Phil Schiller: App Store Levels Playing Field and Supports Developers

[MacRumors]

Ahead of Apple CEO Tim Cook's testimony before U.S. lawmakers on Wednesday at an antitrust hearing, senior vice president of worldwide marketing Phil Schiller has defended App Store policies, in an interview with Reuters.

Schiller explained that the App Store was initially viewed at Apple as an experiment in offering "compellingly low commission" to attract developers. Small developers would otherwise face struggling to sell software into physical stores at the time.

"One of the things we came up with is, we're going to treat all apps in the App Store the same - one set of rules for everybody, no special deals, no special terms, no special code, everything applies to all developers the same. That was not the case in PC software. Nobody thought like that. It was a complete flip around of how the whole system was going to work," Schiller said.

He asserted that the review process and App Store rules were necessary since apps are purchased by customers through Apple's own billing system. According to Schiller, when launching the App Store, Apple executives believed users would feel more confident purchasing apps if they felt their payment was secure and via a trustworthy vendor. "We think our customers' privacy is protected that way. Imagine if you had to enter credit cards and payments to every app you've ever used," he said.

Apple has been known to make exceptions to its own App Store rules, such as in 2018 with Microsoft, to allow users to log into Minecraft accounts that were purchased externally.

"As we were talking to some of the biggest game developers, for example, Minecraft, they said, 'I totally get why you want the user to be able to pay for it on device. But we have a lot of users coming who bought their subscription or their account somewhere else - on an Xbox, on a PC, on the web. And it's a big barrier to getting onto your store,'" Schiller said. "So we created this exception to our own rule."

Apple's 30 percent commission on sales via the App Store has been criticized by developers. Airbnb and ClassPass have, for example, recently claimed that Apple's demand to take a cut of all online sales through their apps was wrong. Schiller argued that Apple's commission helps to fund an extensive system for developers and that thousands of Apple engineers maintain secure servers to deliver apps and develop the tools to create and test them.

Apple has come under fire for its App Store rules and rate of commission, and there is increasing concern that Apple and Google have now established a "duopoly" on mobile app stores. Apple's App Store policies and commission on in-app purchases have now become part of the ongoing inquiry by U.S. antitrust regulators, and a similar investigation has begun in the EU.

Article Link: Phil Schiller: App Store Levels Playing Field and Supports Developers

 

[jonblatho]

UPDATE: Person Accused of Potential Wrongdoing Insists He’s Done Nothing Wrong

 

[cocky jeremy]

And he's right.

 

[btrach144]

Then explain why Netflix and Amazon get special exemptions but the small guys can’t.

Explain why video game streaming services aren’t allowed into the App Store (Xcloud) or had to fight for over a year to get in (Steam).

 

[nt5672]

The solution the whole mess is to allow apps outside of the Apple App Store. Then the monopoly goes away. It does not hurt Apple and if people want to take the risk outside of Apple's nanny rules they can. Everyone is happy.

 

[omihek]

Here's what I don't get. If you don't like the business deal one person offers, you do business with another person instead. If you don't like the price of a hotel, you choose another hotel. If you don't like the wages from your job, you hustle and get a promotion or get another job that pays more. So why does that logic suddenly disappear when it comes to (some) app developers? Apple forces absolutely no one to use their app store or their ecosystem. If you don't like Apple's percentages, don't publish your apps on the App Store. It's simple.

 

[now i see it]

Schiller defending App Store policies.
That was unexpected.

 

[nt5672]

Here's what I don't get. If you don't like the business deal one person offers, you do business with another person instead. If you don't like the price of a hotel, you choose another hotel. If you don't like the wages from your job, you hustle and get a promotion or get another job that pays more. So why does that logic suddenly disappear when it comes to (some) app developers? Apple forces absolutely no one to use their app store or their ecosystem. If you don't like Apple's percentages, don't publish your apps on the App Store. It's simple.

Because once Apple sells the device Apple no longer owns it. So why can't the device owner load whatever software they want? Simple to understand really.

It's like buying a car and only being able to drive it to certain businesses.

 

[omihek]

The solution the whole mess is to allow apps outside of the Apple App Store. Then the monopoly goes away. It does not hurt Apple and if people want to take the risk outside of Apple's nanny rules they can. Everyone is happy.

It actually does hurt Apple. Some devious developer is going to sneak some bad code into their app and then advertise it as something else while avoiding Apple's review process by publishing it "outside of the Apple App Store." Then, everyone who downloads it and has their private information stolen or their device hacked is going to blame Apple for allowing this to happen on their products.

 

[psingh01]

Here's what I don't get. If you don't like the business deal one person offers, you do business with another person instead. If you don't like the price of a hotel, you choose another hotel. If you don't like the wages from your job, you hustle and get a promotion or get another job that pays more. So why does that logic suddenly disappear when it comes to (some) app developers? Apple forces absolutely no one to use their app store or their ecosystem. If you don't like Apple's percentages, don't publish your apps on the App Store. It's simple.

Apple has done a good job of muddling the difference between the AppStore and the iOS device. They are not the same. They shouldn’t be treated interchangeably and you as a user and customer are not being served by having only one option to install apps on your device.

Many of these developers would be happy to publish on an alternative App Store but none are allowed for iOS. If Apple had to compete against someone else, then their service could become cheaper to use or improved in other ways.

In the Android world Google’s store has similar policies, but they also allow competing stores. The user/customer is free to decide where they want to get their software from.

If you are capable of making these decisions for your computer, why shouldn’t you be able to do the same for your phone?

 

[nt5672]

It actually does hurt Apple. Some devious developer is going to sneak some bad code into their app and then advertise it as something else while avoiding Apple's review process by publishing it "outside of the Apple App Store." Then, everyone who downloads it and has their private information stolen or their device hacked is going to blame Apple for allowing this to happen on their products.

Fake argument to keep control. Apple does not make that argument regarding it's computers, yet. Dell does not make that argument. Android does not make that argument.

 

[gsurf123]

The solution is quite simple...if you do not like the rules then go somewhere else. Apple makes a proprietary product and gets to set their own rules. Other people make competing products with different rules. The complainers are like those who move into a neighborhood with an HOA and then start protesting the HOA when they are not following the rules. The next step is to say it is too expensive or should be free.

You cannot go into a retailer and tell them to both sell your product, where to place it and how much they have to pay for it. You can try, but you will not succeed.

 

[Smith288]

Ok, Twitter has hate in it's social media network but they targetted smaller startups like Parler for "hate speech".

 

[Graphikos]

It actually does hurt Apple. Some devious developer is going to sneak some bad code into their app and then advertise it as something else while avoiding Apple's review process by publishing it "outside of the Apple App Store." Then, everyone who downloads it and has their private information stolen or their device hacked is going to blame Apple for allowing this to happen on their products.
[automerge]1595954182[/automerge]

Because once things start going wrong, people are going to blame Apple. They have the right to build a product however they want. And you are free to buy it (or not) and do whatever you want with it after it's yours, including try to use it as a parachute or a hammer or a skateboard. It wasn't built for those things though, so it wouldn't really make sense to go crying to Apple when it doesn't let you do those things.

Exactly. We already see it as an actual problem on Android, and we blame Android, not the developer of the malicious app or the owner than side-loaded it. How is it not a problem if Apple does the same? Better the Apple App Store be known as a safe, but strict environment than an unsecured one.

 

[omihek]

Because once Apple sells the device Apple no longer owns it. So why can't the device owner load whatever software they want? Simple to understand really.

It's like buying a car and only being able to drive it to certain businesses.

Because once things start going wrong, people are going to blame Apple. They have the right to build a product however they want. And you are free to buy it (or not) and do whatever you want with it after it's yours, including try to use it as a parachute or a hammer or a skateboard. It wasn't built for those things though, so it wouldn't really make sense to go crying to Apple when it doesn't let you do those things.

 

[lederermc]

Because once Apple sells the device Apple no longer owns it. So why can't the device owner load whatever software they want? Simple to understand really.

It's like buying a car and only being able to drive it to certain businesses.

You can. All you need do is jail break it, then proceed at your own peril. Or buy an Android. I for one am glad that apps on my iPhone have some level of scrutiny, by Apple, before I load it onto my phone.

 

[Art Mark]

It's Apple's store, they do what they do and consumers decide. Apple is NOT the top seller of mobile phones, they are not the largest platform. People choose to be on their platform. If you set limits or pursue damages against them what does an author whose book is not carried at Barnes & Noble do? Can they demand that B&N carry their book? And tell B&N what price B&N should buy the book for? (remember, stores pay wholesale amounts for products and mark them up.) Apple's method is more fairly defined than a grocery store or Walmart where Walmart demands a product for a certain price before they even carry it. (Then Walmart marks it up getting their 15% or more likely 50% 'fee'.) There's nothing here and it amazes me that so many developers are whining about it.

 

[Naraxus]

"One of the things we came up with is, we're going to treat all apps in the App Store the same - one set of rules for everybody, no special deals, no special terms, no special code*"

*Except where Apple is concerned

 

[Cosmosent]

It's NOT Apple's cut that I have a problem with, it's the fact that they Play Favorites, & have a Complete & Total Stranglehold on App Discovery !

They do NOT recommend the Best Apps to customers, & they flood the App Store App's "Today's Tab" with AAPL content, like Apple Arcade !

NON-Game / NON-Apple Arcade apps are listed at the bottom, almost every single day !

New Law should be announced by the end of August (that hopefully cleans that up) !

BTW, why is Schiller, a man with ZERO Software Development experience & ZERO experience running a Software Company, running the App Store ???

Hopefully, Cook soon sees the wisdom that a change at the top is desperately needed !

 

[Breaking Good]

Here's what I don't get. If you don't like the business deal one person offers, you do business with another person instead. If you don't like the price of a hotel, you choose another hotel. If you don't like the wages from your job, you hustle and get a promotion or get another job that pays more. So why does that logic suddenly disappear when it comes to (some) app developers? Apple forces absolutely no one to use their app store or their ecosystem. If you don't like Apple's percentages, don't publish your apps on the App Store. It's simple.

What if there is only one hotel in the town where you need to stay for the night? What if there in only one employer in the town where you live and you have no other skills that would allow you to seek employment elsewhere?

If your customers are using iPhones, then you are stuck using Apple's app store and paying Apple's prices.

In fairness to Apple, it didn't start out this way. When there were more than two operating systems for smartphones, a developer could just say they weren't going to offer their product for the iPhone, but as the competition fell by the wayside and Apple began to dominate the smartphone market, their app store began to become anti-competitive.

Go back ten to twenty years or so and Microsoft Windows was viewed as anti-competitive. Bill Gates was getting called in front of Congress and Microsoft was in the crosshairs of anti-trust regulators. Now nobody cares about how many machines are running Windows.

Five to ten years from now when every device is a smart-device and they are all connected through a 5G network we may not care how many smartphones are running iOS.

 

[oneMadRssn]

This is just hand-waving to distract from the real issue. The issue isn't the 30% or the application of the rules.

The issue is that Apple is using their mobile software distribution market power to unfairly disadvantage competitors in other markets. The biggest example of this is Apple Pay and how Apple prohibits any other payment processor from working inside of any apps.

 

[Shirasaki]

No matter how this drama go, one thing clear is the two camps (defending Apple and defending developer (sort of)) will probably never reach any common ground and the fight almost look like the fight between android fan and Apple fan: it will go nowhere.

To those who say “it’s Apple’s store. Go away or play with the rules” and frequently use shopping malls as example, remember, there is only one App Store. Think about it this way: you live in a town with only one grocery store, one gas station, one carrier etc etc. If you want to do anything, you HAVE TO deal with that single store, single gas station etc etc. And they can set whatever price and policy it wants. Sure, we have Google Android, but moving from iOS to android is like migrating to a whole new country, where you have to learn a lot of stuff from scratch. Anti-competitive doesn’t need to be the point where there is only one player in the market. Duopoly is a thing, and we are here. Frankly, if there IS only one player in the market, there would not even be any anti-competitive hearings because that one player can lobby the government to death.

If you still think that way, just imagine you can only pick one carrier, one electricity reseller, one water company or one gas company in where you live.

 

[nutmac]

I realize service revenue is a critical part of Apple's business and stock valuation. But if Apple can afford to cut commission for app subscriptions from 30% to 15% on the second year, it can afford to make it a flat 15%, especially if the consumer prepays the entire yearly sum. And I have no idea what special deal Apple offers to big companies, if any. But if the rumor is true, Apple should offer it to everyone.

The elephant in the room: free apps with ads or apps that bypass Apple billing (e.g., Netflix). If Apple is subsidizing these free riders, charge a licensing fee. Apple Developer Program is only $99/year, which is good for low volume sellers and startups. But Apple can charge higher fee to those distributing apps (free with ads and free with their own billing) in much higher volume (e.g., 1M apps).

 

[MacSince1985]

Apple forces absolutely no one to use their app store or their ecosystem. If you don't like Apple's percentages, don't publish your apps on the App Store. It's simple.

If you need to reach customers who happen to use an Apple device, you are forced to go through the App Store.

 

[thejadedmonkey]

In the Android world Google’s store has similar policies, but they also allow competing stores. The user/customer is free to decide where they want to get their software from.

Microsoft too. You can even distribute app store binaries without putting it in the app store.