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> > If I sell paper cups to Walmart they will take a 12-17% cut for “entitlements”. I can’t compete with the white label house brand on price that doesn’t have

> > If I sell paper cups to Walmart they will take a 12-17% cut for “entitlements”. I can’t compete with the white label house brand on price that doesn’t have those entitlements. > The store is obviously going to make a margin to pay for the costs of operating the store. The store brand can't avoid those costs by being in-house because it still needs shelf space and stock clerks etc. Your implication here is that Walmart's 12-17% charge is fine because that covers the costs of operating the store. Ignoring the fact that 12-17% are in massive excess of the operational costs, your implication is then that storefronts should not make a profit. Which is frankly a ridiculous notion. Storefronts should make a profit, or there is little point to their existence. The App Store is not a public service. It is a privately-owned storefront. As long as we live in a capitalist society, demanding that the App Store cede its profits is absurd.

AnthonyMouse 7y ago
> your implication is then that storefronts should not make a profit. No it isn't. It's that they should operate in a competitive environment so that the profits are the ones produced by a free market without unreasonable barriers to entry rather than being monopoly rents.
- xvector 7y ago
  > It's that they should operate in a competitive environment Apple operates in a competitive environment. There are hundreds of other options to choose from. Unless you mean the App Store should be competitive within the iPhone. Why? How many layers deep do we need to ensure a perfectly competitive and open environment? If I put an app (say, a VM) on the App Store that has its own operating system and contained app store, am I now obligated to allow people to put their own app store in my app? > without unreasonable barriers to entry In what world is 30% "unreasonable?" Companies have the option of going to the App Store. There is no obligation for a company to use the App Store. They are not being cut out of the smartphone industry if they don't use the App Store. Apple is not a monopoly here - there are other options than the iPhone for you to sell your service on.
  - AnthonyMouse 7y ago
    > Apple operates in a competitive environment. There are hundreds of other options to choose from. For phones, not for App Stores. Which other viable store distributes iOS apps? > Unless you mean the App Store should be competitive within the iPhone. Why? Because iPhone users are a different app market with different customers than Android users. A customer who wants to buy a PC can easily buy it from Amazon, Walmart, Target, Newegg, etc. based solely on e.g. best price for the same product. A customer who has an iPhone is not going to buy a new phone just so they can buy the same app through Google instead of Apple. > How many layers deep do we need to ensure a perfectly competitive and open environment? What does it have to do with layers? The user should be able to control the product they bought, all the way down. You don't have to enable anything, just don't actively interfere with it. > If I put an app (say, a VM) on the App Store that has its own operating system and contained app store, am I now obligated to allow people to put their own app store in my app? Apple prohibits you from doing that to begin with, which is half the problem. > In what world is 30% "unreasonable?" The one where it bears no relation to underlying costs and is that high only due to the lack of effective competition. > Companies have the option of going to the App Store. There is no obligation for a company to use the App Store. They are not being cut out of the smartphone industry if they don't use the App Store. Apple is not a monopoly here - there are other options than the iPhone for you to sell your service on. Platform monopolies are like regional monopolies. Android customers are not a substitute for iOS customers in the same way that customers in Florida are not a substitute for customers in California -- because you sell to both of them, not one instead of the other. If Walmart had a retail monopoly in California, you can't argue that they don't by pointing to a competitor in Florida.
    - xvector 7y ago
      > Which other viable store distributes iOS apps? In which world is "iOS apps" an industry? The industry here is apps in general. In which case you have hundreds of other devices and tens of other stores, of which Apple is a minority player in both. > The user should be able to control the product they bought, all the way down. To what degree? Should the user be able to swap out the kernel code? Should they be able to switch out the phone CPU? Clearly the notion is ridiculous. To enable the user to customize this deeply requires implementing additional functionality to do so. It is not as simple as "not interfering." > You don't have to enable anything, just don't actively interfere with it. And in doing so, you compromise the security of your product. If I allowed my consumer to edit (compromise) my product arbitrarily, I can never make a secure product, and making a polished product becomes that much harder. Integrating against a generic interface always requires more work and thought than integrating against a known one. > Apple prohibits you from doing that to begin with, which is half the problem. This is why I phrased it as a thought experiment and not a reality. You are sidestepping the question. > The one where it bears no relation to underlying costs and is that high only due to the lack of effective competition. Just about zero storefronts have commissions that even remotely align with business costs. Walmart's 12-17% commission is far in excess of the operating costs. So is the Play Store's 30%, or Amazon's own commission. > Platform monopolies are like regional monopolies. Android customers are not a substitute for iOS customers How? Moving from Android to iOS or the other way is trivial. It is not nearly like moving from state to state. You either buy an iPhone with an App Store, or an Android phone with something else. There is no artificial lock-in besides your own wallet. There is plenty of customer choice here.
jclardy 7y ago
A storefront making a profit is perfectly fine as long as they aren't the only storefront that can exist.
- xvector 7y ago
  Fortunately, they are not the only storefront that exists. There are plenty of other storefronts on slightly different hardware available to the consumer. In fact, the App Store is a minority storefront on minority hardware.

AnthonyMouse 7y ago

> your implication is then that storefronts should not make a profit. No it isn't. It's that they should operate in a competitive environment so that the profits are the ones produced by a free market without unreasonable barriers to entry rather than being monopoly rents.

xvector 7y ago
> It's that they should operate in a competitive environment Apple operates in a competitive environment. There are hundreds of other options to choose from. Unless you mean the App Store should be competitive within the iPhone. Why? How many layers deep do we need to ensure a perfectly competitive and open environment? If I put an app (say, a VM) on the App Store that has its own operating system and contained app store, am I now obligated to allow people to put their own app store in my app? > without unreasonable barriers to entry In what world is 30% "unreasonable?" Companies have the option of going to the App Store. There is no obligation for a company to use the App Store. They are not being cut out of the smartphone industry if they don't use the App Store. Apple is not a monopoly here - there are other options than the iPhone for you to sell your service on.
- AnthonyMouse 7y ago
  > Apple operates in a competitive environment. There are hundreds of other options to choose from. For phones, not for App Stores. Which other viable store distributes iOS apps? > Unless you mean the App Store should be competitive within the iPhone. Why? Because iPhone users are a different app market with different customers than Android users. A customer who wants to buy a PC can easily buy it from Amazon, Walmart, Target, Newegg, etc. based solely on e.g. best price for the same product. A customer who has an iPhone is not going to buy a new phone just so they can buy the same app through Google instead of Apple. > How many layers deep do we need to ensure a perfectly competitive and open environment? What does it have to do with layers? The user should be able to control the product they bought, all the way down. You don't have to enable anything, just don't actively interfere with it. > If I put an app (say, a VM) on the App Store that has its own operating system and contained app store, am I now obligated to allow people to put their own app store in my app? Apple prohibits you from doing that to begin with, which is half the problem. > In what world is 30% "unreasonable?" The one where it bears no relation to underlying costs and is that high only due to the lack of effective competition. > Companies have the option of going to the App Store. There is no obligation for a company to use the App Store. They are not being cut out of the smartphone industry if they don't use the App Store. Apple is not a monopoly here - there are other options than the iPhone for you to sell your service on. Platform monopolies are like regional monopolies. Android customers are not a substitute for iOS customers in the same way that customers in Florida are not a substitute for customers in California -- because you sell to both of them, not one instead of the other. If Walmart had a retail monopoly in California, you can't argue that they don't by pointing to a competitor in Florida.
  - xvector 7y ago
    > Which other viable store distributes iOS apps? In which world is "iOS apps" an industry? The industry here is apps in general. In which case you have hundreds of other devices and tens of other stores, of which Apple is a minority player in both. > The user should be able to control the product they bought, all the way down. To what degree? Should the user be able to swap out the kernel code? Should they be able to switch out the phone CPU? Clearly the notion is ridiculous. To enable the user to customize this deeply requires implementing additional functionality to do so. It is not as simple as "not interfering." > You don't have to enable anything, just don't actively interfere with it. And in doing so, you compromise the security of your product. If I allowed my consumer to edit (compromise) my product arbitrarily, I can never make a secure product, and making a polished product becomes that much harder. Integrating against a generic interface always requires more work and thought than integrating against a known one. > Apple prohibits you from doing that to begin with, which is half the problem. This is why I phrased it as a thought experiment and not a reality. You are sidestepping the question. > The one where it bears no relation to underlying costs and is that high only due to the lack of effective competition. Just about zero storefronts have commissions that even remotely align with business costs. Walmart's 12-17% commission is far in excess of the operating costs. So is the Play Store's 30%, or Amazon's own commission. > Platform monopolies are like regional monopolies. Android customers are not a substitute for iOS customers How? Moving from Android to iOS or the other way is trivial. It is not nearly like moving from state to state. You either buy an iPhone with an App Store, or an Android phone with something else. There is no artificial lock-in besides your own wallet. There is plenty of customer choice here.

jclardy 7y ago

A storefront making a profit is perfectly fine as long as they aren't the only storefront that can exist.

xvector 7y ago
Fortunately, they are not the only storefront that exists. There are plenty of other storefronts on slightly different hardware available to the consumer. In fact, the App Store is a minority storefront on minority hardware.