Apple CEO Tim Cook Likens Competition for Attracting Developers to a 'Street Fight for Market Share' in Smartphone Business

[twisted-pixel]

You also can’t go to Burger King and buy a Filet o‘ Fish (where BK makes no money on it). Or a Honda dealership to buy a Toyota (where Honda makes no money on the sale).

No, but I can buy a car from Honda and then go to Toyota when I want new tires. Something you can't do with iOS (except for certain situations)

I have an app called SQLPro. I got the app from the app store, but purchased the license from the developer directly. Each year when my subscription expires I have to go through a whole issue of deleting the app and reinstalling. This is because I didn't buy the subscription through the app store.

I don't have the same problem for Amazon Prime. I got the app from the app store but I purchased Prime through Amazon directly.


the competition question, for me at least, is that Apple prevents you from getting apps to run on your phone from anywhere else. That's not a free market if you have to go through the App Store and Apple get their 30% cut.

 

[hans1972]

Also that annual $99-299 fee.

´If developers want to distribute to people on iOS, their options are either a web app with all the compromises that entails (compromises which Apple dictates, by the way, since web browsers with alternative engines aren't allowed), or via the iOS App Store with the hundreds of rules Apple arbitrarily enforces,

iOS is not the only way to distribute an application which is the sense Cook means they have competition. If iOS provide so little value to some developers after, they would of course flock to these other platforms and just leave iOS alone.

 

[Analog Kid]

While not directly, but they are. If you want an in-app purchase, you have to use their payment processor and give them 30% of what you charge. For a lot of developers, that's a lot of money. Also doesn't allow them to use their own processing in-app. That is an Apple rule, so it's limiting what a developer can do in-app. They even removed apps that had a link to the developer site to pay outside of the app.

These aren't developer decisions, they are Apple limitations. The old "they don't have to develop for iOS. Partly the reasons for these hearings is regarding market dominance and how they may be abusing their place in the market.

Just remember, they convicted Microsoft for anti-competitive behavior because they pre-installed their own browser, and though allowed any other browser to be installed for free, was illegal.

Maybe developers don't like these restrictions, but I do as a consumer. As a consumer, I'm more willing to interact with more developers than the 3 or so I would in the old world because Apple has setup a controlled space to do it in.

Apple in mobile isn't 90's Microsoft in PCs. Apple in mobile is 90's Apple in PCs.

 

[Ar40]

I'm surprised the congresspeople didn't constantly "reclaim their time" to talk over the interviewees. It seems like that's the usual order of the day in Congress.

 

[threesixty360]

It’s not the developers. It’s Apple. Developers aren’t choosing to make their apps unusable. Apple is pushing them into a corner and making ludicrous demands. That’s why their apps are fully functional on all other platforms except for iOS.

There’s no sense in defending Apple’s tactics which result in you having a worse experience as a consumer than you’d otherwise have. That’s illogical, my dude.

It’s kind of hard to argue that the consumer has a worse experience overall. If that was the case they’d go to android etc. People have voted with their wallets and have chosen the “worse consumer experience”.

the reality is it’s “some” developers that are upset and are trying to promote the angle that it’s effecting the consumer. Because that’s the only angle they can use to force change. But the only reason the consumer may be negatively effected is because some devs don’t want to give up the 30/15% cut. So it’s really about money, and a minority who want more rather than it’s about helping the consumer.

if Apple paid 30% more to the dev NOT to offer a link in the app for some bizarre reason does anyone really think the developers would bend over backwards to provide the consumer with a link in app and lose the 30% Apple are paying them? Hell no.

this is just about who gets money. And has nothing to do with what benefits the consumer.

 

[Analog Kid]

My iPhone has hundreds of apps occupying 10 GB of space - we'll say that a TB can only store 10K apps, though. A 12 TB drive costs $240, so the cost to store 10K apps is about $20, or about $0.002 for each app stored.

For the $99 Apple charges, they can store 50K apps. There's an estimated 2M apps on the iOS app store - those probably occupy around 200 TB, which Apple could store for about $50K. Could multiply the figure by 3 to allow for backups, but that's probably around what it costs Apple per year, and they collect the fees annually, so that's probably about fair.

Outside:





Inside:

 

[insoft.uk]

AppStore isn’t a monopoly it’s like having a great product and because you’re product selling well than your competitors you’re told off for being so popular and told to sell your competitors product.

They could now at least lower that 30% cut on paid apps to 25% or lower, realy with a huge market share I don’t think it will be that much to do.

 

[damphoose]

Tim Cook just said 84% of the apps on the App Store are “free” and Apple doesn’t earn any commission on them. Well if they’re free what could Apple charge a commission for? Also if they have ads and you pay to remove ads Apple gets a cut of that transaction. If they’re games and you pay to get more coins, turns, dice rolls etc. Apple gets a cut of that transaction. Cook also said the cost of distributing software before the App Store was 50-70%. That’s nonsense. We didn’t go from B&M stores to Apple’s App Store. There was digital distribution. I remember downloading lots of apps from the web. It’s disingenuous for Apple to pretend digital distribution didn’t exist prior to the App Store.

Did you do any cost anyalsis of digital distribution post B&M pre app store? I worked for a company that tried to "roll our own" as they use to say, in the B&M to download transition days. Before nearly bankrupting us we found a company in Minnesota that all the big box guys were using. Fees were high and we still had to dedicate resources and time to getting the whole thing set up. It was worth it just to not have to deal with the mountain of technical problems customers had to deal with in those days. Tim is not wrong about the cost. Its started low but every time we renewed the contract our cut got smaller because the company realized what a **** show this all was. Then phones and app stores came along and everyone cried a tear of joy. Until now.

 

[damphoose]

Or like when they removed all of the vape apps because people weren't allowed to be an adult unless apple said they were. specifically looking at the pax app here.

Or Apple didn't want to deal with Congress or that too. There is nothing for Apple to gain by dying on the vaping hill. Its not a battle worth fighting. Apple would have been eviscerated.

 

[mdriftmeyer]

Another commenter referenced placement, or slotting fees, and I presume that's what Tim Cook was referring to. In the world of supermarkets, for example, there are complex contracts where the grocer charges the manufacturer for the right to shelf space. It can be a flat fee, a percentage of sales, or any combination of factors. I don't know very much about it but it's safe to assume Tim was basically saying "We're not like those stores where you have to specifically pay extra just to have your item up for display, and Apple only takes a cut when you sell." Another parallel would be Costco, where apparently they offer very difficult negotiations for the right to sell your products at their store, but with the high volume most sellers are happy. That said, Apple offers the same 70% of sales to all developers, so the treatment is the same across the board.

Take retail and Nordstrom in particular. In a flag ship store, they charge $500k per year for a brand of cosmetic to get a specific amount of counter space and a right to place 2 employees inside Nordstrom to sell their products on top of a percentage of sales.

 

[loby]

He also said developers don’t pay for shelf space. Except for that 30%...

umm...why should the app store be any different compared to any other industry? Everyone pays for shelf space and the best locations...why is this any different...?

 

[tongxinshe]

As a consumer, all I want is for my experience on the iPhone to not feel crippled. But right now, with Apple effectively blocking their competitors’ services from fully functioning on iOS, I’m unable to have a very good experience as a consumer.

Two examples that come to mind are: 1) The inability to purchase movies in the Vudu app. 2) The inability to purchase eBooks in the Kindle app.

Apple prefers you buy movies from iTunes/AppleTV, and eBooks from iBooks. So they intentionally cripple the competition.

This is not only hostile to developers, but hostile to consumers.

Android is not affected by either of these issues. Both of those apps are fully functional on Android.

Apple, please do what’s best for consumers. Stop crippling apps.

You described the reality correctly, but jumped to a wrong reasoning, what a sophisticated liar strategy!

Apple does prefer the Vudu app and Kindle app to include the purchase functionality in their iOS app as well. It’s the Vudu and Amazon that chose to not include those functionality, since they only want the convenience and security from the iOS App Store, but at the same time don’t want to share a cent off the profits earned from those services.

 

[mdriftmeyer]

Tim misdirected.

> they can write their apps for Android, or Windows, or Xbox, or PlayStation.

Only one of those is another phone platform. Ignoring iOS or Android is not viable if you want to reach a lot of customers. The Apple+Google duopoly inhibits innovation and artificially raises costs.
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Apple's stolen a lot over the years.

Watson -> Sherlock
Konfabulator -> Dashboard

That book shelf look was ripped directly from a pre-release of Openstep that was never released which had a lot of functionality to this day still slowly rolling into OS X. Watson was a pretty skin on top of the built-in search capabilities of the platform.
Dashboard were graphical widgets to NeXT Services.

Sherlock was pre-Watson, starting with System 8. It acted as a client Internet scrubber but relied on Search Engines to do the work, thus a glorified front end.

 

[Analog Kid]

I can’t watch the livestream while at work but I’ve been reading some of the questions. I’d like to know why these politicians are wasting everyone’s time asking stupid questions? They should bring in people who understand how these companies operate to ask questions, not people with the same level of understanding as my 70 year old parents. 🙄

It's the House of Representatives. They represent the people. Their view of the people is shaped by the emails they receive and the people standing up at their events. Wander over to PRSI and read those forums full of people. Now re-read the transcripts. Starts to look like the people are being represented more faithfully now, doesn't it?

You're thinking of them as leaders. That's what's confusing you...

 

[Rogifan]

And Tim Cook says every app in the App Store is treated the same. 🙄

https://twitter.com/x/status/1288621178945323010

https://twitter.com/x/status/1288615811771510786

 

[szw-mapple fan]

As a consumer, all I want is for my experience on the iPhone to not feel crippled. But right now, with Apple effectively blocking their competitors’ services from fully functioning on iOS, I’m unable to have a very good experience as a consumer.

Two examples that come to mind are: 1) The inability to purchase movies in the Vudu app. 2) The inability to purchase eBooks in the Kindle app.

Apple prefers you buy movies from iTunes/AppleTV, and eBooks from iBooks. So they intentionally cripple the competition.

This is not only hostile to developers, but hostile to consumers.

Android is not affected by either of these issues. Both of those apps are fully functional on Android.

Apple, please do what’s best for consumers. Stop crippling apps.

There are plenty of ebook and comic apps that allows for payment through the App Store. Disney plus subscriptions can be bought the same way. Apple does not cripple those apps by limiting their features. Vudu and Amazon prevents purchases from directly occurring in the Apps because they do not want to pay commission to Apple.

 

[amartinez1660]

As a consumer, all I want is for my experience on the iPhone to not feel crippled. But right now, with Apple effectively blocking their competitors’ services from fully functioning on iOS, I’m unable to have a very good experience as a consumer.

Two examples that come to mind are: 1) The inability to purchase movies in the Vudu app. 2) The inability to purchase eBooks in the Kindle app.

Apple prefers you buy movies from iTunes/AppleTV, and eBooks from iBooks. So they intentionally cripple the competition.

This is not only hostile to developers, but hostile to consumers.

Android is not affected by either of these issues. Both of those apps are fully functional on Android.

Apple, please do what’s best for consumers. Stop crippling apps.

I understand the sentiment... but in my experience I find myself lately actually hoping to find most apps on the App Store, OS X ones included. Most books on the Books one, movies on the TV one and music on the Music App.
It is so convenient having everything synced across all devices, start here, pause there, resume somewhere else. Change devices? No problem, everything installed, bought and or iClouded appears back.
Once embracing the ecosystem, it is very far from feeling “crippled”.

 

[robbysibrahim]

I have an app called SQLPro. I got the app from the app store, but purchased the license from the developer directly. Each year when my subscription expires I have to go through a whole issue of deleting the app and reinstalling. This is because I didn't buy the subscription through the app store.

This one caught my attention. I have plenty of externally purchased subscriptions and I've never been forced to delete and reinstall the entire app at renewal. Wuddup wit dat?

 

[Brandon916]

You have missed the point buddy, the developer of the game fortnight totally removed the app from the google App Store and the only option was to side load the app. People couldn't still buy from the App Store and the price stayed exactly the same. You didn't get more options all that happened was you could no longer buy from Walmart but you had to go to some random store in a dodgy back ally and still pay the same price while hopping not to get robbed.

Dodgy Back ally? Your logic is insane. I can go to both Amazon n Samsung app store for apps. They offer deals n credit to apps. How the F are they dodgy? One is a trillion dollar company n the other is a hundred billion dollar company. You telling me if Apple allowed another app store n if Amazon popped up they would be considered dodgy? You think no one would use Amazon?

 

[Maximara]

As someone who has worked for consumer product manufacturers, selling into retail for the past 25+ years, the idea that Apple‘s Stores (app, product or physical) should have to sell products that don’t allow them to make money is ridiculous. Do you think any retailer should have to sell another retailer’s product, where they can’t make money on said item?

You also can’t go to Burger King and buy a Filet o‘ Fish (where BK makes no money on it). Or a Honda dealership to buy a Toyota (where Honda makes no money on the sale).

It’s just not how it works for any other business, so suggesting Apple is crippling to developers or hostile to consumers - you’d have to then demand that this same system be done for every other consumer product.

I get the jist of what you are saying but it is so overly broad that an easy counter reducto ad absurdum to one argument can be made: Burger King has its version of the Filet o‘ Fish which was originally named the Whaler sandwich.

More should be made of the fact Apple has only about 25% of the mobile market as that shows this whole argument is silly. Personally I think it is just a case of politicians trying to get brownie points for the upcoming election.

 

[Maximara]

Just remember, they convicted Microsoft for anti-competitive behavior because they pre-installed their own browser, and though allowed any other browser to be installed for free, was illegal.

Non sequitor as Microsoft held (and still holds) the majority of the PC marketshare (~90% bask then ~77% now). Apple, at best, holds 25% of the mobile marketshare. Heck if you compare mobile and decktop OS Andrioid's is above everybody else.

This might as well be about Mario games not being on anything but Nintendo gaming systems. Or the licensing that one has to pay to be on their console.

While we are at it where are the congressional hearings on the debacle regarding Fallout 76 or better yet the whole of gaming practices that if they were held to the same standards as everybody else would have had the FTC drop a legal ton of brinks on their heads by now?

How about actually doing something about clear gambling that loot boxes are?

Or giving a game an SRB rating based on how it launched and then providing DC that if present would have kicked it up to a higher rating if that had been present at launch?

There are so many things our Republican dominated congress could be spending their time on and they choose this Know Nothing nonsense?!

 

[Maximara]

You also can’t go to Burger King and buy a Filet o‘ Fish (where BK makes no money on it). Or a Honda dealership to buy a Toyota (where Honda makes no money on the sale).

No, but I can buy a car from Honda and then go to Toyota when I want new tires. Something you can't do with iOS (except for certain situations)

I have an app called SQLPro. I got the app from the app store, but purchased the license from the developer directly. Each year when my subscription expires I have to go through a whole issue of deleting the app and reinstalling. This is because I didn't buy the subscription through the app store.

I don't have the same problem for Amazon Prime. I got the app from the app store but I purchased Prime through Amazon directly.


the competition question, for me at least, is that Apple prevents you from getting apps to run on your phone from anywhere else. That's not a free market if you have to go through the App Store and Apple get their 30% cut.

I suspect the issue with SQLPro on the App store vs the one on the developer's website is they are not the same program. I have seen many examples of a program in purposely crippled on an online store while the program on the developers own website has more functionality. In fact, a few apps on the Apple store tell you they are not as functional or have different methods of upgrading between the versions.

Heck here are some critical customer reviews of the version of SQLPro on the Apple Store:

"Just sell a paid app. This bait and switch thing is silly and broken useless trial apps with missing features are not the way to convince me you have a good usuable product."

Another has this: "– Paying 5.99 on iOS to even be able to look at rows (why isnt this included) and its not transferable or recognized on desktop so id i have to pay 5.99 2x? No way. Not doing that...""

Don't blame Apple for something that is clearly a problem with the developer.

 

[Kierkegaarden]

He also said developers don’t pay for shelf space. Except for that 30%...

This is a particularly common ignorant comment. These are two separate fees.

Software distribution pre-App Store had more layers and hands wanting a cut. Distribution wanted a cut just like retail. And there may also be shelf or slotting fees from both distribution and retail. And the developer had production costs involved with packaging and media production.

Apple replaced all of this with a single reasonable fee and the lowest possible barrier of entry in the history of software development.

Another comment I hear is that some developers don’t make money. As in any business, there are winners and losers. Nobody is entitled to success in business. There was software pre-App Store that failed as well. The difference was back then the up front cost for the developer was much higher, so a single failure might put them out of business. That risk is greatly lowered by the model that Apple created.

Instead of complaining, I believe Apple is owed a debt of gratitude for what they have done for developers. Of course, it is not perfect. No system will be. But it is as close to perfect as I believe it can be.

 

[Brandon Whitton]

As a consumer, all I want is for my experience on the iPhone to not feel crippled. But right now, with Apple effectively blocking their competitors’ services from fully functioning on iOS, I’m unable to have a very good experience as a consumer.

Two examples that come to mind are: 1) The inability to purchase movies in the Vudu app. 2) The inability to purchase eBooks in the Kindle app.

Apple prefers you buy movies from iTunes/AppleTV, and eBooks from iBooks. So they intentionally cripple the competition.

This is not only hostile to developers, but hostile to consumers.

Android is not affected by either of these issues. Both of those apps are fully functional on Android.

Apple, please do what’s best for consumers. Stop crippling apps.

You can’t blame Apple for crippling these apps. The developers of these apps choose not to add this functionality because they don’t want to give Apple a 30% cut of the purchase price of the extra content. I’m an app developer and I think these bigger apps with the crippled functionality are just greedy. If you choose to distribute your apps through the App Store I don’t think it’s unreasonable that you share a portion of your revenue with Apple. It would however be nice if the revenue split to Apple was less than 30% though.

 

[chrisbru]

As a consumer, all I want is for my experience on the iPhone to not feel crippled. But right now, with Apple effectively blocking their competitors’ services from fully functioning on iOS, I’m unable to have a very good experience as a consumer.

Two examples that come to mind are: 1) The inability to purchase movies in the Vudu app. 2) The inability to purchase eBooks in the Kindle app.

Apple prefers you buy movies from iTunes/AppleTV, and eBooks from iBooks. So they intentionally cripple the competition.

This is not only hostile to developers, but hostile to consumers.

Android is not affected by either of these issues. Both of those apps are fully functional on Android.

Apple, please do what’s best for consumers. Stop crippling apps.

Amazon doesn't want to rev share on Kindle sales - Can't really blame Apple for that. I also suspect this is an intentional strategy to sell more Kindles to iPad owners.