It's completely scummy. You can buy Apple's iCloud storage upgrade from within the OS, and now you can't even LINK to a place where you could link to a place where if you click the right link you could buy Dropbox storage.
I wrote about it in a recent blog post:
As for the payment question, simply in terms of UX and as a consumer, I want only one payment provider and account on the device. I hate pulling my credit card out and remembering my password for the nth account.
Consumers are happy with the platform. Look at the sales numbers and earnings reports. Obviously companies like Dropbox see the value in the platform too -- I just wish they'd take the time to understand why it has that value, and why Apple has huge profits and very happy users.
The fact is that Apple is the one that requires apps to open the browser in the first place. It's rule upon rules upon rules. I'm an iOS user and I'm not happy with this aspect of platform, if that means anything.
(Emphasis mine) Sounds like it might be time to find a new business plan, then.
I would be surprised to find many software products where the gross profit margin would be less than 50%.
Software and service prices seem mostly arbitrary to me anyway.
How else Aperture went from $300 to $100, Lightroom the same, BBEdit shed 70% of it's price in one day, etc etc... Same, why was iWork a $99 package and now it's 3 components are $10 each on the Mac App Store?
Services are more deeply and negatively affected by price changes than software, though. A price change that seems insignificant to you can drive many users away. Look at the fiasco with Netflix last year; they changed their prices by about $6 and subsequently lost about a million subscribers within a few months. Some users see price increases as an indication of a service's instability in the marketplace (and therefore a cue to jump-ship). Most users have lower tolerance thresholds for price differences when comparing services than they do when comparing one-time purchases (like software).
Regardless, now would be a really bad time for Dropbox to increase their pricing. Many Mac & iPhone users are watching iCloud closely and realizing that it could make Dropbox redundant for them. A price increase, even one as small as a ~$30 a year change for their 50+ plan (corollary to your $3 a month change), could push enough users away from the service that Dropbox is better off sticking to its guns.
If your competitors can offer lower prices and still give away 70%, then you're not competitive enough.
create a subsidiary.
dropbox.com, charges $x for 5GB
idropbox.com, a dropbox company, optionally in the caymans, charges $(1.3 * x) for 5GB and has an app.
They've rigged the game.
No, I know of that rule. Just jack the price everywhere --if the iPhone is an important market to you, that 30% is a factor you have to take into account in your overall pricing strategy.
The same holds true for all of your competitors, after all. Either they give up the iOS market, or they have to do the same. So it's not like someone has an advantage over you.
( And, I'd say, if it IS an important market to you, well, you don't get to both have all those customers with their credit cards at the ready in a system someone else built out of thin air AND complain that you have to give him a cut).
> 11.3 Apps using IAP to purchase physical goods or goods and services used outside of the application will be rejected
In app purchases are simply a wildly inadequate solution for many apps and services, and Apple forcing everyone to use them is absurd and helps nobody.
 1 - (1/1.3) is the additional percentage that must be added to a price maintain constant revenue.
 To be pedantic, Apple also handles payment card processing, which is ~3%. So the difference is really 1-(1.03/1.30) = 20.8%
Yes. If the choice is between UX and cost, I'll almost always pay more.
Not everyone will, but the people that don't are less profitable customers, as Apple is demonstrating.
We perhaps disagree about the motivations behind the clauses, but without inside knowledge I suppose we'll never know for certain.
The piece that perhaps I didn't express clearly enough: there are cases where developers -- even the good ones, who care deeply about doing the right thing for their users -- are boxed in and, no matter how much they would like to play by Apple's rules, are unable to for one reason or another. The result is often worse for users.
It's the unintended consequences of the "Kindle Clauses" that I find so interesting; that was what motivated my original blog post.
In the long run the open market always wins.
If Apple wasn't forcing the larger industry to learn how to turn a profit by putting users first, the market would simply saturate the app store with whatever existent concepts are popular today.
Remember, prior to iOS, the Mac OS X market was both cry user friendly and very insular. Now, iOS has gone mainstream, but Apple's user-friendly focus hasn't (yet?).
Of course, your open market does still exist -- users can choose Android, which thrives on the notion of 'user choice'.
Of course, your open market does still exist --
users can choose Android, which thrives on the
notion of 'user choice'.
When I decided to buy a smartphone, I wanted one that allowed me to block calls and SMS messages completely, without leaving traces in the calls/sms logs. I wanted this because somehow my number ended up on a lot of spam lists and a smartphone should be smart about these things, right? If my email address is protected by spam filters, it should be a no-brainer for my smartphone to do the same for calls and SMS.
Imagine my surprise when I found out that such apps are banned from the iTunes App Store and that the only way to get such functionality on iOS was for me to root it and install software through Cydia. And why should I as a consumer go through so many hoops to use such software, when the company (that receives my money in the process) is actively hostile to my use case, a use case which is in no way immoral or unjustified.
When it comes to Android, building an app that blocks calls and SMS messages is still hard, as the APIs you have to rely on are private and keep changing, so the results are unpredictable. But upon a search on Google Play, I did find one that works well, installed with a single click. And I didn't have to root my phone.
Now that's what openness gets you - user experience is important, but it's all for nothing if the apps allowed don't solve your real problems.
The App Store is not an open market, nor is it intended to be an open market.
I've never seen an open market in the wild, much less it "always winning".
You mean an open market like the "$1 trillion bailout not to collapse the whole economy" open market? Or an open market like "we enforce strict copyright laws to artificially limit each copyrighted product to one maker and it's pricing at his whims"? Or an open market with patents, for the same purpose? Or an open market with frequent cartels, to everything from dairy products to RAM? Last, but not least, an open market where a country with a military advantage has several army units deployed and several wars to secure resources and keep their prices down?
There's no reason to hijack a fairly specific discussion with a much broader ideological rant. This sort of thing has been happening on HN lately and it bothers me. It takes a potentially interesting conversation and turns it into an ideology measuring contest.
I understand that the theory of free markets in general might be applicable here, but the point is the way the GP is framing the debate it can't be resolved without much wailing and gnashing of teeth.
What application market is it that is open and always wins?
The same hold true for application markets. In any market where money are involved and parties with interests of their own can get a stronghold on the rules, the results are the same.
>I didn't know Google was using their market to bail people out and wage a secret resource war.
Well, pushing their own apps to users with "picks" and front-page promotion is akin to a bailout. They can restrict apps that compete with their core businesses in a snap, they can change the rules of the game anytime, etc. They use it to do whatever offers them a competitive advantage.
Apple's marketplace is an even better example, as it is more closed. Google cannot close the Android marketplace at the same level, because they cannot do all the stuff Apple pulls and still attract developers away from more lucrative iOS at the same time (developers are the "scarce resource" here).
Btw: "ideological rant" implies that something I said re: "free markets" does not hold true and I say it because of my ideology. Can you point to it? Else it's not "ideological", it's mere empirical observation.
I can. You didn't say (as in "state") anything. You asked a rapid fire succession of rhetorical questions. Rhetorical questions are one of the best indicators of ideology (as in "zealotry").
The free market left to itself would fix most of it's own problems (I say most because I think some regulation is necessary and good). But it requires patience to let the market work.
The free market left to itself will eventually converge into a monopoly.
No, all the things that I mention are instances of actual markets. Were is this free market? If it's possible, why it hasn't been seen anywhere on earth?
>The free market left to itself would fix most of it's own problems
I mean, to reason about what the free market will do IF it exists has no value.
The free market, even if it was imposed by some power for one second, would have to be forcibly sustained by human agents --namely corporations, consumers, workers and the government. Nothing tells us that it would, in fact history teaches us otherwise.
One might as well say: "If everybody always was pro peace and love, and never did anything bad, we would have world peace and love".
Of course, but the whole point is in how to achieve that. So, to say "the free market would fix most of it's own problems" has zero value, if the #1 problem is how to create and sustain a free market itself.
"Way to far" is an interesting characterization. Apple has rules about their playground, they like their rules, they make Apple very profitable.
So the question becomes can Google leverage this liability to increase the penetration or market share of Android tablets? Once these tactics hurt Apple in the market they will change. Until then, well its their town and you either have to play by their rules or not play at all.
Didn't IBM lose the case where they said you can only run IBM software on IBM 360s?
IANAL but it sure would be nice for someone that is to speak up on why many of these old cases don't apply.
Is it that it is legal, Apple just doesn't have to feature it in their store? Phone companies were forced to allow 3rd party phones on their network. So where/are mobile companies as far as I know. Car companies are require to honor car warranties even if you change out the car stereo AFAIK.
Is there some reason similar rules don't apply to Apple (and Nintendo, and Sony, and Microsoft)?
It should be.
You have to write a short letter saying why you once used <product> or refused to purchase <product> because of <reason>.
If this doesn't feel like anticompetitive behaviour, I don't know what does. They are using their rather large position in the smartphone/tablet market to enter another market (in this case storage) and snuff out the competition. And there are other examples.
Be careful what you wish for. If antitrust laws can be applied even when there is no monopoly, indeed, not even a majority market share, you are basically giving the government a green light to do a WHOLE lot of bad things.
Now it's kind of funny to see some of the same people make the argument in comments here that Apple has no significant marketshare or dominance of anything.
Why is this a distinction?
Apple has a monopoly on the "market" (portion) that pays for apps. That's not as clean a definition of market as you would want. The defining characteristics of this market are also (arguably) inconveniently dependent on the offending practices. IE iphone user pay because it is easy, because there is a single payment provider, because users don't have to worry about a cheaper option some roundabout way, etc. etc.
Then there is the problem that any platform, regardless of overall marketshare is something like a little local monopoly. Our definitions of monopoly don't really work here but platforms can still exhibit a lot of what anti-monopoly rules are trying to prevent.
Apple are being abusive, few would deny this. Few have. Why are you?
A market segment just is a market according to the dictionary definitions. And legally, a lot of EU competition law concerns exactly how one individuates such markets/market segments.
Can you draw out what you're claiming more?
The fact remains semantically and legally that you a monopoly of the segment or niche of a market is not possible. A company can be abusive (which is what you mean when you say monopoly - something which in and of itself isn't illegal), but unless they control the significant majority of the whole the it is legally not an issue. Morally is different debate.
Well, I don't know what you mean by 'cogent', as that's generally taken to be a property of arguments and not statements (there may be loser notions, but as I say you'd need to spell out what one you intended). However, the statement that 'Apple have a monopoly over Apple products' is a true statement, which is all that matters to establish the semantic point. It might be trivial, but it's trivially true.
If I might try a helpful suggestion, it seems to me your confusion is arising because you're thinking something like 'if x is a market segment, then x isn't a market'. But of course that doesn't follow, as one can individuate markets at different levels (more or less fine grained).
Then there's a legal point about whether one opens oneself to legal action for dominance when operating in certain ways over market segments - I think it's also true you can be. But I'm not that advanced in my legal training, so don't take a strong position on that.
Further, there are normative and moral issues about what should be the law, and what one should do in these cases - but discussing those would take a long time...
The issue here is one of sensationalism. As a community, we a far too quick to jump to the "$corp is evil!" conclusion without looking for a reason, however ridiculous it may seem. We, as a community, are too cynical for own good.
> "Apple makes 80% of the money in the cell phone market, Apple is the only one making any money"
Making the majority of the profits is not a monopoly in the Microsoft Windows sense, which I assume is what we're talking about here. iOS does not have that in the handset market (esp. if you include Symbian!), and the tablet market is very young.
Unfortunately, Google is probably not capable of exploiting these mini-resentments and I don't think anybody else is either.
I'd love to hear more about that.
This is my reasoning on why I think there is an opportunity there:
Lets say (patent issues not withstanding), you created an exact clone of the iPad and iOS and sold it at the same price but without the 30% 'apple tax' on purchases. It seems reasonable to assume that if that were the only differentiating feature you would get more developers (they get to keep more of the money) and so it would get more apps, and the platform would outsell Apple's iPad with its constraints.
Now granted that is a hell of a hypothetical, but if you can accept the claim that given two otherwise identical products, but one with more developer friendly policies, would allow the developer friendly one to be more successful, then we can talk about at what point the 'value' represented by that can overcome the fact that the product is not an iPad. Does that make sense?
The Android tablet ecosystem is currently horrible. Between the device diversity, the user experience diversity, and the release diversity, and the app experience diversity it is a wild and woolly place which has not been able to compete well with iPad. Contrast that to the Kindle Fire which started with Android, locked down a lot of stuff that Google doesn't, and that has gained more traction than any other Android based tablet.
To me, that shows a market for a non-iPad but with Apple like quality control and predictability. Depending on Amazon's success, Google might just wake up and fix their world (and of course they might not, it would not be the first time a large organization just didn't 'get' it)
But you also claim that nobody can exploit these resentments, and certainly Amazon is going to try and seem to have some modest success in that regard. Love to hear the counter point of view.
Apple has that covered. You cannot make your services cheaper on other platforms. You have to charge atleast what you charge iOS users for the same service. This is to prevent the success of alternative app stores that will take only 20% or 5% cut. The new ecosystem won't take off because the existing developers cannot afford to completely drop the App Store to jump to a new platform.
Surely in a world where the network effect rules and the stakes (the global marketplace) are so high, we shouldn't allow networks to entrench themselves too easily? Else we'd just have a behemoth in each sector, probably the same few companies even.
That's one way of looking at it. Another is that it protects Apple from having their users find out that 30% of what they're paying gets nowhere near the person they think is getting all the money.
I do not believe keeping the price equal to other helps the consumer, it's simply Apple keeping developers from charging the 30% straight to the consumer. I believe it would be interesting if they let this restriction slide. Perhaps the advantage of simple purchasing makes up for an increase in price. Convenience is also worth something, as supermarkets have found out.
What? It's specifically set up to protect Apple's cut of 30% and to prevent other app stores from charging less.
Lets say you price a service at $14/mo. Apple takes 30% so you price it at $20/mo. Apple takes $6/mo. Windows 8 ap store takes zero if you roll your own in app mechanism, but you can't charge Windows 8 users only $14/mo. You have to charge them $20/mo if you want to stay in the iOS App store.
How is Windows 8 users being forced to pay $20/mo instead of receiving a benefit from their platform competing, protect Apple customers?
Apple is trying to protect their own users from being ripped off by Apple? That's some _really_ twisted logic there.
That rule is in place to safeguard their 30% cut. I don't see how the user benefits from having to pay 30% extra instead of getting a 30% discount on the same supplier's website instead of paying Apple the tax.
That cost goes directly to Apple. It protects Apple, not their consumers. Their consumers see no benefit from 30% of their cost, whether larger or smaller than the alternatives.
Based on the examples I have witnessed, I simply do not have any hope in the existence of an open platform with Apple-esque quality and eco-system (the assumption being viable eco-system automatically implies major market share).
Sorry if I spoke in circles!
One of the areas that hasn't been explored a whole lot in the product space is 'moderated open' which is how I think of the Linux Kernel. You can change it all you want, get the source, etc, but if you want to get into the kernel that everyone else sees you have to go through Linus. He keeps the quality pretty high by doing that. It was similar to FreeBSD as 'open source' but 'moderated commits.'
Now in the tablet space I have yet to see someone to take that path. There do not seem to be too many successes for business people to draw on for inspiration. That being said, as an example the Kindle Fire has sold a lot of units. And it is a completely legit argument that Amazon 'makes it up in book sales' (which is their business model) much like the iPod can be subsidized by iTunes purchases.
And I am sympathetic to mladenkovacevic's comment about a wild and free ecosystem can be more useful/desirable than a locked down one. But I also recognize that there are lots of folks who are interested in the product, not deeply technical, and chafe under Apple's restrictions on developers.
If anyone could 'afford' to make a run at this, Google could. And perhaps they will with a 'Google Experience' tablet that has been rumored.
I understand your lack of hope given the things you have seen so far. Back in the before times of personal computers when they had lights and switches on the front, the introduction of the IBM PC for the 'suits' was a huge pain. And really successful brands at the time got pushed aside. Google pushed aside Alta Vista, Sun pushed aside DEC, Compaq/Dell pushed aside the IBM PC, and Android phones at least have put a huge crimp in Apple's style.
Interesting to see how this evolves.
What "Apple tax"? Haven't you noticed that competitors have struggled to offer the same prices for their tablets for example? The iPad/iPhone is one of the cheapest products on their market segment.
Just consider that when everybody expected the iPad to be like $999 or $799 on introduction, it came out at $499 -- and the mostly useless copies (now forgotten) that appeared of it, where in the range of $700.
Apple has their margin's with huge economies of scale and huge massive pre-orders of RAM, solid state storage and screen panels.
They would be cutting their own nose off to spite their face.
Personally, the idea of hardware-accelerated HTML5/JS apps makes my heart sing, so I'm really hoping it takes off with consumers. Maybe it'll be the best texting phone ever and every teenager in the world will swap. A dude can dream...
I wouldn't invest in app development ever, precisely due to these sorts of issues.
Then they came for the trade unionists,
and I didn't speak out because I wasn't a trade unionist.
Then they came for the Jews,
and I didn't speak out because I wasn't a Jew.
Then they came for me
and there was no one left to speak out for me.
At least you realize it's your mistake. After all, what is written can only mean one thing, and one thing only.
Maybe one day you'll learn about context, and history, and how that poem was not about the Nazi purges, but rather people not speaking up about them until it was too late. That you would equate that poem to the purges implies you miss the meaning, the point.
> and a hiccup encountered while installing an iPhone app.
But it's not. Again, you miss the point. People are saying this crosses some line. But that line was crossed years ago by Apple. People defended their actions then, while others decried it, and this exact point (and poem) was raised at the time. People dismissed the warning. They said things like this would never happen.
Now they are complaining about Apple crossing a line.
Finally, I want to introduce to you a literary concept called hyperbole. It is an exaggerated statement or claim not meant to be taken literally. So, while you want the poem I pasted to be about the holocaust, it isn't.
It's a poignant message and reminder that this is not the first time this has happened. It's especially important because the OP mentions Apple having "gone too far," as if everything they were doing before was acceptable.
As for your belief that this response is merely a quip from an recent migrant from Reddit, might I point out that your comment is, at the very least, far, far worse. I'm confident, however, they you merely don't care, and are at best a troll.
It's well known that you cannot link the user to make a purchase outside of the iOS ecosystem. It was a huge issue with the eBook apps last years.
I'm not saying I agree with Apple's stance on that but they are not rejecting apps which use Dropbox because they don't like Dropbox. Dropbox is breaking the rules and as soon as they fix that (it seems they already have) there will be no more problems.
Or, perhaps they're rejects apps that allow you to create a Dropbox account. That would cover all versions of the Dropbox SDK.
The specific reasons they gave are:
- "This app contains a link that takes the user to Dropbox via Safari".
- "The concern with this app is that the user is taken to Dropbox's website, if they do not have Dropbox installed on their device, where they have the option to purchase additional storage space."
How would you read that? They seem to suggest that you can't link to any page on dropbox.com.
The problem is that neither Dropbox's login page nor their create-account page provide any links for purchasing anything, nor do they provide links to Dropbox's main site. http://rfc64k.files.wordpress.com/2012/05/dj-xhtrivxl.png
So it seems that merely because the login page is hosted at Dropbox.com, it is forbidden because Dropbox.com can be used for purchasing things. That would rule out all forms of OAUTH.
Their proposed solution was to remove the "Create Account" link, but it's not at all clear whether that was the original problem, or whether it solves anything.
The bottom line is that if your app currently uses any version of the Dropbox SDK or the Dropbox OAUTH API your app may be rejected and you're now in a state of limbo.
This is on Dropbox to fix, not Apple.
Imagine you provide a marketplace, and you curate that marketplace. And you say to customers who come to that marketplace "Don't worry, we're going to do everything we can to protect you from bad purchases". Then you say to sellers, "No deals behind closed doors. You want access to the marketplace? Sell out in public." Every time you use the iOS in app purchase API, Apple has a way to track the payment. Lets say the customer pays for a service inside of an app that never gets rendered. The customer can then contact Apple who can verify if the payment was processed, and can go about returning the customer's money while policing the marketplace. But if the purchase for a service rendered inside the app happens outside the app, then customers will have a much more difficult time getting recourse for making payments to a service provider (app maker) whose app doesn't work properly or doesn't provide the services that the user payed for.
Having said all that, Dropbox provided this API to developers. They should have built it to work inside these rules. They could let users create Dropbox accounts, they just would not be allowed to charge users from outside of an app for services that would then be rendered inside the app. It sucks, I know, but it's an important part of ensuring the quality of Apple's marketplace.
Users who are directed to Dropbox via my app are not asked to purchase anything. They are not made aware that there is anything to purchase. They are only told that "Dropbox is a free service that lets you transfer files". They create an account and it just works, and they never have to think about Dropbox or their Dropbox account again.
I don't totally agree with their stance on this but I can see why it was rejected.
If the user had Rdio installed, my app would open the song in the Rdio native app.
If the user didn't have the app installed, my app would open the song on the Rdio web site in MobileSafari. Apple didn't like this since you could purchase an Rdio subscription on that webpage bypassing the IAP and Apple's 30% cut.
Checking the numbers, the profit margin on an iPhone is a little over $170, while the profit margin on an app is <<$1; most of the people I know who own an iPhone have purchased at least two of them (an upgrade a couple years later) and have purchased maybe, at most, 10 apps. If you check the Apple quarterly earnings reports Apple doesn't even bother separating App Store sales from iPod accessories: both are a tiny line item in comparison to the profit they make on their actual profit center (core hardware).
However, for content resources, such as books or music, the story is much different: I know people who have purchased many thousands of dollars of music, movies, and television shows from iTunes over the years. This is enough that the iPod and AppleTV can be effectively subsidized by iTunes (something you don't see Apple doing with the iPhone: they make certain to get their profit on that at the point of sale, possibly plus a carrier subsidy).
This is why this issue starts coming to the forefront for services like Rdio and Kindle: those actually hit Apple where it hurts, so Apple would prefer to use their control to hobble their opponents. But, Apple doesn't really want 30% of the revenue from these sales... it would be much better for Apple if they just went away, and people used iTunes instead. (I make this clear, as that is why I then don't feel it accurate to use this as an argument for the 30% being a primary concern.)
In the long run where does the App developer get to make any money? On app sales alone? You cannot survive by making a one off sale to your customers, and apps that seek to generate more income through in-app purchases need to pay fees that are equivalent to what they would do through credit cards or whatever.
Please read the post to which I was responding to undersand the context; the only way in which we care how it affects developers is if that effect is one Apple wants (enough to have caused them to effect such an affect): the primary question is precisely whether Apple makes money.
In the name of UX ofcourse. It couldn't possibly be because unethical market grabs tend to generate money. Remember: Apple doesn't really care about money. They care about you and all that money they make is just accidental.
Most developers seem to be opting for the third option. The only one that doesn't impact usability is the one that involves giving Apple 30%.
The user experience of in-app purchasing on iOS is very good. Compared to the myriad online purchasing systems I've experienced in over a decade of buying things online, it's easily the most reliable and satisfying I've encountered. Case in point: I've had two separate third-party apps crash or stall during in-app purchase (one because of a loss of network connectivity, another where the app just crashed). Upon relaunching, iOS was able to work out where I'd gotten to with the in-app purchase and reassure me that I wouldn't end up paying twice.
This kind of reassurance is invaluable to consumers who aren't tech-savvy, and will almost certainly lead to higher conversion rates. In fact, it means that the user experience of a customer buying in-app purchase with a completely different product makes them more likely to use in-app purchase with your product! Where else can you benefit from this kind of self-reinforcing behaviour? Apple realises that providing this seamless experience is important, and so does what it can to discourage alternatives where a worse experience (an experience which might lead a customer to erroneously blame Apple or the device) might be the result.
Another important point to remember is that Apple targets the iTunes store to run at break-even (http://www.appleinsider.com/articles/12/02/23/tim_cook_addre...), so accusations that this is motivated primarily by profit are wide of the mark. Yes, that 30% cut helps run at break-even, but let's not forget what other benefits you're getting as part of the deal. And if you're certain those benefits aren't worth it, go try the Android Marketplace, and let us know how that works out for you.
What Apple are doing with the App Store is not expensive for Apple. They hire a few people to run some servers and a couple more to filter apps. It's incredibly cheap and as many of us know you can run a content vending business pretty cheaply as it is. Sure, the benefits of using Apple's UI are nice but they are not, in my humble opinion, worth 30% of every purchase.
To put this another way, I read an excellent article about iTunes (http://thetrichordist.wordpress.com/2012/04/15/meet-the-new-...). Apple takes on zero risk in its iTunes business and nets 30% minus trivial operating costs for vending out some files over the internet. What do you call a business model that asks for money without taking risks? Rent seeking. The App Store and iTunes are both examples of rent seeking behaviour.
The App Store runs at just above break even: http://www.macobserver.com/tmo/article/apple_app_store_runs_... http://news.cnet.com/8301-13579_3-20008540-37.html -- figures of less than 1% or 2% of gross profit. That is not "a killing."
It is amazing Apple somehow spends so much money on reviewing apps and providing the app store that they can't make much money on a 30% cut.
Remember: Apple couldn't possibly be a large corporation whose objectives and principles occasionally conflict in a way which causes collateral damage to their users or developers. They only care about squeezing out the competition through any means necessary.
They are acting monopolistically and unethically; this is a fact. The "collateral damage" is OK, if you don't have the majority; Apple does, however.
It's easy to castigate this as a monopolistic move intended to benefit iCloud, but the reality is that Dropbox and iCloud aren't directly competing services. Really this is about how third-parties offer purchasable services from within iOS. There is a trade-off to be made between what offers the best user experience and what is practical for third-parties though, so I have to imagine Apple will eventually be more flexible.
Is it more ethical to give Dropbox special treatment? Should Dropbox-enabled apps be given that competitive advantage?
The most important question (for both customers, and developer partners) is: should Apple be trying to extract 30% from every transaction on their devices? Should they be trying to expunge any links to the internet in all apps (the logical conclusion of their current path), in order to ensure that no payments for anything digital go through anyone but them? If they get away with this, will they then come after companies like Amazon selling physical products later and try to enforce a 30% cut and equal pricing outside the app for products sold through any other system?
Is that a sustainable model and one which we as consumers and developers want to support? If the answer to that question is no, Apple is pricing themselves out of business with their partners (who made all these wonderful apps which they are making money on), and their customers, who pay all the money for those apps and devices (because they have apps). They rely on those people to make their money, and annoying your customers and partners is never a good strategy in the long-term, as Microsoft found out to their cost when they lost customer loyalty in the late 90s.
In this example the developer wasn't even explicitly selling something - they were just linking to the internet, which then meant that someone could possibly buy some digital service from dropbox without paying Apple a finder's fee. If they push this too far, we'll see more and more companies abandoning the Apple ecosystem and selling things direct over the internet instead - there have already been some high profile defections like the Financial Times who decided that it just wasn't worth dealing with Apple, and abandoned their high-profile iPad app for a web app.
While I'm not involved in mobile, I've had similar experiences for over half a decade dealing with the banal, highly questionable, and non-uniformly enforced rules Google imposes on its own advertisers. Some of the stuff is bad enough it makes you think it would fall under RICO if this wasn't a large company but rather an Italian owned waste disposal company.
It is so complex. I'm blown away daily with the knowledge of the hn community, it runs so deep. And everyone seems like a genius because they only comment seemingly on what they know.
Yet everyone seems to think they know the law. On the surface programming and the law seem so similar, yet they are so disparate. So, so far apart.
Ask an attorney what determinalistic is, and you'll probablly find a blank. Ask a programmer, and they think what is the law is the law if it maybe sort of fits part of what they heard about the law.
If you're going to pull in market size, you've got to play to the relevant market as well.
One of the difficulties of anti-trust law is that it's fundamentally about power, which is not something economists have a particularly good measure for, nor are they particularly equipped to find (or be interested in finding) measurements for.
Even in a monopoly/monopsony or oligopoly/oligopsony cannot dictate both price and quantity (supply/demand curve), though in the traditional economic efficiency argument of the Chicago (free market) School, the concentration of buying/selling power means that (for sell-side concentration) prices are higher and quantities are lower, or (for buy-side concentration) prices are lower and quantities are higher, and more net value accrues to the side with greater concentration. The Chicago School cries tears over lost market efficiency.
But that's a far smaller problem than that monopoly allows the monopolist to choose winners. Maybe not for all time, but it's the same argument that's been used against command economies, bailouts, and even just plain government regulation. Generally wrongly in the last case, and mostly in the second.
Free markets are based on the principle that buyers, sellers, and ideas meet on equal footing. Where an entity or cabal can select winners, what you've got is no longer a free market.
Which is a pity, as free markets are generally powerful forces for good.
There is LOTS of competition in the market place.
I guess that explains why the US wireless and cable franchies suck and have the lowest consumer ratings.
No, abuse of oligarchies and cartels are illegal too.
It is generally understood that small numbers of entities can form oligarchies with no explicit coordination, so independence isn't necessarily a defense either.
2) Apple has done nothing different than has been done before. It is an existing in app purchasing rule.
One could argue that rejecting apps that make use of (or in this case encourage signup to) Dropbox is anti-competitive conduct since Dropbox is a competitor of iCloud (isn't it?)
In reality, the presence of very viable substitutes in the market for the iPhone (to wit: Android) probably moots the argument here.
To go further with this argument, you will need to venture beyond Wikipedia summaries.
Jefferson Parish Hosp. Dist. v. Hyde
(b) No tying arrangement can exist here unless there is a sufficient
demand for the purchase of anesthesiological services separate from
hospital services to identify a distinct product market in which it is
efficient to offer anesthesiological services separately from hospital
services. The fact that the exclusive contract requires purchase of
two services that would otherwise be purchased separately does not
make the contract illegal. Only if patients are forced to purchase the
contracting firm's services as a result of the hospital's market power
would the arrangement have anticompetitive consequences. If no forcing
is present, patients are free to enter a competing hospital and to use
another anesthesiologist instead of the firm.
No tying arrangement can exist here unless there is a sufficient
demand for the purchase of cloud storage separate from a smartphone
OS to identify a distinct product market in which it is
efficient to offer cloud storage separately from the smartphone
OS. The fact that the exclusive contract requires purchase of
two services that would otherwise be purchased separately does not
make the contract illegal. Only if user are forced to purchase Apple's
services as a result of Apple's market power would the arrangement
have anticompetitive consequences. If no forcing is present, users
are free to purchase a competing smartphone and to use another
cloud storage provider instead of Apple.
> In reality, the presence of very viable substitutes in the market for the iPhone (to wit: Android) probably moots the argument here.
Obviously, no part of my argument focuses on whoever it was who said Apple's Dropbox rejection is an antitrust violation.
Happy to clear that up for you.
 I do not consider myself a "nerd", by the way, nor do many other people that you probably seek to apply that label to. Some of us find it quite insulting. Call yourself whatever you want, but speak only for yourself.
I think maybe this is an example where tone of voice is transferring poorly to internet text, and you’re interpreting his statements to have quite a bit more bite than he intends (or most others are reading)?
I only wish I could convey such attitude through text intentionally.
EDIT (posted after jacobolus' reply):
When I first came here, I was annoyed at the entire HN attitude of "a better discussion board". Good clean discussion is great, but at the time it seemed too dismissive of the great conversation that happens elsewhere on the web; too arrogant if you will. Furthermore, I saw that attitude as a sort of challenge: could I game the system and be just helpful enough some of the time to allow myself to be an utter asshole the rest of the time without getting banned?
You see, somebody who is an asshole some of the time and useful the rest of the time is not a valuable community member. Even if most of the time is spent being useful that is still not a person that you want in your community; in short, the karma system is broken. Of course HN isn't quite as broken as a pure karma system would be, hellbanning still kicks in for people with positive karma, but it is broken nevertheless. It's pretty easy to keep individual comments at positive or at least neutral karma by picking your topic correctly, which gets you around (to my knowledge) all but manual banning. (I suspect an improved banning system would involve flagging people for manual inspection after they have too many comments with large amounts of up and down voting. I can't speak for the false positive rate of such a system except to say that my honest productive comments rarely seemed to swing)
But I'm done now. tptacek does a better job of what I wanted to do than I think I ever could.
I think I'm past due on closing this account anyway. I'm out; apologies for any grief I've caused. I probably owe a good number of you a beer.
Edit: maybe it’s better to say that he isn’t trolling them (i.e. intentionally riling people up just for the sake of being a jerk), but is trying to be genuinely helpful and advance the conversation, even though sometimes that takes a teasing sort of tone. Notice all the smiley faces.
I've often corrected many of the kind of misapprehensions he seems to see himself as on a crusade against, and it has never been necessary for me to adopt his abysmal attitude in the process.
Edit: To answer your added bit at the end, which has changed several times, I'm interpreting it in light of him. Hence my references to his past history. Some months ago, he went through a particularly nasty period, and when I called him on it, he outright admitted he was intentionally being a jerk.
You don't think that maybe this sub-thread is a waste of time? Your opinion of me --- which you can probably guess I don't organize my thoughts around --- does not change the fact that product tying isn't "per se" unlawful.
Since it's so full of examples, even the thickest of nerds can learn!
I've been a systems programmer since 1994. I do not believe that you honestly believe that I think "nerd" is an insult. It beggars belief. Please find a better way to be irritated with me; this is such a stupid one.
Why not just go the extra mile and call me a "self-hating nerd"? At least that would make sense.
In this case, Apple's IAP rules are preventing apps from selling products/services at their 'natural' prices in rival marketplaces, which could be considered anticompetitive depending on the various factors involved.
1) There are specific scenarios for when antitrust takes effect. This isn't of them.
2) Apple is NOT rejecting apps specifically for using Dropbox. It is because of the well known and well established in app purchasing rules.
I suspect it would take only a few small additional variables to trigger an anti-trust issue when it comes to forcing payment forcing. What those could be, I don't know. Agreements involving a payment processor? The point is its a small step away. What they are doing now is extremely anti competitive and it would not require much to push things over the edge.
The original post indicates that a link in an app had another link in it for something that users could initiate a purchase through. What would happen if Google forced all indexed sites to go through Google Checkout and on non-compliance wiped all references and sites that linked to other payment processors from their search results? That wouldn't fly. Is the only difference that this is Apple's App Store and Apple is not a monopoly?
Looks like he had to remove anything that seemed to be a domain name.
How come Apple's reviewers are so freaking vigilant about in-app purchases while letting a fart app or a tethering app (or even, until one point, those uploading address books without any alert) slip through so often?
See: The initial Apple - Google spat with google voice, Kindle - Apple, Dropbox - Apple.
The UX mantra is just BS like Google's "Don't be evil".
It looks like Apple is rejecting apps that use the Dropbox SDK in a way that violates the TOS. But then the headline may as well read, "Apple rejecting applications which use code."
How can we be sure that doing stuff like this was a contributing cause, let alone a necessary cause?
Did you even read what you linked to ?
Is it wrong for the GP to try and start a conversation about the morality of a company as large as apple, demanding such a large degree of separation between users and the ability to make purchases outside apple's control?
I'm about as 'anti-apple' as they come, and even I can see it was just a case of Dropbox's sdk doing something against apple's rules, but that doesn't mean what that what apple's doing is 'right', or even necessary for a corporation as large as them, which is what I believe the GP was hinting at.
In my opinion it's just business as usual. Just look at wall street, and all the large oil corporations and such; a company as large as apple doing something dubious is not exactly shocking. If anything, that's what got these large corporations to where they are in the first place. Is it sad? sure, but it's nothing that we haven't seen before...
Which is completely and utterly wrong.
1. Don't work for Apple. This one is really the easiest to implement, there's more then enough fine alternatives in the Valley.
2. Don't develop for Apple. Unfortunately, not really an option for most mobile developers. So, the next best thing is "don't develop just for Apple". Make sure that if your customers want to switch, your app is available on other platforms.
3. Don't buy from Apple. Again, not really an option for developers because of #2 (and that's also another example of walled garden - you have to have a Mac to develop for iOS).
One place where government regulation might be needed is to help create secondary market for apps. If I have many dollars worth of apps (or, say, books) and no way to sell them, this is obviously a big barrier to switch. I'd like to see a law requiring companies that sell digital goods to provide a way to transfer those goods to other users.
Now, I don't think that other companies are inherently more moral than Apple. That would be a foolish assumption. It's just that one company dominating an entire market is bad for almost everyone.
If you develop mobile apps, only having one channel of distribution / platform is such a high risk. I don't understand developers that only target one platform.
- forcing cable/telco companies to share the cost of broadcast rights to a major soccer tournament, despite the tournament corporation's remonstrations (previously the companies bidded for the exclusive rights against each other and passed the costs to consumers)
- requiring telcos to provide number porting services so people can switch telcos without losing their numbers, thereby freeing them from lock-in
These two actions cut the profits of the cable-telcos here but benefited consumers significantly. We would have been paying out the nose for soccer broadcasts otherwise, and been stuck with our old mobile providers even when competitors were offering better prices.
In a marketplace as huge as the smartphone+app+media ecosystem, I'm quite sure governments should be stepping in with regulatory tweaks to make sure users can use multiple services on each platform - even buy from competitors.
Antitrust law shouldn't just be against monopolies - it should be actively pro-competition.
Pretty sure most people don't care.
This Dropbox is the same rule that has been in places for years. In fact the walled garden is less evident than in the past.
What made the Kindle issue "OK" is that Kindle was undermining the Apple marketplace. This is simply not the case here. Apple are just being 'assholes'. A link to a link, to a link that sells disk space - not even CONTENT. How does it undermine Apples business model, or hurt end users? Answer is, It doesn't.