[iandev]

I honestly have sympathy for the case he makes. I don't take issue with the way that Apple has restricted the ability to get apps on an iPhone. The problem is the 30% cut that they take in the app store. I think the system can largely stay the same, but they're clearly profiting from the cut they take. It's not simply recovering operating costs.

edit: I'm not saying that they're not allowed to profit. I just wanted to point out that the 30% isn't strictly necessary to run the app store.

[headmelted]

There's clearly merit to both arguments.

Is Apple making a fortune by not having a competitive marketplace for software on iOS? Of course they are.

The hardest aspect of this to defend, and it's obviously not a use case that Epic are going to push because it hurts their potential to profit from this, is blocking services like xCloud and Stadia. Those services aren't downloading software to the user's device, and much like Netflix, the user is accessing a content catalogue administered and provided elsewhere.

Epic doesn't want democracy on Android and iOS, it wants its own store on both devices so it has a competitive advantage over both companies everywhere (if I can buy an app or a game from Epic rather than Apple, and know I can take that purchase with me to other platforms like Windows/Playstation or even if I switch phone eco-systems, that's what I'm going to do as a consumer).

A ruling in Epic's favour would almost certainly get the Epic store onto games consoles, too.

Essentially it does boil down to greedy corporation vs. greedy corporation. Part of me hopes that Epic wins both cases if only to force Google and Apple to separate their income streams from the security model, but Apple's not wrong here. Most users wouldn't understand any of what I've just said and won't take the time to learn so they are a danger to themselves. You would also be trusting Epic to curate content to the extent that Apple does when they have no financial incentive to do so, which is IMHO why the Play Store is so full of garbage.

[periheli0n]

If Epic wins, then consoles are next, and the whole store business will be either in a race to the bottom, or there will be wild mergers with game companies buying hardware makers.

Fortnite was a 5bn/year game that made only 7% of its revenue on iOS, but much more on consoles. This is just a the beginning of a huge fight over a market that has grown incredibly huge, and Epic having realised that access to hardware is crucial to their further growth.

I mean, they could simply make their own, but perhaps that's more risky than suing Apple, Sony, MS for access to their platforms.

[headmelted]

I think what Tim Sweeney has noticed is what Steve Jobs realised (by his own admission) far too late.

The money is in the hardware but the value is in the software.

People will buy hardware thinking of that as their investment, without realising that the software is what extracts almost all of the revenue from them as a customer regardless.

Steve Jobs talking about this in 2007: https://www.youtube.com/watch?v=dEeyaAUCyZs

[justapassenger]

> If Epic wins, then consoles are next, and the whole store business will be either in a race to the bottom

As a customer and developer - yes please.

[wernercd]

I have issue with both the restrictions AND the cut.

Arguments are made along the lines of "don't like the app store? make a web app"... but because of the restrictions, you are limited to a second-rate Webkit base web browser with limitations on bluetooth, game controller support, etc.

Not only are the profiting an obscene amount for services available elsewhere (And arguably better services across the board for stuff like payment options, ad options, browser options, email client options, etc) but they are doing so BECAUSE the better options are restricted or limited on their platform.

This would be like if Microsoft not only forced you to have IE6 installed... but then forced you to have other browsers simply be an IE6 reskin, forced other companies to not advertise about alternatives and then took a 30% cut of all things installed on Windows.

The level of profit goes beyond simply making 30%... it's making 30% after limiting viable options and then saying "we offer this stuff because it's better than the alternative".

[cloogshicer]

Gotta disagree. I don't care about the cut, the problem is the fact that you can't install whatever you want.

[horsawlarway]

I'm with you.

Doesn't matter one whit what the actual cut is, there's absolutely no way to claim it's fair when you don't allow any competition in the space.

I won't buy Apple devices because you don't own that phone, you're just renting it from Apple. They own the phone.

[paulmd]

will you refuse to buy an Xbox because there is no competition for the Xbox store on the xbox? will you refuse to buy a Playstation because there is no competition for the Sony store on the Playstation?

(Microsoft is supporting Epic as well, yet argues that their own Xbox store should not have to open up either. Maybe that would be a good place for them to start?)

https://mspoweruser.com/epic-apple-app-store-xbox-playstatio...

it's always funny how Apple is the specific target of this rage and yet nobody makes such a fuss about these platforms, despite their exclusive control of developer freedoms on their own customer base... nobody gets themselves nearly as worked into a lather about the evils of Playstation, and yet these platforms are locked down even tighter than the iphone.

[maxsilver]

I guess it depends on what you think an iPhone is.

If you think the iPhone + iPad is basically a video game console, then yeah, you probably think Apple's rent-seeking monopoly is ok, because it's not much different than any Nintendo Switch or Sony PlayStation or similar. People generally live with those draconian restrictions, because it's understood to be subsidized by the exclusive titles, and arguably not of high importance (it plays games and media, it's "just for fun").

But if you think the iPhone + iPad is basically a computer/smartphone, then you probably think Apple's rent-seeking monopoly is evil, because it fundamentally breaks the promise those devices imply, and is wildly worse than any Google Android or Microsoft Windows device ever sold. These devices are considered "important", they get used for legal / government / business purposes, and not "just for fun".

So, is the iPhone/iPad a smartphone/computer? Or is the iPhone/iPad a video game console?

Apple's rocking the boat here by trying to have their cake and eat it too -- they want the sell something that is ostensibly a smartphone/computer device, but they want the monopoly control and legal treatment as if it were a video game console.

> it's always funny how Apple is the specific target of this rage. nobody gets themselves nearly as worked into a lather about the evils of Playstation

I mean, people really did get "worked into a lather about the evils of Playstation" too. Notably, for a hot minute, Sony positioned PlayStation 3 as a real smartphone/computer (and not just a video game console) with the release of their Linux setup, and Sony did get exactly the same heat Apple gets today when Sony restricted it, and then later killed it)

https://tedium.co/2020/11/27/sony-linux-otheros-geohot-histo...

[Google234]

smartphone =! computer device

[paulmd]

why couldn't the Xbox run, let's say, Office applications, if microsoft would allow it to? and why shouldn't it?

the reason it's a "video game console" is precisely because it's so locked down, is it not? why does that starting point of unfreedom justify continued unfreedom for xbox, and yet not for iphone?

do you not have a moral right to the free-as-in-speech usage of the hardware you paid for, when you purchase an xbox? if not, why not apply this logic to the iphone?

would apple's lawyers not argue, in the same sense, that an iphone is a phone first and foremost, a tool that runs a limited selection of utilities that people find useful in their daily life, not a general computing platform?

why should iphone be forced to become an open, general computing platform, if Xbox should not?

if the difference is subsidies, that xbox is being sold below the actual cost of hardware (debatable, but for the sake of argument) - is that not "dumping" (in the anticompetitive sense) to secure a monopoly and then enforce anticompetitive lock-ins in the software marketplace and keep their competitors out? How is that a thing that we should be backing, that hardware sold at cost must allow competitors and yet hardware sold via anticompetitive dumping should be allowed to lock out their competitors?

the logic you very quickly come to is that this suit is actually not about freedom at all, it's about publishers who want to bypass app review so they can siphon data without apple interfering to protect their users, and to bypass the revenue cut so they can substitute their own. Because these publishers have no interest in the freedom of their own users at all, and took the exact same revenue cut themselves until the day they filed the lawsuit (and will raise their fees back up a year or two after the lawsuit is concluded).

again, if Microsoft and others were being forthright, it would be easy for themselves to open up their hardware for third-party app stores. The Zen architecture has great support for encrypted memory virtualization, this is extremely low-risk. They most certainly will not do that because - unlike revenue cuts - that's not a change they can go back on in a year or two once the lawsuit is concluded. Once they open pandora's box they can't close it again, and they have no real intention to actually open it. They will argue for the lines to be drawn exactly where it conveniences them while inconveniencing apple - that xbox is a "console" while iphone is a "general purpose device".

it's merely a convenient argument to exploit pro-software freedom advocates and anti-apple sentiment in order to lever open Apple's fortress while maintaining their own, not actually an honest argument. Tim Sweeny of all people is not actually making a good faith argument here, nor is microsoft.

It’s effectively going to destroy all the permissioning and security that defines the ios experience, for no real gain besides letting Facebook siphon a little more data. They’re going to do the exact same thing they’ve already had their hand slapped for doing, and this time Apple won’t be able to do anything, it’ll be “if you want to use Facebook then side load this and give it full permissions, btw we’re revoking the ability to use the website for iOS users”.

https://arstechnica.com/gadgets/2019/01/facebook-and-google-...

[horsawlarway]

You're out here explicitly arguing for a read-only world.

A world where every person is regulated to the position of "Consumer" and no one has the ability to create.

A world where you're taught to read, but the second you think of picking up a pencil to write, you're breaking the law.

----

No one I know from the software freedom camp is absolving those other companies of violating your privacy or selling your data, but the two issues are orthogonal. You can solve one without having to have the other.

---

Want to know something interesting though? Smart phones are the primary computing device in the majority of global households (Not a laptop, not a desktop - a tablet or phone).

No one gives a flying fuck about xbox because xbox is a niche product for rich Americans and Europeans. It's sold a whopping 200 million devices across all generations (original, 360, one) compared to the 2.2 billion iPhones Apple has shipped.

[josephcsible]

> will you refuse to buy an Xbox because there is no competition for the Xbox store on the xbox? will you refuse to buy a Playstation because there is no competition for the Sony store on the Playstation?

Yes. The locked-down-ness of consoles is exactly why I game on a PC and not on them.

[ksec]

>it's always funny how Apple......

This has been explained multiple times. Xbox is a specific gaming platform. iPhone is a general computing platform. Where all kind of business from different industry ( Not just Games ) using Apps ( or anything connecting to the internet ) are relying on it in the modern society.

[mcphage]

> Xbox is a specific gaming platform. iPhone is a general computing platform.

You've got it backwards—the only reason the Xbox is a gaming platform and not a computing platform is because Xbox doesn't want to allow other people to sell software on it. It's a distinction without a difference.

[Google234]

iPhone is not a general computing platform, its a phone. They don’t advertise it as a general computing platform.

[ksec]

It is used as one, where multiple business sector interact. Not just Gaming, aka Xbox.

And one would have a very hard time to argue if iPhone was just a phone, in court or not.

And those who downvoted couldn't understand the difference as Appliance or platform based whether multiple industry interacts.

[macinjosh]

I agree, if a user could check a box saying they are OK leaving Apple's walled garden they should be able to install anything they want on their device. This provides a path around the 30% cut as well.

I think Apple's point is they think users are too dumb to handle that and they don't want to take any chance of user ignorance reflecting poorly on them or their product experience.

[websites420]

> I think Apple's point is they think users are too dumb to handle that and they don't want user ignorance to reflect poorly on them or their product experience.

And I sympathize with this argument, which is why I propose calling the outside-the-garden toggle “Developer Mode.” Apple already has “Pro” phones and headphones. This is just an extension of that.

So when the user toggles the Developer mode they get a dialog box that says we can’t do refunds or offer support until you turn this off, which will delete any 3P apps.

[macintux]

My concern is that once Apple offers it, various companies will tell their customers they have to enable it to install their apps, and customers will do so and blame the fallout on Apple, regardless of any disclaimer.

[taylodl]

There's a couple of things Apple can do to dissuade companies from taking this route:

1.) Suspend the device warranty. The warranty on your device is suspended while in "Developer Mode" or whatever it is they want to call it. They can make switching over to "Developer Mode" go through various prompts to make sure you're okay with what you're doing.

2.) When launching the app that's not from the app store they can popup a warning informing you that this application was not obtained from the app store and therefore wasn't inspected by Apple. It may contain malware that dames your device or compromises your data.

3.) Periodically popup a window for a running application that wasn't obtained from the app store. If you leave the app running then maybe you get a daily reminder that the app is still running. Maybe you can get an activity report of sorts for it to - so you can see what the app has been up to.

4.) When disabling "Developer Mode" then list all the applications not obtained from the app store that will be removed from the device. Those applications will be removed when disabling "Developer Mode."

I think there's a way to do this that protect's everyone's interests and allows Apple's customers to make informed choices.

[ascagnel_]

The Xbox consoles have a model that could be followed here that would be interesting:

> Xbox retail consoles can have two modes, Retail Mode (1) and Developer Mode (2). In Retail Mode, the console is in its normal state: you can play games and run apps acquired through the Xbox store. In Developer Mode, you can develop and test software for the console, but you cannot play retail games or run retail apps.

https://docs.microsoft.com/en-us/windows/uwp/xbox-apps/devki...

[eigen]

step 5: Register an app developer account in Partner Center.

[trdtaylor1]

This would align well (Some in Apple may say too well) with the Right To Repair movement.

[macinjosh]

Couldn't Epic, et. al still have an issue with this? I would see them argue that putting this behind a developer mode is still too restrictive and 'unfair.' Most user's wouldn't know what developer mode implies and Epic would have to have a list of instructions on their install page to show users how to enable it. That is not a small barrier to entry for many users. Not sure what my opinion is, just thinking out loud.

[kevingadd]

There are alternative App Stores for Android that put up with this, so it's at least better than nothing. If the store requests 'install app' permissions it pops up an allow/deny prompt, which isn't too user-hostile. Apple could do that.

While Epic is suing Google right now, it's mostly for anti-competitive measures other than this, like threatening phone vendors to stop them from bundling Epic's store.

[ksec]

Same here. Not exactly "not" care, in the case of unfair / anti competitive treatment. But in the grand scheme of things I am mostly fine.

I have a problem with Apple dictating their World View on me. May have been fine if they were apolitical during Steve Jobs era. But modern days Silicon Valley does not allow anything to be apolitical.

[ridaj]

Technically I think it's possible to install whatever you want: as part of the developer program, you can pay the dev fees (which you might not care about, if you also don't care about the cut) and run whatever you want to build, and my understanding is that you can install binaries off-app-store with enterprise certificates. It's just a lot more tightly controlled.

[thebean11]

Having to compile the software yourself (then periodically recompile when the license expires) is way too big (small?) of a hoop to jump through imo

[jolux]

You can actually sideload to iOS without a developer account these days.

[NegativeLatency]

Not exactly and easy process though

[Jcowell]

You don’t need to pay anything to use the Dev Tools. You need to pay to distribute on the App Store. You can develop and put on your own device.

[ProAm]

There are three legs to the problem, 1) 30%, 2) TOS 3) Monopoly on app distribution to IOS

If any of those pillars fall I think Apple is off the hook here.

[oauea]

Don't you mean all?

[throwawaygh]

I could see the argument that reducing the cut is still anti-competitive, especially because it's easy to show how the TOS harms both competition and the consumer.

But if they allow alternative distribution channels, that would make the anti-trust case a lot more difficult both in actual court and in the court of legislative opinion. I have no problem with a 30% cut if alternative app distribution channels are allowed (a la Android).

[ProAm]

I think Apple will have good legal grounds to stand on if they get rid of one of those, and will garner a lot of customer goodwill. Right now it really looks like Apple does not respect both their customers and third party developers at all which comes off has pure greed.

[throwaway9980]

"they're clearly profiting"

This is the purpose of for profit corporations.

[croon]

And the purpose of a market is to force for profit corporations to compete with other actors. Sometimes this requires regulation when a one or a few get too large.

[manicdee]

No, that is not the purpose of a market at all.

And no, competition doesn’t mean participants are forced to deliver better value for money.

And no, industry won’t regulate itself.

We need regulation to force market participants to participate in a way that even remotely resembles “fair”. The default mode of operation for suppliers in a market is “extract maximum value.”

[plater]

That's maybe fine, but right now there are only two options, Apple with iOS or Google with Android. They can control pricing, the can control what is there and not, they get all the user stats, they decide what the apps can do and not do etc.

Is this it? We are stuck with these two forever?

Many have tried and huge firms at that, to create an operating system and app store for phones, like Microsoft with Windows and Samsung with Bada (and I think they had another OS too). And you can't say they have no resources, money, marketing channels etc.

Who will manage to break this duopoly and when?

I think the only real chance is that web apps/PWAs get up to par with native apps. It's getting there, but Apple is also blocking this with limitations in their Safari browser (and the iOS version of Chrome (which apparently on iOS is just a wrapper around Safari) so also there they are hindering development).

[Google234]

There are many variations of Android. It’s not fair to lump them all together

[iandev]

Should have clarified that it's not an issue that they're profiting. It is sometimes implied that they _have_ to charge 30% to run the app store. My point is that the app store could exist without the 30% charge.

[luxuryballs]

and is the reason why I am typing on this iPhone right now

[mattgreenrocks]

Smaller shops/indie devs can qualify for the Small Business Program, which reduces Apple's cut to 15%.

[kevingadd]

This program does not 'reduce apple's cut to 15%'. Under some circumstances, Apple will reduce your cut to 15% for a given year. But if those circumstances cease to apply your cut jumps back up to 30% for that year AND the next year. For products that you buy once and use forever, this can mean that a small business has a great "launch", earning over the threshold for that one year, then stops earning much the following year but still has to pay 30% for both of those years. This might look like '$1 million per year' in income, but what it actually means amortized across two years is '$500k/year before apple's 30% cut', which once you consider taxes and the cost of employee benefits (insurance, etc) is about enough to pay 3-5 salaries.

Note that Apple could have designed it not to work this way - they didn't, they chose this more complex system because they're greedy and want 30%. This program really only benefits lifestyle businesses and businesses with like 1-6 employees. A more "honest" program would be "15% on your first million dollars per year" which would achieve the goal of helping small businesses and be simple.

Also note if your income is largely being passed on to third parties (processing transactions for charities or individual small businesses), this eats into both your margins and the profits of the companies you're passing the revenue on to. The only solution for that is for every customer to create their own developer account and upload bespoke apps for themselves - something Apple prohibits under current policies.

[mattgreenrocks]

Good info, thanks!

[ulimn]

I think something like 15% default and 5% for small companies would be much better for the services they provide.

App Store compared to Play Store regarding discovering apps is still much worse in my opinion.

I think it’s one of the biggest gripes I have after I switched to iPhone.

[bagacrap]

Without robust* competition, how can you put a value on the services they provide? They wrote an entire, very successful, platform, upon which someone's business depends. They employ an army of engineers that are probably more highly skilled than the average app developer to keep this going. They've even done the hard work of attracting almost all the consumers who spend money freely to their platform.

Auction houses such as Christie's take up to 25% for a similar service (connecting sellers with affluent buyers), although one that's probably far easier to replicate.

*robust meaning low switching costs, but it's hard to imagine how one could have low switching costs on smart phone platforms

[IncRnd]

> Auction houses such as Christie's take up to 25% for a similar service (connecting sellers with affluent buyers), although one that's probably far easier to replicate.

When you want to place an item up for auction, there are more auction houses to use than only Christie's. That might be why their price fixing scandal was discovered in 2000.

[ulimn]

I understand all that and if I wouldn't like the core of the concept, I wouldn't have switched to the Apple ecosystem.

But they also get money if the software for their hardware is easy to find and browsing the App Store is a fun experience instead of getting the same "few" apps. (No wonder apps like AppRaven exist.)

If the App Store was a different company unrelated to the hardware, I think it would be a different story. But since it's all tied together, it's like their own Sales platform.

[ChrisLTD]

Imagine also having to buy a $1,000+ ticket to be able to bid in a Christie's auction.

[dash2]

What’s wrong with them making a profit? I don’t think that would be a powerful argument in this case on its own.

[kevingadd]

Apple has made the argument in court that a given app can be essential for work or education, so customers have no choice but to acquire that app any way they can.

On that basis and others, while I think it is appropriate for a company to make a profit, there has to be a thing as "too much".

Apple (according to evidence in this case) currently earns like 20 billion USD per year off the 30% cut. To me, this is absolutely more than necessary, and while it's not exactly the same as how the cost of insulin has gone from $0.05/unit in 1991 to ~$0.30/unit presently, apparently apps are essential, so it's worth asking just how much it's reasonable for Apple to skim off the top. In the end, the cost of that 30% fee will get passed on to the customer one way or another, and Apple allows that to happen as well.

[dash2]

Ok. But consumers aren’t forced to purchase an iPhone. They could pick Android. Presumably they are considering the whole package when they make that decision, including the tradeoff between app expense and app reliability. I certainly tried Android and went back, for reasons which included that the Play store seemed to have a lot of junk and not much good stuff.

[kevingadd]

If my mom buys an iPhone and then finds out two years later that it was a mistake, at that point she probably has a bunch of apps she'll have to re-buy on Android (Apple gives developers no way to offer cross-buy like this), and she may need to switch providers for things like e-mail or messaging if she was relying on Apple's email service or iMessage. This creates a lock-in effect because not everyone can afford to drop a bunch of money to leave the walled garden.

I think in general people like you or me are savvy enough to not get harmed by these Apple policies, but court cases like this are about protecting everyone.

[dash2]

This could be true, but is there any evidence for it? I have a ton of apps. Very few cost more than $5. Most were free, though sometimes with a paid-for service (e.g. Dropbox, Evernote) - which I would still get if I changed platform. If I claimed this lockin wasn't a serious problem, could you prove me wrong?

[ProAm]

Its not that they are making a profit is that users have no choice, and no choice but to give them 15-30% for no value add (arguable). It's a racket.

[esyir]

Their choice is to buy an android device. The phone market is not a monopoly unless you limit the market to only Iphones, and that's ludicrous.

[periheli0n]

How many users spend more than a tenner on paid apps? Not many... but Epic made 300 000 000 a year on iOS alone selling in game items. What value is epic selling there?

Epic is targeting kids with Fortnite and its their money that they're after. Impulse- and vanity purchases, much more than anything else.

Whereas, when buying a paid app, one usually gets real value. At least as I see it. But maybe this means i'm old :D

[kevingadd]

If you're going to argue "most users don't spend more than ten bucks", how do you explain Apple earning 20 billion USD per year off the app store? 20 billion USD divided by 10 dollars is 2 billion customers. But Apple only pockets 3 dollars of that 10, so it's actually 20 billion divided by 3 dollars - around 6.6 billion customers.

Do the math.

[periheli0n]

Law of skewed distributions. A few apps, like Fortnite, generate huge amounts of revenue for the App Store (and for Epic in this case). Most apps are actually free or ad-funded and don't generate any revenue for Apple apart from the 100 bucks dev fee.

So it's fortnite and a bunch of other apps that make those 20 bn. Again, Fortnite alone made 300 M a year for epic, and 150M a year for Apple.

Actually I'd bet that the largest part of the revenue is generated by in-game purchases. Too easy to trigger addictive gaming with simple tricks like intermittent reward.

[kevingadd]

Game IAPs definitely have skewed distributions, but I think the exact numbers have significant impact on arguments made about how much of a cut Apple deserves or how much total profit is reasonable. If you're making arguments about that I think you need at least basic numbers to support them, and those numbers aren't here.

Apple and Epic both have those distribution numbers, and I wish those showed up in the trial. The distribution is going to vary wildly from app to app, and games like Fortnite allow you to earn currency in-game. While I know they are skewed from personal industry experience, any claim from me about the actual average would be complete speculation.

[IncRnd]

That's not true. There are repeat customers, so you probably mean app sales not customers. Even that isn't true, since there are in-app sales that go through Apple.

[kevingadd]

OK, so you're arguing customers spend <= 10 dollars per app on multiple apps. How many apps? These arguments are being used to make the case that Apple deserves to earn $20 billion USD per year, or even must. I think if you're going that far you should be able to at least support that with napkin math instead of hand-waving.

[varvar]

Don't you know, we're supposed to martyr ourselves for humanity. Profits bad.