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Comment by tshaddox | Hacker News Reader

Why should revenue from iPhone hardware subsidize third-party iPhone app developers?

Because Apple doesn't break out the money from the App Store from the rest of their software/services business, and iOS isn't free, it's licensed with the purchase of a iOS device. If money from every iPhone sold goes into the software/services budget, one could conclude there's enough money coming into that budget from device sales to pay for their CDN/developers/etc.

You answered why there might be enough money to subsidize developers. Apple has a lot of money, there's no question about that, but I was asking why they should subsidize developers (or why we should expect them to).

I think you don't understand the answer. When customers buy iPhone, they already paid a plenty amount of money for accessing third party apps via App Store since it's so essential and inherently indivisible value from iOS and iPhone, in favor of Apple's argument. Apple may not be obligated to subsidize developers with direct cash, but to pay operational expenses for App Store since there is no alternatives. Otherwise, it would be a textbook example of abusing monopolistic power.

I don't really see why there would be any expectation of that from the legal system or for ordinary people, other than that Apple obviously shouldn't drastically reduce functionality of iPhones which they have already sold. But again, I don't think anyone is suggesting that Apple might stop having an App Store altogether, or that the outcome of any of these legal battles would be that iPhone users would have significantly reduced access to third-party software. You're just talking about who ought to pay for the costs of distributing third-party software to iPhones.

Summerlight's point was that if you take Apple's argument at face value (that iOS and the App Store are so tightly integrated as to be indivisible), then it boggles the mind that Apple could then turn around and sell you iOS (via an iPhone purchase) but not include the App Store in that same transaction.

Or, in a sentence: you can't claim something is indivisible, and then charge for its pieces separately and at separate times.

Your point is probably that developers and customers are two separate groups, and there's a history of making a thing free to customers (the App Store) while charging vendors (developers) for the privilege.

> Summerlight's point was that if you take Apple's argument at face value (that iOS and the App Store are so tightly integrated as to be indivisible), then it boggles the mind that Apple could then turn around and sell you iOS (via an iPhone purchase) but not include the App Store in that same transaction.

I just don't see how your "then" follows from your "if" at all! The integration of iOS and the App Store is from a user's perspective. No one seriously believes that Apple is claiming that the two things are literally physically impossible to split up technically. You might as well be arguing that it boggles the mind for the calculator app to be free, but for iCloud storage to cost money!

> No one seriously believes that Apple is claiming that the two things are literally physically impossible to split up technically.

Except Apple in the court does. That is the exact stance why they cannot allow third party stores and browser engines since those are technically a part of indivisible OS services. Of course, this is obviously BS and inconsistent to many other Apple's business practice, anyway it's their official legal stance in nearly all of its antitrust lawsuits.

I find that extremely hard to believe. Can you provide a source for this interpretation of Apple’s argument?

That's not true at all. They're not claiming they can't split it up technically. They're claiming that part of the end-to-end user experience is that users trust the App Store because Apple has oversight into the entire chain from downloading apps to the OS to taking payment information on their devices. If they have to open it up to other parties, then that chain of trust is broken.

Because Apple doesn't allow other form of app distribution? It'd be fine if they allow third party stores like Android.

If you want the ability to use a third party store, why not buy an Android phone instead? Apple doesn't have a monopoly on the market as affirmed by the outcome in TFA. Users choose to buy Apple devices for a reason.

Because I already have invested thousands dollars into the iOS ecosystem? What you're saying is something like "You don't like the only internet provider here? Why don't you move to other cities!". Life is not that simple, unfortunately.

Unless you invested those thousands of dollars before the App Store and most of the relevant modern policies existed, I don't think your complaint is reasonable. This is nothing like moving to another city or country. It's a smartphone, which people tend to replace at least every 3 years, and I don't think Apple has significantly changed any of its policies in the last 3 years.

> Unless you invested those thousands of dollars before the App Store and most of the relevant modern policies existed

Oh, so every iOS users need to understand all the app review policy and TOS before spending their money on iOS ecosystem. Otherwise they cannot complain about what Apple's doing? Customer protection and antitrust regulation don't work like that.

> This is nothing like moving to another city or country.

Why? The main reason of using alternative store is mainly having cheaper apps and contents, usually several cents per each. And you're suggesting that I need to spend ~$1000 upfront cost as well as giving up all the apps and contents that I purchased in iOS? I think it's pretty similar to "moving to other cities", which illustrates how classic monopolist lock-in strategy works.

Subsidizing 3rd party developers, would be if Apple paid app developers to be on their platform, on top of a 0% commission.

Instead, what people want, is for users who already own their own phone, to be able to do what they want with it, without an uninvolved 3rd party (Apple) getting in the way of transactions made between the user and the developer.

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