Apple's new extortion regime to keep big app makers | Hacker News Reader

Apple's new extortion regime to keep big app makers

world.hey.com

36 pointsisaacfrond27 comments

tl;dr

Let’s start with the extortion regime that’ll befell any large developer who might be tempted to try hosting their app in one of these new alternative app stores that the EU forced Apple to allow.

And let’s take Meta as a good example. Their Instagram app alone is used by over 300 million people in Europe. Let’s just say for easy math there’s 250 million of those in the EU. In order to distribute Instagram on, say, a new Microsoft iOS App Store, Meta would have to pay Apple $11,277,174 PER MONTH(!!!) as a “Core Technology Fee”. That’s $135 MILLION DOLLARS per year. Just for the privilege of putting Instagram into a competing store. No fee if they stay in Apple’s App Store exclusively.

Why would I care as a consumer? And why act like it's a disgrace?

Somebody has to pay for the 'core technology' Apple develops. I think Facebook can handle a fee of 1/1000 of their yearly revenue.

If it's about licensing why doesn't the EU go after Microsoft or Oracle? Especially the second one has a tendency to get very creative with licensing requirements.

I Paid for the core technology when I PAID THEM FOR THE FREAKING PHONE

Clearly not

Thanks for the valuable contribution

What if you don’t though? I’m not saying it’s accurate but what if they were like “ok you can side-load but we didn’t price that into the $1000 phone, side-loading costs $4000”

Then Samsung's market share goes up?

I would think it would be obvious why consumers should care about a handful of corporations acting like feudal lords and controlling what smaller developers can do, technically or economically. To spell it out: because you are affected. In the best case scenario, only the Apple tax is passed on to you. In the worst case, the app you get will be discreetly censored at Apple's whims [1,2,3].

But of course you can rely on altruistic developers willing to forego half of the mobile market to get uncensored apps.

[1] https://www.theverge.com/2019/10/7/20903613/apple-hiding-tai...

[2] https://www.buzzfeednews.com/article/alexkantrowitz/apple-ch...

[3] https://www.wsj.com/articles/apple-pulls-hong-kong-cop-track...

Of course there's ample evidence Apple is not on the brink of bankruptcy, but we've settled for current IP laws which permit companies to own stuff and charge consumers for it. If the price is too high consumers won't buy but given the current state of the app store it doesn't look like there's a lack of people and companies building apps despite the "Apple tax".

I'm not entirely against opening up the app store but it remains to be seen if that would change things for the better. Apple may censor a flag, but they also repel a lot of attempts by companies to get my personal data. I'm much more concerned about the latter and would gladly pay a bit more to have less tracking.

They're not going after Oracle because that's a stagnant company with no real market power. Apple is running the most brutal and successful display of monopoly power in the history of technology.

I don't know why you think that EU isn't going after Microsoft. Apple is not being singled out here, a bunch of companies including MS are also in the scope for the DMA. The distinction is just that the other companies seem to intend to actually comply with the regulations, unlike Apple whose public posture is one of whining, and actions are those of malicious compliance.

Who should pay for API development and maintenance?

The thing that Apple (and most other platform vendors) have failed at isn’t the charging a fair price. It’s the delivering fair value. Given the amount they take the APIs, docs, tooling, support, etc should be much higher quality. They’re selling a product (access to people and APIs) and they’re doing an excellent job of giving developers a larger and larger pie to eat from, but they need to make the utensils better.

Uhhh how about the users who purchase the hardware and use the apps?

There users buy a phone- giving Apple money... with an OS as part of the deal. An OS is by definition an way to run apps, or an API to the phone hardware. If iPhones couldn't run apps, they wouldn't sell a bazillion of them every year.

That's literally not the deal. The deal is you get a phone with an OS, and an App Store on which you can get free or paid apps. Plus dynamic content via web browser etc. Developers know they have to pay a fee if they want to transact with these customers. The only people here trying to break the "deal" are consenting developers that decided they want to have their cake and eat it too.

I built an entire company on top of a similar platform in the past. The take rate isn't the issue, it's the developer experience and associated operational costs, but since there isn't' a great narrative to rally the general public around to force Apple to provide better docs, this is the approach Epic and co have taken.

PS. An operating system may be by definition a way to run apps, but it is not by definition something you can do anything you want with. For example, I can't take the Linux kernel make it closed source.

The EU parliament is hardly a group of developers. There are plenty of iPhone owners that want the freedom to run whatever apps they want to on their phones, too.

Further, I never said anything about what the "deal" was. I simply said that there are plenty of ways for Apple to make plenty of money without charging a per installation fee on every app that gets installed/updated on every iOS device.

Who will pay for gas-pump development and maintenance, if we allow drivers to pump gas from pumps not authorized by and partnered with their car manufacturer?

Who should pay for SoC and camera development? The case design?

The API and OS are part of the product just like the hardware. If you could buy a no OS iPhone with actual options and documentation for other alternative OSs to operate correctly and take advantage of the hardware maybe it would be worth having a discussion on the value of API development and maintenance. But with the way Apple sells the iPhone the OS is as much of the product as the rest of it.

You’ve got this all backwards.

OS and hardware developers need software. Their devices are useless without it. It’s why the infamous Ballmer “developers, developers, developers” clip exists.

This is why OS developers and hardware manufacturers invest so heavily in developer tooling. They need to make it easy for developers to make software on the platform, because it is useless without that software. They need developers, and it is in their financial interest to create good tooling for them for this reason, hold conferences to encourage them to make software for their platforms, and so forth. They wouldn’t do any of this if it weren’t critical to their business model.

How do you know this to be true? Because there are many real world examples that show what happens when you don't have developer support for your OS or device. I can make the greatest OS in the world, but if it doesn't have good software support, it will fail. This is a big part of why, for example, Linux on the desktop has always struggled. It's why BeOS failed. It's why Microsoft is struggling to compete with Sony in gaming right now. It's why the Windows Phone failed. And on and on.

Apple is trying to flip the script here. They have a dominant platform, and now want to leverage it to extract greater value for themselves. That’s what businesses do - fair enough. Microsoft did the same thing in the 90s. But I believe that it’s a short sighted strategy which destroys long-term business value. If Apple sufficiently alienates developers they run a real risk of finding themselves in a difficult position where their devices lack critical software in a few years’ time, especially when they are launching an entirely new device (Vision Pro) that desperately needs good native software to succeed.

I would encourage you to talk to iOS devs and see what their opinions are on tooling, docs, and API quality. My experience has been that they're very unhappy with all of the above.

True. And this is yet another data point to support my thesis: The state of the tooling and docs, along with Apple's increasingly aggressive approach towards developer incomes, all gives the impression of an arrogant institution which has lost its understanding of the symbiotic relationship it's in with its stakeholders. It is often at this point that future business and shareholder value is destroyed.

I really hope they turn it around, because their devices are incredible. Their hardware team has been absolutely killing it for the past few years.

I 100% agree and that is why in my original comment I explicitly said that we should put pressure on Apple to make the product they sell to developers better.

Fair enough. I think I misunderstood your point. That's another approach to take, I suppose.

Worth noting at the time of “Developers, developers, developers” an MSDN subscription was about $2500 per year, or about $4.5k in today’s dollars, and I believe that was per seat. So developers footing the costs of the developer ecosystem isn’t exactly a new paradigm.

I didn't know that - appreciate the context. Ironically it drives home my point in a way I wasn't aware of. The “developers, developers, developers” moment happened near the apex of Microsoft's monopoly.

Even in non-monopoly situations, the world of free, high quality, developer eco-systems is relatively new. Console SDKs have always expensive even discounting that you had to buy/lease specialized hardware. For example, GameCube dev could be done with Metrowerks Code Warrior for $3.5k (https://www.gamespot.com/articles/metrowerks-provides-codewa...). And speaking of Code Warrior, in the classic MacOS days, Metrowerks Code Warrior was probably the IDE to be using. That alone was ~$500 retail in mid-90's dollars. And at that same time, Apple's own developer program was $500 or $3500 (https://web.archive.org/web/19990220171442/http://developer....) and even remained that expensive all the way to ~2010 when they dropped the cost to be more in line with the iPhone program (https://www.cnet.com/tech/mobile/apple-drops-price-of-mac-de...).

Remember too it wasn't until 2006 that Java was released as FOSS software, (though it looks like they may have stopped charging for SE around 2000 https://www.tech-insider.org/java/research/1999/1207-b.html) but before that, Sun also sold licenses and SDKs.

Is that a good example? Facebook pulls in over $50B/year from Instagram, about $34/user. Ignoring the EU is richer than the average user, and using the user count you mentioned, that's $8.5B from the EU. So $135M is 1.5% of revenue.

Should I be outraged one of the largest tech companies in the world needs to pay 1.5% of revenue to distribute their app? Are they even outraged about this? Lots of expenses exceed 1.5%. I wonder how much Facebook really cares.

Unless a true alternative emerges (and I don't mean that hopeless current Android hardware), Apple's dominance will thrive undisturbed.

Google is unable to properly launch a phone worldwide, which is really stupid, giving their claimed "top talent", resources they have and market presence in the entire world. They support Pixel 8 in Ireland (5 million population), Norway (5.4 million), Denmark (5.9) but they don't in Poland (38 million, part of European Union for 20 years) where they bought one of the largest offices for over $600 million USD to support 2,500 employees (it's not a "developing country"), and Poles consider Pixel's price a fair price, not an expensive one. Not to mention lack of Pixel presence in at least some Asian countries with at least several hundred millions of potential customers. They even did not enter all radio frequencies in their version of Android, so that 5G or some Wi-Fi bands don't work in some countries. When you roam from supported country to an unsupported one, you may loose part or all connectivity. They did the same in Chromecast. Multiple layoffs confirm it's all about money at Google, so why they don't reach for an easy money from smartphone market? It's a rhetoric question.

Other phones compete with the same hopeless vision, Samsung being notoriously unstable, unfinished, downsized (in certain markets), overheating and just plainly idiotic.

No company offers easy and complete tools to exit from iCloud, just toy projects and non-viable software, make people stay with Apple even if they don't want anymore, because it's just easier for them.

Therefore for now no company with their Android hardware with dreadful UI and nonexisting/unfinished services is going to be able to compete with the biggest electronic religion, that is Apple.

Many years ago idiots from Microsoft killed their smartphone division, which had probably the best realtime OS any phone had at that time, the best basis for app development. They had made some good decisions, such as introducing very easy to use and performant .NET and a nice UI framework, then they have over-engineered it. Had they had the crew with brains inside, had they listened to customers, they would now be the dominant player in the market. But even the simplest feature requests were ignored by them and/or downplayed by their then-zealots.

I've read somewhere that Musk may be considering creating his smartphone. Looking forward to it, maybe it'll shake the market, bring some freshness and at least motivate some changes in the industry.

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