Phil Schiller: Apple Will Not Change Decision on 'Hey' Email App, No App Store Rule Updates Imminent

[Abazigal]

The founder of Hey loves this controversy. He’s probably gotten a lot more downloads. I’m glad Apple is sticking to their guns.

He certainly has a way of weaponising twitter in a manner that generates maximum outrage, while getting free coverage (now everyone knows about his email app and the $100/year annual fee).

What made Phil Schiller come out and personally make a statement was probably when a developer / company has a problem with an App submission / update, and instead of trying to sort it out quietly with Apple, they immediately go screeching to Twitter / Media trying to make out that Apple are the big bad bastards in a bid to force their hand.

And force Apple’s hand DHH most certainly has. Now that he has chosen to escalate matters to such an extent, I am willing to bet that Basecamp will now NEVER get their App approved.

 

[Rogifan]

Isn't the free version of Microsoft Office on iOS unable to create and edit documents? It can only open/view Office documents as read-only. Thus it would be a "reader" unless you buy a license for Office 365. Unless something has changed?

Correct, you can only view Office documents. You need a Microsoft 365 subscription to edit documents.

You can subscribe to Office 365 via IAP, so it's not comparable to this situation.

Are they required to offer IAP in order to be in the App Store? Regardless, guarantee you they’re not paying 30%.

 

[Bluetoot-]

Purchase a $5 email dongle that you must have an app on your phone to use. Problem solved.

 

[mnsportsgeek]

it clearly states how and why apps like Netflix, Spotify able to get around it.

Apple views as apps that display external content like music, books, and movies

Ya, that’s a pretty flaky argument.

 

[Unregistered 4U]

Why don’t developers just protest? I remember a year or two ago one developer went around finding out how many developers were ticked off with Apple’s nonsense. I signed up and then never heard a peep from them.

Developers should remove their apps from the App Store for a month in protest, telling customers to get their applications for Android devices on the Play store OR download for Android directly.

Apple would be more eager to change once you hit them in their pocket.

did it reach as many users as through this platform?

And not only users, users with verified working credit cards in an ecosystem they trust such that they feel comfortable clicking the “buy” button. People pay large sums of money JUST for email addresses... how much is actual paying customers worth?

According to some developers... zero cost?
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(now everyone knows about his email app and the $100/year annual fee).

Absolutely correct. I had no idea, but now I know that there are people that pay $99 for email.

 

[falainber]

I am on Apple's side on this one! And I am an iOS Developer too!

So, how would your work/business be affected if Apple changed the rules and give you more freedom on how to advertise/get paid for subscriptions, in-app purchases etc.?

 

[I7guy]

Well Phil (can’t innovate anymore my ass) Schiller, WHAT IS A READER APP? Define what a “reader” app is in English. I mean an email app seems like the perfect example of a reader app compared to Netflix since you can.. you know actually read emails!

I hope the EU slams them for this. A multi billion dollar corporation can certainly afford to clarify and enforce policies equally.



So why is Netflix, Spotify, etc on the App Store then? Explain that one Phil!

Consumption is different from creation. One creates emails and doesn’t consume them as I understand the distinction, according to Apple.

Let the EU do what it wants. Rumor has it about Apple going portless; probably thanks to the EU.

 

[mnsportsgeek]

I mean, it is clear why Netflix, Spotify, and Prime get a pass on this. However, when it comes to Gmail they are not selling you on their product. You need to have a Gmail account to sign in, sure, but that is free. It also walks you through creating a Gmail account if I recall.

The issue with Hey is that you download the app, and are immediately met with a "you cannot use this product without a subscription" on the front page. There is 0 functionality after downloading the app, it just sits there and waits for you to go to the website to actually use it. The whole crux of what Schiller is saying here is that it is not okay for the app to allow you to download it, but then give you no functionality without a subscription. The suggestions of make some functionality free with a subscription that can be bought online OR charge a small fee to download the app and have some functionality available are more than reasonable. I get that Apple takes a 30% cut from sales, but they have ways around it and it seems they are being given options from Apple directly, they just don't want to take any of them.

Those free shows that Netflix and Disney+ give me immediately after downloading are sweet.

 

[sub150]

Here’s the thing. Apple is paying for the servers that process the in-app payment, the credit card processing, handling all the charge disputes and chargebacks/fraud requests from the credit card company, etc.

That’s not a $0 Bill for Apple. Credit card chargebacks cost businesses a significant amount of money, as well as employing the iTunes App Store support agents, data center infrastructure, they designed and built Xcode, add new features to iOS that enable new features in the apps, handle push notifications, etc.

And the yearly developer fee of $99 in no way covers all of that. So they have to take a cut somewhere.

The infrastructure is a fixed cost. The CC payments cost max of 5%.

Hey is a free download, but it's a revenue stream for Hey. And since it's free on the App Store, Apple makes nothing, and Hey reaps the benefits. That's dumb. I am not on Hey's side.

The only sketchy thing is Apple letting bigger companies (Netflix) get away with doing the same thing, except it makes sense from a corporate politics standpoint because tons of people would be pissed if Netflix pulled their iOS app in protest, and no one would care if Hey went away.

Let's remember something here. Apple makes relative peanuts off of FB/IG/Snapchats revenue. The in-app purchases are really small compared to the massive ad revenue. So those three companies basically exist solely because of iOS and they pay Apple what...less than 1% of their revenue a year?

Yet Apple says if your business model is getting paid cash by your users, not tracking them and serving ads, that 1% number goes up to 30%? I understand it can't be free, but 30% is so excessive...you could EASILY make it 5%, which is what your typical SMB payment processor lives at (I guarantee you Apple has most favored nation CC processing rates on top of that).

Apple's App Store policy basically pushes you to ads because their processing charge for payments is so insanely high.

 

[LeeW]

I completely get Apple's side and would be fully supportive of the, it's their platform, their rules approach.

That is if they were consistent in the way they apply the rules, but they are not.

 

[Rogifan]

I mean, it is clear why Netflix, Spotify, and Prime get a pass on this. However, when it comes to Gmail they are not selling you on their product. You need to have a Gmail account to sign in, sure, but that is free. It also walks you through creating a Gmail account if I recall.

The issue with Hey is that you download the app, and are immediately met with a "you cannot use this product without a subscription" on the front page. There is 0 functionality after downloading the app, it just sits there and waits for you to go to the website to actually use it. The whole crux of what Schiller is saying here is that it is not okay for the app to allow you to download it, but then give you no functionality without a subscription. The suggestions of make some functionality free with a subscription that can be bought online OR charge a small fee to download the app and have some functionality available are more than reasonable. I get that Apple takes a 30% cut from sales, but they have ways around it and it seems they are being given options from Apple directly, they just don't want to take any of them.

Is Fastmail different? Also what functionality does Netflix have if you don’t sign in? Composing an email requires an app to offer IAP but watching a movie doesn’t? Not allowing an app to even mention how you sign up or where you can buy a book to read in the app (even if it doesn’t include a link) is just anti-consumer. Hopefully if nothing else this will force Apple to end these consumer hostile policies. And get rid of this stupid “reader” distinction which was just created so Apple wouldn’t lose Netflix, Spotify etc.

 

[I7guy]

So, how would your work/business be affected if Apple changed the rules and give you more freedom on how to advertise/get paid for subscriptions, in-app purchases etc.?

Business can have their own app stores.

 

[falainber]

He certainly has a way of weaponising twitter in a manner that generates maximum outrage, while getting free coverage (now everyone knows about his email app and the $100/year annual fee).

What made Phil Schiller come out and personally make a statement was probably when a developer / company has a problem with an App submission / update, and instead of trying to sort it out quietly with Apple, they immediately go screeching to Twitter / Media trying to make out that Apple are the big bad bastards in a bid to force their hand.

And force Apple’s hand DHH most certainly has. Now that he has chosen to escalate matters to such an extent, I am willing to bet that Basecamp will now NEVER get their App approved.

" to sort it out quietly with Apple". Oh boy, would not Apple love that! Then they would be able to quietly screw up everybody without attracting undesired attention from the authorities. The changes are coming. EU is clearly looking into this. US government is looking into the tech heavyweights in general. Perhaps it's time for the congress to update legislation for 21st century.
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Business can have their own app stores.

Not yet. But they will be able soon. This would require a new legislation probably.

 

[DipDog3]

Getting in a public dispute with Apple makes for some good publicity for an e-mail app that isn’t anything special.

Who seriously pays $99-$999/year for this “service”?

 

[RemE]

Playing with fire…

As said by Steve Troughton-Smith, “I’ll miss Phil.”

I won't

 

[Abazigal]

Developers should remove their apps from the App Store for a month in protest, telling customers to get their applications for Android devices on the Play store OR download for Android directly.

I don't think people who have legitimate issues with the App Store end up advancing their cause if the narrative shifts to "let's burn the App Store down." Most developers won't get behind that.

It’s also possible that we are simply seeing one of two camps here. Most developers have little or no issues with the App Store (as evidenced by how much the iOS App Store has grown since its inception; you don’t stick with a platform which is so abusive or problematic, much less see countless developers continue to flock to it), and what we are seeing here is a small minority who want change for whatever reason (ie: more profits, more control over their apps and control over the relationship with the customer).

In short, not saying there isn’t a problem, but certainly nothing along the scale of the twitter outrage we saw yesterday. Most developers are happily working and getting paid and getting on with their lives.

 

[jonblatho]

I won't

Yeah, I really won’t, either. More the metaphorical statement that when (not if) the hammer drops, it’s his head that’s gonna roll.

 

[falainber]

Here’s the thing. Apple is paying for the servers that process the in-app payment, the credit card processing, handling all the charge disputes and chargebacks/fraud requests from the credit card company, etc.

That’s not a $0 Bill for Apple. Credit card chargebacks cost businesses a significant amount of money, as well as employing the iTunes App Store support agents, data center infrastructure, they designed and built Xcode, add new features to iOS that enable new features in the apps, handle push notifications, etc.

And the yearly developer fee of $99 in no way covers all of that. So they have to take a cut somewhere.

They don't have to. Many companies/developers would prefer to do it themselves or use the providers of their choice (I am sure they would be able to find pay processors that do not take a 30% fee). In fact they probably would not be able to find a processor with such high fees even if they wanted to.

It's possible that government will relieve Apple from this burden though. They may not have to process those unwanted in-app purchases and subscriptions for much longer.

 

[cupcakes2000]

What about Dropbox? That’s considered a “reader” app by Apple’s standard.

No it’s not. It’s considered a cloud service.

 

[Rogifan]

FYI this guy worked at Apple:

https://twitter.com/x/status/1273732759958126592

https://twitter.com/x/status/1273733498663141376

 

[falainber]

Now that it’s been clarified why Hey is in non compliance with the App Store rules and Apple has given Hey very reasonable ways in which to get into compliance that does not require them to fork over 30% of their revenue, I’m siding with Apple.

Sounds to me like Hey just wanted to raise a storm to attract attention to their new product. The easiest way to fix this would be to charge 99 cents to download the app which would make it usable for a week or whatever, bringing it into compliance.

Does that solution looks natural to you? Customers and developers jumping through the hoops to comply with Apple rules? Sooner or later we'll need a real solution.

 

[jaduffy007]

Apple ... you’re being insanely greedy bastards. The arrogance of waaay too much power. Very disappointing. Clearly the only thing that will make you look in the mirror are lawsuits...and they’re coming. US and European. I hope you lose your a$$.
The CEO of Bootcamp was on CNBC this morning..his argument was extremely convincing.

If I can sign up for Hey without Apple getting any money...I’ll do it right now.

 

[konqerror]

Isn't the free version of Microsoft Office on iOS unable to create and edit documents? It can only open/view Office documents as read-only. Thus it would be a "reader" unless you buy a license for Office 365. Unless something has changed?

Correct, you can only view Office documents. You need a Microsoft 365 subscription to edit documents.

Nope. That used to be true, but now nearly all features are available for free, including editing. It was opened up about two years ago, thanks to competition from Google.

When do I need a Microsoft 365 subscription? - Microsoft Support

Learn when you'll need a Microsoft 365 subscription rather than the free Office apps for your mobile device.

support.microsoft.com

 

[colocolo]

If Netflix subscription would let you upload your own TV Show or movie, you would have a point.

Regardless of what you think about the rule, it is pretty clear.
Unless all you can do is read emails and not reply to them or compose a new one, it most certainly is not a "Reader" app. Replace "Reader" with "Reader only" if it makes it simpler.

Well Phil (can’t innovate anymore my ass) Schiller, WHAT IS A READER APP? Define what a “reader” app is in English. I mean an email app seems like the perfect example of a reader app compared to Netflix since you can.. you know actually read emails
So why is Netflix, Spotify, etc on the App Store then? Explain that one Phil!

 

[MarchyStar]

There is enormous irony here that an 'email reading app' is not classified as a "READER" app. It's like holding up a blue sweater and saying we only sell sweaters that are blue in our store – but this one here iS NOT allowed. I'm frankly shocked by this contradiction and Apple could not have picked a worse battle to stand their ground on.

Should have let DHH go – he has ample money and resources to see this fight through – and if it was a half-decent argument Apple could have made stood by their nonsensical decision... but to call a reading app not a reading app is just shooting yourself in the foot. I sincerely hope they don't get away with this, because this just shows how completely arbitrary these rules are. I could have understood if this was a podcast app that users were 'listening' to... but people READ in emails apps.