Apple Plus – brand versus subscription
ben-evans.com
ben-evans.com
This is an extremely good point. I'm a technical person, I love open technologies, but I've invested in Apple devices because right now we have no choice but to put trust in one major tech company or another, and Apple is the only one I have an iota of trust in not to screw me over. They're smartly capitalizing on a culture shift of tech-skepticism, and I'm not ashamed to say that that sales pitch works on me. Their competitors would be wise to take notice.
If Apple would let you use their products anonymously, that would be a clear indicator they were on the side of privacy.
a couple pointed questions:
- do you know what apps on your iphone are doing? can you find out?
- do you know who they contact?
- do you know what technologies they are using? deep linking? ibeacons?
- can you firewall your apps?
All of Apple's first-party services give detailed breakdowns of what information Apple receives before it does so. Other than privately-stored iCloud data, they send virtually zero non-anonymized data to Apple. And as much as possible - especially with things like Maps - they keep data local to your device.
So no, I don't always know who third-party apps are contacting, because nobody can. But I do know (and have control over) every interaction they have with the rest of my device and data. For first-party apps, I do know everyone they contact and with what information, and it's kept to a reasonable minimum.
On my apple desktop, little snitch does tell me this information.
I think it would be totally reasonable to give interested users visibility and/or control over this sort of thing on their phone.
I can confirm this. I work for a top 10 consumer focused app (< #10 on the App store) and Apple did exactly this - ask us to enable users to use the app even without giving location permissions. There have been multiple push backs from Apple similar to this regarding user privacy and security and none from Google. And this isn't a vague generalization - Google has never asked us about this stuff, ever. It just isn't a priority. And so, as you might expect, I tend to trust and use the Apple platform for a lot of my personal stuff.
Those are not sellable perks to anyone but people on hacker news. Let’s hope those terms never show up on Apple marketing pushes.
Don’t move the goal post.
For instance, the amazon kindle app contacts facebook. Would it be of value for consumers to know their phone is doing this?
Which leads me to the other part of Apple's brand: they will make your life hell if you play in a space they deem important to their survival. Any developer on the app store knows this.
We're entering a world where it will be very, very difficult to survive as a third party in an ecosystem, and the argument will be "our brand." For any success you have, 30% of your gross revenue is going to help finance a potential future competitor. We have to double down on mobile web in the next decade if we want any semblance of competition in media.
I mean that's what net neutrality was always about really, not being responsible for the rails but also regulating them to maximize the advantage to themselves (a standard commoditize your complements play). They dropped their net neutrality advocacy after they got big enough and wanted to partner with cable companies and wireless carriers for distribution, which they gladly pay for.
There are also a half dozen streaming music services.
* News+
* Apple card
* Apple Arcade
* And they already have Apple music
Am leaving TV out of this list for now. Most people may not want a particular service. But it’s highly likely a good chunk of apple customers will want at least one or two of them.
And then that becomes a factor at switching time. For instance, I’ve considered Android in the past. What has always stopped me are two thoughts: ‘What about privacy?” and “what about imessage?”
Note that these don’t need to be sticking points for you. I’m saying they’re sticking pointed for many. Now, apple is adding three new service sticking points, to add to their music sticking point.
People will think things like “I really like reading Apple News everyday/I like getting the WSJ”. “Those games are so fun for my kids” “Ugh, I’d have to get a new credit card if I switch phones?’
Apple already has a strong ecosystem effect, especially in the US. These will add to it. The apple watch and airpods are another stickiness factor that’s growing rapidly as well.
I left off TV: I’m not sure how it adds to stickiness. Apple is making it widely available on third party devices. So you can still get a show you want even with no apple hardware. Will there be some tie in to apple hardware announced when the service launches? Or some kind of bundle price that itself adds stickiness? Unclear, the strategy behind the TV service is still a bit opaque.
Personally, I’m excited for Apple Arcade. Don’t know how the games will be yet, but it has potential and will be a nice complement to having a nintendo switch. News in Canada is....ok, though it’s unclear to me how much I’m getting with paid vs the free version and I may not keep it. Depends how much value I get from the wsj.
I don't think any of those things are all that sticky. I think it's more about leveraging their client base to push into what are essentially commodity industries. Like the credit card. Apple's offering is more or less the same as everyone else's. They will still get some % of iPhone users because it's the most convenient option. Even a few % translates into millions of users and 10s-100s of millions of annual profit. Amazon is a few years ahead of Apple in doing the same thing.
They have a gigantic second mover advantage in any sort of app or online service. Whatever they make can be the default option and they have a built in 30/15% price advantage from the app store fees.
>I left off TV: I’m not sure how it adds to stickiness
I think this is the best example to illustrate my point. Video streaming is not really a commodity. It's a balkanized landscape of minor fiefdoms controlling content. There's a handful of big movie studios, a bunch of TV producers, all of the different sports league, and other live events. It's not like music where Apple can produce a Spotify competitor with relatively little effort. Competing with Netflix means producing originals and doing a better job of buying content. It's much much harder.
No single point of apple’s offering is all that important for stickiness, but I think it will add nicely to their ecosystem effect.
I don't believe it's as strong as Apple would have people believe. It may be that I fail to understand Apples US reach, but I don't see that owning an iPhone makes customers stay with in the Apple ecosystem. I would be surprised if even 25% of Apples iPhone customers have an existing subscription to an Apple service.
The new products/service also seems like a failure to plan for beyond the US marked. Neither of the four service seem like something that would be enticing to customers in other countries. To me it seems like Apple has come to the end of the road, there are no new device or service, to they attempt to make a little profit in four niche markets.
Here’s a short list of some of the things that may keep someone on apple. Most people don’t use most of them. But even having 1-2 may keep someone.
* apple watch
* apple health data
* iCloud photo libraries (sharing with family etc)
* imessage
* certain apps only on ios/mac
* privacy
* apple music
* itunes music library
* now, apple news, apple arcade, apple card
* airdrop
* airpods
* integration between iphone, ipad, apple watch, mac, etc
Apple has about 50% us market share, so a lot of those involve social or family ties. Outside the us these are less important: most people in Europe use whatsapp for example, negating imessage.
But the point is, for each of those bullets, there’s somechunk of people who are deeply invested in it. It csn be a bit hard to imagine on the outside, because most non-apple services are cross platform. But imagine if you couldn’t use gmail, youtube, netflix etc when switching from android to iphone. It would make you think a lot harder about the choice. These aren’t great examples because they’re more important than the apple services, it’s just to illustrate the idea: if you leave the apple ecosystem, there will be things important to you that you can no longer do.
More prosaic android examples would be things such as homescreen customization, better notification management, etc. anyone switching from android has to give those up, and they help prevent switching from android to apple.
(http://fortune.com/2019/02/21/apple-iphone-sales-2018/ New phone sales are even weaker than overall share.)
(Right now you can't even remove magazines after adding them. Really feels like a beta product.)
What killed Good Journalism was the lack of revenue. And I don't see News+ would save it.
It’s not clear that’s a better deal for news sources than just monetizing their own paywalls.
NY Times and Washington Post certainly think they can do better on their own.
There are no such revenue stream from the News Subscription.
We should find out in a few years time.
If 1 million people sign up to AN+ at $10 per month, that’s $10 million per month brought in, or $120 million per year. Apple takes $60 million of that, and 300 publishers divvy up the other $60 million, which if distributed equally would be $200K per year, per magaizine. Apple has stated that payment will correspond with performance, which Apple defines as “time spent,” which will probably heavily skew to the publications being featured on the front page of AN+. Publications that don’t use the enhanced format (which is roughly half of them, currently) will likely never appear on the front page, which means they’ll earn nada, and the revenue will be lopsided to the publications Apple promotes.
Everything hinges on how Apple defines “Time Spent” and how much that correlates with promotion on AN+’s front home screen.
But, look, I’m not saying this is a home run. All I’m saying is that it’s not clear to me that this is doomed to failure. Might work, might not. We shall see.
I was interested in News, because of the WSJ, but it’s not even the full Journal.
I’m still amazed Apple is not doing anything about robocalls. This is an area where software can improve the situation, and I do believe this is related to privacy.
And instead we get the latest iOS with...more Animoji.
There was a lot of back and forth on this, but I think it is the full journal. Is there a section that’s supposed to be excluded? You can go to an article, hit share, and open it in apple news to test.
I didn’t mean these things will be as sticky as imessage and face time. Just that they are factors that expand the ecosystem for some users. Apple news has been very popular in the US, so news+ will probably be a no brainer for some people. If done well, games will be sticky for a ton of people, and so on.
The question isn’t “would I use that?” It’s whether others would.
I do think News is probably the best bet. It’s something I’ve wanted for a while because not many people are going to pay 5-10/month for numerous news sources that are often regurgitating the same news. But I doubt it would keep me on Apple. And isn’t this something that could eventually easily be replicated by others?
I’m not in the US, so I won’t have the card, but that got the most interest post event by far. As for games, if they’re good I think it will be huge with families. Parents will buy for their kids. And if some good games are exclusive it will be a sticking point for sure. I’m almost certainly signing up. I only game with a nintendo switch currently, but the Apple games look similar: fun, lightweight indie games I can play in spare time.
Maybe other manufacturers will follow suit but none have AirPods or a watch like Apple does. Probably in a few years you’ll charge your Apple glasses wirelessly using your iPhone too.
For me this new feature is even stickier as it’s innovative even if they sorta copied Samsung’s Wireless PowerShare that’s in the S10.
Instead they showed a credit card, that look's nice, but I fail to see how Ben think's that reduces churn (credit cards aren't sticky, incentives are - no one will buy a new phone because they're middle of the road rewards are there) and then a subscription that would have been a footnote in a Google or Samsung keynote. Those subscriptions for news (and even more so for Games) are non-events. They are so boring, so anti-sticky that they made me think this whole thing was actually a failure - and Apple shouldn't have made a song and dance of it and just talked about during the iPhone keynote.
The games platform sounds both boring AND unlikely to do well
The strategy may work in the US where the payments ecosystem is incredibly dated and backwards, but Apple Card is very much a me-too offering in nearly every other developed economy.
I'm not sure, the whole in-app purchase thing is a bit of a mess. I could imagine parents subscribing just to keep their kids out of that cesspit.
I can see parents resenting subscribing just to keep their kids out of that cesspit.
For example, virtual slot machines, which make up something like 9% of the top grossing charts, are the biggest IAP offenders. They’re bad for gaming, they’re like the virus of the industry. If Apple wanted to, it could just remove them from the store in an afternoon.
The platforms that don’t run virtual slot machines tend to host the biggest achievements in gaming critically and financially. That would appear to be, in a narrow and uninteresting way, the Epic Games Launcher, or the PlayStation store hosting GTA. How does Apple have the store for devices as powerful as and more numerous than the Switch, and yet can’t host more than a few critical and financial successes a year?
It’s the culture, duh. It’s not the business model. That’s why subscriptions are kind of stupid.
An IAP-free game subscription is exactly what I’m looking for and the only thing I’ll be letting my kids play when they come of age.
You just contradicted yourself. “Stickiness” by definition is not about people getting “new” phones it’s about people staying in the ecosystem and spending more. The whole idea behind services is to get people spending more money in the ecosystem since they aren’t buying new phones as frequently.
The credit card is basically useless without the phone. If you track your spending with the phone, you’re less likely to leave and you get simple cash back with it that goes into your Apple Pay account.
Subscriptions for games are really a big deal. The whole ecosystem for games is slimy with ads and in app purchases of gems and loot boxes. Games that are bundle with the subscription are curated. If you have kids, signing up for a games subscription and handing them a new $329 iPad or hand me down iPhone is a no brainer. AppleTV+ won’t be a big deal, but get a subscription to Disney+ when it comes out and you have the perfect item to keep them busy.
I would get Apple News just for one of two magazines that I care about.
People have been complaining about kids and their electronics since the Atari 2600.
Previously our parents debated if it was ok for kids to read books at the table.
I bet Aristotle complained about kid’s focus of attention these days.
On the minus side the publishers and developers are still compensated by the amount of time users spend in their articles/games so the incentive is still to develop addictive and time hogging services or click bait. To be fair this is a difficult problem as there's not an objective measure for quality that compensation could be based on. Perhaps more thought could have gone into this though.
Even if the game is addictive, at least it isn’t tracking you or trying to take advantage of you financially.
https://venturebeat.com/2019/03/25/apple-will-fund-exclusive...
(For those who haven’t been to the US: unlike the rest of the developed work, contactless payment isn’t universal in America. Many places still require you to swipe and sign. Even chip readers are somewhat new. So this card is a way of pushing merchants to modernize their systems and support contactless. Users get 1% for card use but 2% for apple pay)
Edit: why is this getting downvoted? It seems obviously correct. Apple has been struggling to push us apple pay acceptance for years.
2% cash back on cards is quite common. Especially if you earn enough to be deeply invested in the Apple ecosystem.
And they will have an incentive to ask stores about apple pay: double cashback. That’s my point. Apple will be passively mobilizing these people to spread contactless acceptance.
The card pays cash back daily as dollars that are immediately available for use with Apple Pay. Apple can then prompt you to pay for Apps, Apple Music, and Apple hardware using these funds. That makes the stuff you buy from Apple feel "free" (you're paying for it with magic cash-back dollars). It also means that processing your payment just requires changing a number in an Apple database, not routing money through the credit card processing network.
I'm sure I've gotten some of the details wrong. The top comment here goes into a lot more (somewhat speculative) detail: https://www.quora.com/What-is-Apple-Card-the-new-credit-card...
Google Play Music wasn't a thing Google cared about, really. Same with Youtube Music. Neither of them achieved much success. Apple Music now has more US subscribers than Spotify. They care about it because they make it their business to care about it. Customers see that. They give Apple money. Its that simple.
You'll never get something like The Wire coming out of Apple because it makes the current execs feel uneasy. You will however get safe milquetoast things like Carpool Karaoke.
The evolving brand promise thing seems right to me as a general principle, but it doesn't seem either new or particularly applicable to these services. Apple has always had a major competitive advantage in being relatively free of scams and attacks---much less malware than windows, zero OEM-installed garbage compared to windows or android, SIP and App Store curation, etc. etc. But I'm not sure how that point applies to the rollout of services that are competing with established and legitimate players. Nobody's going to choose Apple over Netflix or Steam or the like on the theory that Netflix/Steam is "scammy."
No.
In the same way people won't be choosing Netflix over HBO because HBO is scammy.
The whole article doesn't make any sense.
When you buy a computer or a phone, you buy just one and that's it, having more than a computer or phone doesn't make much sense as it's worse than having only one. So Apple needs to make a decidedly (for the costumer) better product.
While in art/entertainment, there's no "better", people consume the content they want, and can have more than one subscription.
You can have Netflix and Apple and HBO and many others, or none at all.
The only thing Apple needs is to produce content good enough that people are willing to spend the mensality.
Maybe they can’t figure out a way for it to be cost effective? It just seems word to me you can do this with your iphone but not a computer.
They were negotiating to get a violent TV show according to CNBC [1]. And Apple's iTunes store has already sold movies and TV shows that were for mature audiences, so I doubt they're going to place any restrictions on what kind of content they're going to buy.
[1] https://www.cnbc.com/2018/12/06/apple-pursuing-violent-israe...
I've meet too many people who feel like paying $100 for a service annually is too much, but $10 a month is acceptable. These subscription fees add up, often without users ever realizing.