

Why every iPhone/iPad owner needs to read this. - zapdrive
http://blog.zapdrive.com/2012/10/why-every-iphoneipad-owner-needs-to.html

======
wtvanhest
1) Apple has widely publicized their policy on this.

2) Apple’s ecosystem is designed to create lock in and generate monopolistic
profits. This actually is the goal of all businesses until their market
becomes mature.

3) At the mature stage, businesses seek to compete on price and everyone’s
“economic profits” are lowered to zero.

I don’t know if storage is at the point where it can be offered at breakeven
at $20/year, but if it is, congratulations, you at least helped ruin Dropbox’s
“greedy monopoly”. That being said, you have little chance at ruining Apple’s
monopoly. You can decide to hurt it though by offering your product on Andriod
for $20/year, and Apple for $28/year.

You also gain the benefit of targeting the “right customers” in the sense that
Andriod customers are more focused on price, where Apple’s customers are more
focused on looking cool. (no offence meant for either group, just simplifying
for the sake of it).

I’d love to hear how you are able to gain such a huge cost advantage over the
other companies in this space.

~~~
zapdrive
We actually proposed this idea to the person from Apple who was dealing with
us, and although he said he can not "pre-approve" anything, but this seems to
be ok, and within Apple's guidelines:

1\. Users pay $19.99/year for 100 GB for a plan that does NOT have iOS access.
This is a PC/OSX/Android only App, that has nothing to do with iOS.

2\. Users pay $29.99/year for "100 GB + iOS Access" plan. The iOS app will
have an IAP for the "100 GB + iOS Access" plan, for $29.99/year.

3\. We wont offer the IAP for 19.99/year for "100 GB Desktop only" plan,
because that subscription can not be used from iOS anyways.

How are we offering such low prices? We have worked very hard to create very
efficient storage and compression technologies. We are not using a third party
cloud (S3), and have built our own cloud, ground up, which drastically reduces
the price. We are not offering much free space. According to our estimates,
upto 50% total space on Dropbox is used by free users. Basically, Dropbox is
"taxing" its paid users, to cover the charges for free users.

~~~
gte910h
Why don't you just do this then?

~~~
zapdrive
Yes, we are working on this. But being a startup, we will be really hurt by
this. No iOS customers are going to use our service. However, we would be
happy to lead the change. If this becomes a trend, and more and more companies
follow our footsteps, we would be living in a better world a few years down
the road :)

~~~
gte910h
>No iOS customers are going to use our service.

I think you oversell the price sensitivity of iOS customers. Once you're out
of 0.99 land, people will pay for things.

------
RShiki
> Its all over the Internet Explorer thing happening again. But with IE at
> least you could tell your users to download a better browser if they want to
> use your app. You can not tell your users, "Buy another phone to use our
> service!"

That's what I take from the article. People got up in arms in a way that was
much stronger against Microsoft during IE's early years and whining for
Netscape (who lost because they just made a shitty browser, it wasn't 100%
because of bundling IE with windows. Netscape Navigator 4 was terrible and
slow compared to IE.) much more than people do against Apple, even though we
could install an alternative browser, which is something you can't even do on
the iPhone and iPad (without a modern JS engine you might as well give up,
there isn't a single browser on iOS that is not based on the internal webkit
and a JIT-lacking javascript engine. There's the oddball, Opera, that does all
the rendering in their server farms, but they don't allow anything that runs
locally).

There were even talks of cutting Microsoft into multiple companies, one that
makes office, one that makes windows etc. Only people who have been around
during those years would know what I'm talking about, but MS was hated to a
point you couldn't begin to imagine in 2012, for something that wasn't even a
bit as bad as Apple post-iOS.

I can't believe the crap Apple gets away with, they are getting away with so
much that even Microsoft is now following their lead, Windows Mobile had far
less restrictions compared to Windows Phone and Windows 8 on ARM which are
both reactions to iOS rather than something MS thought of doing before the
tide that iOS (and Android) did to the smartphone market. Windows Mobile
wasn't open source, but the user was as free to install and use apps as they
are now with Android. It's not the case anymore, and there won't be anything
like Chrome or Firefox or (locally rendering) Opera for Windows 8 tablets on
ARM. Only on x86 and only because they know how much of an uproar it'd be with
current x86 users, because if they could close everything down and get away
with it, they would, which is why we should be as loud as possible to show
that we don't want this kind of future for our computing devices.

~~~
bryanlarsen
Apple can get away with this because they aren't a monopoly. Their market
share isn't anywhere close to the 90% that Microsoft enjoys.

They temporarily enjoyed a 90% share of tablet sales, but that has since
dropped substantially. This is probably a good thing from Apple's perspective,
since if it would have stayed at 90% then they probably would have the DOJ on
their back for their monopolistic practices.

~~~
zapdrive
The problem is, the 33% smartphone market is 100% controlled by Apple. Nobody
can enter that market, unless they have Apple's blessing.

~~~
loumf
I also cannot set up a lemonade stand inside of a Walmart.

~~~
zapdrive
But you can setup a lemonade stand elsewhere and sell to people who buy at
Walmart.

~~~
loumf
You can sell your service to people that have iPads.

This is the fundamental question of what an iPad is. Apple would like it to be
treated as an extension of their store, and you want it to be like a Windows
PC. Any consumer that agrees with you is free to jailbreak -- your problem is
that consumers seem to have no problem with Apple's model -- they probably
don't understand it, but they haven't perceived an indirect drawback either.

Developers should have their eyes wide open about it by now.

So, the right thing, if your intention is to change their behavior is to not
support them. Don't buy it, don't develop for it, encourage others to do the
same.

The thing is ... everyone wants one and wants to develop for them.

~~~
zapdrive
No, we can not sell our service to people who have iPads without paying a 30%
cut to Apple.

Again, as mentioned in the article, we think there is nothing wrong with Apple
having an App Store and charging a 30% fee. What's wrong is, Apple forcing
everyone to use their App Store for distributing Apps.

"Don't buy it, don't develop for it, encourage others to do the same" - That
is the whole point of this article.

------
wingfield
Only offer sign-in in the app (with no option to purchase / become a paying
member). Netflix, Dropbox, Spotify, etc all do this, it's basically industry
standard. Boom, done.

I would have expected this blog post 2 years ago; the fact that you were
blindsided by this really doesn't give me a lot of confidence in your company.
Anyone who's developed for iOS would have been able to tell you on day one
that you're in serious gray-bordering-on-black territory with regards to IAP
policy. Yeah, it sucks, and you can't really do anything about it. So suck it
up and go with what everyone else is doing. Because so far, you've definitely
lost me as a customer.

I'm an iPhone owner and I know that 1)you have no qualm about charging me more
for the same service (apple's 30% notwithstanding) 2)you don't know much about
iOS development and 3)your dissatisfaction with the platform makes me doubt
your commitment to it in the future, and with data backup, I NEED to be
confident in my service's future as well as its support of my device.

~~~
zapdrive
Well first of all, you are totally wrong. Read my comment below
(<http://news.ycombinator.com/item?id=4642321>) to know how we are not in the
same category as Netflix, Spotify etc.

Second, We are not iOS developers. Our iOS app is just another "portal" for
our users to access their files. Hell, we didn't even use Apple's SDK, we used
PhoneGap to make the App.

Third, just like you, we were also in the illusion that we were not affected
by this policy, and by not linking to an external website we were within the
guidelines. Turns out, thats not true. (Read my comment linked above)

------
bunderbunder
So why can't this be worked around the way everyone else does?

Don't link back to your own website from the iOS app, and don't give end-users
any way to upgrade their account from the app. Have the app just ask for a
username and password to authenticate with your service, and require end-users
to go to your website in order to do any account management.

~~~
zapdrive
No, that's what we did. But it did not work. If you are thinking about Netflix
or Kindle App, 1.14 of the "App Store Review Guidelines" says: "Apps can read
or play approved content (specifically magazines, newspapers, books, audio,
music, and video) that is subscribed to or purchased outside of the App, as
long as there is no button or external link in the App to purchase the
approved content. Apple will not receive any portion of the revenues for
approved content that is subscribed to or purchased outside of the App."

So that applies to only magazines, newspapers, books, audio, music, and video
subscription/content services. "Cloud Storage" is not included in the list.
This is what was told to us by the Apple guy who we were talking to.

~~~
loumf
I use apps connected to pay SaaS services (Concur, SalesForce) -- the apps are
free with no IAP, but my company pays a lot for them. Yammer has pay services
and a free iOS app with no IAP. I think if you look for them, you will see
tons of apps like this that are the front-end to a SaaS service (not content)
-- why is yours any different?

~~~
zapdrive
Well, thats another thing we are exploring. If a third party developer makes
an App "ZapDrive Browser" using our API and does not link to the website, that
should be ok. Because, technically, they can not offer IAP, since they can't
do it in first place. Its like developers using Dropbox API in their Apps, as
long as they don't point to Dropbox, they are approved.

~~~
loumf
My apps are from Salesforce, Yammer and Concur -- not third parties. I would
bet there are 100's or 1000's of apps like this -- just look at the EMR space:
<http://itunes.apple.com/us/app/drchrono-emr/id363897223?mt=8>

Your way is another, but I think unnecessary.

You might have a bad reviewer -- collect 50 examples like the above and ask
why you are different.

~~~
zapdrive
Thats a good point you raise. But at the end, there is the ultimate reason
that Apple has: "Just because other Apps are doing this, does not mean you can
do this too." I think they have put "cloud storage" into a category, that has
to offer IAP. Since they made Dropbox and Google Drive offer IAPs already,
they expect every new entrant to follow in line. I am sure they will start
targeting other SaaS markets as well.

------
aaronpk
So, after reading the post, why does every iPhone/iPad owner need to read
this? That was never actually explained. ;)

-1 for inflammatory unrelated post title

~~~
zapdrive
It is explained, by buying an iOS based product, they are causing a loss to
consumers in general.

------
coolnow
This is it guys. We're not getting any crappier titles than this.

------
android4life
This is why I love Android. Gives the consumer more freedom.

------
bryanlarsen
Can you elaborate on your "100% safe and secure" claim? You appear to have a
"reset your password" link, which is a big red flag that indicates to me that
any data I store on your service is not private. To me "100% safe and secure"
means that if you lose your password you lose your data, because it has been
encrypted with the lost password.

~~~
zapdrive
Well, this is kind of off-topic for this thread. But anyways, the text you
quoted actually says: "No downloads or installation required. 100% safe and
secure!" That means, you are not vulnerable to any virus or trojans, as you
are not downloading and running some software to use our service.

~~~
bryanlarsen
That's too bad. Storing encrypted volumes on Dropbox is a PITA. I'd readily
switch from paying $0 to Dropbox to paying $20 to you if I could stop doing
that.

------
onetwothreefour
If you can't make your business work on $x * 70%, you can't make your business
work.

 _Every_ SaaS faces the same issue you have. And they (mostly) still offer
IAP. That's because you might lose the 30% on the first sale, but usually
renewals happen out of band.

~~~
zapdrive
What do you mean that we will lose 30% from only the first sale? If a user
subscribes using IAP, their subsequent payments will also be charged a 30% fee
by Apple. Won't they?

And its not the question of whether we can do business at $x * 70% or not. We
would love to give 30% to someone who actually brings a customer to us (we
actually have a 20% recurring commission for our affiliates). The question is
how is Apple entitled to that cut?

------
therandomguy
For IAP can you make it really hard for users to trigger it? For example,
"solve this puzzle to access the Pay button or go to mysite.com for fast
checkout".

~~~
zapdrive
I don't think that is something Apple would "approve".

------
tpainton
Fyi, google play store does not allow 3rd party collection of in app Billing,
if you use google play store. A clear market is mobile app distribution

------
teilo
How can anyone be developing an app for iOS and NOT know that their only
distribution channel (aside from jailbreaking) is the App Store?

~~~
zapdrive
a) we were not developing for just for iOS. Our service is not an iOS only
App. Our iOS App is just a tiny part of the whole package.

b) We knew App Store was the only channel, we also knew paid apps have to pay
30%. We, like many other people here, just were not aware that cloud storage
apps were required to pay a 30% fee too.

------
executive
victim mentality devalues your product

~~~
mladenkovacevic
$20/year for 100GB? Victim or not that is pretty amazing value.

