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

[Abazigal]

I think that is the real discussion here! Spotify has no real options here, just complain. I'd argue most devs are afraid to complain with them, because apples reach is long and they can kill your app easily. So much power and control..

I think it's more that apps have been effectively commoditised in the app store. For instance, note-taking apps are a dime-a-dozen. If you remove your app one day, the user is spoilt for choice when it comes to alternatives. Unless we have some sort of developer union organising a mass withdrawal of apps, on their own, developers don't really have any bargaining power of their own.

I agree that Spotify can't really do anything except complain and try to win in the court of public opinion. I can't see Apple giving in though. Apple didn't even flinch when MS Office didn't come to iOS, and for most part, users got by just fine without it. Spotify might have had some leverage back when it was the biggest music streaming service in town, but now that Apple has its own music streaming service, I don't think Apple would be too perturbed by the absence of Spotify. Heck, they might even welcome it.

 

[true god]

Apple should not be getting more than 5% on subscriptions.

 

[kdarling]

I'm in the UK. Dumb phones are completely a different situation and the market back in the dumb phone days was different altogether. It's more of carriers tried to give you some extra features, which they still do with Android phones with bloat wares but that doesn't mean they "controlled" it. With dumb phones there wasn't any option of free app installation anyway.

There were (and are) plenty of free apps for dumbphones, but they do have to come from the carrier's app store.

Simply because before Apple nobody bothered to streamline the apps experience and the ability for customers to get what they want that easily.

Again, on the contrary, the whole point of carrier app stores is that they exist for the same reasons as Apple's app store: to control (and often monetize) the user experience.

For example, if you have a Verizon dumbphone and want to download an app for it, you have to go to Verizon's app store that's included on the phone. As for success, such dumbphone apps created over $3 billion in revenue by 2010, and that was on just the Qualcomm app platform used by CDMA carriers.

Smartphones were traditionally different, in that while there was often a carrier app store included, sideloading from third parties was also allowed. As I mentioned, large app stores like Handango (which some EU phones came preloaded with) existed long before Apple made theirs. They vetted apps, collected money and paid developers. They had apps for everything from Nokias to Palms to WinMo devices.

A decade's experience only takes you back to the iPhone debut. Anyone who doesn't know about app stores like Handango, should not be commenting about what smartphones did prior to Apple.

Where are you getting this logic from? Apple doesn't take a cut for anything if you've downloaded it from outside.

What?! Of course they do. That's the whole point of this entire thread, and is what is objected to. It's why companies like Amazon cannot afford to sell their videos through an iOS app, media which is NOT served from an Apple server. Ditto books, magazines, music. What do you think we're all talking about?

Yes and as a company they should figure out how to deal with their business. Not blame other platforms when they're clearly using the platform for their own gains.

You couldn't have it more backwards. Slingbox did not need Apple's app store to sell their app. They are well known and respected. No vetting needed, no Apple app store needed. Apple used their lockdown of their iOS platform for their own gain, at Slingbox's expense.

 

[AsherN]

The rules are really simple. If you offer IAP, Apple gets 30%. If it's a subscription, Apple gets 30% the first year and 15% after that. If you have an app that uses a subscription model, you can:
1) Offer the subscription through IAP and pay Apple
2) Offer the subscription through your website and not pay Apple

You cannot refer to the subscription part of your website from within the app. You can throw a login page and say that you need a valid account to use the app.

If you download Spotify and the first thing it tells you is that you need a valid Spotify account and you can't figure out on your own how to do that, maybe you should just put the phone down and back away slowly.

 

[akash.nu]

There were (and are) plenty of free apps for dumbphones, but they do have to come from the carrier's app store.

By free apps I meant freely available apps. The whole installation of apps business wasn't really prevalent with dumb phones. Back in the days when a lot of these dumb phones used Java as their main platform had a completely different architecture than what we use these days. The carrier stores you are taking about, although I've never used myself, feels like a few handful of things that people didn't even care about much to be honest.

Again, on the contrary, the whole point of carrier app stores is that they exist for the same reasons as Apple's app store: to control (and often monetize) the user experience.

For example, if you have a Verizon dumbphone and want to download an app for it, you have to go to Verizon's app store that's included on the phone. As for success, such dumbphone apps created over $7 billion in revenue by 2010, and that was on just the Qualcomm app platform used by CDMA carriers.

The difference being that AppStore was launched for third party developers to use the platform to sell their apps. Which was never the case with the carrier store you are talking about. Don't forget 70% is actually going to the developers.

Smartphones were traditionally different, in that while there was often a carrier app store included, sideloading from third parties was also allowed. As I mentioned, large app stores like Handango (which some EU phones came preloaded with) existed long before Apple made theirs. They vetted apps, collected money and paid developers. They had apps for everything from Nokias to Palms to WinMo devices.

A decade's experience only takes you back to the iPhone debut. Anyone who doesn't know about app stores like Handango, should not be commenting about what smartphones did prior to Apple.

A decade of industrial experience is different to having experience with smartphones as a consumer. I have used almost every smartphone platform that we have ever had on this planet. You talked about Handango, that was nowhere close to what AppStore has done for individual developers. Anyway I think we are going off course here.

What?! Of course they do. That's the whole point of this entire thread, and is what is objected to. It's why companies like Amazon cannot afford to sell their videos through an iOS app, media which is NOT served from an Apple server. Ditto books, magazines, music. What do you think we're all talking about?

Erm, no they don't. I think you've misunderstood the point. If an app is selling something from within the store then it has to pay 30% to Apple but if they sell it outside then Apple doesn't get anything. Services have a choice there.

You couldn't have it more backwards. Slingbox did not need Apple's app store to sell their app. They are well known and respected. No vetting needed, no Apple app store needed. Apple used their lockdown of their iOS platform for their own gain, at Slingbox's expense.

Why did they choose to develop for iOS then, if that didn't make any difference to them? app development is not cheap you know.

 

[kdarling]

The carrier stores you are taking about, although I've never used myself, feels like a few handful of things that people didn't even care about much to be honest.

Perhaps not in the UK. In the US, dumbphone apps (and ringtones, of course) was a billion dollar a year business in the early to mid 2000s. Many dumbphone user download apps. Far more than people realize. Just because people have a flip phone, doesn't mean they don't want apps.

For instance, over 10 million of Verizon's dumbphone users downloaded Verizon's port of Shazam, in less time than the same number of downloads occurred with the iPhone later on.

This is one of the reasons why carriers did not like Apple's model of having their own app store. To appease them, Apple reportedly pays a percentage of app store revenue to some carriers.

The difference being that AppStore was launched for third party developers to use the platform to sell their apps. Which was never the case with the carrier store you are talking about.

On the contrary, the carrier stores were also created for third party developers.

Erm, no they don't. I think you've misunderstood the point. If an app is selling something from within the store then it has to pay 30% to Apple but if they sell it outside then Apple doesn't get anything. Services have a choice there.

That's not a choice. Apple does not allow an app to sell media outside of Apple's store, even if Apple is totally non-involved in the purchase or download.

E.g. I cannot buy an Amazon Video from within the Amazon video app, because Apple wants a percentage for access to one of their users (Apple sells its customers like a product.) Worse, Apple even forbids Amazon from having a simple link to go to Amazon to do so. And of course on Apple TV, that's not even possible. You have to use a second device. On Roku, I have no such problem.

Why did they choose to develop for iOS then, if that didn't make any difference to them? app development is not cheap you know.

Again, because Apple restricted downloading any app outside of Apple's store. No matter how respected the company. So for their customers who wanted to use Slingbox on their iPhone, Slingbox had to basically pay Apple a ransom to host their app which was traditionally available outside of any store.

 

[BaldiMac]

I already did. YOU CANNOT INSTALL A NATIVE APP UNLESS IT'S THROUGH THE APP STORE. How in God's green earth is that not a monopoly?

Easy answer. Because the market in not limited to native iOS apps.

The problem is that this also puts Spotify at a competitive disadvantage since it increases friction for potential customers, particularly since Apple does not allow any kind of link to an external sign-up page.

That's what we call competition. Spending billions to develop an advantage over your competitors isn't anticompetitive!

No disrespect either. This is *without any doubt* a case where one company is trying to leverage its dominating position in one market to stifle competition in another.

Except that Apple doesn't have dominating position in any legal sense in any market. And they aren't trying to stifle competition in another. That have simply developed a competitive advantage in the music market by creating a new platform.

 

[akash.nu]

Perhaps not in the UK. In the US, dumbphone apps (and ringtones, of course) was a billion dollar a year business in the early to mid 2000s. Many dumbphone user download apps. Far more than people realize. Just because people had a flip phone, didn't mean they didn't want apps.

Ok, I knew the ringtones were hit but have never experienced the type of app usage you're talking about on dumb phones. I'm afraid there's not much I can say about that since I've not had first hand experience with such people.

For instance, over 10 million of Verizon's dumbphone users downloaded Verizon's port of Shazam, in less time than the same number of downloads occurred with the iPhone later on.

This is one of the reasons why carriers did not like Apple's model of having their own app store. To appease them, Apple reportedly pays a percentage of app store revenue to some carriers.

I've never heard about Apple paying the carriers a percentage of the AppStore revenue.

The carrier stores were also created for third party developers. And since there were far fewer developers for such stores, those developers actually could make a decent living.

Oh really?! I thought the carrier stores were only for carriers to sell their own apps. Nonetheless, if third party developers were allowed to put their apps on the store then I reckon they had to pay something to the carriers. (although I'm not sure because I've never personally used any service as such. )

That's not a choice. Apple does not allow an app to sell media outside of Apple's store, even if Apple is totally non-involved in the purchase or download.

E.g. I cannot buy an Amazon Video from within the Amazon video app. Worse, Apple even forbids Amazon from having a simple link to go to Amazon to do so. And of course on Apple TV, that's not even possible. You have to use a second device. On Roku, I have no such problem.

Apple does allow sell outside of the AppStore and loads of services such as Netflix, Amazon, HBO are using that model where users pay for content outside of the Apple payment system and then can download a FREE iOS app from the AppStore and use their login details to gain access to the content they've purchased outside.

The only thing Apple restricts is to advertise within the apps for a payment system outside of the AppStore, which is fair enough. If Apple didn't do that then every developer will just do the same and it will just not be a sustainable business model for Apple. As simple as that.

Again, because Apple restricted downloading any app outside of Apple's store. No matter how respected the company. So for their customers who wanted to use Slingbox on their iPhone, Slingbox had to basically pay Apple a ransom to host their app which was traditionally available outside of any store.

Again as a company and the platform owner, Apple can do whatever they feel like with the platform.

Anyway, I think you've got it wrong here. Apple doesn't charge any price for hosting the apps (Other than the yearly fee for development certificate). They take a cut if you're selling via Apple payment system. That's the point here.

 

[kdarling]

Easy answer. Because the market in not limited to native iOS apps.

Don't even go there. HTML apps cannot do everything that a native iOS app can do.

That's what we call competition. Spending billions to develop an advantage over your competitors isn't anticompetitive!

Making sure your competition cannot sell media as easily or cheaply as you can, is.

Except that Apple doesn't have dominating position in any legal sense in any market. And they aren't trying to stifle competition in another. That have simply developed a competitive advantage in the music market by creating a new platform.

Apple's apps don't have to pay someone else 15 - 30% royalties in order to allow in-app purchases.

 

[BaldiMac]

Don't even go there. HTML apps cannot do everything that a native iOS app can do.

I didn't go there. The market for digital music or even subscription music isn't limited to native iOS apps. There are many platforms through with it is offered. Spotify is available on most.

Making sure your competition cannot sell media as easily or cheaply as you can, is.

No, it's not. Again, Apple only has an effect on their platform. Which is not in a monopolistic position in the market.

Apple's apps don't have to pay someone else else 30% royalties in order to allow in-app purchases.

So? That's an advantage of spending the money to build a platform.

 

[Michael Goff]

Don't even go there. HTML apps cannot do everything that a native iOS app can do.



Making sure your competition cannot sell media as easily or cheaply as you can, is.



Apple's apps don't have to pay someone else 15 - 30% royalties in order to allow in-app purchases.

It is true that Apple has an advantage in this. I still don't see how they have enough of a marked for somebody to scream for legal action.

 

[gotluck]

I think it's time 'monopoly' ,or whatever term you want to call this advantage, is defined not just by market share, but profit share too


this forum constantly calls market share irrelevant anyway, how convenient that it is the sole metric for judging abuse

 

[ArtOfWarfare]

How do you think Apple makes money to provide that App Store? It's not free...

No, but it also isn't $3/user/month like they charge Spotify. It costs fractions of a cent per person per year. Apple is charging around one hundred thousand times as much as what it costs them.

 

[Michael Goff]

I think it's time 'monopoly' ,or whatever term you want to call this advantage, is defined not just by market share, but profit share too


this forum constantly calls market share irrelevant anyway, how convenient that it is the sole metric for judging abuse

So we penalize companies for being profitable now?

 

[gotluck]

So we penalize companies for being profitable now?

if they do things like force everything through their store, I think yes

 

[akash.nu]

No, but it also isn't $3/user/month like they charge Spotify. It costs fractions of a cent per person per year. Apple is charging around one hundred thousand times as much as what it costs them.

As a business they can charge whatever they feel like and don't have to answer to anyone. They're not a charity. They're a business and by definition, the sole purpose of a business is to make profit, as long as it's done in legal ways and in this case Apple is not doing anything illegal.

 

[samcraig]

So we penalize companies for being profitable now?

On this forum - don't we penalize Google and Amazon for that very thing?

 

[kdarling]

So? That's an advantage of spending the money to build a platform.

Again, that works both ways. It's a platform that would not be successful without third party apps.

For example, I did not buy an iOS device until Slingplayer was available. It was that important to me at the time.

Likewise, many people held off (and still hold off) getting an Apple TV because certain media stores were/are not available.

Apple has the upper hand only as long as enough major developers give in to its demands. The same situation is happening with Apple Pay and banks, with Apple dangling access to its customers' purchases, as a product to sell.

It is true that Apple has an advantage in this. I still don't see how they have enough of a market for somebody to scream for legal action.

I don't disagree. We'll have to see what the FTC says.

 

[BaldiMac]

No, but it also isn't $3/user/month like they charge Spotify. It costs fractions of a cent per person per year. Apple is charging around one hundred thousand times as much as what it costs them.

Maybe if you only look at one app on it's own on without accounting for anything other than bandwidth. But the amount that Apple charges the paid apps needs to cover the costs of the App Store as a whole assuming you don't expect Apple to operate the App Store at a loss.

 

[waitandwait]

Apple should not be getting more than 5% on subscriptions.

Nonsense. Data is King in today's digital world. Why did Microsoft spend $28b on Linkedin? For their 'social network' or their 'technology?"

Apple gives Spotify and other companies access to their users to subscribe their service. They should pay for it.

 

[Michael Goff]

if they do things like force everything through their store, I think yes

Spotify doesn't have to go through their store for the subscriptions.

On this forum - don't we penalize Google and Amazon for that very thing?

Nope. Amazon sells their own crap at a lower price than others can and we just lap it up. Google doesn't get hit for their profits either. I can't think of a time when either have been brought to court about that. Google has been brought up in Europe, but primarily for abusing what an actual monopoly is.

Again, that works both ways. It's a platform that would not be successful without third party apps.

For example, I did not buy an iOS device until Slingplayer was available. It was that important to me at the time.

Likewise, many people held off (and still hold off) getting an Apple TV because certain media stores were/are not available.

Apple has the upper hand only as long as enough major developers give in to its demands. The same situation is happening with Apple Pay and banks, with Apple dangling access to its customers' purchases, as a product to sell.



I don't disagree. We'll have to see what the FTC says.

My guess? Nothing. Then we will have all the armchair lawyers in here come u with reasons that range from bribes to incompetence.

 

[gotluck]

Spotify doesn't have to go through their store for the subscriptions.

not talking about subscriptions, app store is the only way to distribute non web apps on ios

 

[BaldiMac]

Again, that works both ways. It's a platform that would not be successful without third party apps.

For example, I did not buy an iOS device until Slingplayer was available. It was that important to me at the time.

Likewise, many people held off (and still hold off) getting an Apple TV because certain media stores were/are not available.

Apple has the upper hand only as long as enough major developers give in to its demands. The same situation is happening with Apple Pay and banks, with Apple dangling access to its customers' purchases, as product to sell.

That's an lovely argument full of tangential claims and loaded language, but it doesn't have anything to do with what I said.

To address your argument... Obviously, the platform is more valuable than the apps in the business relationship. That's why the apps pay to be on the platform. Yes, Apple get's value from the apps being on the platform. That's why it chose the pricing that it did and not something higher.

 

[Michael Goff]

not talking about subscriptions, app store is the only way to distribute non web apps on ios

Oh. Then I go back to the idea that having the single App Store experience is good for users and for developers like I said before. Good for users because of security/UI/UX. Good for developers because it cuts down on piracy. It also means we know Apple is going to keep working on the API and give the users updates. Or do you think they do it for free?

 

[gotluck]

Oh. Then I go back to the idea that having the single App Store experience is good for users and for developers like I said before. Good for users because of security/UI/UX. Good for developers because it cuts down on piracy. It also means we know Apple is going to keep working on the API and give the users updates. Or do you think they do it for free?

Every other non game console consumer os seems to figure it out. Ui/ux have nothing to do with anticompetitiveness. Osx is plenty secure. Piracy is possible as it is on iOS right now without a jb