Apple Says App Store 'Welcomes Competition' Following Criticism From Spotify and Others

[AxiomaticRubric]

Get real, Apple.

The ONLY developers who can compete with Apple apps are the TEAMS who work for other big tech companies:

Facebook
Google
Microsoft
Spotify
Adobe
etc.

One individual developer CANNOT compete with Apple, or any team of developers.

So this whole argument of “fairness” is really just PR, just like much of WWDC for example.

 

[AdonisSMU]

Get real, Apple.

The ONLY developers who can compete with Apple apps are the TEAMS who work for other big tech companies:

Facebook
Google
Microsoft
Spotify
Adobe
etc.

One individual developer CANNOT compete with Apple, or any team of developers.

So this whole argument of “fairness” is really just PR, just like much of WWDC for example.

Of course one engineer will have a hard time competing with many but most software companies like even Apple, MSFT, google and yahoo started out with only one or two engineers. So... they can compete just fine. That argument already doesn't hold up simply because the big players right now all started with less than 5 engineers.

 

[oneMadRssn]

Consumers can easily switch between Samsung TVs and Sony TVs and the cost of switching is very high. I can switch from Apple to Android and the cost is not similarly high but less so because you can get free phones here in the US simply for signing a contract with a carrier. They have $49 phones you can even buy outright here in the US. Sure it's the older model but the point is that if you want to switch you have plenty of options at all kinds of price points.

I'd say even a $50 cost of switching is really high.

This morning, I went to Shaws supermarket to get some snacks for my drawer at work. Later I remembered I had a coupon to Walgreens, so I picked up some chips there after lunch. This evening, I'm going to swing by Trader Joes because I prefer their frozen food.

I switched grocery stores 3 times in one day, and it cost me $0.

Now imagine the same scenario but with mobile software. I can't buy a PDF app on iOS, then switch to Android to buy a note taking app, then switch back to iOS to buy a video editing app. It just doesn't work like that, and to make it work like that, I would have to buy two phones and each app I want would have to be purchased twice (once on each platform).

The cost would run crazy high.

 

[rjp1]

Yeah, go over to Windows or Android Chat sites & look. All these people there who download Apps from wherever, Immediately blame the Maker of the Computer or Phone if an app they downloaded stops making their device work properly, because apparently these Companies should test every single App ever made & adjust THEIR software so that it works.

I am no fan at all of APPL's practices regarding fees & many other things, but be grateful there IS a walled Garden regarding IOS Apps.

You realize you could just use their App Store?

That is no excuse to take away the choice from everyone else.

 

[ipponrg]

IMO Spotify is abusing the court system...by trying to inject ambiguity where there previously was no ambiguity.

There really is no ambiguity here though.

Spotify has their own payment processor provider. They can't mention or direct the user from their iOS app to the web to do this because it's against the ToS. They are a direct competitor to Apple Music, so at certain angles it discourages competition. As a public company with a public marketplace, it violates antitrust laws if you exhibit this behavior.

Of course the lawyers from both sides will attack this at their angles, but this is one of the major premises that will be debated.
[doublepost=1559163770][/doublepost]

If Apple loses they should just shut the App Store down and allow no third party apps at all.

If Apple loses, they will just allow developers to advertise and link out of band from their iOS app.

 

[Defthand]

How many of you would still own an iPhone if the only apps available for iOS were Apple's? Imagine there being no alternatives. Imagine there being no apps in addition to Apple's built-in apps. Originally, that was Apple's plan. So the question is: which is more dependent on the other for its success? The phone? Or the apps? I'd argue that the iPhone would sell as well as the HomePod if it didn't have the variety of apps that amuse users. If app developers organized and boycotted Apple's platform, Apple would have no choice but to cave.

Yeah, go over to Windows or Android Chat sites & look. All these people there who download Apps from wherever, Immediately blame the Maker of the Computer or Phone if an app they downloaded stops making their device work properly, because apparently these Companies should test every single App ever made & adjust THEIR software so that it works.

What about MacOS and its app store? The app store is there for those who prefer its convenience. However, you can sideload apps from developers directly. The latter has been a reality far longer than phones have existed. It has not hurt the MacOS experience. There is no proof that alternative app services would harm the iOS experience overall, nor that bad apps can't be managed. (Interestingly, the MacOS app store is not popular. Perhaps the iOS app store is popular because it is the only choice.)

There have always been dubious and buggy apps. Quality apps quickly rise to the top of people's conversations. Friends and media will keep you apprised. The key is to avoid apps that are free and barely supported, and aren't products of reputable software vendors. Let Apple vet the freemium apps and newcomers. Otherwise, avoid those until their reputation is established.

 

[coolfactor]

Easy Fix — allow the store itself to become a true marketplace where anybody can sign up and run their own little "App Store", but it's all powered by the underlying Apple foundation.

"Hey, come to my App Store, I'm featuring some great apps today!"

It would add a layer to the experience, and allow for smaller, more focused storefronts. This is akin to that iTunes feature that once was... what was it called where people could build custom playlists? Had a cool name... ah... "iMix". All of the songs were purchasable as part of the experience, except the author of the mix didn't get anything. The mini App Store solution could be a source of revenue for those that run them.
[doublepost=1559165521][/doublepost]

I'd say even a $50 cost of switching is really high.

This morning, I went to Shaws supermarket to get some snacks for my drawer at work. Later I remembered I had a coupon to Walgreens, so I picked up some chips there after lunch. This evening, I'm going to swing by Trader Joes because I prefer their frozen food.

I switched grocery stores 3 times in one day, and it cost me $0.

Your logic is flawed. Your grocery shopping has "you" at the center of it. An App Store has your iPhone at the center of it. You can eat all of the food you buy from anywhere, but your iPhone can not run apps built for other platforms.

Apple runs its own App Store, not to be greedy, but to maintain a certain level of quality with the user experience. There's way too many bad actors out there that will take advantage of unsuspecting consumers. Apple has chosen to be the gatekeeper to ensure "their" platforms are a safe choice.

 

[oneMadRssn]

Your logic is flawed. Your grocery shopping has "you" at the center of it. An App Store has your iPhone at the center of it. You can eat all of the food you buy from anywhere, but your iPhone can not run apps built for other platforms.

Apple runs its own App Store, not to be greedy, but to maintain a certain level of quality with the user experience. There's way too many bad actors out there that will take advantage of unsuspecting consumers. Apple has chosen to be the gatekeeper to ensure "their" platforms are a safe choice.

All of that is fine, I don't disagree with any of it, but you're missing one thing: "Apple has chosen to be the gatekeeper to ensure "their" platforms are a safe choice" AND Apple has also chosen to compete on their platform. That's the problem.

You're choice of words is quite correct too. Apple is the gatekeeper, but it is also a competitor. Referees can't be players on the team they're refereeing, right? Likewise, Apple shouldn't be able to both a gatekeeper AND competitor.

It has to pick - does it want to be the gatekeeper of this amazing platform that provides good user experiences, safety, and keeps out bad actors? Or does it want to be a competitor in that platform? Being both at once is like letting the referee also play goalie - it's inevitable that the referee will apply the rules differently to himself and that's fundamentally unfair. There is no cure but to separate the two: referees can't also be players, and platform gatekeepers can't also be competitors on the platform.

Either Apple divests the App Store to another entity to be the gatekeeper, or it divests any business that competes on that platform.

 

[mech986]

There do exist numbers in between zero pennies and 30% of your revenue.

How about Apple get to charge the same percentage for App Store sales as they pay in government taxes.

Sure, Apple, according to their Q2 2019 earnings report, provides guidance of over $8 billion in operating expenses and expects a 16.5% overall tax rate (in part due to domestic and international tax rates currently in place via each country’s tax laws that Apple does business in). Apple also guides to an overall 37~38% gross margin on all sales revenue - hardware, software, services.

Apple paid $13.4 Billion dollars in taxes in fiscal year 2018 per their 2018 annual report. For the first six months of Fiscal 2019, Apple have provisioned $6.17 Billion for taxes per the aforementioned Q2 2019 quarterly report.

So currently Apple charges 30% on first year App sales, and then from year 2 on, they charge 15%. The 30% is less than their gross margin by 7-8% and the 15% is 1.5% less than their anticipated overall tax rate and 12-13% than their overall gross margin, meaning they make less on this service area than most of their other business sectors. Apple has a real and sustainable business model which others (app developers) work through.

That means long lasting and popular apps get 70% for this developers in the first year and then 85% from then on. It’s up to the app developers to figure out their business model.

 

[truthertech]

So you agree it’s arbitrary. And by limiting the commission to digital goods it’s being limited to areas where Apple also competes. Sure I can go to Target or Walmart and buy their brand of something. But more often than not it’s a cheaper quality. And for the benefit of those who can’t afford higher quality name brand items.

So what happens if project titan turns into Apple getting into the ride sharing business? Do they start charging Uber and Lyft a commission? Or do those services get lucky because they didn’t exist when the App Store commission was first introduced?

It's only arbitrary in the sense that, yes, it's Apple's business what it tries to sell in its store, like every other company, but it's not arbitrary in the sense that the App store wouldn't have existed if Apple tried to do what you suggest would be "fair." You see, for example, Uber/Lyft, etc., already pay the driver around 85% of the fare, and on the remaining 15% Uber is still losing billions, so if Apple decided to, which they could, charge Uber 30% of each fare, it wouldn't exactly work out mathematically if you know what I mean. So, what would happen? iPhone users wouldn't have the Uber app available to them, which would be crushing for Apple as well as Apple is reliant on iPhone users being able to use the most popular apps, e.g., Facebook, Uber, etc. Indeed, having the most apps in the beginning is what enabled the iPhone to take off. Remember Apple's early ads "There's an app for that."

That's why these decisions need to be made by business people, not people who "feel" a certain way. You are focused on some sense that competition needs to be fair, when nothing is further from the truth. Indeed, all businesses in a free market are based on trying to get an edge on their competitors. Is it "fair" that Amazon decided to get into the accessories business and can sell its cables on Amazon.com without having to pay the same costs that Anker and others have to pay. Yep. That's the way it's done. And yep, it's up to Apple and everyone else that builds a "store," what they want to sell in it, and what they want to charge people to pay to sell in it. A friend of mine works for Kellogg's. Costco is now one of the largest seller of products like cereal in the world. Costco dictates to Kellogs that if it wants to sell Cheerios to the pre-screened and lucrative tens of millions of customers that Costco has spent billions to acquire, Kelloggs is going to sell to Costco at a very low profit margin, is going to package a certain size box, and is going to stack them on pallets a certain way, etc. Oh, and by the way, Costco is still going to undercut Cheerios and sell its generic house Kirkland brand of Cheerios at a lower costs because they own the ecosystem.

 

[macfacts]

It’s always a risk to put your eggs on somebody else’s nest.

Netlfix, Amazon, figured out a way to bypass Apple’s fees. Yet Spotify couldn’t? Puhlease
[doublepost=1559149969][/doublepost]
Because Google is God and Apple is evil. Period. At least that’s the mentality of many people.
[doublepost=1559150116][/doublepost]
But iOS doesn’t hold the majority of smartphone market. The Microsoft equivalent in the mobile space is Android.

Microsoft used their monopoly in OS to hurt Firefox. Apple is using their monopoly in iOS app stores to hurt Spotify.

No on is saying apple has a monopoly in the smartphone market. That is a strawman argument you made up so you can tear it down with ease.
[doublepost=1559172075][/doublepost]

Walmart should stop selling their store brand versions of soda alongside with the more popular varieties. After all, Walmart already gets a cut of the profit, and they even offer shipping discounts for store pickup! Not fair!

(rolls eyes)

Walmart does not prevent Coke from selling in other stores. Walmart doesnt have a monopoly on grocery stores.

Apple prevents iOS devs from selling their app in other iOS app stores. They are forced to sell in Apple's store.

 

[theotherphil]

Nowhere on this website does it say why certain things are subject to commission and why others aren’t, or why IAP has to use Apple’s payment system.

How come I can pay for an Uber ride inside of the Uber app and Apple gets nothing but if I want to buy a Kindle book it’s impossible to do so inside the Amazon app (because Amazon rightfully doesn’t want to give a cut to Apple)?

That's actually pretty clear in the article. Apple either takes a cut of DIGITAL services, or you buy on a website. Paying inside the app for non-DIGITAL goods and services, ala Uber, AirBNB, eBay etc is OK, and a range of payment providers can be used including PayPal, ApplePay etc.

 

[Rogifan]

It's only arbitrary in the sense that, yes, it's Apple's business what it tries to sell in its store, like every other company, but it's not arbitrary in the sense that the App store wouldn't have existed if Apple tried to do what you suggest would be "fair." You see, for example, Uber/Lyft, etc., already pay the driver around 85% of the fare, and on the remaining 15% Uber is still losing billions, so if Apple decided to, which they could, charge Uber 30% of each fare, it wouldn't exactly work out mathematically if you know what I mean. So, what would happen? iPhone users wouldn't have the Uber app available to them, which would be crushing for Apple as well as Apple is reliant on iPhone users being able to use the most popular apps, e.g., Facebook, Uber, etc. Indeed, having the most apps in the beginning is what enabled the iPhone to take off. Remember Apple's early ads "There's an app for that."

That's why these decisions need to be made by business people, not people who "feel" a certain way. You are focused on some sense that competition needs to be fair, when nothing is further from the truth. Indeed, all businesses in a free market are based on trying to get an edge on their competitors. Is it "fair" that Amazon decided to get into the accessories business and can sell its cables on Amazon.com without having to pay the same costs that Anker and others have to pay. Yep. That's the way it's done. And yep, it's up to Apple and everyone else that builds a "store," what they want to sell in it, and what they want to charge people to pay to sell in it. A friend of mine works for Kellogg's. Costco is now one of the largest seller of products like cereal in the world. Costco dictates to Kellogs that if it wants to sell Cheerios to the pre-screened and lucrative tens of millions of customers that Costco has spent billions to acquire, Kelloggs is going to sell to Costco at a very low profit margin, is going to package a certain size box, and is going to stack them on pallets a certain way, etc. Oh, and by the way, Costco is still going to undercut Cheerios and sell its generic house Kirkland brand of Cheerios at a lower costs because they own the ecosystem.

I guarantee you if Apple thought it could get away with charging Uber and Lyft a commission they would. Heck Eddy Cue even said Uber wouldn’t exist if not for Apple.

 

[theotherphil]

Free to download but then with in-app purchases, which of course Apple gets 30% of, since Apple prohibits those apps from not only collecting revenue outside Apple's ecosystem but even prohibits the apps from providing a URL for externally signing up for their services.

People keep saying this but as I have shown multiple times, Spotify will direct you to their website to sign up for premium.

Here, I re-install Spotify and open it up. It immediately advertises premium with an icon in the bottom right tool bar. On clicking, it then asks if I want to learn more. On clicking learn more, it opens the Premium page directly in Safari to sign up and collect their cash outside of the Apple ecosystem. I really don't see how hard this is given Netflix et al do the same thing.


[doublepost=1559173928][/doublepost]

Personally, if there was a way for iOS users to install apps from outside the App Store, I would investigate if it would be cheaper to host and serve my app and implement a different billing system. I can guarantee that it would be cheaper than 30%, and I probably wouldn't use the App Store. And I wouldn't have to pay the annual $100 Apple Developer fee.

.

As a developer, you should already be aware that the $100 annual fee is for access to the SDK's, documentation and other development tools. Without paying that, you won't be writing any apps for Apple devices.

 

[Muzzakus]

Lol, let me know when I can make Spotify my default music player, Chrome my default web browser, and Waze my default mapping.

 

[BootsWalking]

People keep saying this but as I have shown multiple times, Spotify will direct you to their website to sign up for premium.

3.1.1 In-App Purchase:

• If you want to unlock features or functionality within your app, (by way of example: subscriptions, in-game currencies, game levels, access to premium content, or unlocking a full version), you must use in-app purchase. Apps may not use their own mechanisms to unlock content or functionality, such as license keys, augmented reality markers, QR codes, etc. Apps and their metadata may not include buttons, external links, or other calls to action that direct customers to purchasing mechanisms other than in-app purchase.

Source: https://developer.apple.com/app-store/review/guidelines/#payments

 

[theotherphil]

3.1.1 In-App Purchase:

• If you want to unlock features or functionality within your app, (by way of example: subscriptions, in-game currencies, game levels, access to premium content, or unlocking a full version), you must use in-app purchase. Apps may not use their own mechanisms to unlock content or functionality, such as license keys, augmented reality markers, QR codes, etc. Apps and their metadata may not include buttons, external links, or other calls to action that direct customers to purchasing mechanisms other than in-app purchase.

Source: https://developer.apple.com/app-store/review/guidelines/#payments

Yep, I get that, I have a developer account. As I have shown above, this is not what happens and Apple has yet to shut it down. Hardly anti-competitive. Here is a video I have just completed....

 

[BootsWalking]

Yep, I get that, I have a developer account. As I have shown above, this is not what happens and Apple has yet to shut it down. Hardly anti-competitive.

Apple didn't shut down Facebook's wildly-invasive abuse of enterprise certificates for quite a while too. It's hard to keep track of what 1.8 million apps are doing. But it's clear Apple's policy forbids apps from having external links that call users to payment action outside of Apple's StoreKit ecosystem.

 

[Tech198]

Business as usual..

When competitors and develops don't like one side, they go against it immediately,despite is always been the way Apple did..

Its only raised cause for Spoitify, because THEY are the ones who have issues.. Apple never went after Spotify.. it was the other way around.. And if a business gets more customers, you don't go over and beat them up..

That's what Spotify is trying to do...

Spotify and Apple can play nice together,,, So what if one gets more than the other... Spotify users will stay with Spotify, and instead of fighting for MORE, just be happy for what you got...

It could have easily been 0

 

[dankron]

Apple: yeah we welcome competition, as long as you still use your apps for everything in your life.

If Apple was so open to competition it would let you chose your default mail app, or music app and completely delete the apple apps without compromising the usability of anything else on your phone...

Try deleting your mail app for example then go on a website and click on an email link... you can't send emails....

 

[Baymowe335]

I'd say even a $50 cost of switching is really high.

This morning, I went to Shaws supermarket to get some snacks for my drawer at work. Later I remembered I had a coupon to Walgreens, so I picked up some chips there after lunch. This evening, I'm going to swing by Trader Joes because I prefer their frozen food.

I switched grocery stores 3 times in one day, and it cost me $0.

Now imagine the same scenario but with mobile software. I can't buy a PDF app on iOS, then switch to Android to buy a note taking app, then switch back to iOS to buy a video editing app. It just doesn't work like that, and to make it work like that, I would have to buy two phones and each app I want would have to be purchased twice (once on each platform).

The cost would run crazy high.

Not only does your grocery example not really compare, your cost wasn’t $0 unless you value your time at $0/hr and have a free energy source to run between stores.

If you shop at 3 different stores often, you’re likely wasting a lot of time and money.

It would be far more economical if you could get everything from the same store at the same time, like the App Store. I know it’s going to be a quality App if I buy from there and I can trust it’s secure and vetted.

 

[tegranjeet]

As a developer, you should already be aware that the $100 annual fee is for access to the SDK's, documentation and other development tools. Without paying that, you won't be writing any apps for Apple devices.

Actually, you can develop apps without paying the fee. As long as you use iOS simulators. It's only when you go to install the app on an actual iOS device (requiring code signing) that you have to pay the annual fee.

 

[macfacts]

Not only does your grocery example not really compare, your cost wasn’t $0 unless you value your time at $0/hr and have a free energy source to run between stores.

If you shop at 3 different stores often, you’re likely wasting a lot of time and money.

It would be far more economical if you could get everything from the same store at the same time, like the App Store. I know it’s going to be a quality App if I buy from there and I can trust it’s secure and vetted.

Your trust that it is secure and vetted is just blind faith. When devs send in their app for approval, they don't include the source code. Apple never sees the source code.

Stop trying to fool others that the iOS app store is secure because of Apple's approval process.

 

[pika2000]

Microsoft used their monopoly in OS to hurt Firefox. Apple is using their monopoly in iOS app stores to hurt Spotify.

No on is saying apple has a monopoly in the smartphone market. That is a strawman argument you made up so you can tear it down with ease.
[doublepost=1559172075][/doublepost]

Walmart does not prevent Coke from selling in other stores. Walmart doesnt have a monopoly on grocery stores.

Apple prevents iOS devs from selling their app in other iOS app stores. They are forced to sell in Apple's store.

You’re the one that have a false understanding of a market. There’s no such thing as “iOS app stores market”, and thus there’s no monopoly. If you buy a Gillette razor, can you replace its blade with other brands other than Gillette’s own? No. But nobody’s calling Gillette as a monopoly. There’s no Gillette replacement razor (iOS App Store) market. The market is on the actual complete razor (smartphone), where there are healthy competition with other brands (other smartphone brands),

Spotify’s argument are weak, Netflix and Amazon have figured out a way to bypass Apple’s fees. If Spotify couldn’t figure that out, that’s their problem. Meanwhile, Spotify themselves are engaging real anti competitive behavior in many markets by making deals with carriers so their service won’t use up user’s quota (anti net neutrality behavior).

 

[tegranjeet]

Yep, I get that, I have a developer account. As I have shown above, this is not what happens and Apple has yet to shut it down. Hardly anti-competitive. Here is a video I have just completed....

Spotify used to have in app purchase. This is a relatively recent development (within a year):

https://www.billboard.com/articles/...lix-bypassing-apple-app-store-billing-charges

It's confusing that Apple approves Spotify linking to Safari for payment. This seems to directly go against what Apple says: "Apps and their metadata may not include buttons, external links, or other calls to action that direct customers to purchasing mechanisms other than in-app purchase."