> We understand that Basecamp has developed a number of apps and many subsequent versions for the App Store for many years, and that the App Store has distributed millions of these apps to iOS users. These apps do not offer in-app purchase — and, consequently, have not contributed any revenue to the App Store over the last eight years.
They literally have paid 8 years of Developer Program fees for supporting the AppStore.
The apps have also augmented the iOS platform over those 8 years.
An Apple device is better thanks to the apps on it, so they sell more devices. They are double dipping when they benefit from App Store revenues + Developer program fees.
It's a different matter whether 30% is a valid cut for Apple to make on Hey In App subscriptions. But $2,400 (8*$300/year?) for the delivery and update, notifications and Siri integration etc to millions of apps/devices sounds a pretty good deal.
You can’t install an alternative to Siri. You can’t use a different push notification system. You can’t use an alternative store and send updates yourself.
The enterprise account is for people deploying enterprise apps internally. You can't use it for publishing apps to the App Store. Basecamp will be using the standard developer account, not the enterprise account.
An enterprise account is not required to ship public apps. It's specifically designed for those who want to ship private apps, which I'm pretty sure Basecamp don't do.
> Please learn about the Apple Developer Program first. The Apple Developer Program is the right option for most organizations that want to distribute proprietary, internal-use apps. It allows you to use Apple Business Manager, Ad Hoc distribution, or redemption codes to privately distribute custom apps to employees, and TestFlight to test beta versions of your apps.
> The Apple Developer Enterprise Program is only for specific use cases that cannot be addressed using these methods. Before applying for the Apple Developer Enterprise Program, learn more about the Apple Developer Program to see if it addresses your use case. If not, you can start your application.
There is also the missing other side to this argument, and that's without third part apps Apple couldn't sell it's phones that it surely makes a decent amount of money on. Without third-party app authors Apple couldn't sell it's phones. Perhaps Apple should be paying them?
Almost everyone in the world have a smartphone. Having only two options (iOS or Android) to choose between in such a big market is a joke. Google or Apple will just continue to buy out the competition to make sure they are the only option.
Yeah, Apple keeps pushing this narrative that they are giving away a free service to developers that don't accept payments. It costs $99 a year to put anything on the App Store.
And if Apple is really that concerned about free distribution, I'm sure they could set up an AWS-like pricing model where there's a set price for data transfer, updates, maybe even push notifications.
> Isn't that a little like comcast charging websites for access to their customers?
Not exactly, as Comcast don’t provide the infrastructure to Basecamp to host and deliver the binary of its app. Basecamp can’t be said to be ‘freeloading’ on Comcast.
Basecamp would come back and say ‘well, we pay our developer fees’ but developer fees don’t differentiate whether Apple has to maintain app updates for hundreds of downloads or millions.
>Not exactly, as Comcast don’t provide the infrastructure to Basecamp to host and deliver it’s service.
Neither Comcast or Apple provide any infrastructure to Basecamp for hosting. They are just in charge of delivering the ways and means of accessing their platform.
Only because Apple set it up like that. For example, you could presumably have an app store that is only a lightweight directory of signed URLs and hashes, where the developers have to host the blobs themselves.
They could do any number of things, and that might affect what they charge.
But they do what they do, and they charge what they charge. The comment I replied to, said Apple provides no infrastructure. That is categorically false, and thus I replied.
Positing alternate realities where they might operate differently isn't really a relevant response, IMO.
There’s no reason why Apple would do that though: you’re a hosting outage on some shitty VPS box away from the download button not working when you click the button, and the URLs are then discoverable on the open internet for anyone to be able to download at will. Or an indie developer hosts on S3, the app becomes wildly successful, and the developer is unable to pay the AWS bill.
I don’t know why people expect Apple to be the kind of company that would behave in a way that is antithetical to itself and in many ways it’s own customers out of a puritanical devotion to ‘openness’. Most of these ‘Apple could’ changes would cripple the product.
Apple would say tough potatoes and point out that billions of users worldwide are very satisfied with such a deal. You also very rarely hear stories of malware / fake apps on the Apple store.
What really rubs me the wrong way about that is that great products like Basecamp are what give app stores their legitimacy.
Without that top 10% layer of professional, honest apps from trustworthy companies, the app store is just a sea of scams, shams, and clones. Like barcode readers and tutorialware games with a $7.99/week subscription that only exists in the hopes that someone gets confused and clicks it.
I have no problem with Apple offering the services they do in their app store for developers who'd like to use it.
The issue is that it's not really an honest choice - This company has decided that they'd rather not use it, and they have effectively lost access to the platform entirely.
Basically - What you're saying is that Apple should have the legal monopoly over building channels to market for iOS (because they prohibit any other form of distribution). I don't believe that should be true. I'd actually say that's exactly what put Microsoft into a world of pain for IE, and they were actually much more open about it - a user was free to install a different browser on Windows, a user is not free to install a different app store on iOS.
>Apple gives you one on a silver platter and for a pretty fair cost per acquisition compared to other channels.
For the Apple system, isn't that the only available channel to sell and distribute apps? It's not like there are other alternatives, or am I missing something?
Facebook, Google, Twitter etc all offer advertising products targeted at app installs.
So if you imagine a fictitious world where anyone could just install apps off the web then you would need to buy ads through the main 3 players above to get any visibility. Just like how it works today for SaaS or eCommerce products.
And given that we know roughly how much CPC and volume is for certain keywords e.g email app then it's easy to get a picture of whether Apple is being unreasonable or not.
I am talking about the cost of acquiring customers.
It's great that you have these existing users but almost all developers don't. And so when people say that 30% is expensive often it's because the are ignorant of how much it costs most businesses to acquire customers.
And I have to pay to develop apps for most platforms so pretty confused why you feel like this is somehow unusual.
This is ridiculously false. Discoverability on the App Store could be much better, but anyone involved in App Store marketing will tell you that you get a huge boost by being featured. For example, this article claims 800%: https://techcrunch.com/2018/04/20/ios-11s-new-app-store-boos...
Wow, not really. The point is that the vast majority of apps are never featured and you know it.
Everybody that’s paying the 30% still has to do their own marketing. Discovery through the app store is absolute shit. You’re trying to argue that getting lucky enough to be featured covers everybody that’s paying the 30%. It doesn’t.
Assuming you only rely on paid media, yes, you'd need to pay for visibility (arguably through one or more of the 3 main players you've mentioned), or invest in other forms of earned and owned media.
But paid media is a small fraction of the marketing mix when it comes to sell and distribute a product - doesn't matter if it's software or a physical product.
Being unreasonable or not should be up to anyone of evaluates the distribution/sale/communication channel. But I'd limit this fee to be for the "access" to the only distribution channel - because you don't have a guarantee of clicks/impressions/downloads or any media KPI for that fee.
The CPC of a paid keyword is a subset of many subsets of media alone.
They already charge an absurd amount for the privilege. $100/year just to have access to the store. Google only charges $25 once. So Apple is already infinitely more expensive with their reoccurring cost.
Apparently AT&T Mobility gives access to 144 million subscribers. I think this is an incredible value proposition that AT&T is offering to Netflix, HBO and the likes.
For reasons unknown, Netflix apparently hates this incredible offer.
I think you are vastly overstating the importance of apps.
Apple could easily remove the App Store tomorrow, sign deals with a dozen or so companies e.g. Facebook, Netflix, Twitter, Snap, Google, Microsoft etc and they would still sell devices.
Isn't this part of the problem though? Apple _could_ remove the app store, and consumers would lose the apps that have existed so far, with no alternative.
I think if you think back to 2007/8 and people had the choice of Android with millions of apps and a higher priced iOS ecosystem which only has some high profile apps so few people would choose iOS that it would quickly become a waste of money for FB/Twitter/MS to build their apps for it and it would die.
There was no App Store for the first year, which I believe is a time when Android didn't exist. An app-less iPhone would not be able to compete with an app-store backed Android.
The parent complains that apps on phones are mostly useless Barcode Scanners and scam QR readers.
Apple could easily do away with third party apps and sign licensing deals with third parties, and they’d still be massively popular. Most people download the same apps, and then there is an enormous long tail with barely any downloads at all.
Except that you have artificially defined the market to be "applications on an iOS device" instead of "mobile applications".
By that definition Microsoft has a monopoly over XBox games, Tesla has a monopoly over their car apps, Sony has a monopoly over their DSLR apps etc, Salesforce has a monopoly over their marketplace apps etc.
Any antitrust action based on your definition would actually set a precedent that would unravel every single marketplace product. Hence pretty unrealistic.
Yes, and between Android and iOS, Apple and Google have captured ~98% of global the smartphone market in 2018.
Apple accounts for roughly 47% US market share to Google's 52%. Apple's app store generated 33 billion of the total 57.4 billion in revenue in 2018, with Google taking the rest.
They both operate app stores in very similar models, and both of them clearly need attention.
Just because two competitors happen to be splitting the profits from abuse doesn't make it any less of an issue.
I wish them the best while operating a distribution and marketing channel. I think it should be entirely illegal for them to prevent other channels from being created and installed on their systems.
To be clear - this is the definition of cartel behavior. They both operate walled gardens precisely because they know it makes a 3rd party breaking into the market an astonishingly small possibility, and they have both carved out a marketing strategy in the US that mostly doesn't overlap.
Samsung and Xiaomi don't offer stores as distribution channels to 3rd parties. They offer an app on both Google and Apple's app stores to facilitate installing their own software.
I'm not as familiar with Huawei, so I'll go look. But basically - I don't find this a compelling counterpoint. They have a helper app to install their own content, still regulated by Apple and Google's distribution channel - That does not an app store make.
And yes - My stance since the beginning has been that both Apple and Google are actively working to keep the status quo around software distribution and app monetization.
Further, they both pretty clearly have divided the content space.
Google - Focused on free apps as a channel to push ads, with less care on quality
Apple - Focused on higher quality apps with a higher price tag.
They've managed to capture an incredibly large market (70 billion in 2018) of which they simply get to suck 30% with no chance of competition.
They also happen to charge exactly the same rate for their services (30%) which I'm sure you'll also take as a clear sign they aren't cooperating in this market...
I was thinking the cheeky thing to do is charge $100,000 for the in app version. It’s technically there but even if someone clicked it almost no cc would allow the charge through.
If apple’s store provides value they should be able to capture some at a higher price point. Charge $149 for it on the store, $99 on Android and web subscriptions. Get some of that sweet “apple tax”
It seems like we soon see movement on this issue given the EU antitrust and other social unrest. People are tired of things being not only unfair but not even remotely reasonable. It is laughable that Apple Music on Android doesn't use the built in IAP but forces you to pay via Apple. This will come back to haunt them. It doesn't matter that the ToS don't forbid this but in civil suits, it doesn't give them a leg to stand on. They are doing the exact thing they argue would prevent them from making any revenue if they changed their policy. If Apple was smart they would lower their percentage and move on. Better to pick the number than have it forced on you.
If the regulation is smart (sometimes the EU does ok with tech regulation, sometimes they fail miserably) then it's not about picking a number.
The number is never the issue. The issue is that apple has artificially blocked any competing channels from distributing to iOS.
I don't believe they should be allowed to have a legal monopoly on app distribution. In fact, I'd go as far as the ruling for IE with Microsoft around basically the same issue but for web apps -
Not only are you not allowed a legal monopoly on app distribution, you MUST ask the user which app distribution methods they'd like to enable.
Corporate taxes are stupid, anyway. Companies just evade them and hold money elsewhere until the next repatriation holiday. Corporate taxes also prevent us from treating investment income as ordinary income. Just all around stupid.
Apple forces Hey's app in front of unsuspecting users with App Store promotions. If the app doesn't provide any value to a random person who comes across it in the App Store, that doesn't mean it should be banned from the App Store. That means it should be banned from promotion in the App Store.
Hey should still be able to link its users directly to the App Store entry and otherwise make it unlisted in the App Store.
Apple can find a creative way to tax this if they wanted, but what is the yearly developer fee for if not a fee for distribution and security/compliance certifications?
Apple needs to stop conflating distribution on their platform with promotion on their platform. Not every app needs both. 30% cut only makes sense in a publishing deal where Apple promotes the product in the storefront.
> The HEY Email app is marketed as an email app on the App Store, but when users download your app, it does not work. Users cannot use the app to access email or perform any useful function until after they go to the Basecamp website for Hey Email and purchase a license to use the HEY Email app.
The Fastmail email app works exactly the same way and is available on the app store without issue. Seems like a pretty arbitrary decision here.
I’m on Apple’s side on this one. They’ve made Hey’s choice simple: change it so it’s compatible for people to use their mainstream email services (no $ involved), or make it subscription out of the box. Currently you need some dumb invite-only code.
I actually feel misled by Hey’s comments pointing out that Netflix, etc. require a subscription to make the app useful. It wasn’t until I little additional digging revealed that the main difference you can order it straight away, and Apple still charges them the 30% fee. To get around this, Netflix charges for in-app or you can order cheaper directly from their site. I don’t believe Apple’s store T&C’s indicate Netflix is violating anything through this model.
Really this is about how much is too much for Apple’s fee structure. I suspect regulators may try to force Apple to allow other App Stores (like Android) but then the usual problems will surface re: security, etc.
As of a few months ago, Netflix abandoned in-app purchases entirely on Apple platforms. Try it yourself: sign out of your Netflix account on iOS and try and create a new account. There is no option to pay for a Netflix subscription within the app on iOS. It just isn't there.
Fastmail is another app already on the App store that requires an account (but has no option to sign up within the app itself). Salesforce Inbox and GMail are two other email apps currently on the App store that do not allow the user to sign up within the app itself.
(An aside about Gmail: I'm now receiving almost-daily emails from Google
> Your Gmail is full. Get more storage now with a Google One membership. Plans start at $1.99 a month.
How much of that money do you think Apple would like to get? How much of that money goes to Apple? None. That is not implemented as an in-app purchase.
)
I’m still seeing in-app purchases as an option via App Store for Netflix. I can’t comment on the other apps you mentioned except for Gmail. And here’s where I disagree with you.
Gmail is still functional without paying anything. You don’t hit a paywall immediately after downloading. The app provides immediate functionality to users. If Google decided to force subscription-only, that’s when Apple would be saying you need to either open it up, or use our in-app subscription service. Google’s upsell is not a requirement to use Gmail’s basic functionality.
The app must provide immediately functionality after downloading. Guess how much functionality the Hey app I downloaded is providing to me right now? Zero. Because I need an “invite-only” code.
My Hey app is also providing me with zero functionality as well. I'm not being dismissive of your issue.
You know, maybe you do have a point (HEY should be using Apple's in-app purchase system). They should set it up as a weekly auto-renewing subscription at the most expensive price point possible ($1,299 USD). Maybe then Apple would leave them alone.
*(@dhh has said that HEY will be removing the invitation-only restriction in July).
A curious thought experiment here is: what would the situation be in the case of a hypothetical third-party app that provided access to your Hey email?
(I mean via some API that Hey offered - I think they don't actually offer one, but it's a hypothetical.)
You would obviously still need a paid Hey account to use such an app, but there would be no way for the app's providers to enable you to sign up for one using Apple IAP. What then?
>I'm probably missing something, but can't Hey just make subscriptions in their page and let the App from free in the App Store?
That is exactly what they are doing at the moment. Apple has decided to invent a new requirement that this approach is only valid for business applications, and consumer client apps must offer in-app signup and purchase.
I'm generally pro-Apple on these issues. It's their store running on their products on their infrastructure. However in this case I don't believe Hey is violating the current stated and published app store rules. Apple's decision in this case seems capricious and arbitrary, and more than a little hypocritical.
Didn't apple pull something similar with Spotify, that tried to direct users to their page for subscription and Apple warned/suspended them for doing so?
Edit: Confirmed.
>Spotify’s complaint against Apple is a good example(1)(2)(3). Apple charges Spotify a 30% fee to use the App Store(4) and limits how it can communicate with its users. Apple is the owner of the iOS platform and the App Store and is a direct competitor of Spotify(5).
Would it be allowed under the App Store guidelines to offer IAP, but then give customers who purchase the service through the website 30% cashback? The price would be the same in both places, you'd be purchasing the exact same service. But a certain group of customers would get a 'loyalty bonus'…
I'm going to assume that Apple will do everything to maintain their cut. Even if what you said would be possible, I would expect Apple to update their terms of service to abolish it.
You can do this.. but you cannot say "we charge you 30% more here, but if you signup over there, it's regular price"
Apple saying "it's giving the users more options" is total BS.. it's all about getting their 30%, because if you play by their rules, and give the customer more knowledge that you're being forced to charge extra because of this payment option.. then Oh noes.
A great example outside the app store is some credit cards charge much more than the others, so some stores charge you that on top. "You want to use X card, sorry but there's a surcharge for that card.. you could use something else.
And most importantly, you're not actually allowed to communicate what the actual price of the service is. So any customer who doesn't look up the pricing on their website will think that it's $142 a year, not $99 a year.
Most likely according to Guideline 3.1.3(b). The biggest problem with the app is that iOS only users can't actually create an account inside the app. It's perfectly fine to use a windows computer to create a paid account and then use that same account in iOS but since it's not possible to create a paid account on iOS and then use it on a windows pc it's violating the guidelines.
> First, if an app is a way to exclusively consume content purchased elsewhere, like songs or movies or podcasts, they don't have to have in-app purchases
So that might just work, you consume a coupon on the app ? Or not even that, purchase just associated with account
Finally a great breakdown of the issue and a fair look into what both sides, namely Apple, are trying to do here.
> That, Apple said, is not what Hey is. Hey is a consumer app, paid for by users. And Apple takes issue with the idea that when one of those prospective users downloads the app, there's nothing they can do with it — they can't sign up, they can't pay, they have to go somewhere else before they can use the app. Apple doesn't like apps like that, at least when it feels they should be more accessible to their intended audience.
The Hey onboarding today is tied to a website-driven invite and signup process. While that _could_ be a bad customer experience through some lens, what percentage of users following this flow are or will be downloading this app prior to signing up?
In a larger sense, Apple seems to be saying that, at least for consumer apps, they have an expected user flow from launch/beta through purchase. That flow makes Apple the primary channel and pipeline. If you have a multi-channel app (web + app, in this case), they want the main experience through the app regardless of business model or context. This makes the customer experience argument seem like misdirection.
If someone were to look at the reviews on the App Store, they would realize that users are extremely happy with the Hey app, despite how Apple attempts to portray the situation.
While obviously what Apple is doing is crap, why not just increase their in-app prices only on iOS? That's what Marvel have been doing with their comics. A comic that through their website costs £3, on the Android reader costs £3.29 and on their iOS reader costs £3.49. I always just buy them online and immediately download to my ipad without paying the Apple premium.
Yes, it sucks - but it seems like a relatively easy way out.
...because raising the price also reduces demand. This is the nature of the supply-demand curve. So you still end up with less revenues.
Imagine that Hey found the ideal price point on the supply-demand curve. When you factor in Apple's fee - the new optimal price point on the curve may shift higher, but your net revenues will still be lower.
Maybe the pandemic finally offers enough motivation for EU and US to make a strong decision about this. The (smart)phone market, for many people the only computing device they own, is utterly dominated by 2 monopolies under Apple and Google.
The CEOs should get a medal and all the honours for providing society this good platforms then promptly forced to allow separate AppStores on equal footing.
You are trying hard not to understand the message. The laws change to fit what people consider right.
What Apple is doing might be almost legal but it is not right and laws can be written to spell this out for them and others.
Computing should be declared a human right and selling mass produced general purpose computers without allowing anybody to deploy any desired software on that computer should be illegal.
You may not like Apple, but I think it’s quite a leap of faith to declare computing a “human right”.
You want an experience with an Apple product that Apple doesn’t provide, whether you agree with it or not. Where do we draw the line? Should we force all vegan restaurants to serve meat? Surely if computing is a human right, then food is as well and thus I’m entitled to the experience I want as a result. Apple would argue, and rightfully so, most of their customers want a walled garden. People don’t want to have to worry about malware, scams, etc. Why should they be deprived of offering this experience when you have plenty of other choices for unconstrained computing.
Some country was thinking about declaring Internet Access a human right. I think computing should come before that.
The scale of any company should invite extra scrutiny from the state. Apple is at a scale where it has massive societal impact, it's not the burger joint down the road.
It would be trivial for Apple to add a toggle allowing users to switch from 'walled garden' mode to something more permissive.
On macOS you can install any software, or from identified developers or from the App Store and I don't see macOS users screaming they can't manage without their walled garden.
Why wouldn't iOS allow any installs from identified developers or from anywhere?
Again, still not a monopoly. The fact that most phones are iOS or Android just means those are the two most popular products in the market. It does not make it monopolistic.
The PC market, for many people the only computing device for a long time, is utterly dominated by Microsoft. But no one has ever done anything about that.
What? Did you forget the US and EU anti-trust actions? The browser choice screen and the $1 billion fine over it? The forced opening up of Office file protocols and SMB specs?
Also they aren't taking 30% forcibly of every single program that runs on Windows.
But you can download an .EXE file from anywhere and run it on your Windows computer (don't try that at home!). No any Store required. Hell, you can even write a program yourself and run it, completely free, imagine that!
- developers paid a hosting subscription for their app
- pay for bandwidth used by the app downloads
- pay for each update review
- optional pay for promotion
- Apple would not block legal content, just put it under a new category of stuff Apple disaproves but is legal.
This would fix a part for the issues with stores, Apple can't say that they are hosting your app for free anymore or that they provide you bandwidth.
The disadvantage I see is that small apps will have to pay a the yearly subscriptions but if the price is fair I see it similar as you pay for a domain and webhosting.
Apple will have to find a new way to make money though, like maybe have better services instead of crippling competition, have better dev tools and hardware.
Imagine there are only 2 companies that offer web hosting , and they will take 30% of your money (not profit but total) and on top of that they can reject your content if they don't like it.
I don't really understand the argument. The App Store can be a service to both developers and consumers.
That's typically what a store is. Product manufacturers accept that they will sell more of their product in stores, enough to make up for the margin added by the retailer, vs direct sales. Consumers accept to pay more the convenience.
It's only indirectly true that the App Store is a service to developers.
It's a very straightforward argument.
Apple has the App Store in order to keep consumers. That it helps developers is a side benefit. Apple would drop the store if didn't retain consumers on the platforms.
As a consumer you have no choice to use a better AppStore, or to grab your apps/movies/music and move to a better provider.
So IMO Apple is doomed to be regulated, maybe it is not to late to be more fair with the developers.
You understand that this would kill free apps, and strongly disincentivize many startups and other small shops from developing for the app store? This, in turn, would devalue the entire iOS ecosystem and likely hurt Apple's revenue.
Are there "free" apps? I mean you already pay for a dev account 100$ , so say i am an open source project, I already have to pay for dev account, for a Mac device so there is no free stuff. Apple could be kind and offer free hosting for open source projects and if someone affords to pay for a doman and webhosting to have their installer hosted there they could also pay the same amount for hosting on Apple servers.
Supporting iOS is super hard for us. The Apple market is heavily controlled and supervised. We have had apps rejected because we included links to the Android equivalent in the description (same price, so no big reason to switch platforms when you are already on our iTunes page, and no way anyone can install an Android app on an iPhone anyway). Apple used to offer a more or less standard set of phones, resolutions, and architecture. But that has diversified more in the last years. For Android and Linux, we have it much easier to build tools, to handle dependencies, and generally to deploy. Actually, all development happens on Linux, simply because it's a much better and more comfortable platform. When we need to deploy for iOS, we boot the mac computer (which we had to pay for), re-compile the game, try it on the iPhone (which we also had to pay for), upload, and turn it off. Additionally, and I don't have all the details on this myself, Google apparently has also made it much easier for us than Apple to operate when it comes to taxes and banking.
We normally have to sell thousands of units per month to "make
it" (and we don't). For Android, the fees are low enough to justify keeping things open even if we don't sell much one month.
In a wider perspective, we operate in a market with lots of apps and games being offered for free, really high fees and standards set by the major stores, and continuous pressure from the community, our competitors (of course!) and ourselves to release more of our work as open source. Essentially, the combination is crushing, and Apple's move does not help :(
For what is worth, we recently launched "safe2play" (https://keera.co.uk/2020/06/17/safe2play-caring-for-privacy-...), which is an idea meant to make both people safer and the pricing model more transparent. It would probably align with Apple's desires better too, although that's an unintended side-effect.
Generically speaking, I thought that the promise of the Internet was to have more (and more direct) access to resources.
When it comes to e-commerce or e-subscriptions that should have meant the end of the middlemen, the products or contents/whatever are delivered directly from the author/producer/supplier to the end user, cutting costs.
So would everyone else. Part of the problem is that hey is still in invite-only, and everyone who is able would just pay $1 or $2 to get around the invitation list.
Honestly, Apple's response is actually pretty reasonable, all things considered. Read the full letter — it was clear, fair, and professional — despite coming off the back of a lot of bad press.
I see plenty of comments are focussing on this quote, re their Basecamp apps:
> These apps do not offer in-app purchase — and, consequently, have not contributed any revenue to the App Store over the last eight years
Apple have (freely) provided Basecamp a platform to grow their business via the App Store, whilst giving Apple (effectively) nothing in return.
Now that Basecamp want to grow their revenue further (at Apple's expense), AND they are breaching the rules (whether you agree with them or not) — I don't blame Apple for pressing the brakes. Especially not after all the negative press this whole debacle has brought them.
Some people are going to quibble with you over the costs paid for developers licenses, but I think that's missing the real problem.
Apple is welcome to provide a platform for developers to distribute apps on, on that platform I believe they should be able to charge whatever they determine is reasonable.
Apple SHOULD NOT be allowed to have a legal monopoly on making that platform.
It's not really a fair price (doesn't matter what it is) if there's no alternatives because you've literally blocked them from competing.
The issue is rarely that such a tactic exists, the issue is when a single player (or a few very large players) dominates the market and uses that tactic to stifle other entrants.
In 2001 when MS was sued by the government for this exact issue, it was the combination of market dominance and tactics around vendor lock in that got them in trouble.
I think in this case it's pretty clear that Apple is abusing their market position in a similar way (as simply noted by how many of the comments in this thread are "App store is good because of huge distribution channel")
So yes, in theory you could switch from Apple to Android, but honestly, Android has exactly the same problem.
I'll add, I'm in no way absolving Google of the same practice. I think it's well past time the government took them both to task for the app stores.
---
Finally - Your tv comes with several ports on the back explicitly designed to let it play signals from other vendors (like your cable box, fire tv, apple tv, or any other)
> Apple have (freely) provided Basecamp a platform to grow their business via the App Store, whilst giving Apple (effectively) nothing in return.
It's not free though, is it? You have to pay $99 a year, and purchase Apple hardware to develop and test software for their platforms. Basecamp, who hire 50+ people most likely all run Apple hardware, so that's tens (if not hundreds) of thousands of dollars to Apple over the years.
How far do you think $99/yr goes in the grand scheme of things?
Cost of servers, cost of bandwidth, cost of maintenance of the App Store backend services and development of future features, technical support for developers, Xcode development, App Store review time, etc
I would hazard a guess they make nothing on that $99 at the end of the day. The cost is merely to be a gate to prevent anyone from submitting terrible apps for review. Having some monetary requirement there is just a deterrent for the lower quality stuff (obviously not all of it, but probably a rather significant amount).
How much does each individual server cost per registered paying developer?
>cost of bandwidth
If the bandwidth cost is so high, why doesn't Apple charge for it separately? And also, how much bandwidth does it actually require to deliver these applications? The HEY app is 31 megabytes. For $99, you can get 1100 GB of S3 egress. I honestly doubt that your average developer is amassing nearly that much traffic in a year.
>cost of maintenance of the App Store backend services and development of future features
Is funding the upkeep of the App Store fully on third party developers? It's a product that's sold as a part of the iPhone. And according to some speculation, $1,249 iPhone XS Max made like $500 of profit after parts, labor, R&D, admin, and other associated costs.
>technical support for developers, Xcode development
I'd also argue that this is something that shouldn't be fully paid by third party iOS developers. Having a way to develop applications for a platform is a pretty basic requirement.
>App Store review time
We should ask DHH if he feels like he's getting $99/year worth of value from this.
Why does Apple need revenue from Basecamp (or any content provider)? They don't have any cost whatsoever associated with this content deliver. You already paid for the phone, $$$. The network isn't theirs; Apple takes zero part in the content delivery. Apple provides no content; that's all Basecamp.
This is just Apple noticing money being changed hands, and inserting themselves into the process so they can extract a cut. Get their beak wet, as it were. Not for value received, because there is clearly no value add here.
And the hoops they jump thru to make sure they get their cut! Locking down the phone; a walled-garden marketplace (you can't go anyplace else); the threat of revoking the app from a customer phone(!) if you don't toe the line.
* Bandwidth to deliver the app to each user that downloads it
* App Store Review requires human beings, so there's paying those people
* There's also generally maintenance of the App Store servers, backend software, etc.
In the past, I'm sure Basecamp (the app) was featured somewhere on the App Store and thus got featured and brought more eyeballs to the app. These features are done by actual people and there's a cost there.
Any store has a cost. Lets say Basecamp were to be able to side load. Now they'd have:
* Bandwidth for delivery of the app for each download
* Cost to maintain their servers
* They'd have to maintain whatever delivery system they had to write in order to provide the same features of the App Store
* They'd have more support costs as well because can the average person understand side loading? What happens when that goes wonky? Now it's on their support team to handle that business too.
Apple provides a lot of value there.
Edit: Jesus... I hate the formatting options on this site..
The store already takes a cut, to pay for the store. All that is covered. Like every other app.
So, the 'enforcers' have to be paid? ( the reviewers that keep any money from slipping thru Apples' fingers )? That's the whole story? They are already paid for by the store cut as well (like every other app).
> Why does Apple need revenue from Basecamp (or any content provider)? They don't have any cost whatsoever associated with this content deliver
I see it partly as a response to the fact that the industry is moving from one-time purchases to subscription-billing. Apple were always able to make their cut from the one-off sale of a $34.99 premium application. Now that the app is available for a $2.99/month subscription from the developer, Apple have to recover the lost caused by the shift to subscription models somehow.
And they certainly do have costs associated with content delivery. There's the trivial costs (bandwidth, hosting, etc.), and the larger overheads associated with R&D, developer review, continually fighting security risks, and so on.
Apple doesn't have to recover it, as a cost to something they don't have any part in.
They could take a cut of housing sales too, for all the sense that makes. I can see them in front of congress now: "But Apple isn't making the billions we once did! We neeeeed this money!"
Apple sells $25 phones for $1000. That's their business. Trying to make their business, taking a cut of other people's business, is egregious.
> Apple have (freely) provided Basecamp a platform to grow their business via the App Store, whilst giving Apple (effectively) nothing in return.
I've purchased an expensive phone mainly so that I can have access to a high quality ecosystem of apps. Apps like Basecamp and Hey are part of that for me. Apple gains so much from the breadth of high quality apps on the app store, including free apps. If they begin to see free apps as giving them effectively nothing, I see that as an indication that they no longer value the reasons I go to them as an iOS user.
Disagree. They let Dropbox slide, and it looks arbitrary that HEY is considered that different. If HEY stores your email in their servers they should argue that they are also similar to Dropbox then and should be exempted. This seems like Apple drew an arbitrary line where it still can draw one, and is having a tantrum. Nevertheless the arrogance of suggesting that their benevolence is why apps like basecamp have survived is just boggling. They make the best devices for sure but I keep hoping other companies start stepping up and give them real competition.
Maybe they should follow what Netflix is doing, since they don't have in-app purchases in iOS which is why they don't allow registrations at all and force you to sign up on the web.
Not sure about Netflix's Android app though, but Google has sort of done this to Epic Games but only allowing logins and no registrations + card checks might bypass the Apple 30% tax.
Be honest. Have you read articles about the subject thoroughly?
Hey is implemented exactly like Netflix. This is exactly why it’s making such a ruckus. Because big streaming giants get Better treatment than the little guy trying to reinvent email.
> Be honest. Have you read articles about the subject thoroughly?
Since we'll be both breaking the 'rules', first of all be very very honest, have you read the HN guidelines recently?
>> Please don't comment on whether someone read an article. "Did you even read the article? It mentions that" can be shortened to "The article mentions that."
> Because big streaming giants get Better treatment than the little guy trying to reinvent email.
Unless they are 'reader' apps under guideline 3.1.3(a) [0]. Thus it isn't quite like as you said: 'Hey is implemented exactly like Netflix.' as Hey isn't a reader app, therefore they are not exactly under the same category of apps like Netflix. Nice try though, thanks for playing. I still look forward to the anti-trust battle.
They did—or at least, are trying to. The issue is Apple is saying, based on unwritten rules, that Netflix is allowed to do it, while Hey isn’t. And that’s the crux of the problem
The reason Netflix is allowed to do it is because they are classified as a reader app
> if an app is a way to exclusively consume content purchased elsewhere, like songs or movies or podcasts, they don't have to have in-app purchases.
According to apple an exclusive email client is not classified as a reader app and so they are forced to offer in app purchases. The guidelines are super confusing and in my opinion pretty crap but it's not a case of favouritism or giving special exemptions to Netflix for example
I’m looking forward to Apple having to argue in front of a legislative body why streaming services are given a different treatment than any other software.
Are you sure Netflix is able to do this (genuine question)? According to this[0] article, Apple says that apps that target consumers (as opposed to businesses) must allow the user to sign up for the service from within the app:
> Apple allows these kinds of client apps — where you can't sign up, only sign in — for business services but not consumer products. That's why Basecamp, which companies typically pay for, is allowed on the App Store when Hey, which users pay for, isn't. Anyone who purchased Hey from elsewhere could access it on iOS as usual, the company said, but the app must have a way for users to sign up and pay through Apple's infrastructure.
> Users cannot use the app to access email or perform any useful function until after they go to the Basecamp website for Hey Email and purchase a license to use the HEY Email app. This violates the following App Store Review Guidelines
The problem is it's not classified as a reader app according to Apple's guidelines. If you are not a reader app and there is something to be purchased, you must also offer in app purchases.
> if an app is a way to exclusively consume content purchased elsewhere, like songs or movies or podcasts, they don't have to have in-app purchases.
I've seen this comment all over the place and I genuinely can't believe people think this. Apple accepted v1.0 of the app. They're rejecting v1.0.1 which just contains some bug fixes. How could anybody predict this? It's also going to damage their long term relationship with Apple (an important partner) and if they lose this fight their entire product is in danger as being unable to access an email service on one of the most popular phones is going to be unsustainable for Hey.
Apple's stance on IAP isn't unknown, Spotify fought them and eventually just started charging a 30% premium on iOS subscriptions. Hey could do the same thing and likely will, but a public fight in the meantime is generating buzz.
They were probably surprised they got 1.0 approved, I certainly would have been. Apple says they made a mistake approving it, which is not unheard of, and them clearly identified the guidelines they're breaking.
Basecamp is full of smart and prominent people who know what they're doing. I can't believe they didn't predict or plan for this scenario when it's one of the most obvious to me.
That's really a nonsensical example. An app not having a feature to pay for something is very different from an app requiring to buy something elsewhere.
I'm probably in the minority with this view, but I do think that Apple's response makes 100% sense and is fair and reasonable.
- I don't like how everyone claims they want a 30% cut. That is factually not quite true. It is 30% for non subs, which I think is fair. If I want to sell a product on a specific distribution channel then the cut should represent the possible reach and sales opportunity. In the case of subs it's only 15%. This is quite different than 30%. 30% is only for the first 12 months and for a sub which is paid annually this is nothing. Given that the first 12 months are very crucial in gaining critical mass I think 30% is fair and later it is really only 15%.
- I have huge respect for DHH, but he criticises that Apple has published their response to journalists, which is a bit rich given that he started this "dog fight" in the public
- The apps to which DHH compares Hey with are very different in nature and all the mail apps he constantly mentions are also different in nature. They all implement the suggestions which Apple has suggested in their response, so it's really Hey who wants to be treated with different rules because DHH thinks his online status can bully Apple into giving in? Not sure if that is right
- Also I think it is possible to do both. You can disagree with the rules and fight them in a civil way in court, whilst also temporarily comply with the rules like everyone else to get your app public. This approach of not wanting to play by the rules, put them on fire and still publish an app whilst everything is burning seems like a weird strategy to me. Slightly unnecessarily aggressive in tone.
==Given that the first 12 months are very crucial in gaining critical mass I think 30% is fair and later it is really only 15%.==
It’s a lot harder to gain critical mass when you are paying 30% directly to Apple, no?
== You can disagree with the rules and fight them in a civil way in court, whilst also temporarily comply with the rules like everyone else to get your app public.==
Make less money today while you fight the largest company in the history of earth in court. Meanwhile, Apple will just built a competing product and embed it in iOS (see: AppleTV). The rules seem to change while the game has already started.
I absolutely despise Apple and will never own an iPhone but what they did here is perfectly reasonable. Apple doesn't force users to use in-app purchases. It only forces developers (not users) to provide the option of purchasing access to services directly within the app. This isn't eliminating any choices for users and Apple isn't inserting itself between completely unrelated businesses to extend their reach beyond the Apple ecosystem.
> The apps to which DHH compares Hey with are very different in nature and all the mail apps he constantly mentions are also different in nature. They all implement the suggestions which Apple has suggested in their response.
I can only speak to the app I'm most familiar with that DHH has compared it to multiple times. Fastmail. Fastmail's app lets you access Fastmail's email accounts, but not POP/IMAP accounts more generally. It doesn't provide a way of subscribing, and just loads to a login page when the app starts. It doesn't follow the suggestions they included in the letter, and I've seen DHH reference it multiple times.
For what it's worth, I've enjoyed Fastmail a great deal, and having an email client directly tied to the service provider has been great for me. I'm mainly concerned about this whole issue because of it's implications for new updates to Fastmail's app.
Apple’s position is clear and legal, and it’s how the economy works including the proposed hey.com business model. There’s no antitrust violation here, so pay your fees or go somewhere else. Apple don’t owe hey.com a place in the App store, just like hey.com doesn’t owe me a free email address @hey.com.
These aren’t Apple’s rules–they’re ours. It’s the parameters of a free marketplace and flows from the idea of legal ownership of property. Apple has a minority share of the smartphone market, so antitrust does not apply. Antitrust a specific remedy to prevent monopolistic abuses.
If I build a high end hotel and the fee is $10,000 a night to stay there, you can’t apply to the Supreme Court to have your bill reduced. It’s my hotel and I can set the price to whatever I damn well please because it’s a free market.
This analogy makes no sense. It’s not a business to consumer issue. The problem is Apple running their own marketplace and inconsistently applying the rules they have created for that marketplace.
If the hotel opened a food court and treated the vendors like this, it might be an apt analogy.
Well, let’s use the food court analogy then: whoever owns the food court is permitted by law to set whatever rental prices they choose for their tenants (provided they aren’t discriminating against people based on certain characteristics). They don’t have to be consistent, because the food court is their property and they have very wide discretion over how it is used. Fair? No. Legal? Yes!
I think it’s legality is up for discussion (that’s the discussion people are currently having). Because your analogy still falls short because the hotel now opened their own stall in the food court and is competing in the marketplace.
What are they doing with the proprietary data from other marketplace competitors?
You are absolutely right. I real feel disappointed I cannot downvote him. People are so deluded by Apple fanaticism and "free market" that we shouldn't even touch a monopol with a stick.
I’m no Apple or free market fanatic, I’m just explaining that these attacks are going nowhere under our legal and financial system. They are pipe dreams that come round every twelve months or so, and will remain that way unless we radically change the nature of legal property. This particular one is out of the hey.com marketing budget, but I’m sure it won’t be the last.
But 50% of the smarphone market users might want to install software on they own property which Apple has clearly shown to be quite possible, if only Apple wouldn't stand in the way as the sole gatekeeper.
It might not be specifically anti-trust violation, but if Ford behaved the same as Apple there would be 1-2 cars to pick from world wide!
But this case is not relevant, because Apple faces robust and significant competition from Android smartphones (though I would argue perhaps not in wearables).
Antitrust competition is not measured primarily by marketshare but market power, of which the main measure is pricing power, the propensity of people to shift from one offering to another of prices change. With regard to the App Store, would the people — app sellers — whom Apple charges for the service start to move to an alternative if Apple increased prices even incrementally, either expressly in terms of dollars charged or effectively by more-expensive-to-comply-with other terms?
No? Looks a lot like a monopoly, in antitrust terms, then.
What are effectively independent, descriptively similar, side-by-side markets that people don't move between in response to pricing changes aren't the same market for antitrust purpose, even if conventional media coverage labels them the same market and talks about marketshare in the combined market.
"Section 1 of the Sherman Act is violated when an unreasonable restraint of trade within an oligpoly results from a firm's course of action which serves to exclude competition from that market."
- United States v. Griffith, 334 U.S. 100 (1948)
There have been a number of bench decisions based on barriers to entry and market entrenchment to prohibit this sort of behavior by oligopolies, even if the Sherman act didn't specifically mention them.
Don't take this the wrong way, but I think you should put more time in understanding how the basics of economics and works to understand why monopolies or duopolies are bad for societies. I'm sure there are some great online lectures to be found on economics 101.
No offence taken, we are all students :) Monopolies (and duopolies, where there is collusion) can be bad for society, which is why we have specific exceptions in law to deal with them. Apple doesn’t hold a monopoly position in the smartphone market. In fact, they don’t even hold a majority position in the smartphone market. This is like going after Dr Pepper with antitrust...it’s never going to happen.
Thanks for the link, that is a good resource. I was wrong about them having a minority market share in the U.S., they’re more popular than I thought! They are still far from a monopoly position. Looks like it’s a roughly 70/30 split globally, though that’s not relevant for U.S. antitrust law (may be more relevant in Europe).
https://news.ycombinator.com/item?id=23569065
https://news.ycombinator.com/item?id=23568095