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... but this is how actual retail works. Real-world Billy doesn't hold the "license to sell electronics," but the various mall management companies - of which
by geofft 6y ago
... but this is how actual retail works.
Real-world Billy doesn't hold the "license to sell electronics," but the various mall management companies - of which there aren't very many - do in fact exclusively control the real estate in the shopping malls. They don't charge Apple a percentage of sales, but they charge them some amount of money for simply having the store, regardless of sales, which can be even more: if you look at the latest MacBook in person at the store, go home, and decide you want to buy it from apple.com, the landlord still gets money from Apple.
The various mall management companies make, quite literally, billions of dollars a year. The landlords who own non-mall property for the Apple Store downtown also make piles of money. And they don't need a license, nor do they need to convince anyone that they're protecting anyone. They just own the land.
And Apple also sells products through various other retailers, like cell phone companies, Best Buy, etc., each of which work out deals of various sorts. You generally can't buy an unlocked, no-contract iPhone from a cell phone company. You get an iPhone with a contract that commits you to spending way more money than the cost of the phone.
Arguably, Apple's role is a lot fairer; there's no scarce resource like properly-zoned land in a populated city on which the App Store was built. Anything that happens on the App Store is entirely Apple's doing; anything that happens in a mall or in an existing retail store is partly the owner's doing and partly their good fortune to have put themselves there before someone else did. If someone wants to compete with iOS and the App Store, they are free to build their own version from scratch - nothing Apple did is stopping them. If someone wants to compete with a shopping mall, you can't just plop down a new shopping mall - the land is in use. If we think Apple doesn't deserve to take a cut for use of their platform that they built, the landlords certainly don't deserve rent for use of land that they bought.
(Which is, to be fair, my own personal opinion, but the market doesn't agree with me, and there's very little point in me pouting at the market.)
- CyberRabbi 6y agoI think most reasonable people discussing this topic are aware that there are some similar arrangements made between retailers and manufacturers. The one big difference is that there is no retailer monopoly and thus the overhead they charge has been negotiated by the market. I.e. their overhead charges are probably a lot more fair than 30%. If Apple were to allow alternative app stores, I think we’d see price normalization in this space. The various app stores would then be competing on price based on the costs of hosting their App Store service.
- geofft 6y agoSure, but I'm disagreeing with the claim that there is no retailer monopoly and that there is an Apple monopoly. Landlords have exclusive use of land, a limited resource. If I am running a clothing brand and I want to have a store in a particular city, my options are to build a store on empty land very far from the city center, or to negotiate with the person who has the land.n If I want to have a store in a mall, I certainly can't just built on my own, and in many cities, there's probably not even another mall to provide competition. Apple is charging for use of the Apple App Store platform. They are not charging for the Android Play Store platform. They are not charging for anything happening anywhere else. There is no exclusive resource like land involved, as demonstrated by the fact that Android was able to build the Play Store. I don't think it makes any sense to say that Apple has a monopoly over use of their own product, since a monopoly is about control of a market. But if we're going to make that claim, we should definitely say that each mall owner has a monopoly over use of that mall! That is at least as sensible as saying that Apple and Android both have monopolies over their respective competing products. And I think that the concern people have isn't whether the price has been decided by the market - it clearly has, and tons of participants are willing to participate even with the 30% cut - the question is whether the price is fair in a moral sense. I do agree with the answer that it is not. But I think you have to ask the right question to get the right answer.
- CyberRabbi 6y agoApple’s product makes up at least 60% of mobile phone usage in the US[1]. No single landlord owns 60% of retail space in the US. If you want to say landlords have control over their market not unlike apples control, you have to concede that apples control is likely two orders of magnitude more than any single retail landlord. To access 60% of US mobile phone users, App developers must go through Apple. Apple faces no competitor pressure when deciding on their prices, it is their discretion alone. Landlords face competitor pressure but Apple does not in this space so in that sense, no, the market has not decided apple’s prices. Aside from the practical issues concerning their control of the market, the argument that Apple should be able to charge whatever they want because it’s their product is normative. These normative claims can be challenged when we consider the practical effects their market dominance has on app developers and users alike. [1] https://www.phonearena.com/news/apple-iphone-record-sales-us-december-2020_id129957 https://www.phonearena.com/news/apple-iphone-record-sales-us...