From Devin Coldeway’s “Tim Cook plays innocent in Epic vs. Apple’s culminating testimony” posted Friday:
The façade of innocent ignorance began when he was asked about Apple’s R&D numbers — $15-20 billion annually for the last three years. Specifically, he said that Apple couldn’t estimate how much of that money was directed toward the App Store, because “we don’t allocate like that,” i.e. research budgets for individual products aren’t broken out from the rest.
Now, that doesn’t sound right, does it? A company like Apple knows down to the penny how much it spends on its products and research. Even if it can’t be perfectly broken down — an advance in MacOS code may play into a feature on the App Store — the company must know to some extent how its resources are being deployed and to what effect. The differences between a conservative and liberal estimation of the App Store’s R&D allocation might be large, in the hundreds of millions perhaps, but make no mistake, those estimations are almost certainly being made internally. To do otherwise would be folly…
Not having a hard number removes a potential foothold for Epic, which could use it either way: If it’s big, they’re protecting their golden goose (enforcing market power). If it’s small, they’re just collecting the eggs (collecting rent via market power). Apple’s only winning move is not to play, so Cook plays dumb and consequently Epic’s argument looks like speculation (and, as Apple would argue, fabulation).
He then deployed a similar strategy of starving the competition with a preemptive shrug about profits. He only addressed total net sales, which were about $275 billion at a 21% profit margin, saying Apple does not evaluate the App Store’s income as a standalone business.
This was further demonstrated when Cook was asked about Apple’s deal with Google that keeps the search engine as the default on iOS. Cook said he didn’t remember the specific numbers.
If the CEO of one of the biggest tech companies in the world told you they forgot the specifics of a multibillion-dollar, decade-long deal with one of the other biggest tech companies in the world, would you believe them?
My take: Tip toeing to the edge of incredulity.
Just like the comment this morning from Barry Diller, who said Apple should charge 2.5 % like a credit card fee on their App Store. What that had to do with him opening up a park today in NYC is further fodder for this entire PR campaign. He has a bone to pick with both Apple and Google. Even recommended that both companies be regulated. That helps bolster his profits at Expedia.
The logical follow up would be “What are a fair fees and policies for 3rd parties App Stores?” That’s not for the courts to determine.
And I’m certainly going to avoid adding MY click to it….
CEO Cook was a stellar performer before T. rex & a very alert judge. Tim gets an A- , judge gets an A, opposing attorney gets a B+. At one point the judge literally reminded counsel of the fact that lawyers must also follow the rules. Epic’s already friable case went to sand today. Easy to see.
DISCLOSURE: Mom’s family are all Cook’s from Miss.
I was doubtful Tim did not know the $ amount Google pays but I suspect there’s far more complexity in Google’s financial arrangements with Apple than the general public is aware of. Note: Audio was poor & I suffer from significant hearing loss.