I suspect Apple may have to back down over this...
So much of the value they paint of the iOS ecosystem is in the apps - 'There's an app for that' was a large campaign last year. Yet they're now threatening to make a number of their more popular apps economically unviable according to their creators.
In-app payment will mean a new app, no? Which won't get approved if it contains a rant against Apple on that screen explaining the price hike they need to make it viable. Yet the current versions contain links to web-based payment, which would be relatively easy to update to include a page saying 'Apple are thieves' and explain why.
I'm well aware that many / most customers would see such a message, give a stereotyically teenage whatever reaction and move to a competitor, but a good percentage won't and we've seen how fast bad news travels now. Enough providers that customers value enough are now angry enough with Apple to try their luck at this, particularly with a competing platform available and growing without the same restriction, and I wouldn't like to bet on Apple winning this.
I would hope so. My decision to purchase an iPad was based, in part, on the availability of applications that would likely no longer be available if this policy were to go into effect. As a consumer, this feels completely deceptive. For me, the usefulness of the iPad is being arbitrarily reduced, quite drastically, only after I have purchased it. I may not have purchased it in the first place if not for the functionality I am on the verge of losing.
I understand Apple's position and desire to turn a profit, but these actions feel hostile towards me, as the consumer, and leave a pretty sour taste in my mouth. No matter how this shakes out I would be wary of committing to another Apple platform for fear that they will completely change the rules to make it an untenable situation.
I really hope they back down, but if they don't I would gladly join a class action lawsuit against them.
Personally, I wouldn't ever join a class-action lawsuit. But small claims court sounds perfect...
If Amazon ends up removing the Kindle app over these new policies, I would sue Apple (via my local Apple Store to establish jurisdiction) in small claims court for $139.
The case would be relatively straightforward: I purchased an iPad because it could do everything a Kindle could do as well as more; Apple then caused functionality to be removed, so I would like Apple to buy me a Kindle to replace the functionality.
I've been to small claims court 3 times in my life, and each time won a default judgment because the other side didn't show up. Then, I faxed my judgment to my credit card company, and they promptly credited me (and presumably issued a chargeback to the merchant). This was in Fairfax County, Virginia.
I suspect that Apple will quietly reverse themselves, just like they did on the "apps can only be written in C, C++, and Objective C" last year. But if they don't, your local small claims court provides a wonderful opportunity to make your dissatisfaction known. And it only takes about 4 hours.
Honestly, while I empathize, you would so lose that case. I'm fairly certain that Apple makes no guarantees about functionality other than some very narrow statements (like supporting 3g or WiFi). If you thought the iPad replaced your Kindle, that's on you.
And at worst, Apple will simply say that Amazon voluntarily decided to not abide by the terms of the app store. Any time they are willing they are invited back in.
As much as I despise many of Apple's business practices I think this is a case where they are fairly making their own call. I'd love to see some companies "man up" and say, "Lets go all in on Android, WP7, and WebOS -- screw iOS".
Also, small claims court is not based on tort law, it's quasi-contract [1]. So the judge (not a jury) uses the principle of equity. Even if Apple did send someone (unlikely), it's still a question of what is fair, not a question of what is contractually obligated.
I'd never heard of this, but it is interesting. For example:
"To illustrate, assume that a homebuilder has built a house on Alicia's property. However, the homebuilder signed a contract with Bobby, who claimed to be Alicia's agent but, in fact, was not. Although there is no binding contract between Alicia and the homebuilder, most courts would allow the homebuilder to recover the cost of the services and materials from Alicia to avoid an unjust result. A court would accomplish this by creating a fictitious agreement between the homebuilder and Alicia and holding Alicia responsible for the cost of the builder's services and materials."
As a home builder a great strategy is to work with fraudulent agents, and build homes on a bunch of plots. And then sue the landowners.
The key simply appears to give the appearance that you're working in good faith, but once you do that your entitled to all services rendered, whether or not the "customer" actually wants it or not.
Although since it is small claims, probably not worth it.
But may be worth it for web design companies. Do the same thing -- build crappy websites for companies, charge them for the service and product.
Increasingly, class action lawsuits are being settled with "Coupon Settlements", whereby the attorneys get millions of dollars, and the plaintiffs get -- no joke -- coupons.
Well, when you bought your iPad, weren't you fully aware of Apple's whimsical and capricious nature in dealing with the App Store? Even though Apple are just being assholes here, I have no sympathy for computer-literate people who would willingly take part in an ecosystem which has DRM built into its DNA.
> I have no sympathy for computer-literate people who would willingly take part in an ecosystem which has DRM built into its DNA.
I'm inclined to agree with this, but only until I consider other DRM-laden platforms that I take part in.
I have a Steam account, and have many games tied to that account. Steam is DRM.
I have a Kindle, and I have many books on it. Kindle books use a DRM protected file-format.
The difference betweens these, and Apple's, ecosystems is in the value provided to the user, as opposed to the alternatives. Amazon's Kindle gives me multi-platform access to my books, Steam allows me to install my games on any Windows (or Mac, for some games) computer that I interact with.
Apple, on the other hand, actively assaults the freedom to use your purchased data/products/info on any device that isn't made by Apple.
So while I think you have the right idea about DRM infused systems, I think that the intent of the system should be judged as well, and in a more vital role than the DRM itself.
Class action? Alright, let's see what a self-respecting judge would do in such a situation. Especially when your evidence is that Apple's actions "feel hostile" and "leave a bad taste" in your mouth.
When a customer purchases an Apple device, he/she knows what that Apple does not guarantee continued service. Apple does not contractually promise that apps will continue to be there, it does not promise it will work with developers, it does not promise it won't change the rules, it does not promise that it won't get out of business in six months and close the app store altogether. The customer is aware of all that beforehand but still buys the device.
Many people talk about user rights. The only rights a user has are 1) to sue Apple if the company violates a written contract between itself and the user and 2) to refuse to buy Apple's products in the future.
That's probably part of the plan. If they had started at 15% there would be the same complaints. They would have to back it down to 10% to appease people. If they start at 30% they can back it down to 15% as a public act of concession. It would not surprise me at all if they selling this to major players as an opportunity to raise their prices and make more money for themselves in the process. If Apple wants 15% prices will go up 20%
I've already upvoted you, but it didn't feel like it's enough... because the same I did with the person that, a couple weeks ago, predicted that Apple would require prices inside and outside of App Store to be the same.
That only works if Apple doesn't withdraw the current version of the app from the store --- which they're entitled to do.
The EFF got a copy of last year's legalese and posted it[1][2]. Apple reserves the right to withdraw any app for any reason. (The key language is Section 8, which says that they can pull any app at any time for any reason. For good measure, section 4 says that if you don't accept new terms as they are offered by Apple, they can "suspend or terminate" your use of Apple services, including presumably the App Store itself. Section 12 reiterates. There's also language in there that says new terms won't apply retroactively, but their line here is, I think, that they're only getting more stringent about enforcement of existing terms --- and the other sections clearly state that nothing there limits their rights under section 8.)
Yes, but that scenario leads to customers going 'where's my app gone?', at which point a percentage of them put the App name into Google and guess what pops out...
Many of these are free apps (Pandora, Kindle, etc). No refund needed. And if they are the reason you bought your iOS device I'm sure Apple won't be accepting hardware returns past the regular 14 day limit.
I fear that they will "back down" to something like a 5% cut for certain types of low margin content. In other words something that looks good in comparison but is still completely unreasonable when compared to the 1% that Visa & Mastercard take. Maybe that's even been the plan all along.
I suspect Apple has something up their sleeve. Nothing stops them from cutting a deal with certain publishers, except maybe accusations of hypocricy. It isn't, but it could be perceived that way.
Perhaps not hypocrisy, but greed and unfairness, yes. It cuts out the folks that Apple doesn't make a deal with an entrenches the major players, simply for Apple to make more profit. That might not be hypocritical, but it's a shitty thing to do.
> Yet they're now threatening to make a number of their more
> popular apps economically unviable according to their
> creators.
How's that? Or are we again talking pandora and netflix there? In that case I couldn't care less: these are not available in my country, and most likely never will be.
Heck, even iTunes Music is not available, only apps.
Now imagine you are a new company just going to start selling subscriptions in iOS app.
I'd say you get a lot of convenience with this Apple offering.
As for end user, there is no loss there: just a convenient way to buy subscription with one tap.
All this sounds once again blown out of proportion, everyone is shouting without any effort to really understand what they are shouting about.
Seems like you are defending Apple's behavior without any effort to really understand what other people are shouting about.
It's nice that you don't care about Pandora and Netflix. A lot of people do. If those apps were to disappear or mark up their offering by the 40% required to compensate for Apple's take consumers would by definition be worse off.
If Apple's in-app purchasing turns out to be really convenient and worth a 30% cut then that's great for app developers, and they will use it. But I really fail to see how forcing people down that path is at all a good thing.
It's not just that they're taking 30%. It's that they're disallowing authors to charge any more than they do anywhere else, and then taking 30%. So to make the same amount of money on iPhone, you would have to increase your prices everywhere else.
But every app developer who has a subscription model for their iOS app already has this in place. And they can do it for a 3% fee from PayPal, where is the other 27% of value?
That's an app with a one off payment, we're talking subscriptions here. The point being, do you get that 30% (ok 27%) value from Apple when they take it every month. Also, note that I'm not saying I disagree with Apple taking a cut of subscription fees, I just think 30% is insanely high, it should be around 5%. Also, I don't think it should be mandatory.
I'm the one quoted there (RJ). It's worth pointing out that I've not worked at Last.fm for a couple of years, and the chat log (which I posted) doesn't mention Last.fm at all.
That said, I still think my analysis is bang on.
What Apple have done will really cripple anyone reselling/licensing content (Spotify, Last.fm, Netflix etc).
The obvious long term result is Spotify, Last.fm, Netflix etc are going to dump apple. Then a new company will resell Last.fm content at a 40% markup to sidestep the apple rules. Bad PR is then going to force apple to rethink their stance.
However, I expect Apple is going to offer "deals" to the major players.
I think Apple will be happy to have all the music subscription apps go away. They bought lala.com and I expect them to have an iTunes subscription service before long.
You know, just putting co-founder in the title doesn't actually explain that he's not with the company anymore... it just means founded it with someone else (unless co-founder means someone who founded a company with someone and then left? could be my bad english failing me..)
30% is simply an unsustainable cut of many things, of which music subscriptions are just one example.
I've said before--and I stand by the statement--that Apple doesn't have a lot of wiggle-room here without disrupting their retail channel for iTunes cards, which (IMHO) is a really important competitive advantage they have over, say, Android.
Having the retail credit channel is the equivalent of the importance of having prepay options for cell phones vs postpay. Many people don't want to put CC info in iTunes or they simply want to give gift cards to kids.
What Apple should do is make such a service optional. If it's compelling, people will use it. I also believe that for some people this will be compelling because they then don't have to deal with billing and all the infrastructure (payment gateways, receipts, accounts departments and so forth) that that entails.
Forcing it down people's throats is another matter entirely.
It's still unclear how this will relate to the Kindle, which is really what interests me, as it is a mix of subscriptions and single-purchase publications, all of which are purchased outside of the App Store.
Part of the problem is that there is an internal inconsistency in play. You can subscribe to the Wall Street Journal Web edition and use that on Safari on your iPad just fine. Why should the WSJ app that gives you access to that same content be any different?
You could sell an app on the App Store for $10 and Apple would get their $3 cut. Give a free version away and offer a $10 in-app upgrade and Apple still gets their $3 cut. From Apple's perspective, why are subscriptions any different?
I guess Apple are seeing this as people making money off their platform so they should get a cut. That position has superficial attractions but quickly breaks down if you go deeper.
To me it's a lot like the ISPs who want to charge Netflix or Google for all the bandwidth they use, which is nothing more than double-dipping. The customer pays for the bandwidth. What they use that bandwidth for should be immaterial to the ISP.
Personally I think Apple makes enough money from selling the devices, the App Store and iTunes that just nickel-and-diming people who produce material users subscribe to to the point of excluding such content from the device is really not in their interest or the user's interest.
Not having Grooveshark on my iPhone/iPad is a problem (that predates this). Losing other music services will be a problem. Losing the Kindle will be a HUGE problem.
I agree. I've invested in a bit of content on the Kindle. It's ideal for technical books, which often should be disposable.
That said, I'm of two minds about this. I think we should get to the point where there are no longer multiple upstream "distributors" getting a cut of content. Often, this just gets between me and content producers without adding real value.
I guess Apple are seeing this as people making money off their platform so they should get a cut. That position has superficial attractions but quickly breaks down if you go deeper.
The writing is on the wall. Tablets are inevitably going to become commodity items. Apple is already in the software and content distribution business, and wants to ward off big competitors like Amazon. It's just natural that Apple wants to protect its turf.
Unsustainable? How about 'normal retail practice'? It's funny watching people froth at the mouth about normal retail practice.
I don't like Apple or how they run their business, but a 30% cut for a retailer is even be a little low. Go into a bricks-and-mortar store and usually 30%+ of the price you see is markup on the wholesale price.
Apple provide a service: they deserve to get paid for it. Even if Apple allowed apps to be sideloaded, you wouldn't sell anywhere near as many apps if you marketed them yourself, not to mention having to deal with organising a payment system and easy, integrated way of getting them.
App developers are the wholesalers. Apple is the retailer. If you want to be both a wholesaler and retailer for your app, then Apple isn't for you. Go to Android... but you'll find it's still better to give Google a cut and be on their market as well...
> Part of the problem is that there is an internal inconsistency in play. You can subscribe to the Wall Street Journal Web edition and use that on Safari on your iPad just fine. Why should the WSJ app that gives you access to that same content be any different?
The WSJ is the producer of the original content. The music subscription services are but another remora in the food chain. Were they the original producer of content, this would be an entirely different discussion.
No, the writers at the WSJ are the producers of the original content. At some level, every producer is an aggregator. I don't think it's fair to categorically distinguish between the two, although you may disagree on the value of the aggregation.
Sorry, you are wrong. The entire apple business model is about vendor lock-in. Only recently did iTunes remove DRM from their songs. The reason is because iTunes won. Apple used iTunes to lock people in by forcing them to use an iPod if they wanted their music which they "own" or rather "lease". Sure you were free to get ANY other mp3 player in the world, as long as you were ok with losing all your music.
The same here. Vendor lock in. You got ebooks from the cheapest store (iBook?) cool, iOS only, oh and a non-jailbroken one too.
Apple's history with the i... product line is content lock-in onto a device. They lure you in with pretty interfaces, then they hold your stuff hostage. Apple wants a piece of the pie, and they want to be able to undercut all competition. They know they can't ban kindle or face antitrust so they will do other things.
This is monopolizing pure and simple. It has nothing to do with apple making "enough" they want to make sure that they sell the cheapest stuff on the iOS, and they control where you can see the content - on the iOS - and if you leave you are fucked.
"Only recently did iTunes remove DRM from their songs"
A timeline:
iTunes store opens: April 26 2003
Steve Jobs DRM letter: Feb 6 2007 (4 years ago)
EMI content available DRM free: May 29 2007
80% of iTunes music DRM free: Jan 6th 2009
All US iTunes music DRM free: April 7th 2009
So I think you are stretching the meaning of "only recently", especially when considered in terms of the pace of technology development (as opposed to, say, geological time.)
You couldn't even buy an iPhone when they started removing it. The period over which they were exclusively selling DRM content is actually shorter than the period since they stopped.
(Update: that last part is not quite right - I was counting from the DRM letter date, not the EMI date. But it's close.)
When they publicly announced their intention to move to DRM-free approximately half the lifetime of the service ago, and have since succeeded in driving that plan to fruition, it's hard for me to find much to fault. They couldn't have gotten the service off the ground without DRM and the decision to push for non-DRM was a surprise to most. How could they have done "better"?
I think that the antitrust suits are just around the corner. Which is good, because there are a ton of corner cases beyond the obvious ones that just got damaged. I think the books / movies / tv are just the ones that we heard about first. Pretty sure this is going to effect flickr, vimeo, and more.
People love to throw around the antritrust word without--and this isn't necessarily directed at you personally--knowing what it actually means.
Does Apple have a monopoly on phones? Hardly. Look at HTC, Motorola, Samsung, RIM, Nokia, etc.
Does Apple have a monopoly on music? No. You can buy it from Amazon and elsewhere. Likewise you can use Grooveshark, Spotify, Rhapsody, Pandora, etc for different services depending on what country you're in. iTunes sure is dominant though.
Does Apple have a monopoly on ebooks? Hardly. Amazon is a far bigger player here. Amazon is not dependent on Apple as a means of distribution, although Apple devices are obviously important.
Does Apple have a monopoly on TV shows or movies? Hardly. You can buy DVDs from any number of places and downloads from the likes of Amazon. Content producers like Comedy Central, CBS, Fox and others also stream directly from their Websites (and they could do this in HTML5 if they wanted to, allowing them to be viewed on iDevices, but alas they still choose Flash almost exclusively).
So where exactly is the monopoly (virtual or actual) here? You can say that Apple is the only one who can sell apps on iDevices and you'd be right. So what? NBC is the only one who can broadcast shows on their stations. That doesn't make them a monopoly.
So unless someone can produce a cogent argument of how antitrust applies--and I've yet to see one--can we please stop bandying the word around like it has any relevance here?
This isn't to say that some Congressman or Senator won't speak out or possibly there might be a House or Senate hearing but that's really about creating the appearance of doing something rather than their being any justifiable basis for investigation.
You don't need to have a monopoly to engage in anti-competitive behavior. Of course it makes it easier, but it isn't required. Consider obvious examples like dumping or tying.
I'm not an expert, but I believe one benchmark the EU uses in competition law is a "dominant position" which from memory can exist at > ~40% market share.
Clearly Apple has a dominant position in online music sales, so it is likely that they could be subject to oversight at least as far as music goes. As they have built all of their other services into their music store (still literally, iTunes) it seems possible to me that review might extend further into the iTunes ecosystem.
Given that by all appearances they have just lost Symbian despite efforts to promote an EU produced competitor in the smartphone market they are probably watching it all quite closely.
It isn't clear to me that you can discount any action here even if traditional benchmarks aren't being met. Technological rate of change may be out pacing traditional regulatory adaptations.
Computing platforms are becoming intimately involved in everything we do. It isn't much of a stretch to imagine a world where one device wakes you up, gets you to work, pays for your lunch, opens your locks, handles all communications, proves your identity, and saves all your mementos.
It seems unlikely to me that Euro or US regulators will want to let a mobile computing platform become so vertically integrated that it controls all content, payments and communications arbitrarily with the only remedy being switching to a competing totally integrated platform.
> You don't need to have a monopoly to engage in anti-competitive behavior.
"Anti-competitive" behaviour is a much broader brush than antitrust, which has a reasonably specific meaning. Antitrust--in the US at least--relates to the Sherman Act [1] and the Clayton Antitrust Act [2].
Example applications:
> - price discrimination between different purchasers, if such discrimination tends to create a monopoly
> - exclusive dealing agreements
> - tying arrangements
> - mergers and acquisitions that substantially reduce market competition.
While such things are always open to interpretation by courts, it's important to consider their historical application [3]. Standard Oil and AT&T aren't anywhere in the same league as Apple.
It's worth noting that the intent of antitrust law and enforcement is to protect competition itself. AT&T is a good example because the barrier to entry for creating a telecommunications company was (and still is) so high.
Of course the solution was ludicrous and one that the US seems to have not learned its lessons about yet: it swapped one large monopoly for 7 regional monopolies. But I digress...
The Microsoft case is often brought up. It was a controversial case. At the time it virtually wasn't possible to have a (useful) PC (which accounted for >95% of the computer market at the time) without Windows. What's more, the nascent Web posed a strategic threat to Microsoft, one it sought to subvert by giving away IE for free and making it non-standards-compliant in an effort to tie users to IE and thus to Windows.
Now compare this to Apple. Apple holds no monopoly on phones. It doesn't require carriers to only sell its phones. Anyone content you sell choose to sell through the iTunes ecosystem you can sell elsewhere.
What people typically mean when they say "Apple should be investigated for antitrust" is "I really want an iPhone but I don't want one with Apple's restrictions so surely this should violate some kind of antitrust law right?"
No.
> Clearly Apple has a dominant position in online music sales
26.7% of music sales in 2010 [4]. Higher for online music sales I'm sure but is that a meaningful restriction? Antitrust isn't there to protect companies from competition. Any company can sell music. Amazon proves this. Apple doesn't require exclusivity.
The fact that to date any competition has been completely ineffective does not signal an antitrust violation in and of itself.
> Technological rate of change may be out pacing traditional regulatory adaptations.
There's no "may be" about it. And for this reason alone the DoJ will be reluctant to intervene (IMHO). For example, the Microsoft case was settled years after it had ceased to be relevant.
The market has a way of sorting these things out, at least as far as high-tech goes.
> It seems unlikely to me that Euro or US regulators will want to let a mobile computing platform become so vertically integrated that it controls all content, payments and communications arbitrarily with the only remedy being switching to a competing totally integrated platform.
No mobile platform has the sort of market share you're talking about to be relevant from an antitrust point of view.
I consider these vertical platforms to be a transitory problem and one that exists largely because the market is so new. These things will (IMHO) surprisingly quickly become commoditized.
It's for this same reason that I just don't really care about Facebook's apparent dominance of their space. Or at least I don't have the same sense of urgency about it that some seem to.
How is Apple's app store requirement not straight-forward tying under the plain language of 15USC§14?
The language there is:
"It shall be unlawful for any person engaged in commerce, in the course of such commerce, to lease or make a sale or contract for sale of goods, wares, merchandise, machinery, supplies, or other commodities, whether patented or unpatented, for use, consumption, or resale within the United States or any Territory thereof or the District of Columbia or any insular possession or other place under the jurisdiction of the United States, or fix a price charged therefor, or discount from, or rebate upon, such price, on the condition, agreement, or understanding that the lessee or purchaser thereof shall not use or deal in the goods, wares, merchandise, machinery, supplies, or other commodities of a competitor or competitors of the lessor or seller, where the effect of such lease, sale, or contract for sale or such condition, agreement, or understanding may be to substantially lessen competition or tend to create a monopoly in any line of commerce".
All the requirements under the plain language are there:
1) Apple is selling a commodity, access to the Apple App Store, to providers.
2) The commodity is used within the United States.
3) The sale will be on the condition or understanding that the app manufacturer does not purchase payment processing for the iPhone application from any competitors of Apple.
4) The condition may substantially lesson competition in a line of commerce, namely payment processing for iPhone applications, because most iPhone developers will be unable to use one of Apple's competitors.
It seems that Apple's behaviour is exactly what the Clayton Act anticipated and prohibited.
This applies to anything if you define your market tightly enough and "payment processing for iPhone applications" is about as tight a definition as you can get.
If you can define things that tightly how is it different to my going into a shop (for the sake of argument let's make it a shop which sells goods the owner makes and therefore can't be bought elsewhere) which only accepts cash and claiming that they're anti-competitive because they don't accept alternate payment mechanisms?
Unless the iPhone obtained a dominant position in the smartphone market choice exists - you can go elsewhere, as can developers and you can buy (and they can sell) apps from other places and pay or bill in other ways.
That's the market working and that's why anti-trust laws are unlikely to apply under the current circumstances - they're designed to ensure competition and smartphones is a market as competitive as pretty much any on the planet right now.
Except that "payment processing for iPhone applications" is a very artificial category. It seems the language would be more appropriate for a situation where, say, Apple was financially discouraging developers from porting their apps to Android; in this case, they're forcing developers to accept less money on their platform, which, if anything, encourages the competition.
Apple was financially discouraging developers from porting their apps to Android
This is an interesting statement because if you remove the word 'financially,' they have done that by disallowing development with cross-platform tools.
I'm sure somebody will try to sue, but I actually think that it opens a big hole for someone like Google to gain an edge. It's even possible that Google could put out a device that has far more content available than would be available on the i* because content providers won't want to play with Apple any more.
Anti-competitive legislation doesn't just apply to pure monopolies. For example see the investigation into tech companies agreeing not to steal employees of each other, just because there are other companies out there that hire developers it doesn't mean such practices can't violate antitrust laws.
A more relavent example. Consider that you lived in a city where some service was provided my only a single provider (for example a bus service or cable internet service), even though you could move to another city to use alternative services, those operators are still considered to have a monopoly because moving houses is a high barrier to switching.
Similarly switching phones is a high barrier due to contracts and other purchases (apps, books, etc) causing you to be tied in.
In the NBC example, switching between stations has negligible cost. Many pieces of legislation have been introduced for the sole purpose of reducing switching cost (for example reverse engineering for compatibility legislation), because high switching cost can create localized monopolies.
People also love to narrowly define antitrust as legal action against the perpetuation of monopoly without knowing what else it includes.
You don't have to have a monopoly to have the DOJ investigate. All you have to do is engage in anticompetitive practices. Monopoly is only a potential result of these practices, which you can get an overview of here: http://stats.oecd.org/glossary/detail.asp?ID=3145
The issue that I am seeing here is the following, and this may be a gross misinterpretation of the rules that apple has put forth.
I get a dropbox monthly account.
I access my dropbox account through the official dropbox client on iPhone.
Apple says that drobbox must do one of two things, either:
1. offer their service through apples store, and apple takes their skim.
2. pull their official app.
As far as I can tell from the rules that apple put forth, if you have a product for which you can sell recurring billing plans, you must give apple their opportunity to skim, even if you manage your own billing platform, and your margins are too thin to give apple their cut.
I can understand why apple wants it their way, and clearly it is good for consumers (no need to pull out your credit card, we got it on file already), but for businesses where the profit margin is really thin, adding 30% could kill you. So you can raise the price across the board to deal with apple, or you just don't have anything that can access your product on the iphone.
As I understand it (and I may be wrong) that particular scenario (Dropbox) is not well defined in the Apple rules - so it's wait-and-see how they enforce things.
Personally I doubt they would piss off popular development shops like Dropbox and 37Signals (who have Highrise and Campfire clients in the App Store) - but then again they do have history there.
So in my mind, the reason this upsets people is this: Imagine you bought a Sony TV and all you could ever watch on it was Sony produced movies, tv shows, and Sony music unless the other studios gave them 30% of the revenue. You can even only hook up a PS3 and Sony speakers, and there's no other way to get something on the TV but by going through Sony.
Is there still tons of great content? Sure. Do the original artists have a right to go elsewhere? Sure. Could the other studios afford to take the hit? No. Would the other studios make deals with the other TV manufacturers? Probably. But because of their position, you as the owner of a Sony TV wouldn't get to watch some awesome movies and same for people who bought another type of TV. In order to reach a Sony TV customer, Sony would be forcing artists to have Sony produce their content, and that's where it's anticompetitive.
Stepping back to reality, how crazy is this analogy? Well how different really is an iPad from a 10" TV? Sony TVs play movies, music, have apps, etc, etc just like an iPad. Sure in the real world, you need a special partnership with Sony to install your apps onto the actual TV, but there's tons of other ways to get your content onto the TV. Difference here is that Apple has blocked off any of those other channels. And that's why it's an issue.
Did Microsoft ever have a monopoly on OSes? Hardly. Look at Mac OS, OS/2, BeOS, AIX, Solaris, Debian, Slackware, SUSE, Red Hat, RISC OS, BeOS, QNX, OpenBSD, FreeBSD, IRIX, VMS, Palm OS, EPOC OS (nee Symbian) etc.
The answer to your question is "yes" according to the antitrust litigation that actually took place — and if you would like to understand why, then pay close attention to the phrase "relevant market" in the "Conclusions of Law" document from the MS v DOJ case. This phrase plays an important role in determining monopoly status (the question raised in this thread) and this document makes interesting reading along these lines.
Whether this zone of commercial activity actually qualifies as a market...depends on whether it includes all products "reasonably interchangeable by consumers for the same purposes." ..."Because the ability of consumers to turn to other suppliers restrains a firm from raising prices above the competitive level, the definition of the 'relevant market' rests on a determination of available substitutes."
The court's opinion was that the operating systems you mentioned were not "reasonably interchangeable by consumers for the same purposes". The fact that Microsoft would be able to to raise prices "above the competitive level" was key. This was very much the case in the 90s when this litigation took place.
I would have to say that's a pretty harsh indictment of Linux distributions and Mac OS by the US DoJ.
By that definition, it makes me wonder if iTunes has a monopoly in "phone synchronisation software". This monopoly allows Apple to raise its store prices above a competitive level.
I would have to say that's a pretty harsh indictment of Linux distributions and Mac OS by the US DoJ.
On the one hand, it's a little worse than you're suggesting because this was actually the opinion of the court. The DoJ was just the plaintiff.
On the other hand, the implied indictment of Linux and MacOS of the era isn't as bad as you're suggesting. I encourage you to go though the document, since you have the URL handy and I gave you the phrase to grep for. Take a look at the following excerpt:
The Court has already found, based on the evidence in this record, that there are currently no products - and that there are not likely to be any in the near future - that a significant percentage of computer users worldwide could substitute for Intel-compatible PC operating systems without incurring substantial costs.
Now I know you're tempted to rephrase this in some way that bolsters your perspective, but be careful with such temptations, for if & when Apple finds themselves in the same hot water it's going to happen through litigation and the determination will be made in a court — where the tool of choice is linguistic precision in general, and pulling key definitions & tests from precedent in particular. Every word in the above quote has weight, and you should make no substitutions if you want to gauge how things might play out were litigation brought against Apple.
In the above excerpt, note the phrase "Intel-compatible PC operating systems", which is part of the definition of the "relevant market" under which the determination of monopoly status was judged. The MacOS of the era ran only on PowerPC machines and some aging Motorola 680x0 hardware. So there's no harsh indictment of MacOS here.
As for linux of the 90s, I suppose you could look to phrases like "significant percentage of computer users worldwide could substitute" and "without incurring substantial costs". Linux distributions of the era could not rise to that standard. Although you would be correct to note that vendor lock-in played an important role in those "substantial costs".
I'm going to break away from my devil's advocate argument.
I was rhetorically trying to show:
i) The parent's argument is weak. The existence of competitors is not sufficient to show whether Apple is or is not a monopoly. Microsoft had a lot of competitors. Even in 1998, there was a lot of OSes.
ii) The argument that Microsoft was a monopoly was, frankly, ridiculous to begin with, based on defining a market in an oblique way. The same argument could be extended into many fields to show that many other products have a monopoly.
Even so, I do believe that Microsoft engaged in anticompetitive behaviour in actively trying to destroy Netscape and its desktop OS competitors. The weak "monopoly" argument should be sidestepped completely, since it was terrible to begin with.
I do think there is an fine line between limiting creativity and preventing anti-competitive behaviour, and it's not clear where that line is.
I think the EC's "browser choice" decision is shocking given that a web browser is an integral part of any OS, especially in 2011, whether that OS is Windows, Mac OS X, a Linux distribution or whatever else.
I do think Apple and the iPhone creates genuine questions about where the line should be drawn. Is it reasonable for them to close up the protocols in iTunes to prevent anyone from creating their syncing software? Is it reasonable for them to want a cut from downloadable content on their platform?
In my mind, they will always be anti-competitive practices, whatever the letter of the law says.
Again, with respect to your second point, the court had no choice but to pursue what you believe was "ridiculous", because it is required by section 2 of the Sherman Antitrust Act:
The threshold element of a § 2 monopolization offense being "the possession of monopoly power in the relevant market,"...the Court must first ascertain the boundaries of the commercial activity that can be termed the "relevant market."
...and it was germane to the standards regarding product tying relevant to section 1 of the same act:
Proceeding in line with the Supreme Court cases, which are indisputably controlling, this Court first concludes that Microsoft possessed "appreciable economic power in the tying market," Eastman Kodak, 504 U.S. at 464...Because this Court has already found that Microsoft possesses monopoly power in the worldwide market for Intel-compatible PC operating systems (i.e., the tying product market), Findings ¶¶ 18-67, the threshold element of "appreciable economic power" is a fortiori met.
(Both of those excerpts are from the same Conclusions of Law document, of course.)
It's very easy for you to say that "the same argument could be extended into many fields to show that many other products have a monopoly." It's quite another thing to frame your argument in terms of section 1 & 2 violations such that the way you have defined your "relevant market" actually pertains to product tying and preservation of monopoly power through anticompetitive acts. In other words, it's not enough that an anticompetitive act happened: it must also have been used to preserve power — and not just any power but monopoly power, and not just any monopoly power but monopoly power in a market relevant to the anticompetitive claims. And even if you manage to frame it this way, it still must pass through the crucible of the court, as it did in MS v DOJ.
In my mind, they will always be anti-competitive practices, whatever the letter of the law says.
Anticompetitive acts are not illegal in and of themselves. They are illegal for establishment or maintenance of monopoly power, however — and one can't apply that test via hand-waving. The Sherman act is very specific.
I'm replying to the reply to your post, and not your post because for some reason I can't reply directly to it.
Microsoft has >90% market share in OSes. The existence of a rival product doesn't negate a monopoly. The existence of a true alternative negates a monopoly. Apple doesn't even have a dominant share of ANYTHING except portable music players (which, incidentally, play content from other vendors just fine -- oh and you can _legally_ rip your Apple DRMed music to CD and play it anywhere so where's the lock-in?).
If the reply gets beyond a certain depth there is a built in delay (that gets longer the deeper you get).
It's there because Hacker news has decided that there is no value in deep conversations, they prefer the more shallow ones and feel that they get a better result that way. Presumably it also serves as a brake on certain kinds of anti-social behaviour such as flamewars and trolling.
It's in the terms of service or rules for newbies or something like that.
(edit: went looking for the text in the guidelines so I could link it, but couldn't find it. Sorry. It might be one of PGs articles that I was thinking of)
The problem is that they had a huge share of the market, and they abused that to keep other players out.
With respect to computer manufacturers they had a variety of illegal practices which meant that it was difficult or impossible for them to sell other OSes. Since Apple doesn't sell its OS for generic PCs, the main player this hurt was Linux. From memory an example of this was that the OEMs had a huge discount on the 'face' price of Windows, but if they sold anything except Windows they couldn't get this special price, even for the Windows computers they did sell.
Similarly they drove Netscape out of business by bundling Internet Explorer with their OS, and then later retrofitting the OS so that IE was baked into a bunch of things that it hadn't been baked into previously (such as Explorer), such that removing IE and replacing it with Netscape or $other_browser would actually break Windows. They didn't have to do that, and it didn't make any sense to do that, except for the express purpose of breaking Netscape.
As for OS/2, allegedly Microsoft stole all the good technology to use in their own products, and then played silly buggers to the point where it was massively delayed.
BeOS died an unnatural death, which is odd. Neal Stephenson has this interesting article about that. I'll link to the cliff notes in case you're in a hurry:
The thing that gets me about BeOS is everyone I personally know who used it raves about it... but when I go looking for old pictures of it, it is butt ugly. I mean truly hideous. Dos pre-windows 3.1 hideous. It is worse than 90s Linux is how bad it is. :D But hey, apparently it was the superior technology, and yet nobody would sell any PCs with it installed ... FOR SOME STRANGE REASON (cf above discussion on Microsoft's 'intimate' relationship with PC manufacturers)
Not especially. Syncing was a major pain in the butt for most devices back in the old days. I don't think that Apple were trying to establish a monopoly on synchronization software, I think they were just trying to make it easy and painless to use. Whether they succeeded or not is an exercise left to the reader. I think that some people just have this image of Steve Jobs as some bond style villain stroking his white cat and holding the world to ransom for one meeelion dollars /pinky in corner of mouth/
However, if you asked me whether their proprietary dock connectors were an abominable crime against humanity, you might get a different answer. :D
Somebody did do a ten(?) year update to it with Stephenson's blessing, but from recollection I think they didn't really grok why OS X was so good. They also didn't write as well as Neal, but hey, that's not an especially exclusive group.
It is good and original, but the bits that are good are not original, and the bits that are original are not good.
I recall reading it and thinking "he got that wrong, and that's wrong, and that's wrong, and all of that is wrong" all the way through. I think he was one of those pundits that fundamentally just doesn't understand why people like working with an OS like OS X, they think it is because of some superficial silly reason. Like "consumers like it because it is white and shiny" or "because the UI is pretty".
No no no. A thousand times no. I and everyone I have talked to who uses both, prefer the Mac because Windows is like the death of a thousand papercuts. There is in general no one thing you can point to that is especially horrible (obvious exceptions: Win ME and early Vista and Win CE), but there are a million different things that all add up to an unpleasant experience.
Disclaimer: I used Windows 7 on a decent spec machine recently and it was actually pretty good. But see the above quote about good and original. If Windows is going to end up just copying all the good bits from some other OS, why not switch to that OS now and get the benefits straight away rather than waiting 5-7 years?
That really sounds like a distinction without a difference. MS had control of 90% of consumer and office computing. True? Apple doesn't control anywhere close to that in phones.
My premise is that embedded devices and servers don't matter to the vast majority of people who use computers, then and now.
If you're a home or office user, you can't use a server to do your work. You can't use an ATM to do your work. You can't really be pretending the desktop computer market is some narrow or obscure thing, can you?
In 1998, as a home or office user, you had a very specific set of choices for computing tasks, of which Microsoft controlled the vast majority.
Screw you buddy! Apple has a monopoly on Apple products and everybody but you knows it!
Apple should be prosecuted for their illegal monopoly over their own products. I hope they are punished just as much as Microsoft was for abusing their Windows monopoly. Now /that/ would be justice!
I'm trying to decide if you are being ironic or not. If you are, it isn't clear at all. If you aren't, your argument makes zero sense whatsoever. You don't have a monopoly "over products"; you have a monopoly over markets.
There are more Android phones than iPhones. Which market do you think Apple has a monopoly over? They have a quarter or something of the US smart phone market and less world wide.
At the very least, it was a tremendous drain on their public image and wallet. Don't underestimate these effects, and if you're young you should read a bit of history to have a sense of Microsoft's trajectory and goals at the time. You should at least know what the Halloween Documents are.
Thanks, I am aware of the history. My point, which you've confirmed, is that nobody actually knows what the penalties are, because they were so light or non-existent.
You could argue that it scared Microsoft enough to keep their head down for a while because there was a lot of talk about forcibly splitting Microsoft.
The strain on their image and wallet was largely self-inflicted. They were caught with their hand in the cookie jar and they were saying "we've done nothing wrong, we know not of the cookie of which you speak".
Ultimately they didn't need to fight as hard as they did (appealing, using delaying tactics to drag it out, pissing in the European's porridge etc), but in the end all they got the equivalent of a slap on the wrist with a wet bus ticket.
Why do the specific findings of damages and penalties matter here? There was more than one case and they intertwined and resolved in not-so-obvious ways. I'd say it's naive or simplistic to ask "What exactly was the penalty?" the same way it would be to ask about the end result of IBM's antitrust case (13yrs, dropped). Does that mean there weren't any penalties?
One of Microsoft's results was that they were found guilty of monopolistic practices and that will never go away, even though the larger case wound up being settled (as is standard when a rich and/or powerful defendant is going to be found guilty). That their hand was in the cookie jar is a fact of public record.
While many decry the settlement itself, it's also important to look to history for the circumstances of the agreement: it was hashed out in the weeks following the 9-11 attacks. You take your eye off the ball and some scumbag is going to take it, in this case Microsoft and the Bush DOJ workers shaping the agreement.
Sorry, but you're wrong. The iTunes DRM was ridiculously easy to circumvent even in iTunes itself. No mad leet hackzor skillz required.
Since you could trivially turn aac files into mp3 files in iTunes your quote:
"Sure you were free to get ANY other mp3 player in the world, as long as you were ok with losing all your music"
Is completely wrong. I can only assume you are one of the vast throngs of Apple haters who hate Apple and their products because it is trendy to hate trendy things.
I know the iPad supports pdf format, and I think also the epub format(?), which I believe is the big open standard that everyone 'should' be supporting? How is that bad evil and wrong? Apple has great adoption of standards for its web browsers (please don't complain about Flash, for starters it isn't a standard, for seconds its horrible, for thirds it is used mainly for adds which are also horrible, for fourths it violates usability and accessibility for fifths its one good use is dinky little free games, of which let me assure you I have it on good authority there are quite a few of those on the iOS). Apple is by no means perfect nor lily white, but to attack them on standards when they do so well in that area compared to most other companies is ... bizarre.
The only 'entertainment' companies that I can think of that do better at supporting a wide range of open formats are the small indie music and movie makers. Why doesn't Apple work with the indies to help them bring their content to a wider audience? That would be awesome. That you could legitimately complain about. But no, you pick something that Apple are actually good at to complain about. Why is it that when someone rants about Apple it is always opposites day???
The hilarious thing about your complaint is that all of the examples you give are obviously wrong, but there is a much better example: apps. Apps for iOS don't run on any other device.
...
The problem is, if you complained about that, you'd look silly, because as a general rule apps for one platform don't run on other platforms.
So anyway, to sum up the actual state of Apple 'lock-in':
(a) Open formats are supported on Apple products.
(b) Some (e.g. music) closed formats are trivially easy to convert to open formats. (Turns out there are many converters for books that are cheap but not free, go figure)
(c) iOS specific stuff is iOS specific (spot the tautology)
Would I prefer to be able to write apps for iOS in any language I wanted to? As a developer yes yes, OMG yes. As a consumer I would ask whether that means giving up the protections I currently enjoy.
What protections? Surely Apple's only purpose in life is to sell me sufficient numbers of these devices is to enslave my will to that of Skynet?
Not so! On my desktop I hardly download anything unless from a very highly trusted source. I especially distrust the free stuff. On the iOS devices I go wild and crazy, knowing that my private information is private, my data is safe.
So are you complaining about the walled garden? Why? There are a great many alternatives, none with gardens so nice. Leave the Apple lovers alone, the chains that bind them are so nice and shiny and make such pretty bracelets. Maybe if you're nice to them, one of them will bring you a drink of ice-water in your 'warm cosy place'.
Sorry, but you're wrong. The iTunes DRM was ridiculously easy to circumvent even in iTunes itself. No mad leet hackzor skillz required.
Since you could trivially turn aac files into mp3 files in iTunes [...]
Do you mean the "semi-analog hole" of burning protected tracks in iTunes to a CD-R, then ripping the disc back into MP3 tracks?
If so, I wouldn't call that trivial because it requires a physical medium and some level of knowledge about audio formats to realize the possibility (I think a layperson would not understand that AAC->CD->MP3 is no more lossy than AAC->MP3).
Wasn't there an article on Slashdot not so long ago where some researcher had done a random sample of Android apps, and 50% of them were phoning home (sic) your private info?
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The big Linux code repositories are an interesting case in point. I'll straight up give them the benefit of the doubt that there is no spyware or malware on them. But isn't there again this tension between the custodial and the wide open? I recall people complaining about the more tightly guarded ones being hard to get new stuff onto them, everything was out of date. Whereas on the more chaotic free for all ones you would often encounter problems with different apps requiring different versions of shared libraries.
About Linux repositories: Debian's is tightly guarded indeed (although you can find the newest stuff in Sid, and usually install it without problems, even though you're using stable or testing, since only the dependencies need to be upgraded, not the whole OS to Sid).
The difference between Linux distros and Apple's App Store is that you can add third-party repositories whenever you want. And many of them are trustworthy anyway, since they are maintained by reputable community members.
Also, Debian packages are just zip archives. You can download and check out the contents of every available update. Can you do that with OS X or Windows?
So yes, walled gardens are fine, but let users choose to get out of them. Let users jailbreak their phones. Sure, void their warranty, put warnings in iTunes, but give them a device-specific way to do that instead of playing games of wack-a-mole.
The majority wouldn't go for the jailbreak anyway, since most people go with the defaults; but I'm kind of pissed that I have to wait ages before new kernel or other exploits are found and that are untethered, such that I can safely upgrade. Even with a jailbreak, I still buy stuff from iTunes and I'm still an iPhone user.
So why does Apple hate me so much? (not that the same thing can't be said about some Android phone makers, but we're talking about Apple).
I'm not sure that any of this disputes the original post's claim that Apple's bread and butter is vendor lock-in and there are legitimate reasons for users to oppose this.
It's not so much an indictment of Apple---pretty much everyone would like to find ways to keep their customers from jumping ship. In return, Apple has found a way to give their customers value in return for monopoly. By integrating all the parts--itunes (software and service), app store, ibooks, ipods, ipads, iphones, payments, etc---they can build things with a unified user experience that works.
Why I don't like this is that it makes it nearly impossible for Apple users to benefit from non-apple innovation in any of these areas. Would you like to try someone else's tablet or phone? Well I hope you didn't need any of that content from inside the apple ecosystem. Want to try someone elses book or magazine store on your idevice? Well Apple is now in the process of constructing barriers to this as well.
I don't accept your suggestion that people who don't like Apple's policies should "leave apple users alone" and choose an alternative. Problems like this can sometimes be mitigating by shedding light on them through discussion and complaint (i.e., the uproar about developing apps in alternative languages). At the very least, potential Apple customers need to be educated about the system they are buying into.
Could you tell me how to circumvent AAC copy protection? My wife has thousands of songs she can't easily transfer without ripping all of them, 15 or so at a time, to CD.
Isn't this really just a case of a decision which became bad in hindsight as many technology purchasing decisions are?
In a market for music (and digital music) that was (and is) rife with choice, your wife (and others) chose the convenience of iTunes over portability of the format.
That is exactly the same sort of trade off as we all make in purchase we all make every day. In hindsight, particularly in a developing market, we may regret the decisions we make but that doesn't make the vendors acts anti-competitive or immoral or anything else any more than Betamax or Laser Disc or HD DVD was.
Besides, could be worse, she could have bought them on Mini Disc...
Steve Jobs was always vocally opposed to DRM. He said the main competitors for the Music Store were CDs and piracy, and neither hassled you with DRM, so he saw it as a competitive disadvantage. The labels required DRM because Napster had left them gunshy, but Apple always seemed to be giving in grudgingly. (This is different for movies, of course, where the main alternative is DRM-encumbered.)
I think you need to clarify your point. When you say
"The lock-in was iTunes, not the DRM."
do you mean iTunes the application? iTunes the online store? Or iTunes the ecosystem?
The app wasn't a lock in, as far as I know there were no rules requiring exclusivity on the online store... and if the ecosystem was a 'lock-in' there are alternatives.
Not to pick on you specifically, I see plenty of people saying one or more of those is a lock-in, but I haven't seen a good reason why yet. It just seems to be an article of faith. Why is iTunes a lock-in? It just is, that's why.
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But then there is all this heated debate. Why even argue about it? If someone wants to own a Zune and feel all special and unique and pay $15/month for music subscription, hey, they can just do it.
I think the debate is 'interesting', because at HN, surely we would all recognise that building an ecosystem (or community) around your product and giving the users a seamless end to end experience would actually be a good thing. Something to be emulated. No? If not, why not? What is it about Apple that singles it out from the herd for such uniquely irrational treatment?
It is a bit emotional, but understandable. I believe the situation would have been totally different if Apple has these 30% rules and things long before iOS becomes the leading platform, when developers has the choice what and what not offer, and they can decide whether they invest or not. But the situation we have here now is that many of them has invested substantially in the iOS platform. They have invested talents, and have definitely helped co-promote the iOS in one way or the other and created a solid user base. This bomb is understandably very very unpleasant to them. Honestly if a developer/company give in and accept the 30% now, what stops Apple from charging 35%, 40%, 50% in the long run? How are they going to report to their investors and convince them that their business models is not controlled by some giant company's policy that they have absolutely no say in?
Apple tries to tax after sales usage of the device as if it's a leased device. They don't want to give up the upfront sales revenue of the device, and still want to get their cut for the usage.
This both can't happen. Give the device free and tax the usage, or sell it and live with the fact that the device is now belongs to the customer.
And iXYZ owners want to believe that they own the device. They can't hack it, they can't open it, they can't put software on it on their own. They can't even freely access the storage inside. And this kind of actions from Apple reminds them that they just don't own the device.
When it came to the question of who own the device, Apple customers always gave up their right to own the device in return of ahead of the time features, polish, being cool etc.
The Internet will route around all obstructions. I wonder if any of these content providers would get in trouble for providing jailbroken apps with music subscriptions from their websites? They could then encourage people to jailbreak their phones to get 'the full experience'. I think that would be a nice way of flipping the bird to Apple.
I strongly suspect most people who are commenting on this haven't read the iOS developer terms or the updated guidelines. I think these updated terms are crappy and unfair, but they're not at all what some of the more lurid claims are making—including, IMO, the one made in the accompanying article.
These rules are all about iOS In App Purchases (IAP). If your app is not eligible for IAP, these rules don't apply. Period. End of story. If your app is eligible, these rules probably apply.
So, what's not eligible?
* Goods or services for use outside of the app. This means that Linode, TheLadders.com, Chargify, WeightWatchers, etc., are all in the clear because they can't even offer their services through IAP.
* Currency of any form. Even if Facebook's mobile app offered FB Credit purchases, it wouldn't be allowed to do so through IAP.
* Rentals. Pre-determined-time-limited content access is disallowed for IAP.
If one were to look at all of the materials that Apple has published on this, this primarily seems focussed around downloadable content, not around streamed or "rented" content, and certainly not around non-app goods or services.
Yes, Last.fm, Pandora, Netflix, Hulu and the like are in a bit of a grey area right now, but I strongly suspect that they will come out in the clear on this because they essentially "rent" the content to you; you can't download it and keep it—they're probably not eligible for IAP in the first place. On "The true cost of publishing on the Amazon Kindle"[1], I have a comment that outlines the exact sections[2] with paraphrases of the text involved.
I also have a comment[3] on "Why are you people defending Apple?"[4] that talks a bit more about who this hurts, namely reseller-distributors. Content owners are (for the most part) going to be ecstatic about this if they offer the content for sale directly.
First, the guidelines have been changed in the past. That's one of the issues everyone has with Apple's behavior - changing the rules. So let's not take the guidelines as the final arbiter.
Last.fm, Netflix, Pandora, Hulu and so forth are on the platform. They are not "essentially 'rental'" as you argue. They are subscription streaming services. They clearly "read or play approved content" as mentioned in the guidelines.
Content owners are _not_ ecstatic. They don't want an Apple-only marketplace. They want multiple healthy resellers.
Rules and guidelines have been changed for every marketplace in history as it finds its way around. Sometimes these changes are good; sometimes they're bad; sometimes they're neither.
Apple is trying something that I don't personally like (extending the rules to Amazon &c.), but just arguing that this is bad because Apple's changing the rules is a non-starter. Rules change. Sometimes they hurt people who were banking on a strategy that was based on the old rules. This is visible in pretty much every human endeavour. (The banks didn't like the rules that instituted the FDIC. They bitched. The rules were still changed.)
Last.fm, Netflix, Pandora, etc., are essentially rental in terms of IAP rules; you have time-limited access to particular content (with Last.fm and Pandora it's even more time-limited than with Netflix, since you have no real self-direction over the songs that are played per the web radio rules in the U.S.).
The guidelines aren't as clear as they could be, but as I said elsewhere, I'm pretty sure this isn't about access as much as downloadable content.
There's probably a reason they went through middlemen. Not every content company wants to handle the distribution. They could simply have done so before. Was using PayPal that much harder than this new system that they weren't willing to touch it despite it offering much better margins? I doubt it.
and the like are in a bit of a grey area right now
And how long til Apple wants a piece of their pie too? I don't mean this as FUD, I'm serious. Apple has shown, repeatedly, a willingness to fuck over developers by changing its rules to suit Apple whenever the fuck it wants. Sure, some of these are marginally, arguably, better for the customer, but not to the point where it justifies screwing over the developers. For now, iOS is mostly where the profit is. But is it worth putting up with Apple's whims every few months, seriously?
If you're talking about the new subscription fee, that is false (or at least Apple has not given any indication that it will be true at any time in the near future). You still have to distribute the content yourself. The 30% cut is essentially a referral fee.
By "distribution", I meant creating the app, marketing it, setting up downloads for the content, etc. That's not covered by this payment system, but it would be by a middleman.
If content owners are going to be ecstatic about offering IAP for a 30% fee, why does Apple need to force them? Won't they just implement it on their own?
App Store rules are not a legal system. They reserve right to reject you for any reason they like, including attempts to bypass spirit of their rules. They have humans judging every case.
Indeed. In fact Apple can reject for abiding by the spirit of the rules if they simply don't like you or feel you're a threat to them. Don't think that even if you follow their rules, even in spirit, that they don't reserve the right to screw you over. You're in their house and they can make the rules, as they go along.
Exactly. That means that an app that wants to offer a "rental" can continue to do so via an in-app link to another purchase process, and does not need to offer the same service (for the same price) in a way that Apple can get 30%.
The value proposition is pretty similar. Let's be honest. The chance that a kindle book is going to still work in 100 years is vanishingly slim. Might be unworkable marketing-wise, though.
I can understand Apple wanting to increase revenues. And even getting a bit of the subscription pie. But this whole thing seem wrong. It feels like Apple didn't really look at the whole ecosystem to see the ramification. Or that they did, but are overly confidant in their platform and reach to be able to force subscribers into this model.
Perhaps they're hoping that this will force some of the subscription businesses off their platform, forcing people into whatever services Apple can give through subscription (iBooks, music). And then the businesses that do remain can actually pay.
In the short run, I can't imagine users would care very much if they could only get their books from apple and not amazon, and it would probably help Apple lock in users. But, lock-in and anticompetitive behavior probably don't make for a good experience from the user's perspective in the long run... So, maybe they have a different angle.
It's one thing if Apple provides a competing service to Netflix, Hulu, Rhapsody, et al. (And may be accused on monopolism.)
The thing that boils my britches about this is that Apple DOESN'T have a competing service. When the services leave, the iPhone is left only with iBooks and iTunes, both of which are expensive and not very good.
I agree, but I also don't think it would be impossible for Apple to have their own hulu/netflix like service, after all, you can already buy some videos through itunes.
I think this will only be bad for users, but not bad enough to force masses of people to leave. There will always be a cost to leaving Apple behind (both psychological and monetary), and if Apple had to invent their own services to replace those that left, I think they would be more expensive and maybe not quite as good as other products, but they wouldn't be so bad as to force people to leave their iphone, which still has many fun/useful features that don't have subscriptions.
I think the only businesses that are in danger of leaving the apple system would be: Music streaming, video streaming, and books, and I think Apple would be able to provide their own in house replacements for those that left (for better or for worse).
In Apple's mind, iTunes and iBooks are competing services to Neflix, Hulu, Rhapsody, B&N eReader, Kindle eReader, except that iTunes and iBooks have less features or less content or worse experience or no streaming. They are all ways of providing access to view/read/listen to digital media from content producers. Right now, you may not view iTunes and iBooks as competing services because both are available on the same platform and provide different ways of accessing digital media.
Apple currently has to allow these competing services to be made available through their platform, either to make the platform more appealing to end consumers or because of worries of anti-monopolistic concerns or because Apple isn't comfortable with denying these.
That could be a thought, or goal, of theirs, to push content creators to their platform instead of through Amazon and Rhapsody middle men.
Users will and won't care depending on several factors. I can imagine that hardcore Amazon Kindle users will be pissed that they have one less platform to read their books on.
The Kindle syncs books and your position in the book between devices. It's a value proposition that's hard to beat. Even if you have the same book on your iBooks I think users will get pissed that they have to search to find where they finished reading it on their other devices.
In this scenario, if you have the Kindle app installed on your iPad, and if you buy a subscription to something, you can do that from your kindle, your ipad, your computer, whatever. Kindle is cool that way.
Apple is saying, hey, if you do it through the ipad kindle app, we expect 30% of the subscription fee from the publisher. AND the publisher is not allowed to offer cheaper prices to off-ipad purchases.... so the only logical move for Kindle is "umm, okay, we'll stop providing a kindle ipad app and we'll take our customers elsewhere"
Leaving only the Apple-provided bookstore to handle subscriptions.
They don't want people using their platform to launch recurring-revenue models for content and then not get a piece of the subscription pie.
The point is that creators already have to deal with worse than 30% scalping when dealing with other distributors of their content. For example, Activision/Blizzard has the infrastructure to sell/distribute games from their own website, however, when they also sell those games through a big retail distributor like Walmart, they have to give Walmart a huge cut (I'm guessing more than 30%) to entice Walmart to sell that game through their stores. Now, Activision/Blizzard cannot sell the game for 10% less than the retail price from their own website (at least, not initially) because otherwise, Walmart says to Blizzard/Activision "If you don't sell the game from your website at the retail price, we won't sell your game through Walmart."
Even though it's a negotiation, it's mutually beneficial to the content producers and the distributors.
The game Apple is playing is that they want to take the same cut from content distributors as they would from content creators. It's a gutsy move by Apple because those content distributors are already taking a cut by reselling content from content creators. They wouldn't be willing to do this if they weren't also making an aggressive push to be a content distributor of all digital media.
"In the short run, I can't imagine users would care very much if they could only get their books from apple and not amazon, and it would probably help Apple lock in users."
Have you had any actual users actually tell you this?
Everyone has heard of Amazon, everyone knows Amazon has lots of books, everyone knows Amazon has pretty competitive pricing, and most people who would consider buying an iPhone or iPad have probably also heard of Kindle. Having one device that can read Kindle books and also do a lot of other stuff is part of the current value proposition of iOS devices. If that goes away, it will inform the buying decisions of people in Apple's target markets very quickly.
Just imagine the next Walt Mossberg reviews, comparing Android and iOS devices, pointing out that you can read all your Kindle books on Android, but no longer on iOS. That's not going to immediately affect sales?
Heck, much of Apple's target market may already be hearing this news and taking it into consideration before deciding to buy an iOS device, because they are consulting their geek friends about the decision.
I know you said you think this will happen "in the long run", but I think it could affect Apple's sales much more quickly than you expect.
Selling subscriptions is too broad. There's been a lot of talk about music and magazine app requirements, but what about other business services? Chargify, a subscription billing service, offers an iphone app for its customers. Do they need to offer sign up in the app, and pay apple? What about TheLadders.com, or WeightWatchers?
A huge number of companies with an app and a subscription business model just got hosed.
I guess in the long run, most multi-platform content providers will simply have to offer two products: one with iOS support and a 30% surcharge, and a cheaper one that only supports open systems like the web and (plain) Android.
No one can afford not to support iOS. But on the other hand, no one will be able to charge 30% more than the competition on other platforms.
If Apple wants to charge 30%, fine, the companies impacted can just raise their iOS prices by 30% and pass it on to the customer. The higher cost of apps and subscriptions is not a tradeoff to buying Apple products. If customers see it as a bad tradeoff, they will by Android or WP7.
Instead, Apple is strong arming the content suppliers on their prices on other platforms. "make your price the same or less on our platform, or we will kick you off". That seems like the definition of anti-competitive. Why should Apple have any say what-so-ever on the price of pandora on Android?
If Google wants to pay Netflix and Pandora a fee so that their apps are bundled with Android phones for free, Netflix and Pandora could not take the money and give it away for free to users without getting kicked off of the Apple ecosystem. How is this not anti-competitive? Where is the FTC?
Isn't it rather an extra 42%? If Apple takes 30% of the one dollar I used to make, in order to make that dollar again I'll have to charge $1.42, as its 30% is $.42.
I was wondering if there might be a way around that rule by claiming that what you sold in-app was a different product from what you sold out-of-app (e.g. on your website), but I'm not sure it would really work.
E.g.
you sell the in-app "iPhone exclusive" version for $x
and the out-of-app "everything except iPhone" version for ($x * 0.7) and then provide a "works on iPhone for no extra cost" special offer.
If Spotify was called Spatify on the app store, operated by a company that's owned by Spotify, their product wouldn't have to match the pricing of Spotify products on non-apple platforms... and perhaps 'Spatify' could announce a deal that allows Spotify customers to use their product for free.
Then it just comes down to whether Apple follow the rules by the letter, or apply common sense and tell Spotify not to take the piss.
Possibly they could call the sub-company "Spotify Magic" (random example - but something that will show up in search results for "spotify"), or possibly they could just ensure that Spatify gets well enough known for people to search for its new name.
I suspect if any company did this they would put a lot more research and thought into it than I have for my two quick HN comments - I'm really just wondering what, if somebody took this approach, Apple's response would be.
They could but Apple doesn't have to accept them into the App store. They can easily say "these two companies are the same", and enforce the same rules on them.
It reminds me of the "lowest advertised price" policy, where a workaround is that you don't see the discount until you add something to the shopping cart.
But the market is. No company is going to charge 30% extra on other platforms - competition would eat them there. So at worst there will be a split into Apple-only and No-Apple companies, at least for commodity repackaged content.
Yup, when you start introducing countless rules like these topped with the tightly controlled procedure of approving/rejecting apps the whole iOS ecosystem just doesn't feel enticing (or easy) anymore. I can't believe that people actually have to put up with some dude sitting somewhere approving what apps are worth it and getting content via them will cost +30%. It's unreal, if content providers go on with this they'll pass the 30% down to user. How is that not a "tax"?
Kinda. Apple require in-app subscriptions prices to be the same or less than what the subscription costs if bought elsewhere.
A possible solution could be to offer a separately priced subscription for people who want iOS access in addition to what's normally provided, and then keep the prices consistent in-app and outside. But I'm not sure how Apple would feel about a solution like that, it would be the closest thing to an explicit Apple tax we've seen, and it directly hurts the consumer (which Apple seem to care more about than hurting developers/"app store-vendors").
I wish I had the balls to have mentioned this particular risk in my startup school talk re:music a few months ago. People probably would have thought I was being paranoid/delusional.
The subscription model is already pretty f---ed even without a Deus Ex Machina from Apple.
As an aside, what is the fist graphic in the posted article? I probably just don't understand the mark, but I interpret that kind of logo with revolutionary, "fight the power" kind of stuff and this is just corporate positioning, not revolution.
Given my brief scan of that article, there are too many possible associations for the meaning to actually be clear. It could be to do with politics - anything from accusing Apple of being Nazi's, Communists, Communist Nazis (etc) and then there's the racial overtones.
It might just be a call for Solidarity.
E.g. I don't like this, if I revolt will you revolt with me? [ ] Yes [ ] No.
You might be right about forbidden fruit, but Apples aren't mentioned in Genesis at all. It turns out that the first reference to the Apple in the Torah is this:
Friends
5 Who is this coming up from the wilderness
leaning on her beloved?
She
Under the apple tree I roused you;
there your mother conceived you,
there she who was in labor gave you birth.
It seems like Apple's MO now is to over reach on everything, and wait to see how much people push back. It actually seems like a real business tactic they're using now.
I am fine with Apple hosted content being at 30%, but when I have to do all the work for hosting and delivery, 30% is beyond reasonable.
I would even be fine if the rule said that an app developer can provide no link / no in app purchase unless it is through Apple. People using Amazon, B&N, Netflix, last.fm, etc. wouldn't of had a problem because they know to go to the website to buy stuff. The "must also" crap is the problem.
Maybe it will cause last.FM to shut down, or maybe if last.FM pulls out of the iTunes store, it will fuel iOS competition with Android. Or maybe it will fuel mobile browser app development. I like how the market will decide how this all plays out.
Yes, they can. They're just not allowed to link to their subscription page from within the app. If they offer in-app subscription purchases the pice of that offer should be the same or lower as outside the app:
"If you would like to make a subscription offer outside of the app, the same (or better) subscription price must be offered inside the app […]"
Some people misread this sentence as "you can't put a content app in the app store without giving money to Apple".
No, it means if you offer a subscription product, people have to be able to sign up for it through the app using Apple's subscription service. They can still let people sign up on their website, but they also have to let people sign up on the app, and they can't charge more even though Apple is taking a 30% cut.
What Apple is doing is worse than what credit card companies do. --At least with credit cards merchants can offer a discount for paying with cash.
No, it's fine. Section 5.11.2 of the Mastercard agreement notes that "A Merchant may provide a discount to its customers for cash payments". What is usually prohibited is charging an extra fee for paying by credit card.
The relevant text is in section 11, article 13 of the App Store Review Guidelines:
Apps can read or play approved content (magazines, newspapers, books, audio, music, video) that is sold outside of the app, for which Apple will not receive any portion of the revenues, provided that the same content is also offered in the app using IAP at the same price or less than it is offered outside the app. This applies to both purchased content and subscriptions.
I read it in the press release as being just about the price and not the fact that you _have_ to offer it. I guess I was wrong?
Of course Rhapsody [insert Last.fm] can't sell their stuff for a 30% margin. It's not their own stuff!
They're trying to be the last link in a chain of 90/10 (or more) splits. They repackage record labels' repackaging of artists' content. Do you think the artists would find 30% economically untenable?
The App Store is 70/30 because Apple can take things straight from content producer to customer. When the Apple takes the place of publishing, distribution, inventory, sales, payments and shipping, there's real value for that 30%.
When all someone wants out of Apple is merely to process the payment and send things down the pipe, gee, who do they think they are? But that's not what Apple is actually holding themselves out as. Apple doesn't want to be in that kind of commodity market anyway. Seems reasonable to me.
I'm tired of seeing Zach's comment reposted as if it's some sort of inspired gospel.
Apple is positioning itself as _both_ a platform for applications and services _and_ as a consumer service. The services offered by Netflix, Hulu, Rhapsody, Rdio and so on offer value consumers have time and time shown they are willing to pay for. These are services the content owners (artists), studios and labels do not provide or provide poorly. Claiming they simply "repackage ... artist's content" is misleading.
These services are increasingly cross platform, available on the web, mobile devices, internet connected consumer electronics, game consoles, etc. They add value to those platforms and can complete when the platform is suitably independent. Those platforms provide only a portion of the necessary infrastructure to run a consumer service. Purchasing, bandwidth, hosting, encoding, transcoding, metadata, social networking features, inventory and so forth are typically still maintained by the consumer service itself. They already have these services due to their web presence.
Apple tries to play the game both ways in an increasingly monopolistic fashion. Before you go on and start harping about Android, recall that Microsoft was convicted not because it was the only operating system (it wasn't) but because it used it's market advantage in the OS to restrict competitors in other markets (browsers). Apple is doing the same thing.
It's one thing for Apple to provide competing consumer services. It's another when they intentional block competition on their supposedly independent platform. Keep in mind, as a platform provider, Apple doesn't provide as many services as Zach suggests. They are little more than a payment services provider, though their rates and restrictions are completely out of line with the rest of that market.
Consider for a moment if Apple were to do provide the same APIs and restrictions on all of Mac OS. Applications can only be made available in the Mac App Store. Applications must use Apple's subscription and purchasing API and no other API for purchases. And so on. They have their own browser? Why not offer an API for web apps as well. It would be secure and user friendly.
"Apple takes the place of publishing, distribution, inventory, sales, payments and shipping... Seems reasonable to me." I'm sure it does.
Monopolistic? Apple is in no way a monopoly. They have 4% of phone market share. Do you know what a monopoly is? Because based off your comment I don't think you do.
"In economics, a monopoly (from Greek monos / μονος (alone or single) + polein / πωλειν (to sell)) exists when a specific individual or an enterprise has sufficient control over a particular product or service to determine significantly the terms on which other individuals shall have access to it.": http://en.wikipedia.org/wiki/Monopoly
So what product does Apple have a monopoly on? Laptops? No. Cell phones? No. Mp3 players? No. App store? No: https://market.android.com/
There are alternatives to Apple, you just don't like them.
Apple is a middle man, just like Wal-Mart, eBay, or Amazon who all charge for their service (selling your products).
If you don't like it, sell it somewhere else, but calling Apple monopolistic is factually inaccurate and intellectually dishonest.
Oh, and the reason I cited Zach's comment, is because the topic whether it's Rhapsody/Spotify/Last.fm/Pandora/Netflix still applies and credit is due to Zach for his spot on comment/analysis of the situation.
Actually, before you go putting others down, you should read about how this stuff works. It's highly dependent on what the market ends up being defined as. If you're talking smartphones, Apple certainly has more than 4%. MP3 players, again more than 4%. Tablets, again more than 4%.
And if you don't like the app store, Apple prevents you from selling it to customers through other means. So you can't exactly go somewhere else. Customers also just can't pick up and move to Android because of all the money they've spent on apps and content on an iPad.
Also, there's plenty of points that have been made as to why Zach's comment isn't necessarily "spot on" across the many times it has been posted. Many of them haven't really been addressed.
There are more Android phones sold than iOS devices every month. Apple doesn't have a monopoly on anything, however they do control/own their app store and they can refuse to sell whatever they want in it. If you don't like it then don't support Apple by buying Apple products, sell your apps on Android. Actions speak louder than words.
Also, Jaaron was much more condescending that I was: I'm tired of seeing Zach's comment reposted as if it's some sort of inspired gospel.
Now when you're trying to sell apps on those devices, and Apple wants to 30% of anything that is sold for those devices and intentionally blocks out perfectly reasonable businesses, that becomes anti-competitive
Edit: Btw, I have stopped. I just bought a DroidX instead of the Verizon iPhone. But that won't get me my $600 back for my iPad or the money for my iTouch. Or the money for the apps I've paid for.
Read my first comment again quoting Zach, it's pretty clear:
"Of course Rhapsody [insert Last.fm] can't sell their stuff for a 30% margin. It's not their own stuff!
They're trying to be the last link in a chain of 90/10 (or more) splits. They repackage record labels' repackaging of artists' content. Do you think the artists would find 30% economically untenable?
The App Store is 70/30 because Apple can take things straight from content producer to customer. When the Apple takes the place of publishing, distribution, inventory, sales, payments and shipping, there's real value for that 30%.
When all someone wants out of Apple is merely to process the payment and send things down the pipe, gee, who do they think they are? But that's not what Apple is actually holding themselves out as. Apple doesn't want to be in that kind of commodity market anyway. Seems reasonable to me."
Apple is giving them distribution, billing, discovery/advertising, inventory, shipping, et al-- 30% is a pretty fair cut I'd say, but hey if you disagree, don't support them.
And why would you expect to get your money back? You had no guarantee at the time you bought the Apps or iPad that the marketplace rules wouldn't changes, that's to be expected as nearly every marketplace's rules change frequently: see Amazon, eBay, etsy, Wal-Mart, whoever. I really don't understand your complaint.
Also, I'm tired of discussing this topic as it seems most people have already made up their minds on the issue regardless of the facts surrounding the situation.
Disclosure: typing on a Dell, I own a Blackberry and an HTC Aria, and I own a Macbook. I am agnostic to corporate entities, but I can step back and try to detach myself and be as objective as I can.
Yes, I've read the post several times, both the original and your many reposts of it. The trouble is is that it's not clear at all.
How does Apple do any inventory management or "shipping" given we're talking about digital goods? By having a counter for number of downloads? When have they ever done advertising or promotion the 99% of apps not lucky to be featured on in the ads? I'll agree they do some distribution and payment processing, but that's about it.
And I never said I had an expectation to get my money back. But when I paid money for hardware, I expect to be whatever I please with that hardware. I didn't pay $600 just to get access to Apple's app store on a 10" screen. I paid $600 to be able to take advantage of the capabilities of the iPad. Things like netflix and Kindle were a big factor in that decision (and honestly are some of the best things you can do with it).
Apple has blocked out any way of doing anything other than the app store, so it is a big deal. The fact that they sold me hardware doesn't entitle them to 30% of revenues from everything anyone wants to use that for.
|How does Apple do any inventory management or "shipping" given we're talking about digital goods? By having a counter for number of downloads? When have they ever done advertising or promotion the 99% of apps not lucky to be featured on in the ads? I'll agree they do some distribution and payment processing, but that's about it.
It's on their servers and using their bandwidth isn't it?
|Apple has blocked out any way of doing anything other than the app store, so it is a big deal. The fact that they sold me hardware doesn't entitle them to 30% of revenues from everything anyone wants to use that for.
Jailbreak it then, you have alternatives, Apple just doesn't have to support them. Your complaints are without merit.
And you were lecturing me for telling someone that they clearly don't know the definition of a monopoly when you're the one being the condescending asshole: Yes, I've read the post several times, both the original and your many reposts of it. The trouble is is that it's not clear at all.
Many reposts? I reposted it here twice, in reply to you and only because you clearly don't understand it and haven't given it any thought since you're still complaining about paying for something you have every option not to pay for.
No, it's not Apple's servers! The bandwidth for the app itself is small in comparison to the bandwidth for the content (streaming music or movies) which Apple does NOT host or help with at all.
And if you'd go back to the actual case law in the Microsoft case instead of linking to dictionaries and wikipedia, then maybe you'd realize the case law is more applicable than expected. The market can be defined much more narrowly than "smartphones" for the purpose of anti-trust.
How does using their servers mean they're doing inventory and shipping? I'm not understanding how it's possible to pay UPS to ship an app. Do you think anyone would have an issue if Apple just wanted to be compensated for that piece of hosting it on their servers?
You and I are not the average person. I can jailbreak, my parents cannot. Jailbreaking then voids the warranty, which is a part of the money I paid.
And when I do jailbreak, exactly how will that enable me to get Netflix, Kindle, Last.fm, Rhapsody back?
|Do you think anyone would have an issue if Apple just wanted to be compensated for that piece of hosting it on their servers?
When did Apple, or Google for that matter, because non-profits? Your argument is illogical.
Their hosting and bandwidth is the inventory, distribution, and shipping aspect. They also provide: discovery on their app store browsed by millions, billing, marketing, advertising, and promotion. The 30% is because there is real tangible value in the service Apple is providing. If you don't like it--WebOS, Android, Blackberry, WP7 are all available to you.
Edit: Thanks everyone, I wear the downvotes with pride because some of hive-mind on HN can't think outside the ridiculous anti-Apple jealousy. Whatever, if you're downvoting me for presenting facts you don't like but not responding-- you're a coward and a sheep.
As I've said before: I'm using a DELL laptop right this moment, a Blackberry in my pocket, an HTC Aria on my desk, and I have a Macbook at home. I'm agnostic to corporations, but this hyperbolic anti-Apple jealousy/rage is nonsense and hypocritical at best. This Apple hate is blinding many on HN of the reality.
If anyone wants to reply to me, please don't. I'm done discussing this and I'm not even an Apple fanatic, my next phone will most likely be a WP7.
But here are some comments I thought were actually informative:
Unsustainable? How about 'normal retail practice'? It's funny watching people froth at the mouth about normal retail practice.
I don't like Apple or how they run their business, but a 30% cut for a retailer is even be a little low. Go into a bricks-and-mortar store and usually 30%+ of the price you see is markup on the wholesale price.
Apple provide a service: they deserve to get paid for it. Even if Apple allowed apps to be sideloaded, you wouldn't sell anywhere near as many apps if you marketed them yourself, not to mention having to deal with organising a payment system and easy, integrated way of getting them.
App developers are the wholesalers. Apple is the retailer. If you want to be both a wholesaler and retailer for your app, then Apple isn't for you. Go to Android... but you'll find it's still better to give Google a cut and be on their market as well...
People love to throw around the antritrust word without--and this isn't necessarily directed at you personally--knowing what it actually means.
Does Apple have a monopoly on phones? Hardly. Look at HTC, Motorola, Samsung, RIM, Nokia, etc.
Does Apple have a monopoly on music? No. You can buy it from Amazon and elsewhere. Likewise you can use Grooveshark, Spotify, Rhapsody, Pandora, etc for different services depending on what country you're in. iTunes sure is dominant though.
Does Apple have a monopoly on ebooks? Hardly. Amazon is a far bigger player here. Amazon is not dependent on Apple as a means of distribution, although Apple devices are obviously important.
Does Apple have a monopoly on TV shows or movies? Hardly. You can buy DVDs from any number of places and downloads from the likes of Amazon. Content producers like Comedy Central, CBS, Fox and others also stream directly from their Websites (and they could do this in HTML5 if they wanted to, allowing them to be viewed on iDevices, but alas they still choose Flash almost exclusively).
So where exactly is the monopoly (virtual or actual) here? You can say that Apple is the only one who can sell apps on iDevices and you'd be right. So what? NBC is the only one who can broadcast shows on their stations. That doesn't make them a monopoly.
So unless someone can produce a cogent argument of how antitrust applies--and I've yet to see one--can we please stop bandying the word around like it has any relevance here?
This isn't to say that some Congressman or Senator won't speak out or possibly there might be a House or Senate hearing but that's really about creating the appearance of doing something rather than their being any justifiable basis for investigation.
I accidentally upvoted you. Sorry about taking away some of the pride.
The last time I looked into this, HN was a pro-Apple hive-mind, an anti-Apple hive-mind, a blatant Google fanboy den, a collection of privacy-minded individuals who despise Google with a passion, a bunch of Nokia haters, and pg all at the same time. Janus has nothing on us.
So much of the value they paint of the iOS ecosystem is in the apps - 'There's an app for that' was a large campaign last year. Yet they're now threatening to make a number of their more popular apps economically unviable according to their creators.
In-app payment will mean a new app, no? Which won't get approved if it contains a rant against Apple on that screen explaining the price hike they need to make it viable. Yet the current versions contain links to web-based payment, which would be relatively easy to update to include a page saying 'Apple are thieves' and explain why.
I'm well aware that many / most customers would see such a message, give a stereotyically teenage whatever reaction and move to a competitor, but a good percentage won't and we've seen how fast bad news travels now. Enough providers that customers value enough are now angry enough with Apple to try their luck at this, particularly with a competing platform available and growing without the same restriction, and I wouldn't like to bet on Apple winning this.