"You're Apple's customer and Facebook's product" is often repeated but completely true in this case. It's all about incentives.
Apple makes money by selling more products which means they innovate by making Watches, Earpods, M1, etc. Facebook makes money by selling your attention and data, which meants they innovate by extracting data from every experience they can (Oculus, Whatsapp, ...), using more complex technologies (Facebook AI), and encouraging whatever behaviors create more ad spend (hint: outrage).
Add in the fact that Apple has made privacy a core part of their brand promise and it means that Apple has strong incentives to protect their customers in a way that most companies, especially Facebook, do not.
Also, you literally are Apple’s product to their iOS developer ecosystem, in the sense that developers fork over 30% of their revenue to Apple for access to you.
On one hand, it's argued that Apple has an incentive to act against their customers because they want to sell apps on the app store.
On the other hand, it's argued that Apple doesn't care about their developers because they enforce draconian regulations on what iOS developers are allowed and not allowed to do, and don't hesitate even to shut down billion dollar apps (i.e., Fortnite).
I have mixed feelings about Apple's walled garden, both as a developer and a user, but when it comes to user privacy, I'm firmly in Apple's camp. I can't think of a single other large tech company that has a strong stand in favor of user privacy and acted on that. Basically, if Privacy is a killer feature for a consumer, then Apple is literally the only game in town.
We just need to look at how they handled the San Bernadino shooting and requests for a phone unlock to find a supposed "lying dormant cyber pathogen".
Every other company would have been falling over themselves to unlock a terrorists iPhone.
Apple said no, hired Ted Olsen, and litigated (along with lots of other less well known cases).
This may have even hurt them in some consumers eyes (hard to understand them protecting someone who killed a bunch of people). So the PR risk was very significant.
So they do seem to have a pretty committed consumer focus (and now make money because of that).
It is virtually inevitable though that someone will go after them (anti-trust etc) because this is a game of billions and folks who for example do in-game loot boxes (fortnite) and marketing (facebook) etc are going to be in regulators ears and in ny times ads and op-eds calling for this horrible situation to be broken up.
> and don't hesitate even to shut down billion dollar apps (i.e., Fortnite).
It's fairly obvious that, given Epic was saying "you can pay $2 less to get the same amount of vbucks" that Apple was going to lose a huge portion of revenue from the App if they didn't pull it, and if they actually left it up, they'd have to allow every other app to institute third-party payment processors as well to not appear like they're playing favorites and the PR nightmare that would come from that.
I'm saying that Apple was going to get shafted on payments and making money from Epic anyways if they left it up because Epic was charging $2 less when paying directly via a card and bypassing in-app purchases.
No, that's not right. The app is the product, the customer is the buyer of the app, and the split of revenue is 70/30 (or 85/15 for small devs).
Saying that developers are "buying" users makes no sense. Devs are not a customer of apple. If anything, devs are a supplier to apple. Since the net money flow is from Apple to Dev.
On the other hand, devs wouldn't be able to sell to iPhone users if there was no iPhone, or no App Store, or the appleid.apple.com identity verification system, or iOS 14, or anything else that is paramount to devs even having those users as customers in the first place. In this scenario, the iPhone is the product and the App Store is a feature of the iPhone, and the fact that it moves money around (or doesn't, most of the time) is irrelevant.
Now, the legal view of Apple's ecosystem is being litigated right now. What I posted above might be how the court sees it, or what you posted might be how the court sees it. We won't get a definitive answer until either Epic or Apple go home with the key to processing payments on iOS and all of the other systems that are effectively an iPhone with a different form factor (eg PS5, xbox series).
Whether you consider the developers a customer of Apple paying for distribution, or a supplier to Apple who takes a cut, is ultimately a semantic distinction. But the conflict of interest it creates — that Apple retains a monopoly on how software is distributed to a device that you ostensibly “own” and sets rates to optimize for their own gain - is the case regardless of the semantics we use.
(I’m not entirely opposed to this arrangement; I’m typing this on my iPhone. But I bought it knowing and accepting that I’m partly the product)
If this is true about Apple, it is true in any retail situation.
It’s not what people mean when they say ‘you are the product’.
What they mean is that if you aren’t paying, then the company is only interested in retaining you as a user so that they can satisfy their actual customers.
When you are paying, you are the customer
It’s also true that iOS developers are customers of Apple’s distribution service.
Buy Apple’s users are not a product in the sense that anyone uses this phrase.
This is absolutely true. Both companies play the game of selling customer acquisition. But we seem to be generally more okay with middlemen squeezing a two sided market. Sometimes. If it’s DoorDash or Amazon then public opinion seems to go the other way.
But regardless it’s not Facebook’s value prop to business that people have an issue with but ya know, how they actually deliver it.
No, devs don't buy customers from apple. Customers buy apps, and Apple takes a commission. No money flows from Developer to Apple (apart from to 100$ annual fee if you want to be anal about it).
No they buy access to customers. You can't sell to Apple's customer base unless you give them 30% of gross. The world where Apple charges that 30% commission to the devs after the sale or collects it from the customer during the sale is irrelevant. We fork over a lot of money to Apple for the privilege of selling to their customers.
Well, you can't sell peaches to Walmart customers without Walmart taking a cut either. But we don't say the peach growers are buying customers from Walmart, do we?
I think that nowadays most profitable software is cross-platform and is also available on other platforms, thus their developers see access to the iOS market as added value rather than their primary customer acquisition channel.
I disagree. Apple's incentives is to make everybody that has an iPhone pay for apps instead of using advertising supported apps, essentially making things more expensive for the customers.
You can think of it as a common. Blocking tracking essentially is a destruction of a bit of commons; the app developer will get less revenue. By systematically encouraging this block, Apple is making it comparatively less worthwhile to have an ad-supported app instead of a paid app, thus moving revenue to the app store (where Apple can tax it) instead of the advertising side (where it is monetarily free for the user.)
If we really wanted to find out what is right for the user[1], the correct thing is to see if users want to buy their way out of tracking. Offer the apps with advertising with tracking, with advertising without tracking, and without advertising - at different prices, representing the value of the advertising and tracking. My bet is that a majority of users would not want to pay the cost of non-tracked advertising - either they'll want to buy away advertising (and that will only be a small fraction) or they'll want the free variant. Basically, all data I've seen indicate that most people don't want to buy their way out of advertising - it's too expensive. I expect the same applies to tracking.
[1] Under the assumption that we've got an efficient market and will see an equilibrium of development that correspond to value created.
It seems people can do just that now on the new iOS. The app is free to switch off / charge for features if the user is not allowing tracking. Don't know how this works together with GDPR though.
Google had the advantage that their service was separable from the physical devices using it.
I doubt you would be arguing that, if Apple bricked basically every iPhone in China, it would be evidence that their "incentives are aligned with their customers".
Being a separate device, as you said, means the phones would still work independent of Apple.
The Chinese government would block updates and sales, hencecustomers would blame them, not Apple, because Apple was incentivized with customers instead of the government moving forward.
Basically everyone with an iPhone uses an Apple ID. It is certainly not hyperbole that the devices usability would be very severely impacted without access to Apple's servers.
Facebook users (at least a portion) seem to be incentivized by having a large, free social network. It is the advertisements which make it free to consumers. Facebook's monetization strategy may not align with your tastes, but most people have not problem using free services with ads. That said their customers over time are going to want to preserve more of their privacy and advertisers are going to expect the same effectiveness, Facebook is going to have to figure out how to please all parties.
Apple makes money by you being trapped in the Apple ecosystem.
Everything in it is structured around forcing you to pay Apple for access to things you want. Microtransactions, apps etc. All of it must go through Apple and they must have a cut of everything.
You can say they're more honest because they're taking your money up front as opposed to facebook selling you to advertisers, but I don't think it's in Apple's customers' best interests to be milked like cows
That's true for the time being, but considering Apple has a stranglehold on the app store and are therefore facing anti-competitive questions, they are maneuvering from an entirely different anchor point.
It's in Apple's short-term best interest to win over public opinion. It not only cools down anti-competitive rhetoric, but it also helps sell phones.
That's a wrong view. Customer in app market is the buyer of the app. Both Apple and devs are suppliers who each take a split. (Devs supply app itself, Apple supplies infrastructure and supporting services.)
Tell me more. So what would the nomenclature for the actual revenue generating side. I guess more generally, in a two sided marketplace is there specific verbiage for each “customer”?
I don't know, I'm just using common sense really. Look where money flows.
First the money flows from from end user to Apple, and then from Apple to developer.
The simplest way to model it is as a supply from dev to apple, plus a value-adding supply from apple to end user.
People here are arguing it is a supply from end user to dev, plus a supply from Apple to dev. That's obtuse way to model it IMO. Then again those are the kind of people who probably devising tax avoidance schemes and making big bucks so what to I know.
Apple makes money by selling more products which means they innovate by making Watches, Earpods, M1, etc. Facebook makes money by selling your attention and data, which meants they innovate by extracting data from every experience they can (Oculus, Whatsapp, ...), using more complex technologies (Facebook AI), and encouraging whatever behaviors create more ad spend (hint: outrage).
Add in the fact that Apple has made privacy a core part of their brand promise and it means that Apple has strong incentives to protect their customers in a way that most companies, especially Facebook, do not.