
Rethinking the App Store - amaajemyfren
https://stratechery.com/2020/rethinking-the-app-store/
======
supermatt
I am of the opinion that the only fair option is to allow 3rd party stores
with the same permissions as the official app store.

Apples curation isn't (as they suggest) preventing malware, theft of
information, etc - this if verifiably false given recent history with apps
like tiktok stealing clipboard content. The ability to change content of
payment screens post-approval (as epic have just done) also means that
curation isnt stopping apps from potentially injecting phishing, etc, either.
In short, they are just choosing what they like - just as any 3rd party store
could do.

The security comes from the sandbox (and surrounding permissions) - not from
the curation.

Jobs originally said that the aim of the 30% was to cover costs of running the
store. It is evident from the MASSIVE profits that this is no longer the case.

The size of these app marketplaces (I dont just mean apple) make them markets
in their own right - its about time they were recognised and treated as such.

~~~
dkersten
I agree with this. The only winners in the current situation are Apple. By
opening it up to competitor app stores, yes competitors would benefit, but so
would developers and so would their users. The App Store as it stands has
completely stagnated to the point where it’s useless to me outside of actually
downloading or buying an app. It’s been years since I’ve been able to discover
new apps though it, now relying for devs to link their apps directly, YouTube
videos talking about apps or websites with app lists. If I go in the App Store
looking for something, unless it by chance happens to be in their top list, I
can’t find anything I don’t already have a link for or know the name of, at
least on iPad. If I click on a category and press “show all”, they show me
maybe ten or twenty apps in total. Out of thousands.

By opening the platform to other app stores, developers will benefit due to
choice and competition on fees and descoverability, end users will benefit
from encouraged innovation, Apple will be forced to compete on convenience or
features instead of letting it stagnate while they collect buckets of cash...
it would be good for consumers and the ecosystem.

Microsoft got into trouble for bundling a web browser, where they didn’t
directly make money, Apple should get into trouble for the App Store, where
they do directly make money due to their artificial lack of competition.

~~~
nemothekid
> _The only winners in the current situation are Apple. By opening it up to
> competitor app stores, yes competitors would benefit, but so would
> developers and so would their users._

It's hard for me to reconcile this, and I keep seeing that 3rd party app
stores would be better for users, but it all seems very handwavy. You would
think this would be an easy point to prove as Android has had alternative app
stores for years, but there seem to be no winners there. I'm not sure how
having to download app specific app stores (i.e. Epic's app store) is better
for anyone except for Epic.

~~~
AnthonyMouse
> You would think this would be an easy point to prove as Android has had
> alternative app stores for years, but there seem to be no winners there. I'm
> not sure how having to download app specific app stores (i.e. Epic's app
> store) is better for anyone except for Epic.

Let's start with one point. Third party stores don't have to be popular in
order for them to be beneficial, because their _existence_ causes the dominant
store to take competitive steps to avoid their attaining popularity.

For example, you can install actual Firefox on Android, from Google Play,
instead of it being nothing but a skin over the system browser like it is on
iOS. Because if they didn't allow actual Firefox in Google Play, it would
still be in F-Droid or similar, and that would make the competing store more
popular. Since they don't want that, they allow it in the default store. Then
the default store remains dominant, but only because it does beneficial things
like that as a result of the competitive pressure. And third party apps can
send and receive SMS on Android and various other things that Apple doesn't
allow solely because it pushes people to use Apple's apps instead and there is
no competitive pressure from other stores pushing Apple to allow those
competing apps in their store.

But more than that, the other Android stores are actually useful, they just
tend to have a niche. Because people are still going to use the default store
unless there is a reason not to, since it's lower friction. But the other
stores still get to address the cases that the default store fails at. So the
fact that they exist _at all_ is proof that they're doing something useful,
since otherwise who would sustain them?

> I'm not sure how having to download app specific app stores (i.e. Epic's app
> store) is better for anyone except for Epic.

I mean, the fact that they're not paying Apple 30% and then passing most of
that savings on to the customer is obviously going to save the customer money.

~~~
LexGray
> then passing most of that savings on to the customer is obviously going to
> save the customer money.

I see no evidence of Epic passing savings to the consumer in this scenario.
Unless by customer you mean stock holder in which case the fight is about
which stock holders get paid.

Edit: unless you are referring to a temporary PR sale where they were still
paying the 30% cut in many cases.

~~~
AnthonyMouse
When they introduced their iOS "store" which used a non-Apple payment service
they lowered prices because they weren't paying 30% to anybody. Which is
totally logical and profit-seeking in both the short and long term because
when you're making 30% higher margins, sacrificing some of them in exchange
for higher volumes will generally maximize profits.

------
nickflood
Note how many sources wanted to stay anonymous "for fear of upsetting Apple".

Apple knows they can end businesses with the click of a finger. That's what
they tried to do by ending the dev license for Unreal Engine. And Apple wants
everybody to know that they know. I'm almost certain that the Unreal Dev
license revocation is a result of a similar email chain as what happened to
Kindle - [https://www.macrumors.com/2020/07/31/emails-apple-blocked-
ki...](https://www.macrumors.com/2020/07/31/emails-apple-blocked-kindle-
purchases/) \- execs just thinking of a way to punish the company.

This, for me, is the biggest monopoly argument. Too much business success is
hinged on Apple being happy, and they start to abuse this power more and more
by tightening (the interpretation of) App Store rules like requiring in-app
purchases etc.

IMO Epic is not the best company to challenge Apple in all this, but in
American judicial system Epic may be one of the very few companies that can
afford this lawsuit.

~~~
throwaway13337
Epic isn't the hero we need but the hero we deserve.

I can certainly imagine a lot of companies are tight-lipped about it.

My livelihood depends on an app store and so I'm super cautious about what I
say publicly about the company that controls it.

This sort of chilling effect is scary and should rightly be contested.

Epic is criticized for being a huge company themselves and using that as
leverage in their legal battle. However, small companies stand absolutely no
chance so Epic is the only one that can take this fight.

Epic is the champion of all the smaller businesses with apps on phones. Not
because Epic wants them to do well but because Epic wants Epic to do well.
They'll just happen to help all of us - consumer and developer - with them.

I'm rooting for them.

~~~
nickflood
Me too. I think, Epic is uniquely positioned also because it is privately
held. As such, its actions are more representative of what Tim Sweeney thinks
is right instead of the investor mob. And to me as a developer Tim Sweeney
seems like a pretty good guy similar to Carmack in many ways.

~~~
fartcannon
Tim Sweeney's position on Linux is pretty indicative of his character. He'll
bitch and moan about Microsoft and Apple locking things down, but refuses to
support a true open platform. He's in this for money, pure and simple.

Carmack, by comparison, is a saint.

~~~
jonny_eh
Sweeney has principles, but one of them isn't supporting a platform with no
chance of it paying off the investment needed to support it.

------
AriaMinaei
One idea I don't see discussed is that the App Store model is a disincentive
for Apple to come up with better sandboxing and security.

Apple is in fact uniquely positioned to introduce a better sandboxing model.
They control most of the stack, crucially the CPU and the build toolchain, not
to mention the PL. They could, were they not so reliant on the App Store
auditing process, make it less likely for people to develop malware and
privacy-invasive software, by building better abstractions around processes
and IPC, through eg. virtualization and capabilities [0].

That, of course, would take away the main raison d'être of App Store, which is
a significant money-maker for Apple.

[0] [https://fuchsia.dev/fuchsia-
src/concepts#fuchsia_is_designed...](https://fuchsia.dev/fuchsia-
src/concepts#fuchsia_is_designed_for_security_and_privacy)

~~~
threeseed
Any chance you can dispel with the meaningless buzzwords ?

"Abstractions around processes and IPC" does not reduce the number of malware
and privacy invasive apps. And who knows what "virtualization and
capabilities" even means in the context of iOS.

It has been limiting and securing access to APIs/data that has been
responsible for improving the privacy and security of iOS. For example warning
about use of clipboard, per-use permission dialogs for contacts/photos/etc and
randomising identifiers.

~~~
AriaMinaei
You are being incharitable in reading the comment. Sandboxing and capabilities
are buzzwords now? And meaningless?

I'm happy to explain more if you frame your question (for which you seem to
already have an answer) less combatively.

------
willvarfar
I'm divided.

As a programmer, I'm as happy as a pig in mud in the low-level innards of my
computers and operating systems, and like that I can get at them etc. That's
why I have linux on my desktop.

But 'open' systems don't work out well for 'normal' users. Remember the
viruses and trojans and instability and all the rest of the Windows days, or
Android?

I want my parents and friends and everyone else to use an iphone because its
hassle-free and secure.

Do we really want 'unlocked' iphones? Actually, the idea of having to help
someone who wants me to 'just look at the iphone and work out what's wrong'
scares me.

~~~
Sargos
>Remember the viruses and trojans and instability and all the rest of the
Windows days, or Android?

The era you are referencing was two decades ago and those problems stemmed
from development processes that didn't take security into consideration since
it was mostly written in pre-internet days and worked well in that
environment. Once Microsoft took security seriously things got better. Windows
is -still- an open platform where you can run anything you want and you don't
see rampant viruses/trojans etc. It works very well now and still has the same
openness properties as before.

Android has security issues just like Apple but it's never been a huge
problem. The fact that you put Android in that sentence makes me scratch my
head a bit. Android is on the same level as iOS on pretty much every metric.

~~~
LexGray
Originally the carriers were terrified of app stores because there would be
cell network hacking tools and service disrupting network traffic. A vast
majority of malware on macOS now comes from pirate apps stores via torrents.
Much of the current App Store design is based on those concerns and the
current iOS sandbox is still a long way from preventing those abuses.

------
nodamage
This quote is relevant:

 _The problem for Epic — and, I suppose, for me — is that to this observer it
seems exceedingly likely that Apple is going to win this case, last night’s
decision notwithstanding. Current Supreme Court jurisprudence is very clear
that businesses — including monopolies — have no duty to deal with third
parties, and if they do choose to deal with them (or are even compelled to),
that they can choose the terms on which to do so. The only exceptions are if
the monopoly in question changes the rules in an unprofitable way with the
express purpose of driving out a competitor, or if any company — not even a
monopoly — changes access to after-market parts and services._

Current US antitrust law does not favor Epic in this matter. Of Epic's ten
claims, their strongest claim is probably the one tying in-app payment
processing to app distribution services, but even that one is far from a slam
dunk. And even if they were to succeed on that particular claim, the likely
outcome would be that they would get to keep their payment system in Fortnite,
not that they would be able to run their own app store.

I think people need to temper their expectations unless the laws change in the
years it takes for this case to make it through the courts. A court ruling
that Apple must allow third-party in-app payment systems is a somewhat
realistic outcome, whereas a court ruling that Apple must permit third-parties
to run their own app stores is probably a non-starter.

~~~
DaiPlusPlus
> A judge ruling that Apple must allow third-party in-app payment systems is a
> somewhat realistic outcome, whereas a judge ruling that Apple must permit
> third-parties to run their own app stores is probably a non-starter.

I gather judges _really_ don't like to impose technical requirements -
especially in a fast-moving industry like this. Ordering Apple to make the
extensive changes required to allow for some kind of secure (as opposed to
insecure, like Cydia) third-party App Store on iOS would be a massive
undertaking that would probably cost the company north of a billion in total,
especially regarding testing and security point.

...whereas ordering Apple to simply allow what is already possible (namely:
permitting apps to collect payment details themselves through their own
processors) is a good path forward. How would Apple respond to that though? In
the event that Apple is required to allow third-party payment-processors that
skirt the Apple tax, I think it's reasonable for Apple to introduce some kind
of "app support fee" (beyond the annual $99/developer fee) - but Apple would
be hard-pressed to negotiate a reasonable amount of that per-app. Perhaps $1
per app-download per year? Interesting times...

I'm also interested in potential legislation regarding forcing Apple to permit
third-party web-browsers and other banned software categories - Apple's
technical arguments may have had some merit back in 2007-2012, but now that my
phone has more RAM and processing power than my previous laptop (which still
runs the infamously RAM-hungry Chrome 84 fine!) this isn't an argument that
holds water. I'd love to be able to run "real" Firefox on iOS, for example
(there is an argument about how Apple can only trust their own build of Webkit
to have executable memory pages for the JavaScript JIT - that's going to be
interesting). We should compare Apple to Microsoft of 1998: Microsoft was
convicted of monopoly abuse by simply bundling Internet Explorer with Windows
(granted, this includes integrating it into the shell too) - while Apple
doesn't just bundle Safari with iOS, they outright ban any kind of proper
competition - Microsoft was convicted for far less, so why should Apple be
given a free-pass?

~~~
nodamage
> I gather judges really don't like to impose technical requirements -
> especially in a fast-moving industry like this.

Yes, the court in the Microsoft appeal explicitly said this.

> Microsoft was convicted of monopoly abuse by simply bundling Internet
> Explorer with Windows

Not quite. As I explain in another comment
([https://news.ycombinator.com/item?id=24289455](https://news.ycombinator.com/item?id=24289455))
Microsoft's problem is that they forced other companies (OEMs, ISPs, and
Apple) to bundle IE at the expense of other browsers. Whether the sole act of
bundling IE with Windows would have been itself an antitrust violation was not
actually addressed by the court. Microsoft also had a much higher market share
(95%) than Apple currently does.

~~~
DaiPlusPlus
> Microsoft's problem is that they forced other companies (OEMs, ISPs, and
> Apple) to bundle IE at the expense of other browsers

Was that separate from the anti-competitive OEM license / "Windows tax" issue
around the same time? The one about how OEMs were "forced" to sell machines
with Windows licenses and couldn't sell a machine without an OEM license to
someone who just wanted a box to run Linux or OS/2 on?

~~~
nodamage
Yes, that was a separate case from 1994 and they ultimately settled with the
DOJ. The browser stuff happened a few years later in 1998.

------
panzagl
The most important changes Apple needs to make would not cost them a single
line of code- they just get rid of their policy to require consistent pricing
across all platforms, and allow promotion/linking of external (i.e. not on
iOS) payment sources.

If Spotify could charge +30% for a subscription purchased through the App
store, and include a link to their main sign up page where subscriptions are
regular price, everyone is happy. No security is changed and developers pass
along the price of being in the App store to only those consumers who wish it.
Only loser is Apple, who does not get to use their gatekeeper status on iOS to
enforce monopoly-style pricing controls across all platforms.

~~~
zacwest
The consistent pricing requirement was removed years ago. This is an article
from 2011 about it:
[https://appleinsider.com/articles/11/06/09/apple_backs_down_...](https://appleinsider.com/articles/11/06/09/apple_backs_down_on_in_app_purchasing_rules_allows_lower_prices_for_out_of_app_purchases)

~~~
judge2020
For reference, YT Premium is $16 on iOS[0] but $12 directly[1].

0:
[https://lh3.googleusercontent.com/pw/ACtC-3dznQemACWzb2tbYfd...](https://lh3.googleusercontent.com/pw/ACtC-3dznQemACWzb2tbYfdbIsfinczTPJSLJaLKTVKLWG3_UxpfFIpmBx8S5ClHwiurFHBmZM2tuh0iqdAR3ch_OOvtgrr6Iq3FK3QDg4B9fzywSgdrIciI0TtamxupQCV3AJXx3Dr-
Kw1l--xUny28FoQy2w=w553-h970-no)

1: [https://youtube.com/premium](https://youtube.com/premium)

~~~
csunbird
The developer chooses if the price should be different or not. In that case,
Youtube decided that the users should pay the 30 percent Apple tax.

~~~
judge2020
Yes - and YT is still losing money on that transaction. $16 will become $11.20
after apple takes their cut.

~~~
robterrell
Unless Google has a sweetheart deal like Amazon.

~~~
judge2020
YT likely doesn't have the 15% deal that is available for tv/movie streaming
platforms, and they don't do annual subscriptions so they don't get 15% on
second year subscriptions either.

~~~
realityking
YouTube still gets the 15% deal. You don't have to offer annual subscriptions
to get it. The only requirement is, that it's auto-renewing.

> During a subscriber’s first year of service, you receive 70% of the
> subscription price at each billing cycle, minus applicable taxes. After a
> subscriber accumulates one year of paid service, your net revenue increases
> to 85% of the subscription price, minus applicable taxes.

Source: [https://developer.apple.com/app-
store/subscriptions/#revenue...](https://developer.apple.com/app-
store/subscriptions/#revenue-after-one-year)

------
Negitivefrags
The concept that Apple needs to have a monopoly on app distribution for
privacy and security is a smokescreen.

The OS does that with its capability based design which of course the desktop
OSs have a very hard time migrating to after the fact.

Having other means to install apps doesn’t change that at all.

And what’s more, nothing forces a user to actually go outside the Apple App
Store if they want the supposed benefits they provide.

~~~
dgellow
That’s only partly true. Apple app reviews is also about stopping more shady
dark patterns that are tricking the user in accepting something they in fact
don’t want, that cannot always be handled by their capabilities system (think
social engineering).

But I agree with your general point, it’s a smokescreen and even with other
stores they would still have complete control over the system and security
features.

------
czzr
One argument that I think deserves extra scrutiny is the idea that extra app
stores can be “optional”.

The reality is that developers would have a strong incentive to go to the most
permissive App Store, and users will follow. Users will also underestimate or
ignore risks. You can dismiss that by saying it’s the user’s responsibility,
but I think that’s just an abdication of good systems design.

I’m not saying that Apple has the perfect model - it doesn’t - but the trade-
offs are not as simple as we might like.

~~~
yyyk
The reality is that your scenario never happened. Not on Android, not on
Windows, not on Linux distributions... The 'official' App Store always wins,
unless its demands are so onerous a small minority uses a small store in
addition to it.

~~~
bogwog
Which official app store won on Windows? AFAIK, Steam is the number one store
for games, and people buy their apps from vendors directly (example: Adobe,
Autodesk, even Microsoft). The Windows app store was dead on arrival.

And linux package managers aren't app stores. They're mostly meant for system
libraries and core applications, although some devs do distribute their (free)
apps through it. In any case, Linux is a weird one to include in this
comparison, _and_ I'm pretty sure Steam is still the number one store for
getting games on Linux too.

But whatever, another thing: a big part of the reason that the official app
store won on Android is because of the lengths Google goes to to scare users
from installing apps from "unknown sources", hiding the option to do so,
displaying scary popups, etc. That's one of the reasons Epic is suing Google
for.

~~~
yyyk
In Windows the old method was installing exe files, and it remains the most
popular - but otherwise the only app store worth mentioning is the MS one (on
Steam in a moment). In Linux, package managers can and do include other apps
(not all of course), and just about everything that can be installed from them
gets priority from users - and alternative repos get the scraps.

The option isn't hidden on android at all, it's dead simple. There's a warning
dialog, but I can live with that.

* Steam is a very specialized case: Not quite an app store [Apple credits itself with inventing the App Store, despite Steam existing since 2003, so Apple agrees with me on this], but they all but created the Linux game market, and got in before the Windows Store was created. Yea, if you create the market or get in in advance or on stuff the official store doesn't include, you can survive, but the general rule is that the official App Store wins.

People are upset with Google, but it's not so much about the Play Store. And
Apple doesn't need to be as lax as Google - If they had let go of the anti-
competitive behaviour and had a slightly less explotitive fee structure people
could live with the App Store being only store allowed. It's Apple being very
greedy that led to the calls to, well, reduce Apple's permissions (I couldn't
resist).

~~~
bogwog
> The option isn't hidden on android at all, it's dead simple. There's a
> warning dialog, but I can live with that.

I can't. If I'm going to distribute my apps outside of Google Play, I need to
tell my _potential_ customers to crawl through their phone's settings page,
clicking through various menus, then ignore the scary warnings that strongly
imply I'm about to infect them with malware and steal all of their personal
data. And I would have to do that in every single language I want to support,
and of course would lose sales from people who don't want to bother following
these long instructions, especially since they have to close their web browser
(and hide the written instructions) to actually do it. And I also have
increased support costs because I need to respond to emails from people who
couldn't figure out how to do it (in all languages), and I have to constantly
worry about being blocked by the "Play Protect" program, which scans apps
installed outside of Google Play, sends them to Google's servers, and then
decides to block them at Google's discretion. And if I happen to get big
enough to where I potentially become a competitive threat to Google, then I
have to worry about their "white hat" hit squad finding exploits in my
software and sending it to major news outlets to ~~tarnish my reputation~~ I
mean protect users.

Or I can avoid all of those Google-created problems by giving Google 30% of my
business.

So while technically you _could_ distribute your apps outside of Google Play,
it is not practical at all thanks to all of the anti-competitive barriers
Google has put up. Anyone who thinks that Android is a healthy environment for
competition is being naive, or has no experience with consumer products.

> * Steam is a very specialized case: Not quite an app store [Apple credits
> itself with inventing the App Store, despite Steam existing since 2003, so
> Apple agrees with me on this], but they all but created the Linux game
> market, and got in before the Windows Store was created. Yea, if you create
> the market or get in in advance or on stuff the official store doesn't
> include, you can survive, but the general rule is that the official App
> Store wins.

What do you mean? Steam is 100% an app store. It's a store where they sell
applications (although mostly games). Also, Steam was not at all the first
game/app store on Windows or Linux. It was simply the best back in the day; so
good in fact that it beat straight up piracy. Even today they're pretty great,
despite the 30% cut (although that situation is completely different to the
one Apple and Google are in)

~~~
yyyk
I guess I'm so used to dismissing the "Play Protect" dialog I completely
forgot about it, you're right about it, it is annoying. But I think asking the
user to signal agreement before installing and especially allowing another app
store is the right way, given how sensitive it is. Maybe it should be made
easier, but it's far less onerous than the Apple case.

Steam doesn't do the API review/sandboxing component of App Stores. An
installed game technically has access to everything. Even Linux packaging has
API review (due to open source) and modern packaging often has integration
with AppArmor/SELinux. Steam are essential for Linux gaming, but I wish they
improved their deployment to be more secure.

~~~
bogwog
> But I think asking the user to signal agreement before installing and
> especially allowing another app store is the right way, given how sensitive
> it is. Maybe it should be made easier, but it's far less onerous than the
> Apple case.

I don't think so. That's mostly FUD in my opinion, since apps installed from
Google Play can do the exact same amount of evil stuff as anything downloaded
from an external site. Since Android/iOS already have sandboxing and per-app
permissions, the only benefit to having a single distributor is the
_potential_ of having that application scanned for malware before you
downloaded it. The same thing can be accomplished without a separate antivirus
app, like you'd see on Windows. In fact, I think Windows Defender is a good
model for how Google and Apple could provide the same (purported) security
guarantees while still allowing third-party stores. Play Protect (I think)
does that already, but it _also_ mainly functions as a wall of scary
warnings/deterrent to competition.

> Steam doesn't do the API review/sandboxing component of App Stores. An
> installed game technically has access to everything. Even Linux packaging
> has API review (due to open source) and modern packaging often has
> integration with AppArmor/SELinux. Steam are essential for Linux gaming, but
> I wish they improved their deployment to be more secure.

True that Steam is kind of questionable when it comes to security, but that's
more the fault of the desktop operating systems which don't have sandboxing
built-in. I too would like to see increased usage for things like
SELinux/AppArmor, but that seems a bit hopeless. Valve can't just ship a
kernel module alongside Steam, and I doubt Canonical is going to start
shipping SELinux with Ubuntu Desktop (the support forums would explode).

I think Microsoft added sandboxing features to UWP apps, but that's its own
can of worms. If you make a UWP app, you need to distribute it through the
Microsoft app store, and you need to deal with a lot of the same BS that Apple
and Google are being sued for.

~~~
yyyk
> Since Android/iOS already have sandboxing and per-app permissions, the only
> benefit to having a single distributor is the potential of having that
> application scanned for malware...

Well, if a malicious app store application existed, I'd imagine it would work
via social engineering and sending the user a different package than the user
wanted. The user will be convinced to override the sandboxing, e.g. by giving
permissions to install a 'new version of WhatApp', but the store app will
actually be installing something else with the given permissions. That's a bit
easier compared to other apps where the user doesn't expect to install
anything. (Perhaps I'm missing a clever way to deal with these possibilities?)

I don't think that the risk requires banning 3rd party app stores. In practice
we see the risk is very low. I have little worry about F-Droid, and I'm sure
that the Samsung/Amazon stores are as secure as Apple/Google. But I think a
bit of warning is justified.

>True that Steam is kind of questionable when it comes to security, but that's
more the fault of the desktop operating systems which don't have sandboxing
built-in.

Debians/Ubuntus have (optional) AppArmor, and latest Windows 10 Pro+ has an
sandbox which will work with Win32 apps. It's starting to become built-in,
even if not yet. It'd would still take a lot of work.

------
randomsearch
This is really quite a simple problem: the rent is too damn high.

Apple should drop or tier their pricing so that a $10 subscription is paying
say 5% to them. Developers are happy. Anyone raking it in pays more, a
progressive system that ensures small companies can innovate.

Is this bad for Apple? In the long-term, they get more innovation and a better
user experience. Financially, they lose some income on a subset of existing
transactions and gain income from transactions they wouldn't have processed,
as apps switch to native dev, and the market sizes increase as incentives
change.

At the most they could lose a few billion in revenue a year (very unlikely)
and gain $0. That's the upper bound. But how many more subscriptions would go
through the store if apps like Spotify had signup via the app? I'd guess
hundreds of millions of dollars at least, could be much larger in the long-
term.

Apple are losing the argument, even the best possible cut isn't worth the
reputational damage and harm to the user experience, they should restructure
the pricing so they save face and potentially benefit, or at least limit the
damage.

The writing is on the wall at this stage, and they will act or be forced to
act.

~~~
pentae
This still doesn't solve the fact that Apple can control who gets to do
business on the app store. Politically divisive apps, government blacklisted
apps, gambling apps, adult oriented apps, crypto apps, free speech apps,
certain vpn apps - none of these can currently exist with the Apple curated
App Store approach. And just because those apps might not be for you doesn't
mean millions and millions of users who have shelled out $1k+ for a phone
don't want them on their fancy device they paid for.

Allowing sideloading as Android does would fix all these issues. Sideloading
can start with a 3rd party app store, even.

------
zpeti
I think Apple have no incentive right now to change anything, although the PR
and perception of them is shifting slightly against them. I think there are
two things that can happen here:

1\. There are more and more cases like wordpress, Hey and Fortnite, and after
a while the PR gets so bad that they have to change something, or it becomes
so costly to be in the app store that developers will stop developing for it,
making the iphone less valuable to users. Of course this will take years if
not decades to happen, it would be a really slow process. Fortnite is a really
big deal, because I think it does start to chisel away at the iphone market
for 12-18 year olds.

2\. Government steps in and forces them to do something. But as Ben said, the
legal grounds are very shaky. They don't have a monopoly on the phone market,
or apps, or anything. Almost all other app stores have fees around 30%. It's
very hard to make a strong case to say they're guilty.

------
ksec
Gaming Retain the 30% Cut, as Standard in the Gaming Industry.

Apps and IAP is now down to 15%. And 10% for Subscription.

That also puts Spotify And Amazon Prime or other Streaming Services to the 10%
category.

I honestly dont like the idea of an Open Platform where you can side load
Apps. If you want that Android is your choice. Apple tries to built an App
Platform on its Appliance or Phone. Android tries to built a Pocket Computer
that acts like and look like a Phone. These are two fundamentally different
sets of trade offs.

------
nightski
Why do we need 3rd party stores? Why not just have a standard for an app
endpoint url that iOS knows how to interact with. So I could publish an app on
a private domain and then iOS would know how to download the app and check for
updates from that end point? While there is value in a centralized store to
search for apps (and that can certainly stick around), I don't understand why
apps are forced to be hosted centrally in a store, Apple or third party.

Ex: To install the "Pepsi" app just go to pepsi.com and click the install app
button. Then iOS could take over from there.

~~~
cactus2093
This seems like just an implementation detail of the idea of 3rd party stores,
I don’t really see how it’s a big distinction. And Apple’s opposition to this
idea would clearly be the same as the reasons it has given not to allow third
party stores.

------
cesher
I love Stratechery, but I think this one gets it wrong. Think of App Store as
three products:

1\. App quality screening

2\. App promotion/distribution

3\. In app purchasing

Ask any reasonable dev if they are willing to foot a fixed cost to get their
app screened, a fixed cost per app download (bandwidth), and variable cost to
get their app promoted in the store (not everyone needs this) and they would
agree. What pisses people off is Apple’s entitlement to the revenue of a
company when there is no value add from Apple after the customer has gotten
the app. So Apple is using their monopoly to force #3 on developers at no less
than 30% of revenue.

~~~
rimliu
I am considering building some paid apps for the App Store. If I had to deal
with payment processors, handling subscriptions, etc. myself there is zero
chances I'd do that.

~~~
cesher
Have you had bad experiences with other payment processors in the past?
Honestly curious. I’ve used Stripe, and they are amazing in terms of product
quality and customer service.

------
neiman
Fantastically well-written article.

The "problem" with forming an opinion about Apple Store rules is that the
users are willingly and knowingly putting themselves in the golden cage of
apple by buying an iPhone.

Under this view the problem is not with Apple, that created a framework that
users want, and communicate accurately to its customers what they get - but
rather with the app developers, who wants to reach Apple clients, without
accepting the rules of the framework that those clients chose willingly.

~~~
throwaway13337
This is a bad argument that comes up over and over.

You could use the exact same logical framework to argue against labor laws
because employees willingly enter into the bargain.

It's easy to see the ends of completely unregulated capitalism with company
towns, company scrip, and the oppression that comes with it.

We've had this history - we don't need it again.

~~~
neiman
I see the comparison, but in this case what Apple offer is on of their main
selling arguments, not something users are tricked into.

------
fierarul
Interesting this is not positioned as a civil rights issue too.

I understand, you have a developer company vs Apple.

But what about people buying these computing gadgets? The millions upon
millions of them. Shouldn't they have the right to run whatever software they
feel like it on this general purpose computing OS without Apple's forced
intermediation?

~~~
jpttsn
iOS is not sold as a general purpose computing OS. It’s been clear from day
one.

People use products way beyond their original purpose, and then feel entitled
to the manufacturer’s support. Like eating candy for every meal, and then
complaining that it’s not good nutrition.

~~~
wayneftw
Some shady car manufacturers tried to stop people from being able to buy after
market parts for their cars and our legal system put a stop to that.

So, given that phones are easily as important as cars, I have confidence that
we'll get justice for Apple's anti-consumer behavior too.

~~~
electriclove
Tesla is clamping down on people offering performance enhancements that
compete with their own.
[https://www.reddit.com/r/TeslaModel3/comments/ie6660/any_boo...](https://www.reddit.com/r/TeslaModel3/comments/ie6660/any_boost50_buyers_here_just_updated_to_2020322/)

------
yyyk
There's a very simple law: You can't use a strong position in one market to
enhance your position in another market. Simply put, the entire tying up of
payments to Apple is classic anti-competitive behaviour, and there's little
chance the courts won't put an end to it. Same will happen with Apple using
private APIs for its store owned apps. That said, it's very unlikely the
courts will interfere with the 30% fee. There are no legal grounds for
demanding a smaller fee.

------
bogwog
This is a well-written and researched article, but I have to disagree with
some stuff. The suggested alternative payment processing policies make no
sense for Apple; they would incentivize people to _not_ make iPhone-exclusive
experiences. That's something the walled-garden aficionados at Apple would
never go for. And a court order to implement a change like that (or any
change) would be a bad idea. As for the reduced 10% rate, why 10%? In a truly
competitive market, we might see figures lower than that.

I think that trying to come up with perfect changes for Apple's practices is a
waste of time. Apple shouldn't be forced to make changes to their store, nor
should we bother trying to convince them to do it themselves. Let them do
whatever they want, but allow third-party stores. Competitive forces will fix
everything in the long-term.

What I'm not sure of is how that would work in practice. Will Apple be forced
to release (and maintain) their SDKs and dev tools for free? Will they be
forced to make changes to the operating system to allow side-loading? If they
are, how long would that take? and wouldn't it be catastrophic from a security
point of view, since iOS has never had to worry about the security issues of
side-loading.

------
simonh
This is a very emotive issue here and we're never all going to agree on these
issues. I hope though that it is possible to reach a consensus on a few areas
I think were well explained in the article.

One is in-app signup. I have no problem with Apple charging a fee for services
accessed via the phone when you sign up through the phone. I do think it's
user hostile and opaque to not allow apps to refer the customer to a web site
to buy a subscription though. Apple should compete on convenience, not awkward
asymmetric information restrictions.

The other is the organising principle issue. I agree it makes sense to base
the decision to charge on whether the service incurs marginal cost. That seems
a fair way to do it, I just don't understand how that could be made into a
clearly and unambiguously applicable rule. You may well end up with even more
of a fractious grey zone.

------
munawwar
I am more in favour of going back to installing apps from the web, reading app
reviews (also from the web), bringing back app listing websites (remember
nokia days?), running an antivirus and cutting any chance of another monopoly
rising.

Alternative app stores won't break this monopoly. Android for example already
have alternatives.. but how many know them and how many use them? The one
that's shipped with the OS always wins. Besides, most of them take like 20%
tax.. which is still hugely profitable.

------
tonyedgecombe
_In short, what is needed are new laws built for the Internet, which is why it
was encouraging that Congress is holding hearings about these issues, and also
frustrating that Apple received relatively little attention._

That's because the Google and FB monopolies are a much bigger problem. If you
don't like Apple then there are plenty of other choices. It's much harder to
avoid Google or Facebook.

~~~
SllX
Avoiding Facebook and Google is trivial; the reason people use their services
is they get value from their services.

~~~
jabirali
> Avoiding Facebook and Google is trivial

Avoiding Google is definitely not trivial. I know here in Norway, lots of
public schools are giving teachers and pupils Chromebooks, and insisting that
homework is done in Google Docs. How would you propose avoiding Google in this
setting? You pretty much have to bring a Google device into your home and
actively use it if you want to complete your education.

~~~
SllX
It’s school equipment, not personal equipment, as should be the Google Account
associated with it. The value of these is to the school, not to you, not to
your children. Treat it like a work laptop and segregate personal crap from
school crap (or enforce this on your kids) and return it at the end of the
year if you don’t want it.

Or just send your kids to a different school, but frankly I’m not familiar
with your school system or how much choice you guys have on where to send your
kids.

------
gandutraveler
What stops digital only apps like fortnite to start selling some physical good
like t-shirt at a premium price and bypass a Apple's 30% fee?

~~~
guytv
this will reduce their revenue. "whales" on such games can have a life time
value in the 10s thousands dollars and more. No premium shirt will cover that.

They could price the shirt according to what you buy in the shop, but Apple
will surely change its terms & conditions to close such a loop hole.

------
axilmar
The security argument is flawed: iOS devices would be fully secured if Apple
allowed secondary app stores on their devices.

Using other stores not supported by Apple would have come with a big risk
warning anyway. It would then be the user's responsibility.

------
nachoab
The problem with the App Store monopoly is greatly aggravated by the fact that
they are blocking web engine competition on iOS. They don't want PWAs to
bypass the system.

------
specialist
Much as I love Ben Thompson, this is rearranging the deck chairs while the
Titanic is sinking. Or maybe arguing about which dinner fork the gorilla
should use while it's eating you.

Treat the App Store like any other modern open market. Apply real world market
rules to all these digital markets.

\- rule of law. contracts, civil, business, etc.

\- fair and impartial judiciary

\- right of appeal

\- regulations to ensure equal footing of participants

\- tort

Etc.

Voila, fixed.

A bit more discipline is needed to rationalize Google, Facebook, and Amazon.
Starting with no self-dealing (conflicts of interest). And the social networks
need particular mitigations to deweaponize their outrage engine feedback
loops.

This is all pretty simple, obvious stuff.

Seriously, am I the only person whose read books like The Mystery of Capital?

Why are so many self-proclaimed capitalists so painfully oblivious to liberal
and neoliberal traditions?

------
amelius
Why doesn't Apple bump into the same problem with the App store as Microsoft
did with IE and the browser ballot screen, imposed on them by the EU?

~~~
cblconfederate
There are other browsers - There is no other ios store

~~~
amelius
Anyone could easily build one, and start complaining that Apple doesn't
provide access.

~~~
cblconfederate
OK i 'll build one

------
CharlesW
Having read the whole thread, what amazes me is how most people here seem to
be thinking about iOS products as general purpose computing products, when in
reality the iPhone has been a console-like ecosystem from the start.

I'm personally very happy it works like an Xbox or Switch rather than Android,
and that I don't have to figure out which app store a given app came from,
deal with different parties if I need to resolve billing issues, etc.

Any comments focusing on the technical issues are missing the point. Of course
it _can_ be done. The benefit of the iOS ecosystem is knowing that it _won 't_
be done.

------
threatofrain
For any app which has an existence beyond the app store, customers can already
pay without Apple. Customers can pay for Microsoft Office, Amazon Prime, or
Netflix on their own through conventional channels.

Apple's position is that if you are delivering digital goods to be used on
their devices, then you must offer an additional way to pay.

From the consumer's perspective my choices have now grown. Where before I
could've managed my own relationships with Microsoft and others, now I can
have the option for Apple to intermediate. For people with elderly parents and
runaway subscriptions, this is crazy valuable.

And while I say customers can manage their own relationships, the truth is
that without Apple backing them up, it's companies who will get the better of
the relationship by successfully compelling customers to go through their bad
payment system, like they already do.

~~~
ryanbrunner
I think this would be a fair statement if the customer was given an option on
the device, but when you consider that scenario, it becomes super clear that
Apple's take is predatory:

\- Either pay X, your purchase is handled through Stripe / Paypal, and your
relationship is with the company directly.

\- Or pay X + 30%, and your relationship is with Apple

Certainly I can see some advantages to the second option, but how many
customers do you think would willingly pay a 30% premium for that given the
choice.

At 5-10% (i.e. a few percentage points above established and legit payment
processors, but ones that are a little less full-service), I think it becomes
a much more reasonable argument.

------
cblconfederate
In other news, i wonder why ios app developers aren't considered apple's
employees? In fact someone could sue apple to force them to do so. Their
developer guidelines are so strict and hands-on that they don't justify them
being used as "gig workers". And apple's statements in this document make the
emphatic point that they use those developers to deliver an excellent
experience. They even provide their paycheck (and get to keep 30%)

~~~
secretsatan
What about cross platform solutions? web pages? or apps that are interfaces to
seperate solutions. What about apps that are written once that developers
still receive royalties from without any updates? Apple enforce a base level
quality that mostly isn't that hard to conform to, some developers do not like
this, but most apple consumers do, otherwise, they would be free to buy
android phones and sideload everything

~~~
_heimdall
I'd be fine with this argument if they didn't purposely block modern browser
features in safari mobile. Push notifications have worked in Safari on OSX for
years. They also force any third party browser listed in the app store to use
the same crippled safari engine.

They prevent it on mobile because they want app store money. Seems like a
clear legal case that no one has bothered to fight or enforce.

------
Santosh83
Here's an open secret. Most people globally buy an iDevice because it has
become a fashion symbol, a status symbol and the peer pressure is huge to
sport one, once you reach the financial ability to buy them.

It has little to do with otherwise non-technical people somehow appreciating
the technical nuances of security, curation, walled gardens, sideloading and
so on.

~~~
AnonHP
Maybe some people buy it as a status symbol, but the user experience in
general, for someone who doesn't want root and other customizability but likes
a nice smooth easy-to-use interface (as much as smartphones of today can even
be user friendly), is far better on the iOS side than on the Android side. And
one doesn't have to carry a large and heavier device in order to get this
experience (compare the battery capacities between iOS devices and Android
devices). There are things that only those who use it can realize.

~~~
guytv
> far better on the iOS side than on the Android side.

From my experience - latest Android on a Pixel phone is as good as the latest
iOS experience. Where do you see iOS's being a "far better" experience?

