Comment by mrtksn
5 days ago
>the most easily agreeable part of what the EU has been after
It's also probably the most dangerous for Apple. It creates a cash incentive to push people outside of Apple's walled garden and show them what's outside.
I really really hope Apple gets its act together, they are the greatest "the user experience comes first" company and they actually have great hard tech but they show signs of rent seeking behavior which can destroy them.
If Apple just play nice with EU, open up and focus on bringing the greatest experience possible they will keep winning. If not, they will have blunders and they will lose Europe since people are willing to look for alternatives as USA gets increasingly unpopular among the Europeans due to politics.
The Apple's AI blunder is mostly a blunder only because they insist to do it all by themselves so to have higher margins on the services revenues. IMHO those blunders will be more damaging as the Americans no longer have the higher moral grounds than Koreans or Chinese.
I hope Apple is treading carefully.
"Show signs of rent seeking behaviour" seems like an extremely generous position. Forbidding your customers from even mentioning The Outside is full-on rent seeking behaviour, since its inception.
To steel man the policy, one thing it helps avoid is the free rider problem. Apples store terms are than free apps don’t pay a commission to Apple. But someone has to pay for the costs of developing the SDKs and the platform. We no longer live in an age where Apple or Microsoft gets away with charging for multi thousand dollar per year per seat developer license for their platforms, but that doesn’t mean those platforms don’t cost money to develop and maintain. So the idea is, if you make money on the platform, so does Apple. But free apps + in app downloads is a giant loophole in that plan. Sure we all think of Netflix or Kindle apps when we think of this, but without a policy that charges for IAP and discourages or outright forbids steering off the platform, we would see a new category of “freemium” apps where the app is “free” on the App Store, but is effectively just an empty downloader shell that you then have to buy the “real” app through. Unscrupulous devs steer you to their own outside store or put some ridiculous inside the App Store price (think 300x+ markup) with a link to the outside store with the cheaper price and all those customers are transacting, and Apple gets no money for funding their platform.
And yes I know we can all scoff and say “oh poor multi-billion dollar Apple can’t get paid but getting paid is exactly how Apple is a multibillion dollar company. So if they don’t get it from IAP and app sales fees then they’re going to extract it either from hardware prices, or for charging those per seat per year dev licenses again.
Personally I think Apple is big enough now and the App Store is popular enough now they can revisit this but somehow they are going to want to solve the free rider problem, and whatever they pick, people won’t be happy (see also core technology fee)
> But someone has to pay for the costs of developing the SDKs and the platform.
The business model Apple has used since the Macintosh is that the hardware subsidizes the software. I paid for the platform when I bought the device. The only reason why there's even a "free rider problem" is that Apple believes itself entitled to a 30% cut of half of mobile, forever.
Furthermore, we've known since the failure of OS/2 (at least) that expensive development tools almost guarantee zero software uptake. The platforms that win are the ones where the developer tools are affordable or free. In other words, it is not the third party developer's job to pay for the platforms they rely upon. It is the platform's job to pay (in a roundabout way) for the third-party software.
In fact, that's why Apple even has a reader app exception. They know Netflix doesn't have 30% to give and they know nobody's going to buy an iPhone that won't play Netflix.
The reality of Apple's business model is that they absolutely could give away the platform, make money off the phones and the OS, and remain profitable. But investors don't invest into profitable companies. They invest into growing companies. Tim Cook has to treat developers' bank accounts as his own because that's the only thing that makes Apple stock valuable.
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> solve the free rider problem
This framing just doesn't register. You want developers to develop apps for your product, app availability is what makes users choose to buy the hardware/use the OS. They're not "free riding", they're what makes your product worth buying.
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That logic doesn't work for me.
The person who paid for the sdk is the person who bought the iphone.
Typically the definition of free riding requires that if everyone behaved like the free riders, then the system would cease to exist.
If apple made $0 off the app store, would they still make iphones? I would assume yes since they are profitable devices. Hence this isn't free riding.
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> But someone has to pay for the costs of developing the SDKs and the platform.
Like their customers who happily pay a premium of $hundreds on every device sold? Talking about a free-rider "problem" in connection with literally the richest corporation in the world is diabolical. They develop the SDKs and the platform because that's the foundation of their business, nobody would buy an iPhone that doesn't have any 3rd party apps.
What's the cost of developing the SDK and the platform amortized over the number of devices that Apple sells? Is it $0.50, $5, $50, or $500?
> oh poor multi-billion dollar Apple can’t get paid
Apple is 1000x richer than that, they're a multi-trillion dollar company.
Ultimately all the money Apple is making from the store comes from the pockets of people. If apps won't have to pay a cut to Apple, people would be left with more money in their pockets.
If all apps were free and no sales would be forced to go through those apps, Apple still sells the phones and makes money from them. Would it be left with less money? Not my problem. Would it increase the cost of phones (maybe only in the EU) to compensate the missing revenues? Fair. Let's see how it affects sales.
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> But someone has to pay for the costs of developing the SDKs and the platform.
According to APPL's own marketing, that's what the yearly 100$ fee is for.
>the free rider problem
Yes charging rent does stop the free rider problem. The cost of maintenance is infinite if Apple says it is cause nobody else is allowed to maintain Apple services.
When people and universities are allowed to maintain Unix services it turns out the cost isn't infinite, and is easily manageable under a public budget and charity. Apple chooses to burn money to create a smokescreen here and you are falling for it.
> Personally I think Apple is big enough now and the App Store is popular enough now
This isn't a steelman. These aren't real problems as you well know and they know. There's no motivation (no argument needed) other than rent seeking.
> And yes I know we can all scoff and say “oh poor multi-billion dollar Apple can’t get paid but getting paid is exactly how Apple is a multibillion dollar company.
The entire discussion there could be summed up as people have become convinced that Apple the multi-billion dollar company should shift revenue to Facebook or Netflix (or whoever), the other multi-billion dollar company. Fantastic marketing by them to convince people this is a moral thing to do and must be done. It has nothing to do with small developers or better experiences for customers, just an increase in X for Netflix.
> But someone has to pay for the costs of developing the SDKs and the platform.
This is included in the price of the hardware that their customers and all the developers who develop for the platform have bought, many times over.
Don't believe me? Look up Apple's financial statements and compare iPhone sales to the measly amount they spend on R&D (which includes the development of SDKs for all their platforms).
It used to be that Apple charged for MacOS. And then they said: nope, our hardware pays for that. And made it free.
> But someone has to pay for the costs of developing the SDKs and the platform
I really do not want to use the iOS SDK which is utter garbage quality. The reason people use the Apple tooling is because they have no choice, in reality xcode is 10 years behind any modern web or native tooling.
> show signs of rent seeking
They've been hard rent-seeking since iTunes and iPod. They aggressively eliminated and made inconvenient other ways for getting music onto iPods. Hardware was great, but hard dependence on iTunes killed it for me.
Requiring dedicated software available for free is not rent seeking, there is no rent, and it was not exactly rare in the more lifestyle pmp space.
What if that software is trying to sell you stuff? And what if it's discouraging or preventing by technical means alternatives from that?
What do people do with ipods if not play music? And where do they get that music if not paying Apple? Apple's official recommendation at the time if you wanted to ingest arbitrary audio like your own recordings was to burn a CD and then rip it with iTunes. That cost about a dollar an hour to get access to your own audio rather than just... making a reasonable process.
It is the definition of rent. The cost is that I have to run your software on my device. I could create value for myself by running software of my choice, instead Apple destroys that value to create a percentage of it for themselves.
Apple pretends to value user privacy and artist rights as these values often conveniently align with taking away user and partner control. The mask has slipped multiple times but their control over users never will until they are legally required to treat their users like humans.
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> If not, they will have blunders and they will lose Europe since people are willing to look for alternatives as USA gets increasingly unpopular among the Europeans due to politics.
But what alternative? There is no European smartphone OS. Windows and Steam OS and XBox are US-american, too.
I suppose Linux, Playstation, and Nintendo, then?
The alternatives are Samsung, Xiaomi, Oppo and others. Already the dominant brands in Europe. It doesn't have to be European, it has to be good and those are pretty good at much cheaper prices. They also offer premium models that Apple doesn't have a match.
People pay a lot extra for the feelings the brand invokes in them. Tesla was like that when it was about the values it used to represent, right after Musk dropped those values they had to start pricing their vehicles based on the specs to compete with similarly specced alternatives.
If Apple goes into fight with EU and becomes the "anti-european tech giant" they will have to start selling 300 euro iPhones.
American brands should tread carefully: while America is willing to ban their (cheaper, sometimes better) competitors, Europe is much less willing to — especially now as America itself has taken a much more bullying tone towards its allies.
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Android is Linux based, although you'd have to build a shitton of replacements for all the stuff Google took out of AOSP and locked behind GMS. And you'd probably have problems getting anyone to manufacture EUDroid devices given that they'd lose access to Google Play if they did.
Alternatively, you could liquidate Apple.
That is: confiscate Apple's EU subsidiaries, repeal DMCA 1201 equivalents in EU law, strip iOS of copyright protection, crack the DRM, replace iCloud's deep integration into iOS, set up a task force for cloning Apple's hardware, and put everything you steal online so other countries can steal iOS too.
Do the same to Microsoft as well. Actually, that would be easier than stealing iOS but I don't think the EU wants to try to revive Windows Mobile as an escalation to a trade war.
The core idea to keep in mind is that trade wars are stupid, but also that America's business tyrants will crumble easily if one were to happen. Globalized trade and supply chains mean that basically nobody is self-sufficient in everything; but in America's case, we're mainly self-sufficient in agriculture. Our comparative advantages in tech and cultural exports are a function of us convincing every other country to actually pay us whatever we want for our culture; which is a deal that countries can trivially reneg on.
Wouldn't be sad about a Linux smartphone.
Here you go: https://en.m.wikipedia.org/wiki/Librem_5
(My daily driver)
My dream is to run NixOS in all my devices…
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There is android. Works pretty well in China without any google services.
I know it would leave a lot of money on the table, but if Apple had set the app store fee at 5% (enough to cover credit card fees and running the service) and been content with a 50% margin on hardware, it never would have been in this mess.
Even 15% would probably have been universally accepted.
I would imagine that getting the user out of the in-app purchase payment screen and attempt to redirect them at the website for payment, have them figure out how to enter credit card details etc would result in a drastically decreased conversion rate though.
So it should! Then Apple's App Store and IAP could compete on its own merits, rather than restricting competition from existing at all.
Apple does compete on its own merits. Its merits are that it built and controls the operating system and hardware that people choose to buy.
If other companies have an issue, then they can build their own software, their own hardware, and compete.
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Imagine a major streaming service: Subscription through Apple 30USD/Month or 25USD/Month if you do it through this one click fintech app.
The fintech app can even pay the streaming service for every customer they bring.
So for the users who already have the fintech app its a no-brainer, click once and get a free coffee each month. For those who don't have the app already it can push them to create an account as they see it on every app as a cheaper alternative. In Europe at least, even traditional banks are able to create a new customer account through a few steps in the in the app. It's usually just about entering your name, taking a photo of your ID and then scanning your face by looking left and right on the camera. You can have a grace period to add the funds for the subscription.
Banks already pay a lot of money for new customers, its pretty common in some places to offer interest-free loans or give cashbacks when you create a bank account through the app. They can partner with those services to offer months of free use or upgrades and then suddenly the value for the trouble of a few click and a scan goes up substantially.
The money comes first (:
Apple has its act together. Those, who are not Apple, do not in comparison. They are Big Mad that Apple does.
You don't understand the term "rent seeking". Because in this case, it's Apple's competitors that are rent seeking by utilizing the force of the government to make Apple give competitors access to its private but non-monopolistic ecosystem.
I think that Apple should call that bluff and leave the EU.
Which in turn will increase public pressure on the EU, but not as functionally as it would in a democratic system.
All hollow talk. It will lose all of its aggression the moment that Apple leaves the EU, and EU citizens are left with the remaining options.
Totally, the Spaniards are on the edge against EU for forcing Apple to allow competing services on %25 of the smartphones they use. Madrid is pouring police force into Barcelona as we speak as the Catalans started burning cars on the streets against the unelected bureaucrats threatening them to give App Store alternatives to every 4th smartphone. Unjustified violence by the police is being reported against people who don't want to know about cheaper payment options. The situation is considered stable at this point but I don't think that EU will survive if Apple pulls out of EU. The president of the EU commission was caught mumbling at the mic "Ich hoffe, Apple ruft nicht an oder blufft, sonst ist alles verloren." which roughly translates to "I hope Apple doesn't call or bluff or all is lost" in Bavarian.
Interested in learning more, do you have links to the sources?
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That might be a very risky bet. Currently a lot of people are looking for alternatives of US products, if Apple gets out of the EU, it might not be that easy to get back as the market might have drastically shifted.
> All hollow talk. It will lose all of its aggression the moment that Apple leaves the EU, and EU citizens are left with the remaining options.
People in Europe (and everywhere else that isn't the US) are already using these "remaining options" more than they use Apple products by a massive margin. Apple products are not nearly as popular in Europe as they are in the US because more people realize that the price tag is not proportional to the quality you get.
People like you keep forgetting that the EU is the single largest consumer market in the world. This does not mean that Apple gets most of it revenue from the EU, but it's still a sweet $90B in 2024.
In which world does a company give up on close to $100B in revenue out of spite?
In a hypothetical world where it threatens $1T of revenue.
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>private but non-monopolistic ecosystem.
Isn't it a monopoly over Iphone users?
Dude the force of government is us, democratically voting, in a free society. Either respect our law, or don't do business here.
Amen. This American hatred for the government is very tiresome.