Big news for you - when you go to a car dealer, they don’t tell you that you can get the car cheaper across town. When you go to a Safeway supermarket, Safeway won’t let Cheerios print “you can buy this cereal cheaper at Abertson’s” on the box.Some fallacies going on here. iOS, iPhone and the App Store currently are indivisible In practical terms. Yes some “kid” can hack the hardware to install whatever, but that is not a counter example in practice. For one it voids the warranty of the device. I understand why some want to wing this fallacy ... but lets have a honest discussion ok? This is no example of choice and freedom.
Digital/Software businesses create products/services for customers. To compete, digital business need to serve customers wherever they care, that today includes in great part, to be on smartphones. In the US one in two Americans have chosen a specific kind of smartphone, from a specific brand, iOS/iPhone. Therefore Digital businesses need to be there unless they want to leave 50% of their customer behind in the context of smartphones. Notice that I haven’t up until now, in this totally logical reasoning haven‘t even twitch the surface of the App Store.
Now, the App Store. The App Store service banks on the above, as it is mandatory to install any app on those device. Simple. There is not compedition to this Store. Yes, there is competition on smartphones, but not on this store.
Yes, Apple should be payed for the use of their infrastructure. Using its infrastructure is not an option of course. Due to this Apple enjoys the power to fix the price of its infrastructure/service as far as the ability to install and distrubte apps usage goes regardless of compeition.
Did you guys understand the the above? It’s very simple. What are the side effects ... well at least three:
1) In a market where the components of this infrastructure are not forced in, we can find services that way cheaper. From this, two things can happen. Either the prices of apps and services are up to cattier for the 30%, or digital business have less available “income” to provide better services.
2) The App Store owner its self as it happens, can choose to compete with any of the products its ”sells”. So digital businesses not only face the hurdle of higher prices for app distribution but need to compete with the products that the store owner builds With the money fuels. This again, hurts competition.
3) Maybe the more interesting as it is starting come to light. Digital business that device not to put their services on the App Store because of lack of choice to do so. This for sure directly hurts the Consumer choice of digital services to use on their smartphones way beyond they expected.
Now. To counter the above Apple touts a few billions in App Store revenue. True compare that with the billions aren’t in tthe App Store, yet using a more competitive landscape of cloud services and infrastructure, who is really winning in terms of contributing to the economy ... The conclusion, is that those billions n the App Store are little more than the result of a mandatory concentration, not actually contribution.
An interesting story. A couple of days ago decided to start using the Adobe products for photography (I’m an amateur street photographer ... for fun). Went to the App Store and download Lightroom to my iPad Pro 12.5” from 2020. Albeit the use of the app was free I was presented with in app payment service, a Premium subscription that would simply allow me to synch the photos in LR across multiple device .. $8 per month or so ... just for the Lightroom on iOS. Now, I remembered there were other options to subscribe to LR but none were presented ... So as far as the App Store goes, there was not other options available. Gladly we have the Web not built and managed by a monopoly, so I went to the Adobe site. Behold, a plan of $10 bucks that not only a provided synch, I could now install LR AND Photoshop on iOS, Mac, Windows and Android ... just for $2 more per month.
So how can Adobe offer so much more just for $2? Well, this way of subscribing meant that no revenue needed to be shared with Apple, case in case 30% hence the actual service provider is able to provide a better service at a lower cost.
Two pernicious things can potentially be revealed in this process. One, is that the App Store did not informed me that there were more cost effective option, neither did the App because of the store policy forbidding such measures. I can imagine this happening all over the place in the App Store, collectively rising prices and devaluing digital services in favor of the App Store. The second, is that given Adobe shared nothing with Apple through this approach, who actually payed for hosting the App on the App Store? Two possibilities: Customers that are uninformed of better deals given the App Store policy and other digital services ... say for instance Affinity Photo.
I like to have one place that I can go to install and update the apps that I have bought, and maybe I even search for them. But I wonder if what is happening in the backstage is actually to my benefit as a customer. Now, as you can see I’m a very informed customer, way way way above average.
Cheers.
Consumers are not babies.