Phil Schiller: Apple Will Not Change Decision on 'Hey' Email App | Hacker News Reader

Phil Schiller: Apple Will Not Change Decision on 'Hey' Email App

macrumors.com

31 pointspier2534 comments

That response letter is so sanctimonious. “We’re happy to keep distributing your app for free”, good lord. DHH is right, this is a monopolist shakedown.

How's it any more of a monopoly than Microsoft's store, Google's store, or even a digital content "store" like Netflix?

Let's not misuse words to make a point here. All companies have, in your definition, monopolies over their own proprietary stores. By the same token, Wal-Mart has a monopoly over the products it sells and Ford has a monopoly over the vehicles they produce and distribute.

Apple's app store on iOS is more of a monopoly than Google's app store on Android because Android allows third-party installed apps and even other app stores (like F-Droid, and Amazon).

It can’t be more of a monopoly because neither is a monopoly.

https://www.investopedia.com/terms/m/monopoly.asp

I believe Apple has roughly about 15% of the global smartphone market.

Fortunately US antitrust laws wouldn’t use irrelevant global stats, and iOS has over 45% smartphone market share. It’s also important to note other dilutions like “all operating systems” or whatever else are also irrelevant, look at the MS antitrust case which took place in the era of TRON. Finally, oligopolies lend themselves to predatory practices and collusion. It sounds like Android’s App Store has similar policies, which is nuts. That means I need to pay a 30% tax to give 99% of US smartphones access to my service via a native app? Any way you look at it it’s just a cartel.

But you don't have any kind right to force either Apple or Google to distribute your services. You can choose to enter into a business relationship with them or you can choose to not do so.

You neither have a right to force Netflix to distribute a film you've made and you don't have a right to force a supermarket to sell the vegetables you might grow in your garden.

These analogies are just all super bad. For all intents and purposes, you can have one of two mobile OSes: Android or iOS. Apple (and Google, to a lesser but still severe extent) work pretty hard to control the kind of software you can use on their OSes. It's like you can have one of two kinds of shelves, and Apple/Google tell you exactly what your book options are, but without the books the shelves just take up space uselessly.

This is why the app store isn't a grocery store, or a big box store, or whatever else. And it's why, if you're an author, you'd rightly be pissed that the shelf maker, who has a monopoly on shelves and is the most profitable company in history, is saying they're taking a 30% cut of your book sales if you want them to go on a shelf.

You're essentially saying, "well feel free to not make a mobile app". That's a ridiculous position in 2020.

Well the bookshelf analogy isn't perfect either because a bookshelf serves no purpose without books while most normal people just use the built-in apps plus a couple more.

Also book authors would be really excited about paying only 30% to have a shelf maker distribute their book because they currently pay about 90% to the publisher and retail outlet.

Yes I am saying "well feel free to not make a mobile app" and I don't think that's a ridiculous position and I'll explain why.

For a start neither Apple nor Google had to allow 3rd party apps, and actually neither developers nor government would have been able to force them to do so. However they created massive industry and that's benefited them as well as developers and users. The two are in heavy and healthy competition with each other. If they colluded to keep the cut at 30% I would agree that some government action is warranted.

The other thing is if you look back in fairly recent history you see that software developers have a pretty bad track record in terms of respecting their users. People regularly had to reinstall their operating systems to rid it of malware and crapware that was really difficult to get rid of. This situation would clearly be intolerable on phones hence all of the restrictions and app reviews.

Apple and Google also bring customers to the developers. They are providing a lot of value for developers, if the 30% was that bad then 3rd party apps on phones would have never become a thing because developers would have never made the choice to develop for them. So clearly it was a good value proposition before the market for apps exploded so it should be an even better one now.

I think your underestimating the value that Google and Apple are bringing here. They've created a marketplace where customers are really comfortable with trying free apps and buying apps and subscriptions to apps. Cancelations are simple. You've got one-click purchasing which makes it really easy to impulse buy. No one has to give their card details to random companies all over the world. Refunds are easy. It's also really easy to delete apps. Users haven't got to worry that the next update of a trendy photo app is going to install some toolbar into their web browser. All of this creates more sales of apps. I don't think it's unreasonable to take 30% of sales in exchange for this.

Finally it's not like developers can't make web apps that are compatible with smartphones. You can even save the web app as an app icon. Okay so maybe push notifications don't work but so what. The issue is that some developers seem to want it both ways. They want the benefits of the marketplace but they expect Apple/Google to provide all of that for free. It's a sense of self-entitlement I think.

Anyway thanks for the conversation I should probably go sleep now. Also I'm kind of tired of defending two of the largest companies in the world. It's not really me.

We do most of our sales of physical goods we manufacture through a distributor. The distributor marks up the price they pay by 80%. Effectively the distributor takes over 50% of the profit. We think we’re getting a great deal. Eventually the goods make their way to retail where the retail outlet takes 80% of the money of the entire supply chain. This is a pretty normal situation for most businesses.

To me having Apple take only 30% sounds like a fantastic deal.

That’s physical distribution. Digital distribution costs almost nothing.

That's only if you don't include the cost of actually building the digital marketplace and the free developer tools and the actual devices.

Which you pay for w/ your $99/yr. dev fee.

Xcode is free without the dev fee. And a years worth of app reviews for an active developer costs a lot more than $99.

Ugh, you need to pay the dev fee to get your app in the app store, which is the thing we're talking about. Good grief.

Yes and it cost apple money to perform app reviews each time the dev updates the app. It's a trivial amount of money for access to the marketplace.

Yeah it’s almost as if devs getting their apps onto iOS makes it more valuable and dumps profit onto Apple’s balance sheet.

The difference is if I buy something at Walmart I can use it however I want. If I buy something from the App Store I can only use it on my phone, and Apple can yoink it from the store and I’ll never get updates again. Plus Walmart sells actual stuff they have to purchase ahead of time, truck there, and store. That does in fact cost money. Hosting an app on a server farm costs almost nothing.

How is the letter sanctimonious? It's acknowledging the fact that Apple has added value to DHH's business without actually having made any money from it. If anything DHH sounds a bit self-entitled.

This letter acts like Apple is doing Hey a favor but, without Hey and other devs creating the entire value proposition for the iPhone, it would be worthless.

If the value proposition for iOS developers wasn't acceptable there wouldn't be any iOS developers.

Make that "there won't be any iOS developers left" and you're closer to the truth.

Or it's people who think they'll someday make money on their app, just like there are people who think they'll someday make money on their domain name or their Mary Kay sales, but they don't.

You're kind of making my point for me here. It sounds like you're saying the value proposition is so good that people are willing to risk $99 per year on the off chance their low-effort app might be a hit? They must know the chances are low but think that $99 isn't a lot to risk or spend.

Something isn’t a good value simply because you can convince someone to pay for it. Econ 101 will fill your head with the rational market hypothesis and perfect information, but humans are irrational and have nothing even approaching perfect information. We’re bamboozled all the time.

Also, Apple insists that it is distributing the Basecamp app for free which is really not true.

Every developer pays $99 every year to Apple.

Considering there are over 20M iOS devs that's over $2B per year.

$99 a year for free developer tools and access to the marketplace is really good value. There wouldn't be 20M iOS devs if the $99 a year and 30% didn't represent a good opportunity.

My point is simply that developers pay to be able to upload apps. There is no charity from Apple to host free apps.

Clearly Apple benefits from it too and it's mutually beneficial for Apple, developers, and users. But it's not without cost to Apple. I'm not sure how much Apple pays their app reviewers but I suspect it could easily cost more than $99 for a single review of a non-trivial app. And it's the app reviews that creates a marketplace where the users feel safe in trying and buying apps without worry of malware or complicated cancellations of subscriptions. They also make it really easy to delete apps which is pretty nice.

I think if anything the pricing structure benefits small independent developers over the bigger players.

> Clearly Apple benefits from it too

Clearly, which is why it's no charity like their letter implies.

Apple, as a distributor for DHH, has mentioned that they've provided value to DHH that helps him make money without having made any money from him directly. It's extremely charitable for them to do that. Even vendors at a flea market generally pay something to be able to sell.

That would make sense if Apple offered the AppStore for free to developers, but that's simply not the case.

As you said, "Clearly Apple benefits from it too".

I wonder if DHH will give up his iPhone

And his mac

I wonder too, and see the dilemma with such things. Another example for other people is Facebook. With all the things the company and its services have done against people, it still provides some value to some people which they couldn’t really get elsewhere.

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