What if Verizon, AT&T and others aga8n decide that it's their platform and all their customers should use Verizon pay and give them 30% cut for everything related to their "platform"? 30% to Verizon, 30% to Apple, 30% to Cisco, 30% to Qualcomm. Then we would have real fun!

Hardware vs software. Huge difference.
[doublepost=1467438486][/doublepost]

I think we're getting off-topic from the App Store and subscriptions. But since we're here... do you think income from the App Store ever reaches the iOS development team?

I don't know Apple's corporate financial structure. I wouldn't imagine the App Store is... cough... walled-off.

But that's not what I was talking about anyway.

Here's my point about Apple's cut:

I can buy an app for $10 and Apple gets $3. That $3 is allotted to cover the storage, the bandwidth, the updates, and the credit card fees when I purchase the app.

But with a subscription app... Apple is getting paid every month. They're getting paid 12 times a year... but I don't see that they're doing 12 times the work.

Like I said... genius!

Oh, it is smart of them. I'm not denying it's smart. I'm simply saying there's more to it than simply paying for bandwidth.

Edit: Also, I doubt income just stays within the place it was made. The iOS team likely gets money from wherever they need it from.

 

[falainber]

Hardware vs software. Huge difference.

All this hardware has a software too.

 

[Michael Goff]

Who do you think writes the drivers for the software that runs the Qualcomm modem?

 

[Michael Scrip]

Oh, it is smart of them. I'm not denying it's smart. I'm simply saying there's more to it than simply paying for bandwidth.

And that's what I was asking earlier. I'd love to know what Apple does with, say, the $4 a month they get from a Spotify subscriber.

Credit card fees would be less than a dollar a month. The app might only be updated a few times a year... or a person may never download it again after the first install... so storage and bandwidth might only be pennies. I'm sure there are other costs though.

Do we think it's possible that Apple's costs to process an iOS-subscribed Spotify customer are nearing the $4 mark? Could they be breaking even?

Or how about this: imagine if there was an app with a $100 a month subscription. Apple would be getting $30 a month for the same amount of work as a $3 a month app.

That's when it would get interesting!

 

[falainber]

Who do you think writes the drivers for the software that runs the Qualcomm modem?

Who do you think writes software that runs inside Qualcomm modems?

 

[PalidinoDH]

I struggle with this argument as I'm sure most of it is automated no? Are their a fleet of Apple employee's dealing with these transactions every day? I do believe if you have any issue with an app you contact the developer and NOT Apple. But perhaps I'm wrong?

I run a website that offers items similar to paid subscriptions, and believe me being the one in the middle that receives the money has it's issues. Since Apple is handling the transaction, any issues with the payment itself is up to Apple. Not to mention chargebacks, what a nightmare those can be. ESPECIALLY if what is sold isn't shipped to an address, as if it isn't hard enough winning disputes with banks if you actually ship an item with the purchase. I'm sure Apple doesn't get free reign on banks turning down chargebacks because it's Apple.

 

[AdonisSMU]

And that's what I was asking earlier. I'd love to know what Apple does with, say, the $4 a month they get from a Spotify subscriber.

Credit card fees would be less than a dollar a month. The app might only be updated a few times a year... or a person may never download it again after the first install... so storage and bandwidth might only be pennies. I'm sure there are other costs though.

Do we think it's possible that Apple's costs to process an iOS-subscribed Spotify customer are nearing the $4 mark? Could they be breaking even?

Or how about this: imagine if there was an app with a $100 a month subscription. Apple would be getting $30 a month for the same amount of work as a $3 a month app.

That's when it would get interesting!

The updates no.....???
[doublepost=1467440240][/doublepost]

The problem with this is Spotify has no choice but to "piggy back" off of the app store. I'm sure if users could visit Spotify's mobile site, sign - up, click an install banner, and listen to music they would be happy. That would be avoiding the App store and Apples servers all together. Thats the way it should be. Monopolizing on a mobile store and not allowing 3rd party installs is the problem.

It goes through the App Store to ensure some users phone won't be bricked in the event they download something malicious. So yes they have to go through the approval process and app store.

The app store rules are like taxes. You don't make any money you don't give apple any money. It's that simple. You make money then you pay 30% whether its $3 or $300 per month.

 

[Michael Scrip]

The updates no.....???

I addressed updates.

Free apps get updates. Paid apps get updates. Subscription apps get updates.

Updates are a common thing across all apps in the Apple Store.

But I can't imagine updates are a big part of the $4 a month Apple gets from iOS-subscribed Spotify users.

Hell... Apple will let a free flashlight app get a dozen updates a year.

I guess the $99 a year developer fee covers that... which is another thing all apps have in common... including Spotify!

 

[legacyb4]

Actually, Spotify can "piggy back" off the store, just like any other free app provided by a subscription-based developer. The issue is that Spotify is trying to sneak around the rules around using the App Store & charging subscriptions (which Apple is entirely within their rights to do so, to be honest). If you look at cloud storage providers, they offer their free app, then expect the customer to sign up for a subscription through their own website.

The real question should be "why can't Spotify do the same?"...

The problem with this is Spotify has no choice but to "piggy back" off of the app store. I'm sure if users could visit Spotify's mobile site, sign - up, click an install banner, and listen to music they would be happy. That would be avoiding the App store and Apples servers all together. Thats the way it should be. Monopolizing on a mobile store and not allowing 3rd party installs is the problem.