Apple vs. Epic: Ben Thompson’s naive, stupid, probably fruitless wish

Instead of demanding every dime, says Thompson, Apple could give “the slightest bit of ground” for the sake of the ecosystem.

From “App Store Arguments” posted Tuesday on Stratechery:

Quoting Benedict Evans’ Resetting the App Store:

It’s possible to believe that the sandboxed App Store model has been a hugely good thing, and also that Apple has too often made the wrong decisions in running it, and also that unwinding those decisions while preserving the underlying model won’t actually change much for many companies or consumers, and won’t really be a significant structural change in how tech works.

What Evans highlights is that all of these arguments about the App Store are good ones. Apple has good ones, Epic has good ones, Spotify has good ones, the European Commission has good ones, and I’d like to think I have good ones as well. As the Supreme Court has noted, though, a realm with lots of complexity and lots of good arguments about every single trade-off is one that is extremely poorly suited to judicial oversight. Congress is certainly an option — there is a utility sort of argument to be made about the App Store — but that comes with massive risks, given the relative frequency of changes in the law relative to changes in technology (the Epic case is being argued under a law passed 121 years ago).

What I wish would happen — and yes, I know this is naive and stupid and probably fruitless — is that Apple would just give the slightest bit of ground. Yes, the company has the right to earn a profit from its IP, and yes, it created the market that developers want to take advantage of, and yes, the new generation of creators experimenting with new kinds of monetization only make sense in an iPhone world, but must Apple claim it all?

Let developers own their apps, including telling users about their websites, and let creatives build relationships with their fans instead of intermediating everything. And, for what it’s worth, continue controlling games: I do think the App Store is a safer model, particularly for kids, and the fact of the matter is that consoles have the same rules. The entire economy, though, is more than a game, and the real position of strength is unlocking the full potential of the iPhone ecosystem, instead of demanding every dime, deadweight loss be damned.

My take: Thompson’s legal analysis is getting a lot of pick-up this morning through Techmeme. I suspect it’s being closely read in Cupertino as well.

12 Comments

  1. David Emery said:
    At this point, Apple is probably “frozen” until the judge’s verdict comes out.

    And I wish Thompson had been more specific about what changes he thinks are appropriate. The “grab every dime” remark was a cheap shot, particularly without a well-reasoned alternative.

    9
    May 26, 2021
    • Gregg Thurman said:
      This is as clear a demonstration why journalists aren’t (and shouldn’t be) business executives as I’ve ever seen.

      As an investor I would never put my money at risk, in a business with someone like him at the helm.

      Apple management has created a legal and ethical business model that consumers have overwhelmingly selected as the best. Importantly, they’ve voted by putting their money where their mouths are.

      11
      May 26, 2021
  2. Fred Stein said:
    Why do so many people think they’re smarter than Tim Cook and his team?

    The question applies to legal issues, possible mergers, new products, return of capital, etc.

    7
    May 26, 2021
  3. Fred Stein said:
    Apple’s margins on the App Store are typical for software. Apple’s App Store fees and the developer prices to consumer are nearly identical to other game platforms. Apple’s overall margins delight us for sure, but they too are with norms. Apple’s device prices are also within norms, not premium – actually very competitive with resale taken into consideration.

    What is fuss? Who is harmed?

    12
    May 26, 2021
  4. John Konopka said:
    The pundits focus on Apple’s 30% (sometimes 15%) commission. The judge cited a survey of developers showing something like 39% had some level of dissatisfaction with the App Store. I’ll bet that the commission was just part of that. I think Apple could go a long way to improving developer relations by other means. They could institute an ombudsman to field complaints, they could have more transparency when settling appeals. Establish a senior executive as a Developer Advocate to lobby internally on behalf of developers. Gruber has mentioned that there are more rejections at certain times of the week; not fair. Pay the reviewers more and lighten their load. I’ve dealt with the public a lot in my career and have training in compliance. By and large people want to work with you if you treat them fairly. It is not always about the money.

    The App Store is a fantastic deal. Apple created and supports Xcode and Swift. Apple supports Objective C. They run the servers that host the apps. They developed and support the platforms that run apps. Apple rolls out iOS updates yearly and supports iPhones for about five years. There are roughly a billion iOS users. It is incredibly easy for even a single person to develop an app and publish it.

    5
    May 26, 2021
  5. James Franklin Heck III said:
    When it comes to all things App Store, Thompson too often let’s emotion trump reason.

    1
    May 26, 2021
    • THOMAS E FARRIS JR said:
      Ya, but when that’s all you have, what else is there??

      0
      May 29, 2021

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