6 ms·

The Apple Strategy Tax

81 points by ugh 16y ago

chapel 16y ago
The way the OP is presented is a little confusing, comparing Microsoft and it's internal applications having a 'strategy tax' versus Apple and their internal and 3rd party applications. I do agree with the closing argument, it definitely could have been presented in a less confusing way. Apple is in every right to charge whatever they want, but that doesn't mean they should. I would hope that everyone that is affected by the policy change will jump ship and show Apple that they are important to the iOS ecosystem. Maybe even causing Apple to change their policy to be more developer friendly. It is crazy to me that Apple lauds their iOS app ecosystem as a reason to buy iOS devices but then punishes the developers that make those apps.
- georgemcbay 16y ago
  I didn't find the article to be confusing. As it explains, Apple is the arbiter of every application that appears on the App Store, both internally or externally developed, creating a situation in which 3rd party developers are loosely similar to internal teams at Microsoft. Microsoft never tried to be gatekeeper of what could or couldn't be published on Windows, thus it could only control the fate of its internal apps, whereas Apple can control both internal and external apps equally, thus the loosely parallel situation even though in Apple's case their strategy tax can be used to kneecap external developers just as much as internal ones.
  - chapel 16y ago
    It really felt like a forced analogy because the two situations are much different in practice. To have them be the same, Apple would have to be crippling their internal applications and services at the benefit of the external ones.
    - georgemcbay 16y ago
      I think it still works fine if they are crippling external applications for the benefit of the internal ones. Which (as the article mentions and as anyone who has paid attention to the situation already knows) they have been doing all along.
      - chapel 16y ago
        Of course they have, but my point is that the situations are dissimilar. In the case of Microsoft, they are crippling their own software at the behest of another internal project, where as Apple is effectively crippling 3rd party software at the benefit of their own. This means that Microsoft is hurting itself, where as it remains to be seen if Apple is hurting itself, but it isn't doing it intentionally if so.
        ttyS0 16y ago
        By crippling 3rd party software, Apple is hurting its platform the way Microsoft is hurting itself. Whether or not the hurting is intentional is beside the point.
        RickHull 16y ago
        Yes, I agree the strategy tax analogy is misplaced, in accordance with a since-deleted comment: > Apple isn't facing a "strategy tax," per the Microsoft example; it's making a strategic mistake. Except that a mistake is when the downsides outweigh the upsides. We don't yet know if Apple has made such a strategic mistake. So if we can say that Apple has incurred a strategy tax, then it seems like a strategy tax is merely the (omnipresent) downside of any strategic decision. What is striking about the Microsoft example is (indeed) that the company is actively harming (read: hindering) itself. I'm not sure "tax" is the best descriptive term for this phenomenon, but I think the author intended the distinction. It is a tax in that you are redistributing (within the corpus, and hopefully profitably or at least equitably) the value of certain efforts (read: features).
  - jcsiracusa 16y ago
    That was one of the connections I was trying to make, though I agree it's not spelled out as well as it could be. The other is that Microsoft's decision to expand into so many different markets parallels Apple's decision to do the same. When you're a platform owner and you also want to build businesses on that platform, the "success" scenario for your businesses can end up looking like a failure scenario for your platform, and vice versa. For example, it's some person's job at Apple to make the iBooks store the most successful ebook store, but it's another person's job to make the iOS platform the most attractive, popular platform. My point in the final paragraph was that the only way for Apple to reconcile this tension may be to decide that the complete domination of Apple's businesses built on the iOS platform actually would make iOS the most attractive, possible platform. Ergo, the "What's good for Apple is good for America" reference. But when Apple's businesses have so many practical and now financial advantages versus competitors, how sure can Apple really be that its iOS content businesses would be winning based on their merits and not because of their "unfair" advantages? (That is, assuming the platform isn't stunted even sooner by customers abandoning it as their favorite non-Apple businesses decide they can't or won't agree to Apple's latest round of policy changes.)
    - po 16y ago
      In my view, Webkit is the canary in the coal mine for the strategy tax. The most viable competition for iOS native apps is HTML5/Javascript applications. If I ever feel like the webkit team isn't pushing into new technologies as aggressively as possible, I get nervous. For example, it would probably be in Apple's best interest for Mobile Safari not to support offline storage. It would force developers who need offline features into creating native apps instead. In this way, I think the Google Chrome team is giving us a good yardstick for measuring Apple's willingness to compete.
      - danssig 16y ago
        Apple was pushing HTML5 as much as anyone else if not more. To claim that it was only ever because of Google is unfair at best.
        16y ago
- zach 16y ago
  Yeah, it seemed like quite a stretch. It was like one of those Simpsons episodes from recent years where they paste two plots together that have nothing to do with each other, because neither one can sustain a complete episode.
- josh33 16y ago
  Apple is positioned in a way that if people leave the platform because they've been squelched by Apple, they can easily loosen their policy. The lack of a real competitor who offers the hardware/software integration (leading to the awesome user experience) is why they may still have some time to milk the platform for profit without risk of a mass exodus.
  - chapel 16y ago
    Quite true, but sad that a company like Apple would even entertain this path considering their roots and seemingly pure beginnings. A business is a business, but sometimes it behoves one to be better than the rest and not just financially (which Apple is as well). It isn't like they wouldn't stop making money if they chose to not do stuff like this.
    - josh33 16y ago
      True. The real question is what is the cost of not opening the platform vs. opening the platform, considering their humble beginnings and cult following that powers a lot of their revenue.
- danssig 16y ago
  Can we reign in the hyperbole on this whole iOS vs. Android thing? This isn't "right" vs. "wrong" or "evil" vs. "good". It is a simple trade off. Apple wants to do what it can to control the user experience as much as possible. To ensure users experience the phone exactly how Apple thinks is best (lucky for Apple, they have really good taste). Android takes the tried and true Microsoft approach of letting everyone do what ever they want (for the most part) and leaving more of the responsibility of having stable, malware free, etc. system in the users hands. Each way has advantages and each has disadvantages. Neither is "evil".
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deleted 16y ago
[deleted]
deleted 16y ago
[deleted]
6ren 16y ago
One effect is to encourage competitors to use non-iOS platforms, including webapps on iOS, or android. The consumer downside is if these are not also available for iOS. However, if Apple quickly copies those features, or buys the company (as it often does), then its customers aren't harmed. And, in fact, Apple's apps are often leading anyway. I think the place for a real downside is for apps that would be better or more quickly developed on the iOS platform, or would be more attractive to developers there (because more profitable or more users). These apps would appear more slowly for other platforms, if at all. Because native iOS apps are faster than webapps, and because iOS customers seem willing to pay more than Android users, this downside seems realistic - and invisible.
trout 16y ago
Until more official news about the fee is released, I'm done reading these articles. The speculation and thinking-four-steps-ahead chess moves are not convincing.
sacrilicious 16y ago
I can't really reconcile the hope in this argument that apple could enable/allow more constructive and innovative business models to flourish... with the(at this point) unconvincing menace it's being to itself and others. I don't see the subscription move as trying to directly favor Apple's stores: they _don't_do_subscriptions_. I honestly can see this move as being more 'in bed' with old media than a type of not-invented-here syndrome. In the iMovie intro yesterday the CEO of Apple said they're trying to do the platform right with an app they like developing, but also raises the bar to a place other developers should shoot for. I'm not saying to take that as parallel to 'the brand of capitalism we foster is naturally better', but who knows if there couldn't be an upside(once things get clarified) that's natural for the market and doesn't smack of greed.
joebadmo 16y ago
Did anyone else think of Twitter while reading this article? Specifically re providing a platform and then competing on that platform.

81 points by ugh 16y ago

The way the OP is presented is a little confusing, comparing Microsoft and it's internal applications having a 'strategy tax' versus Apple and their internal and 3rd party applications. I do agree with the closing argument, it definitely could have been presented in a less confusing way. Apple is in every right to charge whatever they want, but that doesn't mean they should. I would hope that everyone that is affected by the policy change will jump ship and show Apple that they are important to the iOS ecosystem. Maybe even causing Apple to change their policy to be more developer friendly. It is crazy to me that Apple lauds their iOS app ecosystem as a reason to buy iOS devices but then punishes the developers that make those apps.

georgemcbay 16y ago
I didn't find the article to be confusing. As it explains, Apple is the arbiter of every application that appears on the App Store, both internally or externally developed, creating a situation in which 3rd party developers are loosely similar to internal teams at Microsoft. Microsoft never tried to be gatekeeper of what could or couldn't be published on Windows, thus it could only control the fate of its internal apps, whereas Apple can control both internal and external apps equally, thus the loosely parallel situation even though in Apple's case their strategy tax can be used to kneecap external developers just as much as internal ones.
- chapel 16y ago
  It really felt like a forced analogy because the two situations are much different in practice. To have them be the same, Apple would have to be crippling their internal applications and services at the benefit of the external ones.
  - georgemcbay 16y ago
    I think it still works fine if they are crippling external applications for the benefit of the internal ones. Which (as the article mentions and as anyone who has paid attention to the situation already knows) they have been doing all along.
    - chapel 16y ago
      Of course they have, but my point is that the situations are dissimilar. In the case of Microsoft, they are crippling their own software at the behest of another internal project, where as Apple is effectively crippling 3rd party software at the benefit of their own. This means that Microsoft is hurting itself, where as it remains to be seen if Apple is hurting itself, but it isn't doing it intentionally if so.
      - ttyS0 16y ago
        By crippling 3rd party software, Apple is hurting its platform the way Microsoft is hurting itself. Whether or not the hurting is intentional is beside the point.
      - RickHull 16y ago
        Yes, I agree the strategy tax analogy is misplaced, in accordance with a since-deleted comment: > Apple isn't facing a "strategy tax," per the Microsoft example; it's making a strategic mistake. Except that a mistake is when the downsides outweigh the upsides. We don't yet know if Apple has made such a strategic mistake. So if we can say that Apple has incurred a strategy tax, then it seems like a strategy tax is merely the (omnipresent) downside of any strategic decision. What is striking about the Microsoft example is (indeed) that the company is actively harming (read: hindering) itself. I'm not sure "tax" is the best descriptive term for this phenomenon, but I think the author intended the distinction. It is a tax in that you are redistributing (within the corpus, and hopefully profitably or at least equitably) the value of certain efforts (read: features).
- jcsiracusa 16y ago
  That was one of the connections I was trying to make, though I agree it's not spelled out as well as it could be. The other is that Microsoft's decision to expand into so many different markets parallels Apple's decision to do the same. When you're a platform owner and you also want to build businesses on that platform, the "success" scenario for your businesses can end up looking like a failure scenario for your platform, and vice versa. For example, it's some person's job at Apple to make the iBooks store the most successful ebook store, but it's another person's job to make the iOS platform the most attractive, popular platform. My point in the final paragraph was that the only way for Apple to reconcile this tension may be to decide that the complete domination of Apple's businesses built on the iOS platform actually would make iOS the most attractive, possible platform. Ergo, the "What's good for Apple is good for America" reference. But when Apple's businesses have so many practical and now financial advantages versus competitors, how sure can Apple really be that its iOS content businesses would be winning based on their merits and not because of their "unfair" advantages? (That is, assuming the platform isn't stunted even sooner by customers abandoning it as their favorite non-Apple businesses decide they can't or won't agree to Apple's latest round of policy changes.)
  - po 16y ago
    In my view, Webkit is the canary in the coal mine for the strategy tax. The most viable competition for iOS native apps is HTML5/Javascript applications. If I ever feel like the webkit team isn't pushing into new technologies as aggressively as possible, I get nervous. For example, it would probably be in Apple's best interest for Mobile Safari not to support offline storage. It would force developers who need offline features into creating native apps instead. In this way, I think the Google Chrome team is giving us a good yardstick for measuring Apple's willingness to compete.
    - danssig 16y ago
      Apple was pushing HTML5 as much as anyone else if not more. To claim that it was only ever because of Google is unfair at best.
      - 16y ago
zach 16y ago
Yeah, it seemed like quite a stretch. It was like one of those Simpsons episodes from recent years where they paste two plots together that have nothing to do with each other, because neither one can sustain a complete episode.
josh33 16y ago
Apple is positioned in a way that if people leave the platform because they've been squelched by Apple, they can easily loosen their policy. The lack of a real competitor who offers the hardware/software integration (leading to the awesome user experience) is why they may still have some time to milk the platform for profit without risk of a mass exodus.
- chapel 16y ago
  Quite true, but sad that a company like Apple would even entertain this path considering their roots and seemingly pure beginnings. A business is a business, but sometimes it behoves one to be better than the rest and not just financially (which Apple is as well). It isn't like they wouldn't stop making money if they chose to not do stuff like this.
  - josh33 16y ago
    True. The real question is what is the cost of not opening the platform vs. opening the platform, considering their humble beginnings and cult following that powers a lot of their revenue.
danssig 16y ago
Can we reign in the hyperbole on this whole iOS vs. Android thing? This isn't "right" vs. "wrong" or "evil" vs. "good". It is a simple trade off. Apple wants to do what it can to control the user experience as much as possible. To ensure users experience the phone exactly how Apple thinks is best (lucky for Apple, they have really good taste). Android takes the tried and true Microsoft approach of letting everyone do what ever they want (for the most part) and leaving more of the responsibility of having stable, malware free, etc. system in the users hands. Each way has advantages and each has disadvantages. Neither is "evil".

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deleted 16y ago

[deleted]

deleted 16y ago

[deleted]

6ren 16y ago

One effect is to encourage competitors to use non-iOS platforms, including webapps on iOS, or android. The consumer downside is if these are not also available for iOS. However, if Apple quickly copies those features, or buys the company (as it often does), then its customers aren't harmed. And, in fact, Apple's apps are often leading anyway. I think the place for a real downside is for apps that would be better or more quickly developed on the iOS platform, or would be more attractive to developers there (because more profitable or more users). These apps would appear more slowly for other platforms, if at all. Because native iOS apps are faster than webapps, and because iOS customers seem willing to pay more than Android users, this downside seems realistic - and invisible.

trout 16y ago

Until more official news about the fee is released, I'm done reading these articles. The speculation and thinking-four-steps-ahead chess moves are not convincing.

sacrilicious 16y ago

I can't really reconcile the hope in this argument that apple could enable/allow more constructive and innovative business models to flourish... with the(at this point) unconvincing menace it's being to itself and others. I don't see the subscription move as trying to directly favor Apple's stores: they _don't_do_subscriptions_. I honestly can see this move as being more 'in bed' with old media than a type of not-invented-here syndrome. In the iMovie intro yesterday the CEO of Apple said they're trying to do the platform right with an app they like developing, but also raises the bar to a place other developers should shoot for. I'm not saying to take that as parallel to 'the brand of capitalism we foster is naturally better', but who knows if there couldn't be an upside(once things get clarified) that's natural for the market and doesn't smack of greed.

joebadmo 16y ago

Did anyone else think of Twitter while reading this article? Specifically re providing a platform and then competing on that platform.