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The Art of the Possible (hypercritical.co)
177 points by MaysonL 25 days ago | hide | past | favorite | 69 comments

Just a note on the final line:

>Apple needs to decide if it wants to be “right,” or if it wants to be happy.

I think Siracusa is referencing a line from The Hitchhiker's Guide to the Galaxy, spoken by Slartibartfast as part of an exchange with Arthur Dent:

>"I'd far rather be happy than right any day."

>"And are you?"

>"No, that's where it all falls down, of course."

>"Pity," said Arthur with sympathy. "It sounded like quite a good lifestyle otherwise."

I love the book, but that particular line has stuck with me for quite a while. I try to use it as a guide whenever I start to lean toward being right over happiness. Works for relationships, code reviews, whatever you like.

A good friend likes to say, “being right is worth nothing.”

In college a lecturer said, “would you rather be right, or get what you want?” He wasn’t a professor because he knew the steps required would make him unhappy. And completing them would only get him “prestige.” As he said, that’s what they give you when they don’t have anything valuable to offer.

I'm going to remember this one. What an excellent observation.

That exchange sounds like he tried being happy over right and he didn't end up being happy anyways?

You can try for happiness without actually achieving it. I'd prefer to be happy and right; sometimes I'm neither. Preferring one is no guarantee you'll get either.

Also, Slartibartfast is pretty melancholy.

I guess it's saying it can be difficult to practice what you preach.

I've always known it as a classic adage in relationship contexts, particularly romantic relationships, where for the sake of the relationship it can make sense to stop trying to win the argument. I don't know if the saying is a reference to the book or if the book is referencing the saying.

it’s an old adage. when arguing with your wife, would you rather be right, or happy?

If you're arguing with your wife, your chances of achieving either are (to the nearest approximation) zero. :D

Very well put, as usual. The most important part for me is how both developers and users are unhappy with the current rules.

Hey is the latest flavor of the controversy, but from the start I’m bitter I can’t buy Amazon ebooks directly from the amazon app. And it’s not like these rule give me more security, provide for the stability of the platform, or help me in any indirect ways. The kindle app still makes no revenue for Apple either way.

Everyone loses, and that doesn’t help Apple’s image as it’s slowly crawling out of the laptop keyboard fiasco and this string of pretty flaky macos versions.

> And it’s not like these rule give me more security, provide for the stability of the platform, or help me in any indirect ways.

In the case of Amazon, probably not. In the case of nearly all other apps, they definitely do. Having every fly-by-night game accepting credit cards to buy more tokens or whatever would be a usability and security nightmare. Even respectable apps I don’t want to give my credit card info to: I let Apple sit in the middle, handle security, and provide me a place to cancel with one tap.

I understand why companies, especially big and responsible ones like Amazon or Basecamp, don’t want to use IAP. But a free-for-all would be terrible for iOS users.

Why not keep IAP as an option vs credit cards? Let apps offer a credit card discounts. If it provides additional benefits to you: it sounds like you're willing to pay a ~30% more.

Apple is passing credit cards cost on to app store vendors consumers for an additional upcharge. How much is it?

Comparing the percentage cut on a credit card: If I can earn 5% (3% on food and gas?), I'd assume the store is pricing some of that cost into it's products.

Apple's model of easy cancel, harder to steal should be something other companies could MITM. Paypal, Amazon, square, and Google offer similar payment schemes. (Venmo to my knowledge can't be used to pay businesses).

I get the feeling Apple is expanding into this area with their own credit card.

If the choice is a 30% fee or free and no credit card option, this feels like an abuse of power.

> Why not keep IAP as an option vs credit cards? Let apps offer a credit card discounts. If it provides additional benefits to you: it sounds like you're willing to pay a ~30% more.

This is already the case though, right? Apple's response to Hey specifically suggested that they could offer an IAP option in the app at a markup over their web-based subscription.

You cannot offer both in-app. You cannot even mention that you offer both and that the credit-card signup is on your website. If you go with Apple's in-app purchases, you must not mention any alternative methods of payment.

Apple actually built a way out, but they haven't advertised it, publicized it, nor marketed it under these terms. They probably don't even want people thinking about it.

I have not just one, but three active podcast subscriptions that I initiated through Apple Pay just this past year including one to Siracusa's podcast, and I did so through Safari. There's your IAP alternative for payment processing right there that doesn't rely on giving Apple a 15-30% cut, nor giving your credit card details to every fly-by-night crapware peddler.

EDIT: Also I just remembered, I believe this is also how I initiated a yearly subscription for a newsletter/podcast vendor hosted on Substack. For that matter, you can pre-order a Tesla Cybertruck using Apple Pay, I haven't, but it was an option on the order page.

As a user I much prefer in app purchases and Apple Pay, but the fees they charge are clearly extortionate.

I agree with you, my preferred solution would actually be that Apple acts as a PSP and lets Amazon and other companies use IAP without the 30% cut (let’s say it stays at 3 or 4% for instance)

My angle was just that taking 30% instead of 3% doesn’t do anything for me as a customer.

My feelings exactly. I want a no-questions-asked unsubscribe option. IAP is guaranteed to provide that, not the individual apps I download. So even though the 30% share of revenue might look huge, being an independent trusted arbiter probably makes it worth it?

I certainly agree with the sentiment this article advocates. It feels hard for any reasonable person to think otherwise.

What I haven't found a discussion on is the alternatives? Given that App Store will probably be the only place to sell apps within the _Apple ecosystem_ (at least medium term?), the only way is for Apple to rethink its how it monetizes App Store. What am I missing? Are there alternative models that that people know of which would align with the "dream"?

The two possible alternatives I’d see with any plausibility:

- Apple brings down their fees to an almost “at cost” amount (basically a bit more than average PSPs). They keep ads and other potential “premium” services that have actual value for buyers.

I even wonder if they could make searchability or even app store listing as a paying service (apps staying on the lowest tier could only be DLed by direct link for instance)

- they bring an “unmanaged” tier to apps, where users go through many hoops to have non app store apps to run. It could be on the same model as The mac app store, where the dev is identified and the binaries are signed, but not verified by Apple.

Both alternatives were vehemently avoided by Apple for such a long time, but I wouldn’t be surprised (actually I hope) if they have to give up this battle.

I don't have any specific solutions either, yet I do know that I'd like the fee structure and policy to benefit small developers more than large ones. In the current system the rich developers (Amazon) get lower, while the little developers have to pay 30%.

Yes, in much of the world the rich get richer while the rest stagnate or get poorer, yet I hope for more from Apple.

I was a big iPad user, I bought 1, 2, and 3 and used it a lot to read, mostly comics via Comixology. Then, Amazon bought Comixology and refused to pay the 30% Apple tax and it became very hard to buy digital comics. So I stopped using my iPad and never bothered to buy a new one.

In the end I won: I get to keep the $150 I was impulse-spending in digital comics, and saved thousands of dollars I would've spent on iPads otherwise.

> that doesn’t help Apple’s image as it’s slowly crawling out of the laptop keyboard fiasco and this string of pretty flaky macos versions

You make it sound almost like they aren’t the richest and still among the fastest growing tech companies.

I understand they are in a dominant position in pretty lucrative markets, but I am not sure their position is that stable anymore.

At some point I actually needed an iPhone to perform some tasks in my life, and there was a huge gap between iOS and android. I think that gap is pretty thin now.

Mac laptops were a beacon of good customer experience at some point, last year I had a lengthy conversation with my boss before getting approval for the 16”.

It’s anecdotal, but I feel they could be growing and sitting on piles of money the same way Blackberry was super growing and had all the money even past their prime. They just didn’t have anything in their sleeves to keep it going.

Fingers crossed for monday’s announcements.

I don’t get it. For context I am the first to criticize all of the wanna be lawyers on HN who don’t know what monopoly or anti trust is. But Apple’s stance is just dumb for a lot reasons. It’s not good for Apple, consumers or developers. There is a simple solution that would make everyone happy but the sleazy developers of pay to win games and I have no sympathy for them:

All “reader” apps and apps that have subscriptions for services must allow in app purchases. But through Apple Pay. Meaning they get charged standard credit card fees. Apple could even charge a slightly higher rate like 6% to cover the rewards program like other premium cards do.

This benefits:

Apple: They can bring all of the apps back into the fold like Netflix and Spotify and they can get Microsoft and Adobe in. It’s more money for Apple. On top of that, it gets both the EU and US government off their back.

Users: have a much better experience.

Developers: Get to keep more of their money.

It also excludes pay to win games. Between this and Apple Arcade, I am okay if all of those types of games die.

Also offer upgrade pricing capabilities for apps to make it easier for developers to make money without having to rely on subscriptions.

This doesn't work at all in countries where Apple Pay is not a thing, or where Apple Pay doesn't have support from one or more major banks.

Simple: you don’t have to offer Apple Pay in countries where it’s not available. That still covers the richest countries.

> It’s more money for Apple

I'm not sure that would be true with a share of revenue set at 6%. Maybe 15% or 20%

Considering that Apple gets no revenue from Netflix or Spotify from new subscribers any amount would be better.

That is in fact the solution Apple offers, all apps must offer purchases via Apple Pay. Except the fee is 30% and not 6%, and there lies the problem.

That’s not Apple Pay. That’s in app purchasing. That’s a completely different payment flow.

In app purchasing: User pays Apple with the card on file with Apple. They take 30% and pay you in 30 days. You get a tax form at the end of the year.

Apple Pay: Multiple cards can be stored in your digital wallet on your device. Apple doesn’t store your credit cards on file. When you pay via Apple Pay, you choose the card,Apple takes a much smaller cut, the payment goes through the credit card network, through your merchant bank and you get paid within 2-3 days. Apple doesn’t even have a record of your transaction unless you’re using Apple’s credit card.

You are responsible for establishing the merchant account and taking care of card processing and refunds.

You are also responsible for making sure that users update their credit card information.

Sorry, mind fart. The point is Apple requires that subscriptions be available through them, and then take the 30% cut - you can’t, say, use Stripe to take new subscriptions inside the app. So what the parent suggested is already there, the problem is the size of the fee. From the user POV Apple Pay vs IAP is almost the same flow.

Why is it so surprising that a retailer wants to make a profit when they sell something in their store?

A developer is free to offer subscriptions both in and out of the App Store and charge 43% more in the store to make up for the 30% cut.

The idea that it is almost the same flow is good for the consumer and developer. For none digital goods, this is already possible and allowed - to use Apple Pay within an app.

I do it with Uber.

So you have no qualms with paying 30% more just for the convenience of doing it in-app? Would you feel ok finding out afterwards that you’d save $40 by not paying with Apple? It’s a shitty consumer experience either way (not having the option, or paying more).

Well, there are a lot of places where consumers pay more for convenience. In fact, you almost always pay more for items in “convenience stores”. You even pay more for the cold drink in the check out isle at grocery store than you do for the same amount of drink in the aisle.

How much more do you pay for recessions at the movie theater than by going to the dollar store before hand and putting the candy in your or your SO’s purse?

I’ve found out later that I could get items cheaper by doing comparison shopping all the time. There are also times I purposefully pay more for convenience.

Apple doesn't seem to understand they are running out of track. This is not about some disgruntled developers, because to be honest those developers don't have enough leverage over Apple. This is about the EU's investigation. History tells us that these sorts of investigations tend to result in big fines and restrictions being applied, at least if harm to EU businesses can be demonstrated. A big American tech giant harming European businesses like Spotify? Everyone can read those tea leaves.

Now, the real question is this, what scenario is more likely?

1. Apple gets out in front of this, and opens up the app store just enough that they don't get fined / restricted.

2. The EU applies fines and restrictions to Apple and only Apple.

3. The EU drafts a digital store directive, and applies it to all digital download stores, including Apple's.

The third scenario is probably going to happen at some point anyway, but the current complaint may be the catalyst. I don't know whether to hope for it or fear it, because you never know whether it's going to be a well-written directive.

What percentage of revenue do App Store apps generate for Apple?

It seems like an unusual hill to die on for a high-margin business like Apple. It's definitely making the experience worse for everyone and highlighting all the drawbacks of having a single source of software for your device.

I don’t know, but it’s part of the “services” revenue that they need to continue growth now that hardware sales are flat(ish). Apple now has bad incentives to rent-seek, and it’s showing.

Mobile gaming money is a big deal, and ebook market would have been too if Amazon caved.

Yes it is. It’s not the mobile gaming crowd that’s screaming the loudest. They are making money from in app purchases from whales for loot boxes and tokens. Their margins are basically 0 for in app purchases. It’s the app developers that are reselling licensed content or that have a server component who are complaining the loudest.

Yes. I think that’s Apple has put itself in a weird position where the most vocal devs are making them the least money at this point.

But if they make an exception to give these devs what they want, mobile gaming devs will be next banging at the door to get their fees lifted up (well, they are effectively already banging the door pretty loud, like Epic for instance)

EU should force Apple to allow a third party store for IOS. Any other outcome of their investigation is simply blackmail for money (aka toothless fines, cost of doing business).

I still think the fact that end users know that apps in App Store have been valided by someone creates a kind of secure bubble for the end users. And it works well!

The vast majority of users have zero idea about the App Store review system

Interestingly, I've begun to treat apps with caution recently because they're quite likely to include ads/invasive tracking.

This is one thing I find fascinating about iterative price negotiation: if one party can get a given price to "stick", they can use that normalization as a de facto negotiation tool. And given that there's no collective bargaining on the side of app developers, Apple holds all the leverage, even against giants like Netflix and Google [0].

Once a one-sided pricing norm is established ("industry standard"), whichever party established the norm is highly incentivized to never budge, even to their own detriment on some transactions, lest the norm erode [1]. This phenomenon isn't limited to app stores: I think we see it play out in other economic domains (mortgages/landlords/wages), as well as the political (any policy concessions, even mild or reasonable ones, signals weakness and creates a perceptual opening for your opponents to twist the knife).

I suspect there is a formal economics label for this phenomenon which is escaping me at the moment; if anyone more learned on the subject would care to enlighten me I would appreciate it. :)

[0] It does seem telling that Amazon seems to be the only giant in the position to carve out a secretly negotiated exception, no doubt because they're so often in the same game themselves: taking hardline stances on negotiating with suppliers, effectively "winning capitalism" within their niche.

[1] I harp on the concept a lot, but one way of modeling such norms is as Schelling focal points: https://en.wikipedia.org/wiki/Focal_point_(game_theory)

This whole situation reeks of entitlement.

Apple is under no obligation to make someone’s ideal business model feasible. Just like if you want to post content on Facebook, or if you want to sell through Stripe, or you want to deliver groceries on Instacart, or you want to have a business in the USA - you have to follow the rules created by the owners of the platform you stand on, or find/start a new platform. This is a fundamental aspect of social life, not some corporate profit-seeking BS from Apple.

No one is making DHH do an email app. No one is forcing him to charge $99. If Apple is so big and bad, then maybe he should be working on a new mobile phone platform instead of another email app. Complaints about injustice without alternatives hold little weight.

Finally, if this was something society actually needed, I think I’d feel differently. If this fight was over an app that was critical to survival or civil liberty or something, it would mean something different for Apple to reject it. But it’s not something we need. It’s not important or critical in any way. It’s a new email app. Forgive me for not busting out a bigger violin for someone who has already released multiple profitable software products and is now upset that an even richer entity won’t let them have their exact way.

> Apple is under no obligation to make someone’s ideal business model feasible.

Sure, but if it's in someone's interest for Apple to change their policies, it makes sense for them to try to pressure Apple to do so.

There's no reason to uncritically accept Apple's policies, and it's more feasible to direct public pressure toward Apple than to build a new mobile platform.

You want a market economy that is competitive and where dominant players are curtailed to avoid them stifling innovation. Did society actually need the internet when the Telecommunications Act of 1996 said AT&T had to release some of their control on the internet?

I'm not sure if you realize this, but you've just laid out an argument that boils down to "I think your app is kind of stupid and not really important, since it just does email. I'd be more inclined to listen to you if you did something I approved of. You could also try to pivot to competing with two of the largest corporations in the world in something that is their core competency if you don't like the current situation." Do you see how you failed to address the part where there's a problem in the current situation and how your argument simply boils down to "I don't really care for what you're doing", which is completely orthogonal to the problem?

I think you know it's completely unrealistic for DHH to make a competing phone platform, so your argument is clearly not in good faith. Microsoft was well positioned to do it and spent many billions and failed to make it work.

Im not sure that the situation is actually that egregious yet, but if the barrier to entry becomes so high that it warps the whole economy to the detriment of society we shouldn't just say that's fine because those few companies deserve the freedom to act that way.

Microsoft wanted to establish a Windows phone platform where phone manufacturers pay license fees.

If they had finished Nokia's Maemo with a Windows graphics framework and given away the operating system for free they would have had a much better chance.

There is room for another platform as long as it serves what the market wants.

their target price is $99, so if apple wants their 30% cut to be on the app store, just increase the target price to $150 for ios version, no?

As an iOS user, I don't want this to be the default option. iOS devices are expensive enough as it is, there doesn't need to be an extra tax on apps I buy after getting one.

Directly answered here: https://hey.com/apple/iap/

DHH has explained that it's not ultimately about the price. There is another factor: divergence of customer billing experience across platforms. Hey has it's own cross-platform billing solution.


In that case. That’s not a hill he should want to die on. It’s just like selling any physical good through a retailer. I pay for Netflix for instance through T-mobile since I get a discount. I pay for Hulu Live TV for myself and my wife differently than I pay for Hulu+Disney+ for my kids.

Not having my information across random app developers and having it centralized with Apple is an argument for the App Store. I would much rather have all of my subscriptions in one place. Of course it isn’t worth a 43% premium.

The thing is, is that in all those situations, the businesses have a choice.

T-Mobile doesn’t go to Netflix and say "you can run your site over our wires to our customers unless you bill through us and give us a cut".

Neither does a Apple. They are saying you have to provide in app subscriptions as an option, not the only option.

No, they are not giving developers a choice in reality. They’re forcing developers to offer subscriptions on their platforms where they take a 30% cut. That’s not a choice.

And developers can charge 43% when you buy in app as opposed to outside of the App Store to make up the difference.

I guess the argument is that Netflix and others are given a pass.

As a customer, I agree with you. I am happy to have all of my subscriptions through Apple.

I'm content to watch from the sidelines as the moneymen argue for their pieces of the pie.

For me, the emerging global civil rights movement is of greater import.

It’s not just Netflix. It’s the class of apps. Even no name apps like ACloudGuru where you subscribe to get access to training classes do this.

I think there’s also some rules in place that say you can’t discourage people from using IAP vs. other payment methods. So a price disparity would probably not be allowed either.

YouTube apparently does this, and Apple also suggested it in their letter to Hey.

Couldn't they just charge people coming from the app store MAXINT dollars to be technically compliant (the best kind of compliant)?

They could, and I might be wrong here but Apple also disallows you to mention that a cheaper version of the service is available elsewhere on the app. So the user has no idea what the actual price is or where they could avail the price. All they see is a button that unlocks an ad-free version for $2,147,483,647 (Assuming you're using a 32bit signed int).

No there aren’t. Spotify use to offer in app subscriptions at a higher price.

How does the price increase effect sales?

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