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Comment by archildress | Hacker News Reader

Given the strong emotions around the topic, I've been a bit afraid to ask this question - is what Apple does really that different than traditional retail? In FMCG there are difficult hurdles to jump over to get on the store shelves. The stores don't have an obligation to put anyone's product on the shelf. They can also module what the cut of the revenue is. I'm not sure I have an opinion on what Apple is doing, but isn't it worth asking if it's really that unique in the economy? I welcome feedback on if I have a major blind spot here.

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I think the difference here is that Apple is the only retailer for someone to install an app onto an iOS device. It prohibits anyone else from setting up a retailer, through policy-based (not technical) restrictions.

You cannot install an app on an iOS device, except from their store. Apple won't let you install an alternative store. Therefore their app store is a monopoly store, and should be regulated as such. (Is the argument being levelled against them.)

Well, Walmart is the only retailer in a Walmart store. Only Walmart is permitted to retail in a Walmart store.

But Walmart isn't the only store to go to in meatspace. If you have an iOS device, you get the Walmart of apps and only the Walmart of apps.

This is the problem.

But you're choosing a definition of the world that's too narrow -- "if you've already decided to go to Walmart then Walmart is the only store that can sell at Walmart."

Why isn't "the world" the smartphone market where there are plenty of options?

> Why isn't "the world" the smartphone market where there are plenty of options?

At a certain point in debates like this everyone ends up over-examining analogies to a point where it isn't useful. To be a useful parallel you'd need a world where you can only buy two types of car and each one only lets you go to one type of shopping mall, or something like that. My point is, that isn't how either the real world works or how smartphone app stores work, so it's a debate over nothing.

Because an iPhone is not the App Store. This seems fairly obvious?

"the definition of world is too narrow" is a pretty weak argument.

I buy an iPhone, knowing what App Store I'm getting. I don't see the issue, I chose to buy into this ecosystem.

> plenty of options

There are two options, and one of them is provided free of charge by the world's largest advertising company.

The state of the smartphone OS market is so wildly different from the general-merchandise retail market as to render any comparisons meaningless.

Not only are there only two options, there is a high entry fee to each option, and you can only choose one at a time even if you wanted to pay this entry fee twice. What percent of consumers are willing to carry two phones in their pockets?

So you can compare this to if you could only buy things at two different stores, each store has a hefty membership fee, and you were effectively locked into your decision for at least a year at a time.

I think the underlying sentiment is that you've bought the device, so you should be able to do whatever you want with it. And there's no technical reason that your choice of device should preclude other stores.

For a more meatspace example let's say you own a car with full self-driving capabilities. Now, the manufacturer of that car also runs a chain of grocery stores. It would be problematic if the car refused to drive too a different store. "If you've already to decided to buy a Walmart car then Walmart is the only store that you can go to."

well put

There are essentially two options for smartphones, for tablets it's closer to one. Remember when Microsoft got in trouble for bundling Internet Explorer in Windows? Seems quaint compared to what Apple is doing now.

It can be very difficult for someone to switch between iOS and Android. They're called ecosystems for that reason.

There's the obvious problem around apps and protocols. If you've been using them for a long time, your apps, their connectivity to each other, personal data etc is likely to be locked into Apple services & devices, or Google services & devices, in a way that is difficult or even impossible to move over (I know people with data they can only access now if they buy a license to apps they can no longer run).

More subtly, for example there was a recent article about how people in some places experience a social penalty if they aren't using iOS, because the difference is visible to others in terms of protocols used for instant messaging.

In my view, the great difficulty of switching and the penalties of switching mean that both Apple and Android ecosystems are, more or less, separate marketplaces, and each one has a strongly dominant player that should be subject to anti-trust measures.

Basically if you build a platform ecosystem, expressly design to lock-in users especially in ways that hugely affect their lives, that comes with responsibilities you don't have in a free and competitive marketplace where your users can switch with low friction.

> Walmart is the only retailer in a Walmart store

It's not like people have to choose whether to exclusively shop at Walmart or Target, like they do with phones. Reasonable people don't own both an iPhone and an Android.

Walmart actually does allow multiple retailers in Walmart stores.

Such as Coca-cola (who even has to stock their own inventory), and those shops and restaurants that are at the front of every superstore location.

It is more like "Fordmart" is the only store you can go to in a Ford car, I think.

There are multiple things retail does. Discovery and sales is one of it, but no one does what Apple wants to do with IAP.

Imagine that you buy a DVD player at Best Buy. That's cool. Best Buy decides the markup, where it puts it, how much it puts in promoting it, etc. That's also cool. You are OK with giving the with 30 % of your DVD player sales. After all, shelf space, promotion, etc. isn't free.

Now, imagine Best Buy hears that you sell DVDs by mail. People are already buying your DVDs and you are shipping it to their door, so you don't feel that it's worth your time and effort to "sell" them through Best Buy.

Best Buy is not happy with this. They say that for ANY DVD for the DVD player in their store, NEED to offered in their store AND you need to pay the same fee for which you get placement, promotion, etc.

You don't want to sell your "Mail in DVDs" in Best Buys, you don't want or need them promoting your DVD, they will never touch, manage, offer support, etc. for these "Mail in DVDs", but you HAVE to sell them in Best Buy because if you don't, then they will just stop selling your DVD player.

In short, they are in the business of selling DVD players, but want a cut of all "Mail in DVDs" because your customers bought the DVD player through them.

This is what Apple wants to do for any app that offers digital content / experiences that might not want to use their services. How is that OK?

Best analogy ever known.

It's not unique in the economy; it's not even unique in the software economy: video game consoles have the business model that they sell the hardware and make money by having a monopoly on the software that runs on them.

The questions are, do we want phones to be like video game consoles with a walled-garden marketplace, or like general purpose computers where the manufacturer does not exert control over the entire software economy. There are arguments for both, but I think the former stifles innovation.

Even with video game consoles and their walled gardens, consumers don’t totally lose out because consoles are sold nearly at cost (at least when first launched), sometimes even below cost.

Meanwhile Apple wants you to buy their $1000 phones AND wants you to pay an extra 30% for all software and digital services.

For the retail analogy to work, it would be like if Best Buy suddenly told Microsoft that because their Xbox allows people to subscribe to Xbox Live, Best Buy must get a cut of that subscription for every Xbox that's purchased in their stores.

This would be an absolutely perfect analogy. Maybe Comcast should get a cut too. In the end, Xbox Live is using its network to run the service.

Leave even traditional retail aside, is it that much different than what pretty much every gaming console does? I am aware that there _are_ people who are ideologically consistent in disliking the walled gardens of both iOS devices and popular consoles, but I have never actually seen the level of heat/vitriol that Apple gets targeted at, say, Sony or even Microsoft for the PlayStation/Xbox ecosystems respectively. I suppose it's due to people seeing games as "frivolities" even though the PlayStation Network for example pulls in the same ballpark of revenue as the App and Play Stores.

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