๐Ÿ“‘ Apple, Epic, and the App Store

Bookmarked Apple, Epic, and the App Store by Ben Thompson (Stratechery)

This lawsuit is also a reminder that Apple has a lot to lose. While the most likely outcome is an Apple victory โ€” the Supreme Court has beenย pretty consistentย in holding that companies do not have a โ€œduty to dealโ€ โ€” every decision the company makes that favors only itself, and not society generally, is an invitation to examine just how important the iPhone is to, well, everything.

Indeed, this is the most frustrating aspect of this debate: Apple consistently acts like a company peeved it is not getting its fair share, somehow ignoring the fact it is worth nearly $2 trillion precisely because the iPhone matters more than anything. This is not a console you play on to entertain yourself, or even a PC for work: it is the foundation of modern life, which makes it all the more disappointing that Apple seems to care more about its short term bottom line than it does about the users and developers that used to share in its integration upside; if Apple doesnโ€™t change course, hyperessential will at some point trump hypercompetitive.

Ben Thompson discusses Apple’s ban of Fortnite in the App Store.

Fortnite is free, but users can pay for in-game items like weapons and skins through its direct payment option.

Epic said the system was the same payment system it already uses to process payments on PC and Mac computers and Android phones.

Apple takes a cut of between 15-30 per cent for most app subscriptions and payments made inside apps.

Thompson breaks down the three aspects of the app store’s integration as a core installation, for payment processing and customer management. Although this provides many benefits to users in regards to trust and efficency. It also creates problems for cross-platform developers who have to make various adjustments to accommodate Apple.

I have long believed that the Internet is going to fundamentally remake all aspects of society, including the economy, and that one area of immense promise is small-scale entrepreneurship. The App Store was, at least at the beginning, a wonderful example of this promise; as Jobs noted even the smallest developer could reach every iPhone on earth. Unfortunately, without even a whiff of competition, the App Store has now become a burden for most small developers, who instead of relying on the end-to-end functionality offered by, say, Stripe, have to support at least two payment solutions, the combined functionality of which is limited to the lowest common denominator, i.e. the App Store.

Continuing down this path, Thompson argues that at some point hyperessential will trump hypercompetitive. He elaborates on some of his suggests in a follow up pieces.

Alex Hern also discussed this topic in his newsletter:

Time and again over the last six months, Apple has revealed that it truly believes that it is entitled to a cut of all commerce that occurs on an iPhone. It has said as much to developers, as it rejects their apps while noting that they made a lot of money without paying anything to Apple.

I don’t think that Apple is entitled to that. I don’t think that Apple is entitled to anything other than the money โ€“ theย vastย amount of money โ€“ that I have paid it to buy an iPhone in the first place. If it wants to make more money after that, it can try and sell me more products. But if I want to ignore it, I’m going to.

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