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Supreme Court Allows App Store Monopoly Lawsuit Against Apple to Proceed [Updated]
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Monopolies relate to markets, not stores or products. Since Apple has 15% of the smartphone market, they are not a monopoly. Their app store, apps, pricing, conditions of use, etc. have no effect on monopoly status since it is contained within the scope of their marketshare.
Apple is quite clear about the conditions surrounding their product, including that apps will only come through their app store. You, knowing those conditions, chose to buy an iPhone. Now you're upset with the situation that you willingly agreed to, and you want to change the rules. And you don't want to renegotiate, you simply want to choose the new rules unilaterally.
It shouldn't, and doesn't, work like that. If you wanted a phone where you could sideload apps from anywhere, you should have bought an Android phone. It's not like they're hard to find. If you didn't understand that limitation coming in, despite Apple being very clear and upfront about it, that's on you.
Difference is that retailers have much higher operating costs. So no - it is not a 30% profit margin. Walmart has something like 3%...30% for digital goods is just absurd.
You're forgetting that Apple's taking 30% cut, not making a 30% profit off the store. They have to pay for expenses, etc. Their gross margin is 37%, so on average 37% of that 30% is profit. In real life the margin will be higher, because it's on the services side and the margin is lower on the hardware side.
All my apps are free. But even if they weren't there aren't any expensive apps on there anyway, or at least not expensive enough to warrant the increased risk in security.
Are you sure actually? From my understanding, all the App Store revenue gets counted as revenue and then the 30% cut - Operating costs would be the profit margin. Yes, they have some associated costs for the App store (infrastructure, staff), but how high can that be? And it must be decreasing in costs, since servers get cheaper and cheaper.
So even if they take home 25% (so 30% minus the costs). That's A LOT. Most businesses don't have 25% margin. It doesn't seem justifiable in the year 2019.
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Let's now take a look from the developer point of view, which is what this is all about:
I think iOS has more than 50% market share in the US (iirc). So, I think we can all agree that to make your App/service a success, releasing an Android App is not sufficient. For your iOS customer base you have to go through Apple.
There you are forced to a 30% charge. What's your alternative? Well... There's your anti-trust problem.
Google circumvents this by allowing sideloading Apps on Android.
Also, the best proof that there's not enough competition on the market of App-Stores is the fact that the fee is at 30%.
If you believe in capitalism ensuring competition is a requirement, on every segment of the market.
I'm still waiting for a ruling by the EU like they did regarding the internet explorer, i.e. at least on Android that a user must be presented with the available App-Stores. That would allow for a better competition and I'm sure those 30% would drop instantly. Next step would be that all plattforms running an App-Store with 3rd party Apps must be open to 3rd party Stores. Because that's the only way you can ensure healthy competition and a free market which is the fundamentals of capitalism...
Other than that: I don't know how one can have such a Stockholm syndrome with EULAs...
Sorry if this is expressed a bit harsh, but it sickens me how people like you completely ignore the fact there EULAs are NOT the law. There can still be an anti-competitive situation -and there's also consumer protection (weak in the US, I know). That doesn't require a perfect monopoly. It requires that a certain seller/provider can take unfair advantage (read: dictate conditions) over a significant share of the market.
Jailbreaking is not an acceptable solution.you can jailbreak your phone to get third party apps, or go android !
Android is not acceptable.
Difficult to see why anyone would argue against app store competition on any of the available platforms, yet to read a rational argument for it (beyond defending the bottom line).
The flip side is Apple could just change its fee structure. Which could make it more expensive to get on the App Store, preventing many developers who may lack the cash from having a platform to sell their product. Apps could be charged per download, for example, which means developers of free apps would face even more expenses just to get an app on a device. 15% after a 30% charge the first year is not unreasonable considering Apple handles all of the administrative stuff involved in delivering the app. It's most likely far less than the cut a developer paid under the pre-app store distribution model; and if developers had to roll their own infrastructure it would probably cost them as much, plus much would be an upfront cost before they sold one copy. With the App Store, all that is already in place.
Personally, I think Apple will ultimately prevail since they are not a monopoly and that consumers are not hurt by Apple's app store pricing model.
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For you. However, for something like 70% or so of smartphone users Android is an acceptable alternative.
I disagree. There are apps that are only in one store; it all depends on how much time and money a developer wants to spend on developing for multiple platforms.
No, it's not. Apple does not force developers to sell at any given price, nor collude to raise prices on apps; if anything the app store has driven prices down to where people expect apps to be a few dollars or euros or even free.
Apple, like any retailer, makes a profit margin on what it sells. Competition comes in on pricing and access, and Apple provides access to all apps that met its guidelines and lets each developer set their own price. Given that many apps are cheap or free shows the market is competitive.
Loss of an apple like App Store experience. Malicious apps masquerading as something else are two points. For the latter, Apple takes the hit.
It's the only major consumer platform with basically no malware. Speaking as someone who works in IT, the average person is a fool. They WILL install malware and mess up their devices if they have the chance to, and all it'll do is drive everyone (including the fools) completely insane. Let's not even go down that road.
BB10 is a real corporate OS and it allows sideloading and third party stores (and corporate lockdown).
You can partition a phone into 2 isolated private and business parts.
1. Loss of an apple like App Store experience. - individual users & devs can decide how important or otherwise that is.
2. Malicious apps masquerading as something else - any app store could just release apps vetted either by themselves or another app store or a 3rd party vetting service. Again, it would be nice to have the choice (based on multiple factors such as price and reputation) of app competition on each platform.
The lack of any competition on iOS makes it difficult to determine if the official app store is offering the optimum experience.
The average gross margin of the entire S&P 500 on a trailing twelve month basis as of 1Q2019 was 43.76%. [Source: CSIMarket.com]
AAPL's net margin is 19.93% as of March. The average for the S&P 500 is 10.56%. Coca Cola's, which I pluck out as a complete non-competitor to Apple in an entirely different market, but also global, is 20.91%. Adobe is 28%, though Salesforce.com is only 8.36% (which if I can interject opinion here, I think that is embarrassingly bad for being a SAAS company, but they are also wildly successful, as is AMZN with their notoriously low profit margin. The question is if the low profits make sense for the stage of the company and their strategy.) Apple could easily lower their profits, very very quickly, by doing nothing more than simply paying all their employees more. Would any of us as customers OR shareholders like that? My point is: simply saying what is or is not a "justifiable" profit margin misses A LOT.
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"Cheap" is a relative term so it's of very limited use in the above quote. I'm pretty sure the market should be allowed to decide what price represents effective competition.
That's my take on this. My anecdotal comment is that I would not perceive multiple app stores to offer me a better experience. YMMV. And we will see how this trial proceeds.
Nothing wrong with having a preference.
I assume at some point the SC or EU or another relevant authority will mandate open competition on all platforms, it'll be welcome just from the perspective of having an evidence based debate on the matter.
This isn’t about developers. The lawsuit was brought forth by consumers.