The Apple Thing to Do

Apple isn’t wrong, but that doesn’t make it right. 

Despite plenty of commentary and opinions on Apple’s fight over control of the App Store, I don’t think there’s any other way to look at it. Even if you don’t like Apple at all, I feel like we should all be able to agree that Apple is allowed to create rules for its platform. In that regard, at least, Apple isn’t wrong. The issue, then, is which rules are reasonable, and whether Apple is applying them in a way that stifles innovation or oppresses developers. 

That’s where things start to get complicated.

Credit: Shutterstock

Credit: Shutterstock

A Very Brief History

Obviously, for anyone paying attention, much of this came to a head when Epic Games, the maker of Fortnite, waged war against Apple (and to a lesser degree, Google), in order to launch a PR campaign against the App Store. Epic’s goal, made apparent through its legal filings, isn’t that it wants monetary damages from Apple or Google, but that it wants—ultimately—to be able to drop its own App Store right on an iPhone and sell games, collecting its own commission from developers instead.

To recap, Epic added its own payment method for purchasing game credits, known as V-Bucks, within an update to Fortnite, bypassing Apple’s in-app purchasing system and, as a result, Apple’s 30 percent commission. At the same time, Epic reduced the price of those V-Bucks purchased with its new method, and in every other version of Fortnite, in an attempt to highlight that Apple was taking what it views as an unfair cut. 

Apple, as expected, removed Fortnite from the App Store, though it did not do anything about existing copies of the game already installed on iPhones. Almost immediately, Epic launched a PR campaign that included a parody video of the iconic “1984” ad, as well as an antitrust lawsuit claiming Apple is exerting unfair control over the App Store. 

And that was all a week ago Thursday.

Then, on Monday, Apple told Epic it would terminate its developer account if it didn’t roll back the changes that are in clear violation of the App Store rules. Epic then filed a motion for a restraining order, saying that if Apple is allowed to terminate its developer account, it would be catastrophic to its business. 

Of course, Epic’s timing isn’t an accident. Apple has been under intense scrutiny for how it manages the App Store, with Tim Cook appearing before Congress last month to answer questions on the subject. Before that, the company engaged in a public battle with Basecamp, the developers of the Hey email app, which had been rejected from the App Store because it doesn’t allow users to sign up in the app. Eventually the two sides seemed to find a compromise with Hey allowed in the App Store with a slight modification in that users can now sign up for a free trial with a dummy email.  

More recently, Microsoft launched a shot at Apple because the iPhone maker won’t allow the xCloud streaming gaming service in the iOS App Store. Facebook did the same, though I hesitate to even mention it because Facebook’s gaming app is hardly relevant in this particular story. Or, in any story.

Before we get too far, we should be careful not to lump every developer with a gripe about the App Store into the same category. The reason xCloud isn’t in the App Store isn’t the same as the reason Fortnite isn’t. Epic got the boot because it clearly violated the terms of the developer agreement when it simply dropped in its in-app purchase system bypassing Apple. There was no question it was going to get banned. In fact, Epic was counting on it.

Plenty of developers have a beef with Apple right now, but their specific complaints are quite different. Sure, they all center on the control Apple exerts over its platform, as well as the 30 percent fee it collects on in-app purchases, but there are still enough differences that we should handle them individually. 

First, Fortnite.

Epic Clearly Is Wrong

Epic doesn’t like Apple’s rules. That much is obvious. What’s also become obvious is that there are a lot of developers who feel the same. That’s certainly a reasonable conversation to have, but Epic’s move wasn’t reasonable.

At first glance, it appears Epic just doesn’t want to pay Apple a cut. Okay, that’s reasonable. Epic is a business, and a very successful one at that. It makes sense that it doesn’t want to share with Apple if there’s any way to avoid it. But there’s nothing particularly noble about Epic’s move. It’s purely a business decision.

The bigger reason, at least according to Epic, is because its CEO, Tim Sweeney, wants to make his own app store available on iOS and Android devices. And it doesn’t want to have to share with Apple.

This isn’t even a new fight for Epic. Sweeney has long railed against the App Store policies, specifically the cut it takes. But even more, Sweeney has far grander ambitions for Epic and it includes owning the space between games and gamers, without Apple as a middleman. Epic makes as much clear, without even hiding its real motivation.

From Epic’s lawsuit against Apple:

But for Apple’s illegal restraints, Epic would provide a competing App Store on iOS devices, which would allow iOS users to download apps in an innovative, curated store and would provide users the choice to use Epic’s or another third-party’s in-app payment processing tool.”

As Rene Ritchie points out on YouTube, the goal is “that they’re no longer paying Apple or Google 30 percent, but having other developers pay them, much like other developers do on the PC version of the Epic Game Store today.”

There is zero chance Apple is going to allow that, at least not in a way that would make Epic happy. It wouldn’t be good for Apple, and I don’t know that you could argue that it would be good for users. There are very real benefits to users from the App Review process. There are drawbacks as well, which we’ll get to shortly, but on the whole, Apple’s approach prevents all kinds of malware and other nefarious content from ending up on your iPhone. 

That doesn’t mean all the apps in the App Store are good—many (if not most) aren’t. A lot are garbage, but they aren’t going to brick your iPhone or steal your credit card information. They can’t even get your credit card information. 

Presumably, Epic wants to offer a competing store for app downloads because it thinks Apple takes too large a cut, and that competition would be good for consumers. That might be true, but Sweeney didn’t build a $17 billion company, with investments from Sony, Chinese tech giant Tencent, and Nintendo, without being shrewdly focused on the bottom line. That’s exactly what’s happening here.

To be clear, in Epic’s case, Apple isn’t taking a cut of a subscription fee, or a fee for a tangible good. Apple doesn’t even take a fee for tangible products you might sell in an app. Epic literally sells fake money in exchange for real money. And that fake money is used to buy virtual goods (also fake), like dance moves or skins for your avatar. 

There is literally no incremental cost to Epic to exchange real money for fake money, and the price of the virtual goods is entirely arbitrary. Epic has claimed in the past that the 30 percent cut is detrimental to developers who have to front the entire cost of game development. Again, the game is free, the money is all in exchange for completely intangible things, one of which is to speed up the time it takes to advance to another level.

Think about that—the game developer builds elements that it knows are a hassle and extract ransom from players in exchange for eliminating those completely arbitrary annoyances. Imagine if every time you went to check your email, Apple told you that you’d have to wait three minutes. Or, if you don’t want to wait, you can use some Apple credits—that you paid for with real money—to get in immediately.  That’s literally most games on the iPhone (or Android, for that matter). 

There is literally no scenario where Apple could get away with that. But it’s exactly how gaming companies make their money. It’s an extortion racket that makes casinos jealous. 

It’s also a business decision that Epic has made. 

In the case of Fornite, at least, the issue is simply that Epic doesn’t like that Apple is skimming off a piece of that action. Never mind that Microsoft and Sony take the same cut on their gaming platforms. (Again, we’ll get back to that.)

Maybe Epic can’t have a problem with the cut Microsoft and Sony take because it can’t survive without Xbox and Playstation, but doesn’t feel like the same is true of the iPhone.

The company’s CEO Tim Sweeney tells GamesIndustry.biz that this is in part to build “a direct relationship with all our customers”, but that the decision is also “motivated by economic efficiency” — namely avoiding the need to pay Google a 30 per cent cut of all revenue generated by the game.

“The 30 per cent store tax is a high cost in a world where game developers’ 70 per cent must cover all the cost of developing, operating, and supporting their games,” he explains.

“There’s a rationale for this on console where there’s enormous investment in hardware, often sold below cost, and marketing campaigns in broad partnership with publishers. But on open platforms, 30 per cent is disproportionate to the cost of the services these stores perform, such as payment processing, download bandwidth, and customer service.”

On Twitter, Sweeney justified his different positions regarding game consoles vs iOS and Android:

Epic seems to feel like it gets enough value from the fee it pays console makers, but not from Apple. Never mind that Apple builds and supports the tools required to create iOS apps. Never mind that Apple invests in hardware that is capable of running apps and games built on Epic’s Unreal Engine.

Of course, Epic also takes a cut on its own app store with in its games. Epic might argue that it only takes 12 or 15 percent, but the argument hasn’t been that Apple takes too large a cut, but that Apple takes a cut at all. Tim Sweeney says he’s against middlemen, but seems to be just fine with them, as long as it’s him. 

Epic might have a moral point to make in terms of whether Apple should have as much control as it does, but it certainly went about it in a way that cost it the moral high ground. It doesn’t matter how much you dislike something, or how many people agree with you, you still don’t get to simply decide you’re not going to abide by the terms you agreed to and not expect to get booted.

Of course, that was exactly what Epic was hoping for.

The problem is, Epic isn’t acting in good faith. There’s no question that Epic made this move intentionally and with the knowledge that it was breaking the rules. It also was fully aware of the consequences of such an action. It’s hard to give it credit for starting a moral revolution against Apple when its motivation isn’t pure and it’s tactics aren’t moral.

It’s pretty clear that even if you think Apple has far too much control and is taking far too large a cut, Epic is wrong. You can even think that the point Epic is trying to make is correct, but everything about the way it went about it is wrong. This isn’t civil disobedience, it’s a coup attempt.

No Soliciting

Apple isn’t going to allow Epic, or anyone else, to add its own app store to the iPhone. There are plenty of reasons for this, and money is only one of them. While I actually think there are even better reasons, let’s assume for a moment that money is the only reason. Before you think that’s a selfish reason, consider that no business anywhere is okay with a vendor standing inside their front door attempting to sell on its own the products it also offers on the shelf. 

Or, would Walmart ever allow Amazon to set up a tent sale in its parking lot? Of course not. And we’d never criticize Walmart on the grounds that its stifling competition. The opposite is true—it’s competing, which means that it is making decisions, by definition, to advance its own business against all the others. 

Sure, sometimes businesses enter into partnerships when they feel it would be mutually beneficial. Again, those are decisions made to advance individual businesses. The fact that one business is willing to make a specific decision isn’t a reason that every business should be required to do the same.

In this case, Epic’s goal is clear—it wants to cut Apple out of a space it would rather occupy itself. That’s is certainly Epic’s prerogative, but it shouldn’t be surprised Apple isn’t having any of it. 

Microsoft Is Also Wrong

While much of the focus is on the Epic battle, mostly because it is obviously the most public, the irony is that there are businesses with a much stronger case to make against Apple’s rules. Take Microsoft, for example. 

Microsoft wants to bring its streaming game service to iOS, previously known as xCloud, which would allow iPhone users to play a catalog of major games like HALO via a monthly subscription fee. I’m not going to get to far into the technical aspects of how a gaming service that simply streams the games from a central server works, except to say that reviews seem to be overwhelmingly positive. People who know far more than I do about gaming argue that this is the future of video games. I have no reason to doubt that.

Apple, however, isn’t having it. 

According to Microsoft:

“Our testing period for the Project xCloud preview app for iOS has expired. Unfortunately, we do not have a path to bring our vision of cloud gaming with Xbox Game Pass Ultimate to gamers on iOS via the Apple App Store. Apple stands alone as the only general purpose platform to deny consumers from cloud gaming and game subscription services like Xbox Game Pass.”

You might argue that the reason Apple rejected xCloud, along with Google Stadia and Facebook Games before it, is that it already offers a competing gaming service, Apple Arcade. Maybe, but I doubt it.

According to Apple, the main reason it won’t allow streaming game services is that it isn’t able to review every app individually. In a statement, Apple said: 

“The App Store was created to be a safe and trusted place for customers to discover and download apps, and a great business opportunity for all developers. Before they go on our store, all apps are reviewed against the same set of guidelines that are intended to protect customers and provide a fair and level playing field to developers.

Our customers enjoy great apps and games from millions of developers, and gaming services can absolutely launch on the App Store as long as they follow the same set of guidelines applicable to all developers, including submitting games individually for review, and appearing in charts and search. In addition to the App Store, developers can choose to reach all iPhone and iPad users over the web through Safari and other browsers on the App Store.”

As I’ve thought about it, while the two arguments look different (Epic and Microsoft), there is actually a common thread, which is the ability to remove the middleman. Microsoft isn’t specifically asking for its own “store,” but rather wants to be able to simply stream games from another source, within a single app in a way many have compared to Netflix. I happen to think that’s the wrong analogy, and I’ll explain why in a minute.

Microsoft is wrong because it wants to define the boundaries of Apple’s platform differently than it has defined its own. Did you happen to notice the interesting little carve out Microsoft makes for itself when it explains why Xbox Game Pass Ultimate (because Microsoft is really second only to Google when it comes to product names), isn’t available on the iPhone. 

“Apple stands alone as the only general purpose platform to deny consumers from cloud gaming”

Microsoft wants to argue over the idea that the iPhone is a “general purpose platform,” and therefore is subject to some specific set of rules that should govern how Apple makes that platform available to developers. 

There are two problems. Inherent in Microsoft’s argument is the acknowledgement that there are some types of computing devices for which the available content and services can be tightly controlled. The Xbox is one of those “console” devices. Microsoft wants to make it clear that it doesn’t think the iPhone is one. 

Here, Microsoft is wrong.

Why Netflix Is the Wrong Analogy

A brief aside about Netflix. I’ve listened to, and read, many reasonable arguments that compare streaming games, for example, to Netflix. I said before that I don’t think this is the right analogy.

Okay, fine, a video game is simply video streamed down and interactive commands streamed back. Technically that’s the same as what happens in Netflix, except, it isn’t. 

No matter how many times you press pause and then play, the episode of Stranger Things doesn’t change change. It’s linear video and its frames all occurs in the same order. Yes, you can skip around and watch those frames in any order you want, but first, that’s nonsense, and second, you still didn’t change the story, you just messed it up.

That isn’t what happens with video games. The interactions you have with a video game determine the story. It’s actually interactive. 

It’s also different because of the user experience and expectation. Videos on Netflix also don’t have the ability to interact with other aspects of your device in the way an app potentially can. Apple isn’t worried that a Netflix original is going to suddenly drop its own payment method in order to fast-forward the film past the credits, for example. The same can’t be said for games, and Apple isn’t giving up control over that part of the experience, at least not when it comes to video games.  

A Third Type of Thing

I tend to agree with John Gruber that the iPhone is a console, if for no other reason than Apple considers it such. It’s just happens to be the most versatile console ever made, with far greater scope and scale than one that simply plays games. 

Of course, there are like 65 million Xbox users, compared to the 1.5 billion people with iOS devices. The stakes are of no comparable scale. 

Though I think that might also mean that it isn’t. As I think about it, the argument between “console” and “general purpose platform” isn’t the right one because I don’t think that a smartphone is necessarily either, but is—at the same time—both. It’s a third type of thing. 

A smartphone is part general purpose computer in that it does a wide range of things, and part console in that the user experience is tightly controlled. 

You could even argue that the iPhone was clearly designed originally to be fully in the console category. Third-party apps weren’t even a thing at first, aside from Google Maps, but there wasn’t an App Store to download them. 

Even after Apple added the ability to download other apps, the reason it exerted so much control was largely because it felt the need to protect the user experience in order to be sure the thing was good. And by “thing” I don’t mean apps, I mean the iPhone. Apple’s control over the App Store is, at its core, meant to make the iPhone the best possible user experience. 

That doesn’t mean Apple doesn’t also benefit from that control, it absolutely does. The App Store is ridiculously profitable for Apple, and drives most of the growth in its crucial services division. 

But, I’m not entirely sure it’s fair to say that profit is the primary driver behind the control. Sure, you might think I’m naive, that’s fine. Except, that control of the user experience is exactly what has made the iPhone so popular. That refined user experience is why an iPhone is far easier to use than a computer. It’s why my grandmother could use her iPhone long after she could no longer figure out how to check her email on her Windows PC. 

Control isn’t necessarily a bad thing unless it leads to an unfair monopoly.

Defining the Market

By the way, not all monopolies are inherently unfair or anticompetitive. Obviously, if Apple has a monopoly over a market, it depends on how you define that market. Epic wants to define that market as “the distribution of software applications (“apps”) to users of mobile computing devices like smartphones and tablets, and (ii) the processing of consumers’ payments for digital content used within iOS mobile apps (“in-app content”).”

Basically, Epic is accusing Apple of having a monopoly over the iPhone, which, I mean, of course it does. Apple makes the iPhone. That reality is neither complicated or controversial. 

This, by the way, explains Tim Cook’s statement when he testified before the Antitrust Subcommittee of the House Judiciary Committee. In it he made it clear that Apple views the App Store as a “feature” of the iPhone. 

If that’s true, then of course Apple has a monopoly, just like it has a monopoly on the camera. No one can sell cameras that you can swap in for the one that Apple built in when it was assembled. It’s a feature of the device. Also, no one is complaining about it. No one accuses Apple of being monopolistic because you are limited to the functionality of the camera that it chooses or that it’s unreasonably restrictive that you can’t add one from someone else. 

Of course, where that argument breaks down is because in many cases Apple not only offers the market, but also offers products within that market, putting competitors at a disadvantage. Spotify would have to pay Apple 30 percent in order to sign up customers via in-app purchases. Apple Music, on the other hand, doesn’t have to pay that same tax. 

Except, we don’t make that argument when it comes to iPhone cases sold at the Apple Store. Apple makes iPhone cases. So do a lot of other companies. Many of those other companies sell their cases in Apple’s retail stores. When they do, Apple gets a cut. That’s not controversial at all. Does Apple have a monopoly on the market of “things sold in the Apple Store?” Of course it does, it’s Apple’s store. 

The question isn’t whether Apple can exert this level of control, but rather whether it should. Those are very different questions, and it really gets to the core of the problem.

Apple Is Right, Sort Of

Apple’s Developer Program License Agreement is pretty clear on the consequences for doing what Epic did. Section 11.2 says:

This Agreement and all rights and licenses granted by Apple hereunder and any services provided hereunder will terminate, effective immediately upon notice from Apple:

(f) if You engage, or encourage others to engage, in any misleading, fraudulent, improper, unlawful or dishonest act relating to this Agreement, including, but not limited to, misrepresenting the nature of Your submitted Application (e.g., hiding or trying to hide functionality from Apple’s review, falsifying consumer reviews for Your Application, engaging in payment fraud, etc.).

There’s really no way around it, Epic clearly violated the terms, and did so intentionally. In fact, it didn’t just do so for the purpose of skirting the rules, it did it just to pick a fight. I don’t think there’s any way to argue that Apple isn’t acting within its right to terminate Epic’s membership in the Apple Developer Program (ADP). 

You could even argue that Apple is acting with a measure of restraint. According to those terms, Apple could have terminated Epic “immediately upon notice.” Instead,  Apple gave Epic a way out. 

Apple’s statement:

The App Store is designed to be a safe and trusted place for users and a great business opportunity for all developers. Epic has been one of the most successful developers on the App Store, growing into a multibillion dollar business that reaches millions of iOS customers around the world. We very much want to keep the company as part of the Apple Developer Program and their apps on the Store.

The problem Epic has created for itself is one that can easily be remedied if they submit an update of their app that reverts it to comply with the guidelines they agreed to and which apply to all developers. We won’t make an exception for Epic because we don’t think it’s right to put their business interests ahead of the guidelines that protect our customers.

It’s true, Epic’s problem is of its own making, and any collateral damage that might occur to third-parties as a result of its action is Epic’s fault. That includes Unreal Engine, which Epic points out would be unavailable to developers who want to make games for iOS if the company is no longer allowed access to the tools that make that possible. 

Apple is also right when it comes to streaming games. Well, it’s right in the sense that they aren’t allowed under the current “rules.” Should those rules change? Possibly. 

Many of the arguments that I’ve heard for why Apple is wrong are basically just that people don’t like the way Apple is managing the App Store. Meaning, Apple is acting in a manner counter to their personal preference. If you want Stadia or xCloud to be available on the iPhone, you think Apple is wrong. If you think you should be able to set up a Hey email account in the app, without Apple taking a cut of the subscription, you probably think Apple’s position is wrong.

Take Facebook for example. It seems as though every business that thinks its service is super valuable to consumers deserves an exception from the App Store’s rules. “hey, people should be able to use Facebook gaming. Apple is wrong.” 

Apple is trying to prevent a scenario where a company like Microsoft, instead of submitting apps to Apple for review, and making them available in the App Store, simply submits its own catalog app.

Microsoft absolutely could submit each app individually and would probably make more money selling them to iPhone users. Microsoft is making a business decision, but wants us to think that it simply doesn’t care for the way Apple is gating access to the iPhone. Except, Microsoft does the same thing with the Xbox. 

By the way, there’s a reason Apple isn’t interested in Epic, or anyone else running its own App Store, or allowing streaming gaming services like xCloud, ahem, Xbox Game Pass Ultimate.

Arguably the main thing Apple cares about is avoiding a scenario where other tech companies, full of very smart developers and shrewd executives, figure out ways to bypass Apple’s control over the user experience on iOS devices.

Every time you create a “rule” that allows for an exception of a certain type of business or app, you open the door to a myriad of unforeseen circumstances. 

Apple simply isn’t going to go down that road until it figures out whether it can do so in a way that still allows it to maintain a level of control over the experience (and probably still get a cut). 

I don’t think the problem is streaming gaming services. I think the problem is the line. Until now, the line has been somewhat clear—you develop an app and submit it to Apple. 

Microsoft and Epic want Apple to move the line.

Where Apple Is Definitely Wrong

I spent a lot of time making the case for why I think Apple is right, but ultimately, I’m not sure that matters. In fact, I believe that being right is probably wrong for Apple and definitely wrong for users.

The problem for Apple, and this isn’t a small issue, is that all of this is creating a worse experience for users, which is something that has long been anathema to Apple. Honestly, that’s the only reason this is an issue—the customer experience is worse because of the standoff between Apple and all of these developers. 

That isn’t to say that I don’t think that the damage the company is doing to its relationship with developers isn’t consequential on its own. It definitely is, and developer relations are—and should be—a very real concern. I even heard John Siracusa on the Accidental Tech Podcast argue that, compared to Microsoft and Sony, Apple has done a terrible job with developer relations. That’s absolutely true.

I do think that part matters, but it’s honestly secondary to the user experience issue. Apple and developers should be able to work out their differences on their own, not in a way that creates a bad experience for the people who give them money. 

Also, there’s the fact that Apple is inviting even more scrutiny from regulators on both sides of the Atlantic which already seem intent on finding a way to force it to change. If Apple thinks avoiding that is important, this isn’t helping. We’ll get back to this in a moment.

I also think there’s an argument to be made that Apple is wrong because it come to a point where the policies it uses to govern the App Store have betrayed the values it was founded on. Primarily that’s the user experience. People want to be able to play games on their iPhone. I mean, I don’t, but a lot of people do. Making it harder for those people to use their device the way they want is wrong. 

Apple is also wrong because the level of control it exerts isn’t actually making it better. Apple isn’t getting better, and neither are its services. 

Take the rumor that Apple is planning to introduce a streaming fitness service. Apple absolutely could start its own fitness video streaming service, but it probably shouldn’t. It probably won’t be better than what’s already available.

AppleTV+ isn’t better than Netflix or Disney+. Apple Arcade is nice, but it isn’t better than xCloud. iCloud is a really useful way to sync pretty much everything across devices, but it isn’t better than Dropbox at file management or collaboration. 

Every product or service is better when there’s competition, and to the extent that Apple can simply strong-arm anyone else who tries to compete in those spaces means the services won’t be better. That’s wrong.

There’s Something Worse Than a Monopoly

By the way, if Apple really does have a monopoly on the market that is App Stores on the iPhone, then it should figure out the best remedy by working with developers now. If it doesn’t, regulators, Congress, and the courts absolutely will act. It’s only a matter of time at this point.

That should worry everyone because there is something worse than a monopoly. It’s called Congress.

Can you imagine if Congress decided that there were specific types of computing devices and then wrote rules governing each? I promise you that if you think it’s bad that Apple gets to decide what you can put on your iPhone, it’ll be far worse if it’s up to the government. 

Apple may think it can win a court case against Epic under the terms of its agreement, and the laws that exist today. The problem is that it very well may be inviting a change to those laws as a result. Apple is a big enough company, and it’s full of enough smart people, that it will certainly find a way to adapt. 

But there is absolutely no question that if Congress passes laws to further regulate the tech industry, the situation for everyone will be worse. It would be far better for Apple to simply find a better way, one that makes everyone as happy as possible without inviting further scrutiny or regulation.

The Apple Thing to Do

That isn’t impossible. Apple’s overarching principle here should be to do what’s right for its users, which—by the way—leads to a better experience, which leads to brand loyalty, which leads to more profit. 

That is literally how Apple became the largest, most profitable, and most valuable company in the world. Steve Jobs was an extraordinarily smart business person who knew that the way to give people exactly what they needed and wanted, when they had no clue what they needed or wanted. That obsessive focus on the user is what made people love Apple in the first place, and powered its growth to become the first $2 trillion company.

But, right now, it feels to many observers—including many long-time loyal Apple users—that the company has lost sign of that focus on the user. What’s even more complicated is that it seems that Apple thinks it’s doing the right thing for the user, but can’t see that it’s actually making the experience worse.

Of course, there’s an argument that what Apple is doing now is absolutely the Apple thing to do, and that’s not a good thing. Meaning that what Apple has become is a very different company than the one that cared about the user experience. Apple very well may believe that its platform is more important than any individual app or developer. 

That wasn’t always true. There was a time that Adobe and Microsoft’s software products were far more important to users than the Mac. If the Mac didn’t support Photoshop or Word, forget about it, the Mac would have no longer been a thing. That’s just reality.

Today, Apple clearly thinks its platform is more important to users than Fortnite or Microsoft or Netflix. If that’s true, it means it also believes its platform is more important than its users, which is bad.

Apple has to figure out the Apple thing to do, the thing that re-centers the conversation on the user. I happen to believe, if it does, it will also benefit both Apple and developers. 

Here’s how:

It would seem that the easiest change would be to allow apps to tell users that they can’t sign up in the app, but can by visiting the service directly. Meaning, in the case of a company like Hey or Netflix, they could simply tell you how to sign up. It’s literally absurd that developers can’t do this. 

But I think Apple should go further. I think that the best experience for the user would be to give developers a choice to direct customers to their service if they also include in-app purchases. Imagine if, when you downloaded the Netflix app and opened it for the first time, you were given two options: Create an Account with Apple and Create an Account with Netflix. 

Button one uses the in-app purchase. Button two takes you to a web view of Netflix’s site. Apple wouldn’t get anything when people click on that button, but iPhone users would get a better experience because it’s available. And, if given this option, companies very well might go for it. They could even charge a little more for the Apple IAP version. Let the customers decide whether they value the security and certainty of Apple, or go through the developer directly.

In the case of Netflix, most people will probably go to the site to sign up, which is fine—Apple isn’t getting anything from Netflix right now anyway. Netflix is a large enough, and trusted enough company on its own that people will do that. 

But imagine if Apple made that option to other developers. You can add a button to direct people to your site to sign up, but you also have to allow in-app subscriptions or purchases. 

There are plenty of services people would never give their information to directly, but would only sign up through the in-app purchase because it’s managed by Apple. Developers can make that call. If you choose not to use in-app purchase, you risk losing customers. 

I suspect there is a correlation between the apps that are able to stand on their own (without the benefit of in-app subscriptions) and those that Apple would prefer to keep on their platform even if they aren’t going to get a cut. Their presence alone adds value to the overall iOS experience, which means it adds value to Apple. 

That’s subscriptions. 

If a business is selling real-world goods, then it doesn’t pay Apple anything. That’s already the case. When you place an order at Starbucks, you use Starbucks’ payment processing system and it keeps all the money. Apple gets nothing. Otherwise, there’s no scenario where you’d ever be able to order a Carmel Frappucino from Starbucks on your iPhone—at least not in an app. 

Then, Apple could, as a good-faith move, change its pricing structure to a tiered system as follows:

  • Subscription services pay 20 percent the first year, 10 percent the second year. 

  • In-app purchases for games are 25 percent. 

  • All other app developers that offer paid app (non-subscription) are a flat 20 percent. 

(If you think those numbers are wrong, okay, tell me what’s better.)

Apple would more than make up for the loss on a percentage basis simply because some developers would likely come back. There are very real benefits to the simplicity of Apple’s payment system including the fact that people trust it and are more likely to sign up or buy when it’s an option.

There’s also the fact that it incentivizes Apple to help developers acquire new customers. The best business partnership is when both sides gets something they want (even if not everything). 

Apple could even waive, or reduce the commission in exchange for a “marketing partnership.” For example, take a company like Netflix. There’s a world where Netflix might consider adding in-app-purchases through Apple if it could negotiate some kind of favorable agreement. 

There’s a part of me that hesitates to even make that suggestion since it seems very “un-Apple-like,” except this is essentially what it did with Amazon Prime Video, for which Apple doesn’t collect a commission when rent or purchase content within the app.

You might argue that would go against Apple’s position that it treats all developers the same, but businesses enter into deals and arrangements all the time that account for the total amount of revenue involved. Call it a volume discount. 

My point is, there’s another way for Apple to do The Apple Thing, without putting its business at risk. When it comes to Apple and developers, sometimes a little good faith can move what otherwise seem like immovable objects. Right now, its unwillingness to do that is putting the user experience at risk, which for many is just as bad.  

Microsoft + Tik Tok: The Odd Couple?

From this morning’s newsletter:

I wrote on Friday that the biggest story in tech was the antitrust hearing last week. It turns out that the weekend brought its own interesting storyline as the news broke that the Trump administration was considering a ban of TikTok as early as Saturday (that didn't happen). 

Credit: Shutterstock

Credit: Shutterstock


Microsoft entered the picture and appeared to be interested in purchasing TikTok until President Trump said he would oppose any effort by a U.S. company to buy the social media app. That put a "pause" on negotiations until Microsoft's CEO had a chance to talk directly with Trump.

Now, both companies appear headed, once again, toward a deal, now that Trump has neither imposed a ban nor expressed further opposition to a potential deal. According to The Wall Street Journal, Microsoft expects to wrap up negotiations by mid-September. 

I wrote yesterday about why Microsoft's move to buy Tik Tok looks risky, but in reality, is quite brilliant

"Why Microsoft? Because it can. The most likely candidate, Facebook, can't possibly buy TikTok. It's not that it can't afford it, at least from a cost perspective. It's just that there's no scenario, especially after its CEO, Mark Zuckerberg, appeared before Congress, that a deal could get the approval from the federal agencies that would need to weigh in.

That puts the leverage on the side of Microsoft (or any potential buyer). Buying TikTok may seem like it makes little sense for many reasons, but it could make perfect business sense. Microsoft didn't become one of the most valuable companies on earth by passing up opportunities as good as this one."

Read the full story.

Finally, one more note from the antitrust hearing--this time about Apple. In an answer to a question about the App Store, Tim Cook said that the reason the review process is so rigorous is "because we care so deeply about privacy, and security, and quality."

Those three words--privacy, security, and quality--stuck out to me because they define exactly why people are so loyal to Apple's brand. In fact, I think you could argue they guide every decision Apple makes. This morning I wrote about why that matters. 

WWDC Is Finally Here, But New Macs Will Have to Wait

If you follow Apple closely, June is always a great time of year. WWDC always brings an interesting combination of the latest versions of the company’s collection of operating systems, in addition to usually bringing us at least one new device.

wwdc2020.png

According to several sources, including Jon Prosser, it’s looking like we may not see new hardware introduced at WWDC today. The two most likely Macs to see an update were the long-overdue iMac, and new ARM-based MacBooks.

Apple’s still expected to announce its transition to its own in-house A-series chips, even if it doesn’t launch a Mac powered by those chips. The iMac, in particular, would be a painful miss, unless Apple intends to still roll out an updated design later this summer or fall.

If that’s the case, I suspect that it’ll likely be just a spec-bump of the current design, instead of a complete overhaul. I have no inside information, but that’s the sense I get. If Apple doesn’t use its largest platform to roll it out, it’s probably because it’s not going to be something that the company thinks is worth taking up space during its most-watched keynote.

Watch the keynote live

Speaking of the keynote, you can watch it live today at 1 p.m. EDT/10 a.m. PDT over at www.apple.com/apple-events, on YouTube, or in the TV app on your iPhone, iPad, Mac, or AppleTV.

Quibi's Having a Rough Go

From the Wall Street Journal:

Quibi entered the market with big financial commitments from advertisers, enviable access to cash and two brand-name corporate leaders from the worlds of movies and technology. Its promise of a new storytelling format and Quibi’s deep pockets proved irresistible for many stars. The vision was to create short programs, 10 minutes or less, that people could watch on the go.

Quibi literally could not have launched at a worse time. It’s entire reason for being is to be consumed in the in-between moments while people are on the go. Except, for much of the last three months, no one has been going anywhere.

Quibi at CES / © Jason Aten

Quibi at CES / © Jason Aten

There’s also the reality that the content on Quibi isn’t very good. It just isn’t.

You can blame the first problem on the pandemic. The content problem, however, is squarely on the quixotic streaming company that never quite convinced the world that it needed 10-minutes-or-less “quick bites,” as the name stands for.

That isn’t to say it didn’t have a fighting chance. The company raised over $1.75 billion in funding. It planned to spend more than $300 million of that on content. But you can’t buy your way out of a bad idea.

At its current pace, Quibi will sign up fewer than two million paying subscribers by the end of the app’s first year, a person familiar with its operations said, well under its original target of 7.4 million. Quibi’s app download numbers have been falling in recent weeks, according to analytics firm Sensor Tower. Daily downloads peaked at 379,000 on its April 6 launch day but didn’t exceed 20,000 on any day in the first week of June, according to Sensor Tower.

Look, there are really smart people behind Quibi, on both the content and technology sides. Meg Whitman, the CEO, is about as experienced as you can be at running tech companies. There are few people with more content credibility than Jeffrey Katzenberg. When I met with the heads of the content and technology at CES in January, I was impressed by their demo.

The problem is, no one is impressed with the content, and no one is sitting on the subway or standing in line at Starbucks for 10 minutes right now.

Apple Is Giving College Students a Pair of AirPods When They Buy a Mac or iPad

Yesterday, Apple’s Education Store was down for a while. That usually means there’s something new coming to the store, and it turns out that’s exactly the case. And, it’s pretty good news if you’re a college student who might be in the market for a new Mac or iPad. When you buy one right now, Apple will give you a free pair of AirPods, or you can upgrade to a pair of AirPods Pro.

Courtesy Apple, Inc.

Courtesy Apple, Inc.

I’ve written on more than one occasion that I think the AirPods, along with the AirPods Pro are the best overall wireless earbuds you can get. It’s not that they’re the best sounding, though they do sound quite good. The reason is simplicity. They just work.

That includes the noise cancellation and transparency modes on the AirPods Pro. Sure, you can get earbuds from Sony with slightly better noise cancellation. Sure, there are higher-end wireless earbuds that offer better sound. But no other earbuds offer the same combination of features, sound, and ease of use.

Courtesy Apple, Inc.

Courtesy Apple, Inc.

College students already save $100 off the starting price of a MacBook Air. Now, you can get that same device + a set of AirPods, which should cost you $1159, for only $899. That’s a pretty sweet deal.

Facebook Is Failing Its Biggest Test

Leading a company like Facebook has to be challenging, even without the President of the United States using your platform as his own personal chaos machine. Maybe throw in a virtual walkout of employees, and a rebuke from some of your earliest employees over your position allowing that chaos. Oh, and there’s still, you know, a global pandemic.

Source: Shutterstock

Source: Shutterstock

Interestingly, though, none of those are actually the worst thing Facebook is facing. They do, however, lay bare the core of what is most definitely Facebook’s biggest problem.

I wrote about that problem last year, and it turns out that nothing has changed. Facebook’s biggest problem its true believer founder, Mark Zuckerberg.

You really don’t have to look further than how Mr. Zuckerberg has handled the latest chaos. Which is, essentially, to do nothing. 

Kara Swisher, in her New York Times column, wonders what Zuckerberg means when he says he did some “pretty thorough” research on how to respond. I suspect all he needed to decide to do nothing was to look at how the President responded to Twitter. 

The President wasn’t thrilled, to say the least. Twitter, of course, decided it would take action by placing at least one of the president’s tweets behind a warning that it could glorify violence. That came after fact-checking several other tweets.

In Facebook’s case, the content isn’t nearly as important as the source. 

Zuckerberg’s biggest concern has always been preserving Facebook. I get it, Facebook basically prints money, and it’s gotten very good at it. So good that it’s made Zuckerberg one of the wealthiest people in the world. Time after time, response after response, one thing has been clear—Facebook isn’t going to do anything that could invite the ire of whatever administration writes the rules. 

Facebook is failing its biggest test, and, as a result, it’s failing us. It’s failing us because when you have a platform, and especially when you directly benefit from what happens on that platform, you’re responsible. That isn’t a question of what is legal, but rather one of accountability.

I do take issue with one point Ms. Swisher makes. She writes, about social media companies: “They fed unlimited amounts of sugar to him and now wonder why he is diabetic and screaming.” 

It isn’t that he became diabetic, it’s that they fed unlimited amounts of sugar to him and now wonder why he’s running around the house with a toy lightsaber, hitting his brother, and breaking things. If he had only become diabetic we could ignore it since it’s up to him to measure his blood sugar and take his insulin. 

Instead, Mr. Zuckerberg is content being his dealer. The rest of us are left picking up the pieces. 

Apple TV+ Is Shifting Away From Original Content and It Could Help It Win the Streaming Wars

It’s really not going out on much of a limb to say that Apple’s streaming service is a bit behind the game. Sure, it has more subscribers than Hulu. Of course, very few of them are actually paying for the service since Apple gave it away to anyone who bought one of its devices after the November launch last year. Finding paying customers, however, is sort of the reason you spend lots of money creating content and launching a new service.

Some of that content happens to be pretty good. The Morning Show earned a small handful of award nominations, and for good reason. Dickerson is quirky, but genuinely entertaining. The rest of the lot is curious, but no one is calling it poorly made. That’s because Apple spent plenty of money on original content in a play to take on Netflix, Hulu, and Disney+.

That strategy, however, hasn’t exactly gone the way the company likely hoped. If you need proof of that sense, look no further than the fact the company is now adding classic content to supplement its existing library.

Honestly, there’s probably more than one reason for the shift. And, it is a shift. Tim Cook had previously said “it doesn't feel right for Apple to just go out and take a rerun,” when asked why the service didn’t try to get Friends. Instead, what used to be Netflix’s most popular show is coming to HBO MAX when it launches next week.

Now, however, things are different. Now the company is reportedly getting out its AppleCard and spending money on licensed content.

One reason is that original content isn’t really a thing right now. At least, not the big-budget, high production value shows and films Apple was making. All of those productions are on hold due to the coronavirus pandemic, and there’s only so much finished work in the pipeline before you have to figure out a different strategy.

Here’s the thing, Apple absolutely could dominate streaming video with the right content library. Disney+ is the runaway winner right now, with 55 million subscribers, half of whom signed on during the pandemic. And Disney clearly has what is arguably the best content library of any media company. But imagine if Apple started licensing everything else that was up for grabs. And it could.

I mean, let’s be honest, Apple has an enormous amount of cash it can spend on building up a content library—far more than Netflix or Disney or anyone else entering the fray. Apple could just buy a Netflix or a Disney if it wanted to. Especially Disney, especially right now.

Disney’s market cap is a bit over $200 billion as of today. Apple could cover that with cash alone and still have enough left over to save for more than a few rainy days.

The point is this: If Apple is serious about dominating streaming video, it has a lot of control over it’s own destiny. It will, however, have to make a shift in strategy, and maybe even swallow a little pride. That said, it appears Apple is playing for keeps, which, when you consider the stakes, would make me very nervous if I were Netflix or Disney right now.

Smart Home Assistants: Alexa vs Google Assistant vs Siri

There are a lot of reviews of the different smart speakers or smart home devices you can buy. For example, you can find plenty of reviews that compare the Echo Dot with the Google Nest Mini, or the Sonos One with the Apple HomePod. Most of them cover things like audio quality or other features that come built into the specific hardware. 

IMG_2923.jpeg

That's really helpful, but I want to zoom out a bit and give you a perspective on the voice assistants themselves and the overall ecosystem since that's where the real magic happens (or not). For context, in our home, we have devices with each of the three major voice assistants running. We have a Google Nest Hub, a Nest Thermostat (from before Google bought it) and a few Nest Mini speakers, which run Google Assistant and control the smart light bulbs throughout our home.

We also have iPhones and Apple TVs which run Siri. Finally, we have three Echo Dots with LED Clocks that are powered by Alexa. I also have a second phone, a Google Pixel 3a. As a result, we find ourselves frequently talking to all three voice assistants for different reasons. And, as it turns out, not all are created equal. 

Alexa

Alexa is certainly a good voice assistant. She can answer questions, and she usually does a good job of understanding what we mean. That's no small feat considering we have Echo Dots with the LED clock in our kids' rooms, and they are always asking her questions.

One of the biggest advantages of Amazon's Echo devices, where Alexa primarily lives, is that they support not only Amazon Prime Music, but Apple Music and Spotify as well. If you're a music lover, that could be a big deal. 

On the other hand, setting up other devices, like C by GE light bulbs, for example, has been far more complicated than with Google Assistant. In fact, despite the fact that it'd be great if our kids could control their own lights upstairs, I've mostly given up trying to connect them to Alexa, it's just too much work. You have to have a hub, sign in to a C by GE account, connect it to your Alexa app, and then search for devices. Google is far easier in this regard.

Google Assistant

While Alexa rules upstairs, on our main level, it's Google Assistant who powers most of our smart lights, and answers most of our questions. Frankly, for normal commands like "turn on the lights," or questions like "what's the weather?" Google Assistant does a great job. 

As an added bonus, on the Google Nest Hub Max, Google Assistant does a great job of pulling up relevant information, maps, weather, or even photos. It also makes it really easy to pull up TV programs using YouTube TV, and them stream them on our Living Room television using Chromecast.  

One of Google's biggest advantages here is the number of Google services we already use like Google Calendar, Gmail, Maps, and YouTube TV, plus the fact that it integrates so easily with services like Spotify or Netflix.

It is worth mentioning that I'm generally harsh on Google over privacy concerns, and I don't want to gloss over that here. Like the others, Google has faced criticism over how the company has used recordings of interactions with Google Assistant. On the positive side, the company has released changes to its privacy settings, and even rolled out voice commands to give you better control over what happens with your data

Siri

Oh, Siri. How we want to love you. You're built into our iPhones and Macs, and you're always there for us. In some ways, you're far more helpful than either Google Assistant or Alexa, but in others, you still fall so far short.

For example, adding reminders using Siri is one of my favorite things about iOS. Also, being able to send iMessages, activate Siri Shortcuts, or even get directions, are all very useful. And those tasks work really well. Where Siri falls short is asking her other questions or finding information. 

Siri just doesn't have the breadth of answers that you get from Alexa or Google Assistant. In fact, when we would ask all three services the same question (about a sporting event or the weather, for example), Siri was often the odd-one-out. The others just provide better answers more reliably. 

Which Is Best?

I really want to like Siri, mostly because of the integration into iOS. There are definitely a few areas where she excels--like the ones I mentioned earlier--but there's really no doubt that Google Assistant is the overall best, purely from a voice assistant standpoint.

She understands the greatest number of questions we ask, and most frequently returns the correct answer, or most helpful information. Google Assistant also does the best job of controlling our smart home, including lights. Unless you plan to limit yourself to one family of technology, and need to connect to Apple Music, I'd recommend Google Assistant as the best overall voice assistant. 

This article was first published for my column at Inc.com

The FBI Isn't Happy that Apple Is Protecting Your Privacy

It seems absurd that we’d have to start here, but let’s be clear: Apple isn’t on the side of terrorists. You wouldn’t know that the way the Department of Justice tells the story, with federal law enforcement loudly criticizing the company’s position on encryption and protecting your data.

The latest attack came earlier this week with Attorney General William Barr’s statements at a press conference where the FBI revealed it had been able to hack into the iPhone used by the shooter who killed three U.S. sailors, and injured eight others, at the Pensacola Naval Air Station last year.

Credit: SHUTTERSTOCK

Credit: SHUTTERSTOCK

“Apple’s desire to provide privacy for its customers is understandable, but not at all costs,” said Barr at the press conference. “There is no reason why companies like Apple cannot design their consumer products and apps to allow for court-authorized access by law enforcement, while maintaining very high standards of data security. Striking this balance should not be left to corporate board rooms.”

The most dangerous part of this argument is that it sounds reasonable. Who isn’t on the side of preventing bad guys from doing bad things? Who wouldn’t want the government to be able to investigate crimes, especially acts of terrorism?

Except, once you open that door—or iPhone—it’s open.

Apple’s position has long been that privacy matters, and protecting your data with encryption is an important aspect of that value. There is no such thing as encryption that has some type of special secret access for the government whenever it thinks it needs to crack an iPhone. Either it’s encrypted or it isn’t. Apple believes that encryption is important enough that it’s willing to stand up to the government.

And it should.

This isn’t the first time, either. It made a point in 2016 of refusing to unlock another iPhone, this one belonging to one of the attackers in the San Bernardino mass shooting. The government was eventually able to access that phone using a third-party tool that is able to guess a passcode while bypassing some of the device’s security features. Apple, however, didn’t budge.

Regardless of the protests by the country’s top law enforcement officials, that’s exactly how it should be. Apple has made protecting your privacy its core brand value, and it stands behind that with its actions. No matter how much pressure, no matter how much criticism, we’re all in big trouble if Apple ever gives up that principle.

That’s because encryption protects your personal data, your business data, your photos, your conversations, your text messages, your financial records, and your health information. It makes it so that hackers with bad intentions aren’t able to access take advantage of that personal information. In order for that to be the case, it means the feds can’t have a backdoor.

The FBI and DOJ aren't the only government agencies, by the way, that take a different stance on user privacy than Apple. I wrote this week for Inc.com about how states have decided to bypass the contact tracing technology developed by Apple and Google, and are instead designing their own apps which collect and track far more information.

While those decisions have nothing to do with criminal investigations, there is a similar thread, which is that government agencies don't particularly like that Apple is protecting your privacy even when agencies want your information. And, before you think this doesn't really matter because it doesn't directly affect you, let me remind you that there has never been a more important time to get this right.

Keeping your personal information private, whether it's banking records, or your company's customer data, or just personal photos of your kids, matters. So does keeping your health or location information private--which is suddenly extremely relevant. 

There has never been a more important time to remind ourselves that whatever access the government has to the iPhone belonging to a terrorist, it will have for everyone. And, even more importantly, whatever access the government has to a backdoor can also be exploited by people with far worse intentions. That, ultimately, is why it matters.

A Brief Guide on Managing a Remote Team

Right now, remote working--or, working from home--has become more than a trend. It's now a necessity for companies all across the globe. As a result, there are thousands of team leaders and managers who find themselves suddenly managing a completely remote team. Honestly, that can be scary, especially if it's the first time you've ever had to do so and didn't have a lot of time to prepare.

Credit: SHUTTERSTOCK

Credit: SHUTTERSTOCK

If that's you, this list of tips will help you set up yourself and your team for success:

1. Have a Daily Check-In

Whenever possible, this should be one-on-one, and face-to-face via video. Phone conversations, email, and Slack go only so far. Your team needs to see you, and you need to see them. The good news is that services like Zoom or Google's Team Hangouts make this relatively easy. At first, this should be every day. The purpose is simple--set the agenda and provide the feedback and resources your team members need.

2. Communicate a Lot

It probably goes without saying that you should be in regular communication with your team. One of the hardest things about working from home, especially if you're used to an office environment, is the sense of loneliness and isolation that can set in. That's especially true considering that many people are practicing social distancing. 

3. Take Advantage of Technology

As a manager, your job is to keep your team connected. Communication tools are a simple way to keep everyone engaged. While email and text messages might be a short-term solution, tools like Slack or Microsoft Teams are far better suited for collaboration and communication. Some of those collaboration tools are even available for free right now.

4. Manage Expectations

Help your team figure out what they should do, and create realistic expectations for their work. By the way, "managing expectations" applies to you as a manager as well. Set yourself and your team up for success by clearly stating both the tasks and the reasons behind them, and help your team understand exactly how you will measure success.

That means defining the scope, deadlines, and deliverables for each task or project your team is working on. Otherwise, don't be surprised if a few weeks from now you find yourself wondering what everyone was doing. Which brings us to ...

5. Focus on Outcomes, Not Activity

It's not possible to manage every aspect of the work done by a remote team. For what it's worth, you shouldn't be trying to manage every aspect of any team's work, but especially when your team is distributed across different locations. Instead of focusing on activity or hours worked, focus on the outcomes and measure your team accordingly.

6. Resource Your Team

Make sure your team has the technology it needs to get the work done. If you suddenly have a team of remote workers, that means there's a good chance they need tools like laptops, software, mobile devices, or even a high-speed internet connection. It's not reasonable to assume that everyone has all of those things, and it's your responsibility as a manager to make sure they do. 

7. Be Flexible

Understand that, especially in the current environment, your team has a lot going on. That's not an excuse for not getting things done, but it is a reason to reconsider what productivity really means. Punching a clock for eight hours is out. Regular work hours are also probably out for many people. Instead, trust your team and give them the freedom and flexibility to get work done on the schedule that helps them be the most productive. That's good for your team in the long run anyway.

This post was originally published at Inc.com.