So you think that Apple should have said nothing and accepted whatever Spotify wanted ?
That's not how business works.
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Apple Says Spotify Seeks to Keep All Benefits of App Store Without Making Any Contributions to Marketplace
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So you think that Apple should have said nothing and accepted whatever Spotify wanted ?
That's not how business works.
Your analogy makes no sense, because Apple is the ONLY department store in town. If there were other “department stores” and Apple added value, then fine, let them take their cut. And the merchant is free to sell their products at any store of their choosing.
Windows 10 S is completely different. 10 S was geared specifically towards education only where you actually WANT devices to get apps from only the store which could be individualized per school so only the apps they allow to run on the device can be installed. Even then it still allowed the option to exit S mode and run windows Pro for free.
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Did you miss the part where Apple actively prohibits the Spotify from even mentioning that other "easy" way in the app?
There’s the rub. Who is the App Store more important to? Devs? Or Apple, who uses it as a selling feature for iDevices? If the latter is truer, then devs are doing Apple a favor by using it. Compare it to the MacOS app store which is devoid of many top tier apps.
As for the belief that Apple vets app offerings, that is questionable. No doubt they check for things that try to circumvent Apple’s revenue system, but they fail to detect code that compromises privacy. Aside from the couple of times that Apple purged numerous copycat apps, it was Users and outside auditors who discovered any malicious apps.
No. I did assume that most people who are buying iPhones have heard of the web. Or used Spotify's app on a computer. Your argument makes sense if someone had never heard of Spotify before buying their iPhone. But then - oh look, Apple exposed Spotify to a new customer!
In what way? They are twisting Spotify's argument - they aren't asking for exclusive terms where they get a sweetheart deal. They are asking for Apple to improve their terms with all developers on the platform.
Apple is saying it wouldn't be fair to small developers since Spotify is already established. In what way would giving small devs 10-15% more revenue hurt them?
Developers currently pay a flat $99 yearly fee to register. Then all one-time sales are 30%. What does Apple provide for that now, in 2019? Back in 2010 you could argue for trusted payments, but now we have services like Stripe and Square and you get only a 3% fee. Hosting costs are absolutely minimal now. So it is basically a 30% cut just to exist on the iPhone.
The issue with Apple and iOS is that there is no alternative. On Android you could host an APK, users can install it with the toggle of a button, and then you can accept and process your own payments. On iOS this option just doesn't exist.
It's almost like they're trying to be a business and generate a profit... Those savages!
Apple is the only store on their devices no one is forced to buy iPhones if they want a more open ecosystem
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Netflix and amazon have sign in only apps and their costumers has no problem finding the website to sign up. It’s not a problem for other companies that have decided to not offer Apple a cut but still have a presence on the App Store.
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If having an alternate App Store is important to a costumer they wouldn’t buy the product they now is in a walled garden.
To add on, so many of Spotify’s points are so dubious and one-sided that it kinda overshadows their only real legitimate point - Apple’s 30% cut of revenue (never mind that it drops to 15% in the second year).
Even if Spotify is the victim here, I find I have a hard time sympathising with them.
Even if Spotify is the victim here, I find I have a hard time sympathising with them.
If they were just trying to be a business and generate a profit then they would be applying the same rules on payments initiated within an app to all developers, not just those that provide digital goods. However, they are not. The rules on mandatory in-app payments are only applied to particular market segments, and the primary markets where the restrictive rules are applied are where Apple is also a direct competitor (eBooks, digital movies, digital music, etc.). Other service providers, like Uber, are free to use their own account sign-up and payment systems within their apps and completely bypass Apple without having to go through the hassle of logging into an external website to initiate the purchase and payment.
It certainly looks like Apple is singling out markets where it is a provider and making it harder for others to compete. I have yet to hear any rational argument why a payment for an eBook or a movie acquired from Amazon should be treated any differently than a payment for an Uber ride or a cabin rental, or even payment for a physical good from Amazon paid through its app. "Because Apple's Rulez" isn't justification. The argument has been made by Spotify that Apple is using its AppStore rules to target competitors in other markets, and Apple isn't doing a very good job explaining why companies like Uber are treated much differently than Spotify.
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Apple doesn't have a competitor (yet) to Netflix and Amazon. Apple isn't (yet) using it's App Store platform to unfairly compete in the streaming movie/tv market.
Also, funny you mention Amazon. Apple doesn't charge 30% of all purchases I make on Amazon. Why is that? Why does Amazon get to have their own deal with the credit card companies and process their own payments in their app but others don't?
The distinction Apple is trying to make is on the type of goods or services. Digital items are subject to the 30% fee, hence if you look for an eBook, a movie, or an mp3 album on Amazon's app you will see a message "this item is not available for purchase from the app". You have to go to the Amazon website to initiate the purchase and payment, then you can watch the movie, listen to the music, or read the eBook on the appropriate Amazon app. Of course, Apple prohibits Amazon from telling you how to do this.
You can purchase all the paper books, CDs, and DVDs you want through the app without any issues and without Apple getting any percentage of the purchase price, it is only the digital versions that Apple makes it harder to acquire.
Just think: if Apple Music didn't suck, there would be no need to use Spotify at all. Maybe instead of this pedantic back and forth Apple could deliver a superior product and win Spotify's market share.
They can't. Apple just isn't good enough to displace Spotify through competition.
They can't. Apple just isn't good enough to displace Spotify through competition.
Billions to develop
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Nevermind roughly 80% of the functionalities within all iOS apps comes from Apple frameworks. Without AppKit or Foundation Kit an average app would be 3x larger to download and a much higher vector of malware, viruses and much more in terms of General bugs.
I understand the distinction, but it's imperfect. See below examples where Apple does not presently charge a 30% fee. There is a big grey area between digital items and physical items.
I can buy a Spotify gift card in the Amazon iOS app, which just emails me a code a short while later; no physical card even. If it's just a code that exists in email, isn't that a digital item?
Services, whether it be a driver (Uber/Lyft), a cleaner (Handy/Tidy), a food delivery (Grubhub/UberEats), a dog walker (Rover/Wag), furniture assembly (TaskRabbit), shipping (UPS, FedEx, Stamps.Com), can all be purchased in app. I'd argue all of these are closer to digital items than they are to physical items. It's a service transacted over the internet, isn't that digital?
At the same time, I understand the conundrum for Apple. If they didn't charge a fee for digital IAPs, then all paid apps would become free with a paid IAP and Apple would get nothing. I don't think this problem is fixable.
I think Apple has to decide: do they want to monetize a platform, or do they want to sell on their platform. They can't do both without running into serious antitrust issues. I think Apple would be more interested in trying to grow their services. Indeed, they're apparently going to announce a movies/tv service later this month. For this reason, I think Apple should just drop the 30% fee entirely, offer ApplePay as a convenient way to process payments but also allow other payment processing APIs to plug into their system (PayPal, Visa, Mastercard, AmEx, Shopify, Square, etc.). Basically, give up monetizing the platform.
Is there any theft in your home or car in your last many years? do you lock your home or car?
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This is the only meaningful comment I read in this whole issue... you are right, I think AppStore and PlayStore should be considered as essential patents and should be given at fair price (slightly debatable) without discrimination (which Apple is already doing).
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There is also a catch - Apple is no where near a monopoly and never asked or agreed to be essential (which is needed for SEPs scenario), so whatever suggestions we are making is like using govt power to implement and mend the rules for Apple... Apple will be always at advantage in anti-competitive cases because of their low market share.
I'm in agreement with you. There shouldn't be a distinction on the type of good or services being acquired. The use of in-app purchases should be strictly voluntary. I don't think IAPs should be free as Apple is providing value in the form of handling the credit card transaction fees and remitting the funds to the developer. Many smaller developers would be more than happy to use such a system, give Apple the 30% cut, and not have to worry about dealing with the financial aspect of it. Others would appreciate the ease of IAPs for microtransactions like you see in many casual games. No separate sign up, no second party to keep a payment method updated on. The sheer volume of easy, small transactions would make it worthwhile.
I'm not exactly sure how ApplePay works, but my general understanding is it would be more work by the developer to maintain such an account as it is essentially accepting credit card payments. With IAPs Apple is the retailer and they handle everything. IAPs should be an available option for those that want it.
On the other hand, larger developers like Amazon, Netflix, Spotify, etc. have the infrastructure in place to handle the entire process from beginning to end. I don't see why they should be treated any differently than the companies you used as examples.
What you are saying is that - Samsung makes their own LEDs but charges/treats their customers differently?
What is this analogy? Apple has a product and store, so its an obvious advantage... if Apple market share is more than 50% then it could be considered as anti-competitive as a monopoly...but it is not... anyone is free to charge their customers outside AppStore like Netflix and Amazon Prime.
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Yes... its simple.. show two buttons to users:
"Subscribe to Spotify" - 9.99$ (Instant)
"Subscribe to Spotify" - 12.98$ (Web link).
Samsung makes their own LEDs. Samsung also makes televisions, but for argument's sake they don't make computer monitors. Samsung charges $50 to monitor makers for the LEDs, but if they are to be used in TVs the manufacturer has to pay $100. Samsung has tacked on an additional $50 cost to every television made by their competitors just because it is a market in which they compete.
It isn't that Apple is treating its customers differently, it is that it is treating certain customers in markets where it is also a competitor differently.
FREE COMES AT A COST. You cannot take your shoes down to the cobbler and expect them to fix them for free. You cannot sell your soap at a local market without paying taxes and paying for the stall you hold.
If you sold soap at the local market for free then either the people entering the market are selling their data (to pay for the vendor stall) or the vendor is putting advertising on the product being bought.
Apple has always taken a cut to cover the costs associated with making the item available to sale. Spotify wants to offer their product at a cost and assume no costs and then they don't care if Apple charges the customers in the market a fee to make up for what Spotify isn't paying. If Spotify wants to charge for their product, then they would pay the market fees.
Again... FREE IS NOT FREE!
What I will add to this though. It is incumbent on Apple to be consistent in how they charge vendors. They cannot charge the fruit stand one rate and the soap stand another as long as the stand is the same size and such. They need to be transparent about their rates so this will help guide developers on what they will develop and contribute to the platform. Apple takes customers rights above the vendors I believe, so no, they are not going to give you the capability to spam their customers with "offers" via email. Sure, in app run specials and such. But that all falls under the app.
If you sold soap at the local market for free then either the people entering the market are selling their data (to pay for the vendor stall) or the vendor is putting advertising on the product being bought.
Apple has always taken a cut to cover the costs associated with making the item available to sale. Spotify wants to offer their product at a cost and assume no costs and then they don't care if Apple charges the customers in the market a fee to make up for what Spotify isn't paying. If Spotify wants to charge for their product, then they would pay the market fees.
Again... FREE IS NOT FREE!
What I will add to this though. It is incumbent on Apple to be consistent in how they charge vendors. They cannot charge the fruit stand one rate and the soap stand another as long as the stand is the same size and such. They need to be transparent about their rates so this will help guide developers on what they will develop and contribute to the platform. Apple takes customers rights above the vendors I believe, so no, they are not going to give you the capability to spam their customers with "offers" via email. Sure, in app run specials and such. But that all falls under the app.
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