Apple Should Align Its Corporate Behavior with Its Stated Values

Article Comments
21

I have the minority view. I think that Apple created the iPhone, iOS, and the App Store, and should be allowed to run it the way they want. Perhaps they should lower their 30% cut, but I don’t think that they should be forced to by courts.

There’s justification for the no-steering rule. Apple doesn’t charge for apps that are free to download in the App Store. If it were not for the no-steering rule, any app could just be free in the App Store, and then direct user to pay for it elsewhere – and then Apple wouldn’t get their cut. Which again, you may argue the merits of whether Apple deserves a cut, but it’s Apple’s store and they make the rules.

What developers such as Epic want is like if I walked into a Walmart or Target and put a bunch of my products on their shelves, with notes that say “Just take, walk out of the store, and pay me for it directly at www.stiff-walmart.com.”

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22

No. Apple always gets their cut.
That free app developer you mention needed to buy a Mac in order to develop iOS apps. That’s where Apple gets their first cut.
Then that free app dev needs to pay Apple $99/year every year for the privilege of gifting the App Store with their work, the free app. That’s another cut Apple gets.

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23

There is a vast amount of expensive infrastructure and development that goes into the public APIs and documentation developers need, the Xcode development environment, the App Store itself (massive data centers that require huge ongoing expenses), hundreds or thousands of developer-focused employees, credit card fees, international tax calculations, and much more. Paying $99 per year and buying a device or two doesn’t begin to address the per-developer cost of all that work.

Long ago, being a developer was a far more expensive proposition, requiring developer accounts that cost thousands of dollars per year, and WWDC was similarly expensive. I think it’s good that Apple has vastly lowered the cost of entry, so you don’t have to be rich to become a developer, but it does affect the business model.

As others have said, the App Store is anything but a free market. It’s a highly controlled market, with all the advantages and disadvantages inherent in that.

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24

I don’t think anybody is arguing that. The point was to refute the incorrect to claim that “Apple wouldn’t get a cut”. They clearly do get a cut and they will continue to do so.

Now if that cut is sufficient to cover their App Store cost or if it should be, is an entirely different question.

I will state that if devs stopped developing for the App Store, the ecosystem would likely collapse and iPhone would have no future. Hence, these days (not historically, but now certainly), it is not unreasonable to consider that Apple providing tools for iOS development and running a market place for curation and distribution is simply their marketing expense to ensure that devs keep developing so their ecosystem stays attractive and healthy. Sales of iOS devices in 2024 garnered Apple ~$90B in profit — I’d argue such marketing expense is thus quite well spent money.

25

But that’s not what Apple does. Apple has never made a dime off my Netflix subscription, for instance, which I established decades before the App Store existed.

With the “external linking” privileges Apple established (that the judge ruled against) Apple did want to take a cut of any external purchases for one week after the customer left the app, but that is a customer that was discovered via the app (i.e. the customer saw the product at the mall and the mall owner wants a cut even if the customer bought the item elsewhere). Similar, but much more limited than what you’re describing.

(I also think Apple’s plan was nuts, but it wasn’t meant to be a valid system. It was meant to cause so much friction no developer would use it, and it worked.)

26

And that’s exactly why Apple deserves a cut…they’re paying for the store. 30% is too much…but 0% is too little.

Since Google and MS do essentially the same thing…it’s either legal or illegal for all of them and Apple should not be singled out. Most users and devs would probably happily pay 10% to eliminate the hassle and cost of running their own payment system.

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27

Apple from the beginning always believed it knew best – that often led it to great achievements (especially under Jobs). It’s also gotten it into trouble at times (“You’re holding it the wrong way”) and this is a pretty classic example. Trying to play silly games with a judge is almost always going to get one into deep water very quickly and it seems to have here (especially the Apple exec who may have perjured themselves).

Having said that, these conversations about Apple as bad actor frequently (and do so here) elide the interests of consumers and developers, with the interests of the latter being taken to be the interests of both groups. That seems to me to be badly wrong. I’m a consumer and I don’t care if developers feel trapped in Apple’s ecosystem. I don’t care if they have to pay a cut of their revenues to Apple for access to the store. I don’t care if Apple’s vetting process for apps is sometimes arbitrary and slow-moving. My sense – from things like brand favorability ratings and rebuy preferences – is that the vast majority of consumers similarly don’t care.

I do care that the App Store has made installing software incredibly easy. I do care that software prices have dropped massively since the App Store premiered. I do care that there is a (if imperfect) safety check on the apps I can download.

I care about things that affect me as a consumer; I’d rather not be recruited against my will into a technical and legal discussion between Apple and its developers.

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28

I’d suggest that Apple already includes its corporate behavior in its marketing whenever it trumpets its greenhouse gas reductions or uses of recyclable materials. That’s fine, but if Apple wants consumers to think more highly of the company because of these actions, it’s appropriate to point out that consumers should also consider that the company is acting like a bully in its relationship with developers and like a spoiled child in its dealings with the courts.

And I do so with the hope, likely futile, that Apple will clean up its behavior so that marketing itself as a good corporate citizen would be accurate across the board.

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29

The “not getting drafted into an argument” point applies as much to Apple as it does to developers.

30

@glennf echoes some of what I’m saying over at Six Colors.

@John_Gruber also covered this from a similar perspective at Daring Fireball.

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31

I agree completely, but the one aspect of this controversy that does affect me as consumer is in buying digital media. Amazon, for example, can’t offer Kindle books via in-app purchasing if there’s a 30% Apple commission involved as that would consume Amazon’s entire profit (Amazon is the middle-man to the publisher and only takes a 30% cut they’ve have to give to Apple).

Now that Amazon can legally direct kindle users to buy Kindle books on the web, it makes getting books much easier (though not as easy as using iOS In-App purchasing).

But even this is changing, though only on a case-by-case agreement: I recently was able to buy an Audible audiobook with In-App purchasing, so Apple and Amazon have negotiated some kind of a deal where Apple takes a smaller cut. I haven’t seen that in the Kindle App yet, but maybe that’s coming.

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32

I’m sure the developers (or their employers) care, because they set the prices and Apple takes a cut from there.

Most users, on the other hand, couldn’t care less. They pay a price for a product and don’t care who gets what percentage of that price.

When I buy a pack of toilet paper at a retail store, I don’t care how much of that cost goes to the store, vs. the manufacturer’s profit margin vs. the salaries of the employees working in the factory. I simply look for the best price.

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33

Not surprised to be aligned in thought here! I didn’t like the “27% solution” they had come up with, but I was surprised about how bad I felt after reading what they did in private (according to the judge’s order). Big sea change for us all.

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34

Sure, and I agree that that affects me as a consumer. But viewing it without the prism of “Apple’s failing to make the world better!” turns it into a minor annoyance rather than an earth-shaking revelation about the immorality of the six-colored pomme.

I have a 2018 Honda Accord. Honda decided – probably for financial reasons – not to have an HVAC vent in the back seat area, which means when someone is back there, you have to crank the heat / cold up to massive levels for their comfort. This causes the front seat occupants some problems. They are being blasted either by hot or cold air on its way to the back. It’s quite annoying and I wish Honda hadn’t done it that way. I do not, however, think it worth an anguished and lengthy conversation over many web sites about how Honda is Turning Evil.

35

Another bit from Daring Fireball on treating developers as partners, not suppliers.

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36

Apple doesn’t provide those things so the App developers can make money. They provide those things so that apps will exist for their devices. Otherwise nobody would buy an iPhone. It’s absurd to claim that Developers somehow “owe" Apple for providing those things.

Indeed.

Great article.

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37

At the iPhone announcement, Apple said nothing about third-party apps, and at WWDC in June 2007, Steve Jobs was pushing Web apps.

Who knows if Apple had a different plan than Jobs said all along, but there was developer outcry at the time, and it took until October for the company to reverse course and announce an SDK.

And that was after Apple sold 1 million iPhones in 74 days, which was huge at the time. So it’s not at all clear that native apps and an App Store were necessary for the success of the iPhone. Obviously, the App Store changed things tremendously, but it was only one of the ways things could have gone.

38

We’re not talking about 2007. We’re talking about 2025. Android exists. Smartphones are a category.

True or false, Apple cannot continue selling iPhones without providing developers tools to write apps?

And for that matter, true or false, Apple added native app tooling for developers so that it could sell more iPhones?

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39

Well, it’s a bit more complicated than that.

Back in the “old days”, Apple sold developer tools (compilers, IDEs, documentation, etc.). As did everybody else. And there were third-party developer tools for those who didn’t like Apple’s tools. Many here will be familiar with terms like MPW, Lightspeed/THINK C and Code Warrior - the major commercial developer kits at the time.

At some point in the 90’s and early 2000’s, with the rise of major open source projects, including Linux and its development tools like the GCC compiler suite, users started using free development tools. Initially on various Unix/Linux platforms, and later on everything else as different teams ported those tools to other platforms.

By the time Mac OS X was released, everybody, including Apple was using these free tools (initially GCC, later Clang) with custom tools (IDEs, UI editors, etc) built around them.

By that point, there was really no option but to give away the developer tools for free, because most developers had gotten used to free availability of high quality tools. Apple knew that if they would charge money for the developer tools, most developers would simply use third-party tools, which (rightly or wrongly) Apple assumed would be of inferior quality.

By the time iOS came around, the die was cast and Apple would never consider charging for developer tools and docments.

Apple would lose most of the market if they started blocking third-party software. But I don’t think that’s the same as if they would resume charging money for developer tools.

As long as there is suitable documentation, there will be third-party developer tools, and therefore there will be third-party apps developed with those tools.

Of course, many developers may decide to leave the platform on principle. But it’s all moot, because it isn’t going to happen. The entire software industry worldwide relies on free developer tools and that isn’t going to change any time soon.

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40

But I’m pretty sure you literally cannot do what used to be possible: use third-party tools to build the software. I’ve read enough developers complaining about being forced to buy a Mac in order to release software on iOS, that I’m pretty sure it’s true.