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That Was The Week, #36
Editorial
It seems as if the kitchen is getting too hot for some of Apple’s former friends, especially MG Siegler. While Fred Wilson, never really a friend, is pleading on behalf of his portfolio for Apple to stop being so….well, capitalist.
MG says, in his interview with Alex Kantrowitz:
That’s where I think this really irks me and a lot of people. I don’t think that Apple, while they might be explicitly following the letter of what Jobs said back then, I don’t think they’re following the intents of what was implied by what he was saying. If you go back and read those quotes, I think he’s basically saying, look, we’re launching this new in-app purchase service because we’re trying to make the best user experience for people to be able to transact within our apps and on our devices. And we think that we can create a better experience for those users using what at the time was the iTunes Rails to be able to pay for these subscription services, and now it’s obviously all run through the App Store. And if you feel like, if you’re a service that brings in your own users a different way and you can do that, that’s great, you get to keep all of that money. And if they choose to use our Rails to do it, then we’ll take that 30% cut.
And we can talk about the 30% cut itself in a second, but I just think that Apple has deviated from that mentality and now it’s all just like, how do we make sure that we are getting that 30% cut and they are signing up are via our mechanism. So it feels like they’re not so much competing on having the best experience or product necessarily anymore. They’re competing on obfuscation and trying to make it confusing and/or just like impossible to sign up.
And in his self-written piece “Compete!”:
How stupid does Apple think we all are? I mean, seriously. The announced changes this past week to the App Store rules are maybe the most absurd attempt to placate bad PR that I’ve ever seen. Instead, they helped clarify something pretty fundamental: Apple no longer wishes to compete.
I feel as if I’ve been dancing around this realization for a few months now. But reading over Steve Jobs’ statements in the original press releases around in-app subscriptions and Marco Arment’s hilarious recent post on the matter, mixed with these changes, really drove it home. Again, Apple clearly — I mean this: clearly — does not want to have to compete with the best offering and experience any more. They want to leverage their user base to bend the will of developers.
Fred Wilson of Union Square Ventures, an investor in CoinBase and others says:
Coinbase, Epic, and Spotify are not alone in their struggles with Apple and Google. They are simply large enough and protected enough to go public with their struggles. The truth is every developer that distributes software through these two app stores struggles with them.
In what world does it makes sense for two large and powerful companies to completely control software distribution on mobile phones? In no world does it make sense. It must stop.
These are points of view widely held but they are wrong. I cannot think of a single iPhone native Apple app where there is a better competitor that isn’t allowed full reign. Photos, iMessage, Facetime all have many excellent competitors and none are crippled. Mail, well it just is not any good, so GMail wins, on iOS. Office apps even beat Pages, Numbers. ketNote is better than Powerpoint but both co-exist.
As for the app store economics, Apple earned the right to charge 30% on sales when it built a global, free, distribution system for iOS software, and a global platform of iPhone and iPad users. It’s fight with Epic is only about defending that, not any other agenda.
As for Fred Wilson’s question, the world in which it makes sense for two large and powerful companies to control software distribution is a world in which Apple and Google built global hardware/software platfroms transforming the previous era where there was zero ability to distribute software efficiently or for free. This is a world in which successful investment leads to clear advantages to the investor – in this case Apple and Google. A venture capitalist, above all else, should recognise that. How would Fred feel if people were saying that it makes no sense that CoinBase owns a huge proportion of the US Crypto Wallet?
This week has a lot more on IPOs, SPACs and more. I could write a long essay on that alone. Dig deep and enjoy.
Best Keith.
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