The Apple $2T Economy
asymco.com
asymco.com
> Users can find thousands of apps on the App Store to help them adopt healthier lifestyles. Many of these apps take advantage of Apple’s HealthKit API, which allows the use of sophisticated sensors on iPhone and Apple Watch, while ensuring that user data is safe according to Apple’s rigorous privacy and data security protocols.
The actual 1.1T number comes mostly (81%) from goods and services purchases (mostly retail) made in mobile apps on Apple devices. The methodology?
> We estimate the share of each app category’s sales that occur via mobile apps, within each geography, using information collected from marketing surveys or data on usage patterns. Finally, we apportion usage to Apple platforms based on the overall iOS share market share.
So it's an estimate; not hard data.
I don't want to discount the conclusion, because it's always difficult to understand Apple from outside the company, and the point really is just that people make a lot of purchases on Apple devices.
(Conflict of interest: I'm an Apple shareholder.)
When you read enough over Apple's marketing and PR over the years. You can easily detect them. Not saying all marketing are bad, but I would be cautious simply because of that.
The reason to be skeptical here is not because "it's an estimate"; it's because it's one group's model, studying a very nascent space for which there's been very little academic research.
What this estimate shows is that this is a clearly very large economy that isn't being rigorously modeled or studied right now. And we should probably devote some resources to that since what happens in this economy will meaningfully contribute to employment and national GDPs.
He did a lot of analysis to determine how many active devices Apple had in the world before Apple even started reporting those figures.
He was one of the only analysts who understood Apple’s position and scale, as well as some of the internal culture that helped explain a lot of their seemingly abstruse decision making.
Recently he got really focused on “micro-mobility” (ie, Bird/Lime scooters, etc) which hasn’t really been as earthshaking as he predicted, but he’s been mostly proven right about Apple.
It’s unreal to see the scope of Tim Cook’s Apple (or the iPhone Apple if you prefer).
What was his prediction? Seems like that's only increasing in popularity as people realize cars are like the most absurdly wasteful, lazy, and/or excessive methods of transportation imaginable for most daily activities, but it would depend on where you are and what your real requirements are.
Mostly because of antisocial behavior of all sorts: people thinking that scooters were similar to bikes so you could drive them while wasted, random youth groups throwing them off of bridges, into waterways or otherwise destroying them "for the lulz", inconsiderate dumb fucks parking their scooters right where they stepped off, or companies that plastered scooters, bikes and cars over entire cities without coordinating with any authority beforehand.
All of that led to a massive amount of public resentment and subsequent regulation that impeded usage (e.g. no-park-here zones, speed limits during the night and sobriety tests to reduce the risk for drunkards, requirements to force people to submit parking photos), and on top of that come the sometimes ridiculous "unlock fees" or absurd pricing of 20-30 ct/min or more. Public transport tickets cost less than that.
Horace (and the various VC firms that dumped money on e-scooter companies) probably assumed that intersection had more people in it than seems to be playing out in reality.
Sure, maybe they rented for a bit to see what it was like, but once you agree it’s a good option it is not insanely expensive (or heavy) to buy your own.
Scooter and bike share companies routinely parked (and still park) bikes and scooters directly in the path of pedestrians because they know that the more visible their devices are, the more likely someone will use them.
Additionally, as you point out the pricing these companies charge started out very low but have escalated quickly. But this isn't always true - micromobility can replace ownership if done right: Companies with presumably less VC funding, such as Donkey Republic or Forest have different pricing models that are still affordable. In Donkey Republic's case, you can sometimes sign up for a $10/month subscription with minimum three months (equivalent in local currency) where you can then reserve a bike and take it home with you or park it near your house but blocked from others renting it. You pay a discounted fee to ride it, and an even smaller fee to reserve it.
Cities are also to blame:
Better than no-parking-zones are cities like Paris where they created parking spaces specifically for bikes and scooters. You rarely see problems in these cities. Some places require designated parking areas without making the space in the roads for them - those are much more problematic because the parking spaces fill and spill over onto where people would prefer to walk or drive.
But users are indeed part of the problem:
The number of times I've seen unsafe drivers of any vehicle, or two people on one scooter, or scooters or bikes going the wrong way down a bike lane... the problems are actually endless.
But the problems aren't always with scooters or e-bikes themselves. Sometimes it's an ecosystem problem, and sometimes the rental companies are too short-sighted.
And regulation isn't always bad:
As a scooter rider myself, I look forward to the day when the 2027 E.U. law requiring removable batteries might take effect in the private scooter market. It's silly that so many high end scooter brands aren't making batteries removable simply because they don't want to have to deal with shipping batteries and user-replaceable parts and the inherent design costs of a removable battery.
Paris just banned rental escooters. https://www.nytimes.com/2023/09/01/world/europe/paris-escoot...
What has gotten them huge, and sustained them throughout the years, was a series of products that really look nothing like their first. Or their second. Just a continual evolution against a vision, which I think has been pretty consistent.
Worth putting modern, small startups today in that context...you never know what they'll evolve to become beyond their first, second, even third products
How much is each entity extracting from the suggested economy in terms of income.
PayPal operating income: $4 billion
Apple operating income: $114 billion
And of course PayPal is a skimmer, somewhat similar to Visa, so their extraction is miniscule compared to the transaction base. Apple carves out a fat profit from their ecosystem by comparison.
Maybe PayPal is beaten down here and their stock is relatively cheap as a value play. Or maybe they're about to be destroyed as the US switches to a European style, low cost insta money moving system courtesy of FedNow, and the market is pricing it accordingly. PayPal better diversify in a hurry, the transaction skimming business isn't going to be so nice in the future.
Meanwhile you have Epic offering to do the whole shebang for 10%, F-Droid doing it on Android for free apps for nothing, PayPal doing payment processing for a fraction of a percent over the credit card fees whereas Apple still wants 30% from in-app purchases that don't even use their hosting or tools. Makes it pretty clear that 30% is the monopolist lock-in price and not the free market price.
Id say thats scary
I’m just glad it’s Apple and not some other company…. I guess :-/
If you are an Apple user what real choice do you have? The cost of switching is massive for established users as everything Apple only supports Apple.
Sure an unaffiliated user can choose but once you are in one camp it requires a massive change to switch.
They utilize this to raise their prices holding the difficulty to switch against their users.
On a similar note they use heavy vertical integration to avoid options for users. You want their OS you need to buy their hardware.
"Doesn't have a monopoly" only makes sense in a make believe world where you have 95% market share or enough competition.
Unless you get a new same manufacturer device and then it takes minutes and you keep everything.
Copying data from iCloud Drive to another cloud provider like Google Drive can be done in the Files App.
Music you bought has been DRM free since 2009.
Apple works with MoviesAnyWhere. Four or five of the major studios participate too. Meaning any movie you buy from one of the participating studios can be synced to Amazon Movies, Google Play Movies (or whatever it’s called these days), Vudu etc.
Photos can be synced to Google Photos, Dropbox, OneDrive.
Bookmarks can be synced between Chrome and Firefox and Safari if you have a Windows PC using Apple’s extension for those browsers.
Those in the know can switch.
Those who just have a phone are looking at a hard to judge effort that might take months of "where was that?"
Don't just discount the literal day it would take a tech person to switch their primary phone as meaningless. Nor should you discount how many people don't even know it is meaningfully possible.
I am pretty sure I knew people back in the early days who wanted to switch so they just lost everything from before.
People have been using copy and paste to copy files from one drive to another since Windows 95. It works the same way with the Files app. You download the other storage provider’s app and they show up in the files app. Heck you can literally attach a USB drive to your iOS device and it shows up in the Files app like it would hold computer.
Syncing photos is as simple as downloading Google photos.
You can literally Google all of this stuff.
As far as it taking “a day”. It takes me about as long to set up a new Windows PC.
And it’s not worth a day of your life to jump over Apple’s “walled garden” where there is a big ass door that you have to push on a little bit?
No, I just saw it at random. You replied 3 minutes after my response; far sooner than I replied to you.
You know. A good society.
This mostly means that AAPL is seen as a safe asset to park large amounts of (fiat) money.
> this data includes payments which are not captured by Apple directly. In the words of the authors, “More than 90% of this figure originated from transactions that did not happen through the App Store, meaning that these amounts accrued solely to developers and other third parties, and that Apple collected no commission on them.”
> this data includes payments which are not captured by Apple directly. In the words of the authors, “More than 90% of this figure originated from transactions that did not happen through the App Store, meaning that these amounts accrued solely to developers and other third parties, and that Apple collected no commission on them.”
Notably they seem to view their product lines quite different, the website lists "Store Mac iPad iPhone Watch Vision AirPods TV & Home Entertainment Accessories".
The only change is that you could also choose something different.
And even now, Apple can just relocate, as Microsoft threatened to do.
Consumers have choice. They can buy from Apple or any number of much cheaper Android devices. They made a choice to pay Apple more. It’s consumers making a choice that led to Apple’s revenue.
Both Google and Microsoft have better services than Apple and they still can’t compete.
Google is worth a trillion dollars plus, have their own operating system and has the most visited page on the internet and still is estimated to sell as many phones in a year that Apple sells in less than a month.
It’s not Apple being anti-competitive. It’s the competitors - all large companies - being incompetent.
In the computer space, Apple was a nobody and almost bankrupt compared to Dell and HP in 1997 when Jobs came back. Why were they so incompetently run?
Why couldn’t Microsoft make a competitive ARM chip?
Apple lucked into a chockpoint. They had plenty of opportunities, even if less than other giants. Now giants sit like bridge trolls demanding a tax to cross.
The market is not healthy when so few players have so much control.
One of the big things that makes Apple products so compelling is the integration and shared engineering between them.
For instance, Apple made some of the best processor cores over the course of a decade for the iPhone. Now, variants of those cores are used in everything from the Apple Watch to the Mac.
Also, when you buy an iPhone app, it will often also work on the iPad and Apple Watch with tight integration and syncing.
To break the company up on product lines would significantly worsen the products. It would make the products less competitive worldwide and likely hurt the US economy. I think this would be a nonstarter for regulators.
If regulators want to go after anticompetitive practices, they would more likely force Apple to make changes to App Store policies, which are in many cases incredibly unfair.
Regulators could force Apple to sell their CPUs (if as hardware or as IP license) under fair conditions to willing buyers, or to open up macOS, iMessage, Facetime and Find My iDevice to competitors' products.
That way Apple could still enjoy the benefits of having tightly integrated hardware and software, but the rest of the world could enjoy high performance ARM systems as well, thus finally providing some actual competition to Intel and AMD.
Intel has 80%+ of the computer market. Should they be forced to license their IP? Should Google be forced to license their search algorithms?
You can walk into any computer store you want and pick up a top of the line Intel or AMD CPU, and buy parts from all kinds of vendors to assemble a computer from them. With Apple, you're locked in into paying whatever they demand. The only problem is that anything x86 is an utter pain in performance-per-watt because Intel doesn't care, AMD doesn't have the resources and the patent situation means that there can't reasonably be competitors for these two. Having actually performant Apple components available on the open market would be the kick for Intel to finally do something. Competition would be working again. (BTW, I'm an Apple user myself, but the way that Apple gouges you on storage and memory is beyond ridiculous)
> Should Google be forced to license their search algorithms?
At least to open them up. Google is incredibly powerful thanks to its market share, and its decisions (or not-decisions) have serious economic impacts upon individual people and small businesses unable to afford the millions of dollars that you need to get a personal Google account representative.
How is this different from Intel or AMD? There might be a retailer middleman between you and Intel/AMD, but just like any other business, you are paying whatever they are willing to sell at.
You're not in any sense locked in, because it's so easy to switch.
But how does an Android phone get you an Apple CPU? Or to put it another way, if your app customers want the Apple CPU, and they want your app, how do they get them both together without the troll bridge between you?
A company who wants to make mostly their own car and use some parts from another manufacturer can do that too:
https://www.hotcars.com/awesome-cars-powered-by-other-manufa...
This is the normal operation of a competitive market. Chelsea Truck Company wants their vehicles to be mostly Land Rover so they start with a Land Rover.
But Apple interferes with even that. If you wanted to buy iPhones to mod and resell, they stop you from putting your own operating system on it, and their operating system doesn't have drivers for your custom components.
Of course. And anyone can build a phone that is charged from a wall socket and communicates using standard mobile protocols.
> If you wanted to buy iPhones to mod and resell, they stop you from putting your own operating system on it, and their operating system doesn't have drivers for your custom components.
This industry is much younger. I wouldn't guarantee that Land Rover lets you even today mod its software system, but possibly it does, but then again, it also is in an industry that's been around 100+ years.
A company that wants to make their own phone can do that and still use the same wireless providers.
> A company who wants to make mostly their own car and use some parts from another manufacturer can do that too:
A company that wants to make mostly their own phone can get ARM chips and cellular chips and all of the parts from plenty of places all the way up to getting contract manufacturers
> This is the normal operation of a competitive market. Chelsea Truck Company wants their vehicles to be mostly Land Rover so they start with a Land Rover.
So are you saying there is no competition in the phone market and people must buy iPhones even though 80% of the world buy Android phones?
> But Apple interferes with even that. If you wanted to buy iPhones to mod and resell, they stop you from putting your own operating system on it, and their operating system doesn't have drivers for your custom components.
Then fork your own version of AOSP and work with a contract phone manufacturer and sell your own product. Just like 100s of Android resellers do
Apple is not currently a vertically integrated wireless provider. Would you say that it's a problem if they were, so the only wireless carriers with widespread coverage are Apple and Google?
> A company that wants to make mostly their own phone can get ARM chips and cellular chips and all of the parts from plenty of places all the way up to getting contract manufacturers
Anybody can make a device that terminates phone calls. The issue is that you want to benefit the consumer by making something which is better than what already exists. And you have an improvement to contribute -- a better display or battery or form factor or app or a way to lower costs or whatever.
So what you want is to take the best available device, change it by only your own contribution, and get lots of customers because what you're selling is the same as what people already want, but better.
Which you can't do, because you can't get the rest of the phone people want. So instead of starting with an iPhone and making it 10% better, you have to start with a phone which is 25% worse, and then even when you make it 10% better it's still 15% worse and it's not competitive.
So then you don't even try, which is terrible for the consumer.
> So are you saying there is no competition in the phone market and people must buy iPhones even though 80% of the world buy Android phones?
There is very little competition for phone SoCs. It's basically Apple and Qualcomm, and Qualcomm sucks. OEMs buy from them because they can't buy from Apple. (Samsung keeps making an attempt but they're not that impressive even relative to Qualcomm and go predominantly into Samsung's own devices.)
Android phones have 70% of the world market because they cost less. They're only ~40% of the US market. That doesn't help you if you're trying to make a premium phone.
But they aren’t. The cell phone network is the infrastructure just like with your analogy, the road was the infrastructure that given enough capital, anyone can build a car on.
> Anybody can make a device that terminates phone calls. The issue is that you want to benefit the consumer by making something which is better than what already exists. And you have an improvement to contribute -- a better display or battery or form factor or app or a way to lower costs or whatever.
And cell phone carriers do that today. They add their own spin - foldable phones, ruggedized phones, phones with better cameras and either they manufacturer the phone themselves or use someone like Foxconn to manufacture the phones for them - just like Apple. Apple doesn’t make or design its own cellphone chip (yet) or camera assembly (Sony).
> So then you don't even try, which is terrible for the consumer.
Yet literally hundreds of manufactures do try.
> It's basically Apple and Qualcomm, and Qualcomm sucks
Again whose fault is that? Samsung isn’t a small company and it’s been around for literally a century.
> Android phones have 70% of the world market because they cost less. They're only ~40% of the US market. That doesn't help you if you're trying to make a premium phone.
Everyone says that Google’s phones are premium and some of Samsungs phones. Again whose fault is it that two multi billion dollar companies can’t compete on the high end?
The infrastructure in this analogy is the platform.
You're trying to avoid the consequences by going another level up in the infrastructure. But you can always do that. Wireless networks run on electricity, power plants run on gas pipelines. The issue is that the layers of the infrastructure they do control (devices, operating systems) are being used to limit competition on the adjacent layers (app distribution, apps).
> They add their own spin - foldable phones, ruggedized phones, phones with better cameras and either they manufacturer the phone themselves or use someone like Foxconn to manufacture the phones for them - just like Apple.
Yes of course, they add them when they want to compete with other Android phones. The market for low cost Android handsets is quite competitive.
The issue is that if you want a ruggedized phone that runs iOS on Apple Silicon, or one that has a non-Apple app store, that isn't available. Even if there are both companies interested in making it and customers interested in buying it.
> Everyone says that Google’s phones are premium and some of Samsungs phones. Again whose fault is it that two multi billion dollar companies can’t compete on the high end?
Google is not really even making the attempt. Their interest in Android is to get it on as many phones as possible to promote the use of their services, and for that phones from other OEMs are satisfactory, so what do they care?
Samsung is only a fraction of the size of Apple and punches well above their weight, but there's only so much you can do in a bidding war against someone with more money.
The road carries all types of vehicles from place to place. The cellular network carries data from place to place and any phone can use that network. Different physical manufacturers make stuff to go on the “digital highway”. I didn’t make that term up.
> Yes of course, they add them when they want to compete with other Android phones. The market for low cost Android handsets is quite competitive.
Most of Samsung commercials go after Apple. Samsungs foldable phones costs more than the most expensive iPhone.
> The issue is that if you want a ruggedized phone that runs iOS on Apple Silicon, or one that has a non-Apple app store, that isn't available. Even if there are both companies interested in making it and customers interested in buying it
I also can’t buy a gas powered Tesla.
> Google is not really even making the attempt.
You mean they are spending money creating products and advertising them during the Super Bowl and they don’t care?
> Samsung is only a fraction of the size of Apple and punches well above their weight, but there's only so much you can do in a bidding war against someone with more money.
You realize that Samsung makes its own processors? How much do you really think it costs to design a processor? Just like Microsoft, Samsung was making cell phones before the iPhone even existed and when Apple was basically about to go bankrupt. Whose fault is it that they couldn’t compete with a decade headstart?
Pepsi chooses to not serve customers who go to McDonald’s and Costco chooses not to serve Amex customers.
You either choose to work with customers where they are or you don’t. Just like video game makers
It's not that you want to buy a Whopper at McDonalds. It's that you have a Ford and if you try to drive it to Burger King to buy a Whopper they disable your car because Ford owns McDonalds and Chevy owns Burger King.
Which in turn keeps anyone from producing a new make of car or a new brand of food, because no existing source of food will serve you if you're not in the parent company's vehicle and no one can scale a new restaurant or grocery chain enough to make some other brand of vehicles viable when people in existing vehicles can't patronize it.
This kind of tying is meant to be prohibited.
> Pepsi chooses to not serve customers who go to McDonald’s and Costco chooses not to serve Amex customers.
People who want Pepsi can go into McDonalds, come out with a Big Mac, pick up a Pepsi at any vending machine or convenience store and go sit down and have them together. People who buy a washing machine at CostCo on their Visa can go buy detergent for it from Walmart with their Amex.
> You either choose to work with customers where they are or you don’t. Just like video game makers
The same antitrust action should be applied to video game consoles.
We are talking about ARM chips, anyone with the money can design their own ARM chips and contract TSMC to manufacturer them. There are at least a dozen companies that do so. No one forces you to buy phones made by Apple just like no one forces you to buy burgers from McDonalds.
If people are willing gk pay more for a gourmet burger at an upscale restaurant (Apple) than McDonalds (Android$ because they feel like the burgers are better, that’s people making an informed choice.
> The same antitrust action should be applied to video game consoles.
Are you saying that video game makers should also be forced to license their IP so other manufacturers can clone their consoles?
So the first step is to have enough capital to design a state of the art microprocessor that can compete with the world's largest corporation. If this is feasible, why hasn't anyone done it? Every other phone chip is slower.
Then they have to make their own phone, and their own app store, and somehow get a critical mass of third party developers to make apps for a platform that has no existing user base or a get a critical mass of users to buy a phone without existing third party apps, and then drive Apple out of the market because even if they achieved 50% market share in phones they still could not distribute their app to half of their app's customer base.
If you want to write a piece of software that Apple doesn't approve, the barrier to entry has gone from "you post it on your website and people install it on their Apple computers" to "you must be a trillion dollar multinational conglomerate who can not only produce your own vertically integrated hardware and software platform but operate at a loss long enough to cause all of your app customers who currently have an iPhone to switch to it so they can install your app."
And that would only work for one entity -- then they're the vertically integrated conglomerate standing between third party developers and users.
This is clearly not a realistic option.
> If people are willing gk pay more for a gourmet burger at an upscale restaurant (Apple) than McDonalds (Android$ because they feel like the burgers are better, that’s people making an informed choice.
The whole point of tying is to take away your choice. Instead of choosing which phone you want and which OS you want and which app store you want, all of these are forced into a single decision that can no longer accurately represent the customer's true preferences. Having the information doesn't let you choose differently because the decision is still coerced to binary.
But if you want to talk about informed, why is the 30% cut hidden from the end user? Shouldn't it be on the statement when they buy something from the store?
It isn't because it would make Apple look bad to be taking such a large percentage from third parties you thought you were supporting, after you've already paid them hundreds of dollars for a piece of hardware you ought to own.
> Are you saying that video game makers should also be forced to license their IP so other manufacturers can clone their consoles?
Nobody wants to clone a console. They're sold at a loss in a dumping scheme to achieve a network effect so they can shake down video game producers.
What they should not is be able to shake down video game producers. Xbox and PlayStation should have Steam and the Epic Games Store. Which would render the dumping scheme non-viable, as intended.
> and I can’t create my own car either to compete with a Tesla that doesn’t mean Tesla is being anti competitive.
> If this is feasible, why hasn't anyone done it? Every other phone chip is slower.
Ask Microsoft, Google, Qualcomm etc. Microsoft in particular had a years limb head start on Apple in the phone market. And Apple was still basically coming out of near death at the time. The other companies incompetence doesn’t mean Apple is being anti competitive.
> The whole point of tying is to take away your choice. Instead of choosing which phone you want and which OS you want and which app store you want, all of these are forced into a single decision that can no longer accurately represent the customer's true preferences.
I can’t choose to get a Tesla battery and the Tesla infotainment system on a Ford Mustang. Is Ford being anticompetitive?
The entire point of leverage is that Apple has an integrated experience and people pay a premium for that. If you want a non integrated experience - you can buy an x86 computer or an Android phone - as most of the workd does.
> But if you want to talk about informed, why is the 30% cut hidden from the end user? Shouldn't it be on the statement when they buy something from the store?
Does any retailer show the customer the difference between wholesale price and retail price?
> Nobody wants to clone a console. They're sold at a loss in a dumping scheme to achieve a network effect so they can shake down video game producers.
There were at one point reference designs for consoles and the hardware was manufactured by others
https://en.m.wikipedia.org/wiki/3DO_Interactive_Multiplayer
> What they should not is be able to shake down video game producers. Xbox and PlayStation should have Steam and the Epic Games Store. Which would render the dumping scheme non-viable, as intended.
Instead of whining, Steam actually did come out with their console. That’s the same thing any large enough company can do and their are literally hundreds of companies selling their own phone
Can't you though?
https://performance28.com/modified-tesla/
> Ask Microsoft, Google, Qualcomm etc.
They all have less money -- and that's saying something.
> The other companies incompetence doesn’t mean Apple is being anti competitive.
The problem is not that they made a faster CPU -- that's great. The problem is that they won't sell you the faster CPU unless you buy their phone and their OS and bind yourself to be locked into their app store.
> I can’t choose to get a Tesla battery and the Tesla infotainment system on a Ford Mustang. Is Ford being anticompetitive?
Ford will sell you every separate part of the Mustang. You can buy the frame and put Tesla batteries in it if that's what you want to do.
> The entire point of leverage is that Apple has an integrated experience and people pay a premium for that. If you want a non integrated experience - you can buy an x86 computer or an Android phone - as most of the workd does.
There is nothing wrong with selling an iPhone to customers who want an iPhone. The issue is the tying. Anyone who wants it should be able to get the hardware and the OS without the app store.
I honestly don't understand why you defend them. You would still be able to get the thing that you want, but then other people would too. The availability of more options would make the market more competitive and force even Apple to provide more value for less money -- which you would benefit from even if you continue to use exclusively their products.
Would you not benefit if the 30% they take was less than 10%, and then you paid 10% less and the app developer got 10% more which they could use to make more and better apps?
> Does any retailer show the customer the difference between wholesale price and retail price?
Normal retailers show the customer the price, which they can then compare with other retailers. If they were charging 30% when five other competitors were charging 5%, their prices would be higher. When there are no competing retailers because Apple prohibits them, the only information for the customer to use to evaluate the cost of using Apple's store is the amount they charge to the developer.
> There were at one point reference designs for consoles and the hardware was manufactured by others
Which is fine. But then they still don't need to shake down the game developers because they can charge a license fee to manufacture the hardware in the same way that ARM does.
> Instead of whining, Steam actually did come out with their console. That’s the same thing any large enough company can do and their are literally hundreds of companies selling their own phone
I'm more concerned with what small companies can do.
But even Valve is deploying a mitigation rather than a solution -- if they captured half the market with their console (which they have yet to do), they'd still be paying the monopoly rent on the other half of their sales.
You think this is something which only Apple does?
Go try to buy a Snapdragon CPU from Qualcomm. Or an Exynos from Samsung. Or (going a little further afield) a Graviton CPU from Amazon.
There are a lot of components which are only sold to select manufacturing partners, or which are entirely exclusive to a manufacturer. Apple is not doing anything outlandish here.
Those companies will basically sell them to anyone willing to place a volume order, and if there was any demand for it they'd be selling them retail on Newegg. (There isn't because they don't use sockets and there aren't enough individual customers with the equipment to solder it to a logic board, but an individual can get one of their CPUs on a single board computer.)
Amazon doesn't sell Gravitron separately but they also don't sell it whatsoever. I don't know what to call that but it's not what's happening with Apple.
If that were all, you'd see these parts resold through distributors, just like you do for other components like transistors or DRAM or audio codecs. But you don't -- the manufacturers place restrictions on how these parts can be used, and those restrictions typically forbid their resale.
(As an aside, the same is also true of many Intel and AMD CPUs. Some parts are sold to consumers, but many others -- including non-socketed CPUs and motherboard chipsets -- are only sold directly to manufacturers, typically under restrictive terms.)
> an individual can get one of their CPUs on a single board computer
I've never seen one. There's plenty of SBCs built around ARM SoCs which are available on the open market, like Allwinnner or Rockchip, but, as far as I'm aware, Samsung and Qualcomm only sell parts to manufacturers intending to use them in end-user products.
I can’t use Tesla’s infotainment system in a Ford Mustang. Tesla ties their hardware together to make a complete product.
> They all have less money -- and that's saying something.
Do you really think that those companies couldn’t afford to design a chip? Apple doesn’t have its own factory. TSMC is available to any company.
Microsoft and Google definitely had more money when Apple first started building their own chips.
> The problem is not that they made a faster CPU -- that's great. The problem is that they won't sell you the faster CPU unless you buy their phone and their OS and bind yourself to be locked into their app store.
Should all companies be required to sell their components separately?
> Would you not benefit if the 30% they take was less than 10%, and then you paid 10% less and the app developer got 10% more which they could use to make more and better apps?
Most of the popular services are either already available as subscriptions inside and outside of the App Store or there is not even an option to subscribe through in app purchases.
> Normal retailers show the customer the price, which they can then compare with other retailers. If they were charging 30% when five other competitors were charging 5%, their prices would be higher. When there are no competing retailers because Apple prohibits them, the only information for the customer to use to evaluate the cost of using Apple's store is the amount they charge to the developer.
Before Spotify completely removed in app subscriptions, they in fact did have a cheaper price if you described directly than if you went through the App Store. For awhile CBS All Access (now Paramount+) does the same thing.
> Which is fine. But then they still don't need to shake down the game developers because they can charge a license fee to manufacture the hardware in the same way that ARM does.
Or they can choose to not be in that market and just sell on PCs.
> I'm more concerned with what small companies can do
Small companies also can’t build cars. Does that mean it’s anti competitive? Microsoft wasn’t a small company when it failed and neither was Nokia. Why blame on anti competitiveness when it’s clearly incompetence.
We keep having the same debate. You point out something that isn't anti-competitively tying to products together, like McDonalds having a trademark on Quarter Pounder, but that isn't the same thing, so it isn't a problem. You point out something that is anti-competitively tying products together, like game consoles requiring customers to use their store for games, which is the same thing, and is therefore also bad.
This is finally something which is at least ambiguous, but it's still not that interesting.
If the reason you can't use the infotainment system is that the software expects you to have an electric car and the Mustang isn't one and retrofitting it in there is a lot of work, you can still use it, it's just a lot of work.
By contrast, if they purposely lock the thing with DRM or contractual terms that prohibit you from transplanting it then it's clearly an anti-competitive practice that should be prohibited.
> Do you really think that those companies couldn’t afford to design a chip? Apple doesn’t have its own factory. TSMC is available to any company.
They not only have to design a chip, they have to outbid anyone else for use of TSMC's latest process, for which the company with the most money wins.
> Microsoft and Google definitely had more money when Apple first started building their own chips.
Apple started building their own chips in 2010, by which time they were already somewhat bigger than Google and the same size as Microsoft. And their chips from then were nothing special.
> Should all companies be required to sell their components separately?
They should if it's not a fungible component otherwise available in the market from someone else.
But also, why wouldn't they want to do this, if not for some kind of anti-competitive practice? Someone wants to give you money. Shut up and take their money.
The fact that they don't do it voluntarily is the argument for actually breaking them up, because just forcing them to sell the CPU is going to encourage compliance trolling like putting the same margin on the CPU by itself as they do on the entire iPhone.
> Most of the popular services are either already available as subscriptions inside and outside of the App Store or there is not even an option to subscribe through in app purchases.
How does that apply to apps?
> Before Spotify completely removed in app subscriptions, they in fact did have a cheaper price if you described directly than if you went through the App Store. For awhile CBS All Access (now Paramount+) does the same thing.
Originally that wasn't allowed. Then they allowed it, but you couldn't actually reference the lower price external option from the app. Then, as part of an antitrust settlement in Japan, they allowed it:
https://9to5mac.com/2021/09/01/apple-will-let-developers-red...
Amazing the benefits of a little antitrust enforcement.
Now if only it applied to apps and not just subscriptions.
> Or they can choose to not be in that market and just sell on PCs.
So the problem is that the console maker is shaking them down for 30%. What a given developer's net margin is depends on the developer, but let's say it was 40%. Going from 40% to 10% is bad. Your proposed to solution is for them to go from 10% to zero. That doesn't solve the problem?
> Small companies also can’t build cars.
Well sure they can. They just can't design one from the ground up.
Being able to buy the individual components separately is what enables them to build cars. Your compatriot brought up the Chelsea Truck Company, which the internet says has two employees.
But that's how it starts. The original Tesla Roadster was based on a Lotus Elise. The ability to do that is critical for new competitors to enter the market, so you don't have to be a gorilla from the first day.
> Microsoft wasn’t a small company when it failed and neither was Nokia. Why blame on anti competitiveness when it’s clearly incompetence.
Microsoft's failure (irony be damned) was strongly attributable to anti-competitive practices. People actually liked their phones and their OS. But it had no apps, so it has no users, so it had no apps.
And Apple prohibits the sort of things one might use to overcome that, like cross-platform frameworks or languages.
Otherwise why has no one succeeded in establishing a third platform here? Not just Microsoft; Plasma, postmarketOS, Mobian, PureOS, Ubuntu Touch, LuneOS, Tizen, /e/, CalyxOS, KaiOS, SailfishOS, FirefoxOS, Facebook Home etc. -- none of them has ever had more than trivial market share. It's not for lack of attempts. Several of these are from major corporations like Samsung and Facebook, or large communities like Mozilla and Debian/Ubuntu. Are they all incompetent, or is something else going on here?
So you think you can use the Tesla infotainment system that is tightly integrated with other electronics in its car if you are “willing to do a lot of work”?
> So the problem is that the console maker is shaking them down for 30%. What a given developer's net margin is depends on the developer, but let's say it was 40%. Going from 40% to 10% is bad. Your proposed to solution is for them to go from 10% to zero. That doesn't solve the problem?
Or you know you just raise your price so the wholesale price is enough to be profitable - just like goods sellers have been doing since the beginning of time. You realize that the markup from wholesale to retail is usually a lot higher than 30% don’t you?
> Originally that wasn't allowed. Then they allowed it, but you couldn't actually reference the lower price external option from the app. Then, as part of an antitrust settlement in Japan, they allowed it:
Spotify was doing that in 2015
https://www.theverge.com/2015/7/8/8913105/spotify-apple-app-...
> Being able to buy the individual components separately is what enables them to build cars. Your compatriot brought up the Chelsea Truck Company, which the internet says has two employees.
And cell phone manufacturers can also design phones and get all the parts they need.
And car manufacturers can buy the components they need for their infotainment system that supports both Android Auto and CarPlay. But they can’t use Tesla’s software.
> Microsoft's failure (irony be damned) was strongly attributable to anti-competitive practices. People actually liked their phones and their OS. But it had no apps, so it has no users, so it had no apps.
Microsoft had Windows Mobile and Windows CE phones years before the iPhone existed.
Heck they couldn’t even release a good version of their own Office products for their own phones and they just gave up.
> And Apple prohibits the sort of things one might use to overcome that, like cross-platform frameworks or languages
This is also not true. There are plenty of cross platform frameworks that work with iOS and Android devices. Are you really admitting that you never heard of Flutter by a little company named Google? Microsoft also has a C# based framework that supports iOS and Android. There is also React Native.
> Otherwise why has no one succeeded in establishing a third platform here?
So you’re blaming Apple for this with only 20% worldwide market share?
Do you also blame Apple for the “year of the desktop Linux” not happening and Firefox being crushed by Chrome?
There is plenty of competition but for making ARM chips - Qualcomm, Microsoft, Amazon, Samsung and Google all make ARM offshoots and none of them are exactly little companies. Whose fault is it that they can’t compete?
You chose to buy a MacBook unlike 80%+ of the PC buying population. Apple must have had something that you valued to make it worth the price.
People being allowed to charge a price they'd like to for a product or service they provide is a good idea.
That's also the biggest reason why I avoid their products. Their compatibility with non-Apple products is limited. And Apple doesn't care.
(not an Apple shill)
So who gets the operating system? The processors?
It's like having Comcast and Time Warner and they each want to charge 30% of revenue to any service traversing their network. Not only is it unreasonable to say that they compete with each other because if you're not satisfied with Comcast you can just sign up with Time Warner -- because one of them is in California and the other is in New York and you'd have to move -- but it's not even you who would have to move. The customer of the App Store, the one who pays the fee, is the developer. It's your customers who would have to move -- every single one of them, or Apple still has a monopoly on each one who doesn't.
Notice how this differs from an ordinary retailer. Your customer can easily go across the street to Target or Walmart, or shop in both stores on the same day. They don't have to "move" -- buy a new device for hundreds of dollars and transition all of their other apps and services to an incompatible platform.
You're a smaller company with a hot new phone? You need a large supply of 3nm chips from TSMC to compete? You can't get them because Apple is buying them all.
And their leverage on TSMC (with TSMC eating the cost of defective supply), which is very remarkable unto itself, may also be a serious problem.
https://arstechnica.com/gadgets/2023/08/report-apple-is-savi...
But by that logic Shopify has a monopoly on distributing Shopify apps, and McDonalds has a monopoly on Quarter Pounders.
But I also notice that you're not providing a counterargument in any logical sense and only an appeal to authority. We're not in a courtroom, we've having a public policy discussion about what the law should be.
If you have prospective customers with iOS devices you want to distribute your app to, name a feasible distribution method that isn't Apple.
> But by that logic Shopify has a monopoly on distributing Shopify apps, and McDonalds has a monopoly on Quarter Pounders.
Anyone can make and sell a Quarter Pounder to anyone. They may need to call it something else if McDonalds has a trademark on the name, but that doesn't cause it to be a different market when the product is a substitute and the customers are the same people.
Maybe Shopify does have a monopoly on distributing Shopify apps? That presumably depends on whether you can install the apps in some other way. Microsoft doesn't have a monopoly on distributing Windows apps, for example, and the fact that there is a difference between that and what is going on with Apple is demonstrative.
because judges are kinda the authority on the interpretation of the law. That’s how the legal system works.
> Anyone can make and sell a Quarter Pounder to anyone. They may need to call it something else if McDonalds has a trademark on the name,
Only McDonald’s can distribute a McDonald’s quarter pounder. Anyone can make a distribute a smart phone too. There are dozens of white market smart phone makers that a company can get a run of smart phones made and put their own version of AOSP or Linux on it.
> If you have prospective customers with iOS devices you want to distribute your app to, name a feasible distribution method that isn't Apple.
The web….
Unless you have a Supreme Court opinion, their authority is limited to one courtroom or one Circuit. And this still doesn't tell you what the law should be, which is ultimately up to the public.
> Only McDonald’s can distribute a McDonald’s quarter pounder.
You're talking about the trademark, not the product. Anybody can distribute a hamburger. It can even be indistinguishable from a McDonald's Quarter Pounder as long as you don't call it that.
The issue is not that Apple has a trademark on Apple App Store so no one else can make a store with that name. It's that there are millions of people whose only mobile device is an iPhone who can't reasonably use any other app store no matter what you name it.
> Anyone can make a distribute a smart phone too.
The question is whether anyone can make a store that distributes apps to everyone with a smart phone. If they can only distribute apps to some subset of the people with a smart phone, that strongly implies that these are separate markets.
> The web….
I want to install the Firefox browser engine, my favorite VPN, BitTorrent and the Epic Games Store on an iOS device. Can I use the web for this?
Notice that you couldn't list Google Play either. Why is that if the market is supposed to be something like "smartphone app distribution"?
I don't know why this myth about % market share and anti-trust refuses to die.
Harm to consumers is the primary consideration. Apple has that ability through locking up component supply in an aggressively exclusionary manner that restricts competition, which then harms consumers. If Apple perpetually uses their very elevated profit margins to lock up that supply, you can bet they're plainly raising the average cost of a smartphone by limiting how many other lower cost competing devices there are eg at TSMC 3nm.
Or did you mean you and me?
This is largely faked and comes from people intentionally misreading donations from company employees as if they were donations from companies. (Companies can do some things with PACs, but not much, and Apple doesn't have a PAC.)
What's actually happening is the FTC currently is run by someone who's trying to break up all the big tech companies, and they keep losing in court because their arguments are bad.
The issue isn't "companies, specifically, the direct legal entity have influence on politicians"
The issue is "money, and the people wielding it, having undue influence on politicians"
It uses the wrong denominator. You may as well compare it to the bank balance of Bill Gates. If you add up the revenue of every company it will far exceed 100% of GDP, making the comparison meaningless.
It’s been pointed out again and again. Any financial analyst should know this.
My only concern is whether their push into services ends up corrupting the core products. If so I'll deal with that when it happens.
The neoliberal dogma that tariffs and trade barriers are bad is economical suicide for Europe.
With iPhone and Mac they control critical choke points in a crowded market, where all the choke points are now taken by large and powerful incumbents.
Europe cannot deregulate it's way into success. In fact I'd say asleep-at-the wheel regulators and anti-trust are what got us into the mess of few real choices and luxury taxes for mediocre offerings.
https://www.ndtv.com/world-news/why-google-and-amazon-are-st...
That’s suppose to be for “worker protection”. But the average senior enterprise CRUD developer[1], in the US makes more than many BigTech workers in the EU. I’ll take the tradeoff of more money over being laid off any day.
VC funding has also traditionally been lower because of regulations
https://www.maxio.com/blog/state-of-vc-funding-in-europe
[1] no offense intended. That’s what I was for decades and I still turn back into a an enterprise dev pumpkin if you take AWS away from me.
And regarding those protections, they're there for a reason and in terms of hardware it truly is a race to the bottom, hardware is only made in low cost of living places because workers can be abused at will.
For software I'd argue that it was the unified market in the US (and now China) that's the real deal breaker.
Plus VC capital, but I think that's changing.
I would much rather get an offer for $250K a year, get laid off in two years than not be able to get a job or even get a job for $100K a year and have job security.
It's not how successful tech economies like Korea developed either. They used industrial policy and export discipline.
Europe can't develop more tech companies because it doesn't have enough financing options and because you're passing 100000 cookie popup laws.
Think about that for 2 seconds. What does it mean?
It shows us in 2023, corporate robots can design a highly optimized runaway process of cash extraction from the chimp troupe, for no reason other than it being possible. There is no purpose to these processes.
When a corporate robot finds a scaling rule it keeps scaling. Scale always needs purpose. Otherwise we end up like Apple. And only fools think the Apple story of mindless scaling is going well or going to end well.
Apple makes stuff that people want and are willing to pay for.
Be careful what you wish for, they could use the money to buy out every potential competitor just like Adobe, Microsoft, Google et all.