Epic v. Apple, Day 11
Nick Statt (tweet):
Apple spends about $50 million hosting its annual developer conference, known as WWDC, every summer. That is until the event, which has been held in recent years at the San Jose McEnery Convention Center, went all-virtual last year amid the coronavirus pandemic.
Elizabeth Lopatto (tweet, also: Adi Robertson, Leah Nylen):
The Steve Jobs line that Epic has touted — ”We don’t intend to make money off the App Store” — comes from these early days. At the time of this announcement, Apple didn’t know if it would make money, Schiller testified. He also suggests that the line was not a promise that Apple would not make money. The App Store was a “huge” risk, Schiller said. “We’re taking our hot new product and putting something we’ve never done before on it, and we have no apps yet! So we have no idea how this is going to do.” This is credible. What is less convincing is Schiller’s attempt to redefine what it means to “lock customers into our ecosystem,” a phrase that comes from a Jobs email entered into evidence earlier in the trial.
Look, “locked in” has an accepted meaning, and it’s not a very friendly one: prisoners, for example, are locked in. Schiller gives this the old college try anyhow, telling the court that the idea behind “locked in” was just to make services more attractive, so that customers wouldn’t want to leave.
[…]
Despite Schiller’s friendly demeanor, some of his testimony is a stretch. For instance, he says he doesn’t see mobile as a duopoly. He lists Samsung, Microsoft, Google, and Amazon as competition. The Amazon Fire phone was discontinued in 2015, as was the Windows Phone.
Schiller has also been speaking about Apple’s App Store policy to treat developers large and small the same, and his testimony has included some interesting little tidbits. Apple wanted to charge $99 for the App Store developer program to prove that an app that’s being worked on is “important” and that developers are “serious about making a quality app.”
[…]
On the topic of physical goods, Schiller said that in 2019, the App Store drove $400 billion+ in transactions like food delivery, Amazon purchases, Uber, and more, which are not subject to a 30 percent cut. According to Schiller, Apple does not take a cut of physical purchases because Apple can’t guarantee they will actually arrive.
I don’t think it makes sense to count purchases using the Amazon app as being driven by iPhone. Also, as I mentioned earlier, Apple can’t guarantee that digital purchases will arrive (or will not be withdrawn), either.
Schiller says the App Store 70-30 commission was better than the physical model and competitive for digital distribution.
Schiller says they anticipated competition for the App Store that might necessitate a commission reduction.
But of course… that did not happen! At least not until after the Epic lawsuit, when Apple dropped rate to 15% for small devs.
Was Epic’s lawsuit a factor?
“I would say it helped me get it done. I would absolutely agree it helped to get the program done,” Schiller says. “I wouldn’t say it’s why we did it, but it helped.”
Again, Apple keeps thinking of what happens inside third-party apps as part of Apple’s store. If this trial has accomplished anything it is making that crystal clear.
When it suited them - in Apple v. Pepper - Apple vehemently denied that they had any direct control over the sale of apps on the App Store. Instead, they said, they were akin to a “shopping mall”.
Phil Schiller gets asked about Roblox, which you may remember Apple’s earlier witness said was not a game.
“In my opinion, it’s a game,” Schiller says.
[…]
“Roblox itself allows a class of users often called creators to create games within the Roblox app, and those are added to Roblox and they’re released as content within the app.”
[…]
To recap: Apple is okay with iOS apps that allow access to many games, but only if those games are created by creators and not developed by developers.
Schiller: “Well, it’s a new type of app I think in the industry,” Schiller says. “It’s made up of multiple games, it’s not one game. And the idea of who creates them and what they’re for is a new phenomenon in our industry … it’s pretty new stuff."
Roblox is older than the App Store.
Claiming Apple deserves to get money from developers for implementing these features - which they use to sell iPhones + constantly plead with us to suport + undoubtedly make way, way more money from than we do - is downright obnoxious.
Apple: give us 30% of your money for inventing ARKit
Also Apple: please please please support ARKit
Previously:
- Epic v. Apple, Day 10
- What It Was Like to Sell Apps Online in 2003
- Roblox in the App Store
- App Store Small Business Program With 15% Fee
- App Store Monopoly Lawsuit
3 Comments RSS · Twitter
Phil: “We’re taking our hot new product and putting something we’ve never done before on it, and we have no apps yet! So we have no idea how this is going to do.”
Because a website where you could see a list of apps and then download them was really a first for Apple… Oh wait, no it wasn't. There was already a section of http://www.apple.com that listed and then allowed to download 3rd party app like what versiontracker did very well (until it got purchased by (cnet?)).
Again, Apple keeps thinking of what happens inside third-party apps as part of Apple’s store. If this trial has accomplished anything it is making that crystal clear.
For pure short term capitalists, this is the best of all worlds. Invest nothing into making an App. Take 30% off any revenue (not profit). Lock developers in so that moving to a new platform requires a rewrite (Metal vs Vulkan, Java/C versus Swift, different design requirements) and keep them busy by breaking backwards-compatibility. Further commodify your complement (software) by making APIs that let anyone compete with those that actually master some technology (OCR, AR, etc). Present this commodification as of great value to developers, and thus convince Apple customers that developers are greedy and ungrateful.
Long term, one would expect it to lead to generic cheap low quality software, and software distinguished not by quality but by branding. Developers which invest a lot of resources into the product will not survive. Better to spend the cash on advertising. But in the short term Apple rakes in the moolah.
Given that Apple is defending this model, and intelligent people work there, one has to assume that they know this. Thus, all really cares about is money: pay attention to people's deeds, not their words. It's not for nothing that they've become a 2 trillion dollar company. Don't think they're your friend, just because some of them seem friendly.
> Because a website where you could see a list of apps and then download them was really a first for Apple… Oh wait, no it wasn't.
That may be what we would prefer, but it's not a fair characterization of what the App Store is.
Setting up a long-term rent-seeking revenue source may have been one of the reasons they went with an App Store instead of a VersionTracker/Mac OS X Downloads/MacUpdate-style downloads directory, but I don't think it was the only reason. I think they genuinely thought the added safety and security ("I have a reasonable level of trust that this app is safe to install and remove") was critical to making the notion of installing software from the Internet less niche, and at that point, integrating payments makes sense.
(Yes, I'm well aware that payment providers like Kagi already existed, and I'm bummed that Apple is pretending they did not.)
