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This take is a tad naive.

The App Store absolutely enforces Apple’s preferred position in its marketplace.

Apple stifles direct competitors in media (music streaming, TV/movies/video, video games, books). They force competitors like Netflix to pay obscene royalties or abstain from selling subscriptions within their apps at all. This wouldn’t be a restriction on a third party App Store.

Another example: you’re not allowed to install a browser with an alternative rendering engine. Apple is forcing their browser engine to have enough marketshare so that developers won’t ignore it. Make no mistake, they absolutely would lose significant browser engine marketshare and developer attention without this arbitrary restriction because a significant amount of users would prefer to install Chrome with Chrome’s rendering engine. If Safari becomes irrelevant to the web then Apple loses economic control to competitors, it’s basically following Microsoft’s 90’s browser strategy with a little twist here. A third-party App Store would allow for consumer choice in that regard.

Don’t forget that mobile games are a more lucrative market than all consoles and PCs combined, and Apple is collecting a significant chunk of that revenue via royalties for in-app purchases and advertisements in the App Store. It’s a multi-billion dollar business just for Apple.

Make no mistake, this is not a side project. Apple’s services revenue is larger than Mac and iPad sales combined and has the potential for much higher operating margins.

Apple's services revenue includes an annual lump sum payment from Google in the neighborhood of $18B per year. In 2023, that was roughly 22% of the revenue, and probably a majority of the profit.

And how much less would that payment be if iOS gave you a choice of default web browsers in randomized order that leveled the playing field?

That’s really my overall point here. Everything that is locked down about the iOS ecosystem helps keep that lump sum payment high.

For example, you can’t add a custom search engine to the OS preferences. There’s just 5 choices. How much did it cost DuckDuckGo to get on that list? (Probably more than $0)

Chrome has been available for a long time on iOS, albeit with the Safari rendering engine.

This is like complaining that the food in a hotel minibar is expensive.

You want to approach the smartphone as a general purpose computer, but that's not what it is.

> because a significant amount of users would prefer to install Chrome with Chrome’s rendering engine.

I'm not convinced that users care about rendering engines. Non-Safari (not non-webkit) browsers already enjoy a modicum of popularity on iOS due to offering different UI/features on top of the rendering engine.

The biggest reason for running chrome on iOS is getting access to your Chrome password manager. I don't think web rendering engines are much of a concern, but I've never run into an issue that was web rendering related.

I’m not talking about the end user caring about browsing engine, I’m really talking about the technology risks.

If Apple allows Chrome based on Chromium, Google or other tech giants could basically pull a Microsoft in the 90s and make their websites not work on Safari. “Sorry, Office Online only works on Edge” or “Gmail for web only works on Chrome” would basically snuff out Safari.

By forcing everyone to use the WebKit rendering engine, iOS is a giant lever that keeps Apple relevant and influential when it comes to steering web tech and standards.

You’re right, the end users don’t care. That’s not the point.

The point is that forcing all iOS devices to use the WebKit rendering engine prevents competitors from closing off the web to Apple technology.

E.g., Google has to make sure its mobile sites work with WebKit because they can’t just tell their iOS users to download Chrome to make it work. Any website that works for Chrome on iOS will also work for Safari because they share the WebKit browsing engine.

If Google could release a version of Chrome on iOS that used its own browsing engine they could basically leave their critically popular websites broken on Safari and tell their users to download Chrome to fix it.

Somewhat tangential, they could also get around the Apple App Store by leveraging the Chrome Web Store and extensions as an alternative.

The fundamental problem is that Apple cannot have it both ways; you cannot have both a marketplace where you tax merchants in and you compete against them at the same time. If you want a cut of Spotify's revenue because you are enabling a great platform for them, awesome, but you cannot have Apple Music at the same time. If you do, your management of Spotify/Tidal/whomever should be regulated: fees capped, rights restricted, etc.

Apple has tried to do this too many times (Apple Books anyone?) and only succeeded in a few places and they've usually leveraged their OS/market position to do that --see Apple Music vs Spotify. At the end of the day it's Apple's customers that get hurt (because we massively prefer Spotify over Music but are not getting a first-class experience). Same for Siri, or Mail (what a POS that is) or Notes (why can't we map the swipe-from-bottom right to a better note-taking app?).

I say all of this as an Apple fan and a customer. Cut it out, stop trying to be 90s Microsoft.

> There was a mentality years ago that the iPhone was the good hardware plus a bunch of apps -- but over time many of the most important apps have been built in apps / services from Apple directly

I don't think this was ever correct. The iPhone has always been strong on good hardware and software working together.

The "wows" of the original iPhone announcement were things like slide to unlock, pinch to zoom on images, and rotating the iPod app to get cover flow.

> The iPhone has always been strong on good hardware and software working together.

Yes, but they also have taken advantage of third party developers doing market research for them, just as Microsoft did with Windows in the 1990s. I wouldn't be surprised if that was actually a key reason why the App Store was included in the first place.

> Apple incorporating more and more capability into the base iPhone OS / software stack is what keeps people coming back.

I'm reminded that, in a different way (but to the same purpose) several years into Android, Google started shifting features from the OS to their own Services app to keep phones up-to-date with App updates rather than needing OS updates.

We’ll have to see how it plays out. It’s also possible that iOS having a distribution model similar to that of the Mac opens it up to a bunch of high quality single-platform indieware similar to that macOS has enjoyed for decades, which could help maintain its reputation for better apps.

macOS has shifted and it’s harder than ever to distribute indieware. Devs must compile with and up-to-date version of Xcode which means they must legally abide by Apple’s TOS even if they don’t pay for the yearly license (and agree to the further agreements), and if they choose to circumvent the App Store the user must know how to unlock the restrictions needed to run unsigned apps and also push through the fear-inducing security warnings.

As an HN user that’s “easy” but how many first-timers will be comfortable enough to get to the point where they can actually run that 3rd party app?

Xcode doesn’t require the yearly fee, it’s downloadable for free, and you can get a barebones compiler toolchain with a terminal command. Devs who distribute outside of the Mac App Store can notarize their apps to make them run without the security warning stuff. I’ve done it to distribute a screensaver on Github, it’s not too bad, no worse than the hoops one needs to jump through to build and distribute apps with some cross-platform UI frameworks.

I rarely download apps these days, but the ones I do are important: my car app, bank security code app, spotify app, Sonos app, just things I need for devices I own but are otherwise free.

I would be perfectly happy with a device control ecosystem rather than an app store. It might actually be a better experience.

I'm surprised the US didn't go after airtags. This, to me, is the number one reason for owning an iPhone, and something that can't be replicated on Android. Apple is really leveraging their market share here in a way that Android doesn't (for some reason, they totally could and should).

> I would be perfectly happy with a device control ecosystem rather than an app store.

The crucial thing is that you can achieve this without needing to prevent users from installing their own apps. Any attempt from Apple to prevent users from installing their own apps is purely because they're terrified at the idea of needing to compete with third-party developers.

I don't know, I know plenty of idiots who would take their freedom to install anything and...install anything...and then blame Apple when their iPhone starts running very poorly, or when their private info is exposed, or so on. They would want both freedom and safety.

Surprised this is not mentioned already, but it’s a decades-old Apple play to allow some 3rd party innovation, then take it’s core feature and “reimagine it” as an 1st party feature.

Further: when it’s been difficult to compete directly, Apple has tools that allow it to control the 3rd party directly: Developer agreements and white-listed internal APIs (and restricting what can be done with them) to name two.

And, since they have seen the financial benefits of that control, they have spend years not only building more tools but also refining their legal position.

Can anyone now imagine an iOS app surviving if it had killer features that made Apple look bad by comparison? Or one that is defiant of Apple’s brand image?

I can’t.

It's not a side hustle. It's probably about 20-25% of their profits.

Nah. That little slice of their P&L also includes a lot more than App Store revenue. AppleCare, Apple Music/TV purchases, rentals and subscriptions, Books, Apple Pay fees, Google Search revenue and whatever else you can plausibly call a service under umbrella in addition to App Store revenue.

They don’t break out the exact mixture, but we know the Google Search deal is an enormous chunk of it.

I would guess that the majority of Services revenue is from the App Store, and the majority of that is casino games for children.

Apple doesn't break it down, so this is all analysts-guessing, but the guesses I've seen for the share of Services revenue that App Store represents have been in the 25-35% range.

e.g. https://www.trefis.com/data/companies/AAPL/no-login-required...

per apple they paid $60 billion to iOS developers. Given 70/30 split, that's $26 billion of revenue to Apple.

For context in 2022 Adobe made $17.6 billion.

So 30% cut of iOS store is 40% more than Adobe revenue.

And I'm guessing the bandwidth + review team overhead is many times lower than, you know, actually paying software developers, marketers, sales people etc. to write and promote software.

For what time period?

Looks like the $60bil number is for 2021. https://www.bnnbloomberg.ca/app-store-developers-made-about-...

Great. AAPL Services revenue for that time period was $68.42B.

Apple also launched the Small Business Developer program that year reducing their cut for qualified businesses down to 15% after the first year of an active subscription (it’s stupidly complicated for what it is), but at the high end, under their prior cut of 30%, Apple would have earned between $25B and $26B. If after the small developer program Apple only took home a 25% cut averaged out, then that’s about $20B. If they get 20%, then they get about $15B.

Some of that extra cut that developers get comes back to Apple in App Store ad dollars though, so best estimate with available data: between a fifth and a fourth of Apple’s 2021 services revenue of $68.42B was their cut of the App Store + App Store ads which puts it ahout on par with their Google Search money for that year ($18B).