Verizon Huffed and Puffed and Blew The Firefighters Off
The COMUNICANO for Monday September 3rd 2018

Apple Fortunes May Be Changing

In the movie "Wall Street" the phrase, "Greed is good" has defined a culture for many years. The "Apple App Tax" where the Cupertino giant takes thirty percent of in-app purchases is a wonderful example of Gordon Gecko's now infamous line in the film. On one hand, Apple wants to make as much money as possible, and at the same time, by taking their cut off the top of every in-app purchase they are in effect holding back their potential competition from being as profitable.  Or maybe not.

What everyone forgets is that the 30 percent goes to fuel the Apple iOS platform development, pay for the tools and infrastructure that developers develop on and provides the ongoing efforts that keep the apps safe. While big brands like Amazon, Uber, AirBnb and others handle transactions outside the app, for a long time Netflix and Spotify have been handling signups and in turn monthly payments inside the iOS application, which in turn gives Apple their cut. Now they are saying, "no more."

On face this puts Spotify and Netflix in the group like Uber and Lyft. They love the iPhone as it is their route to generating the ride, but it's not in current and past terms of service, where the purchase is made. 

So what's Apple to do? The iPhone, and Andorid devices, have in reality become the shopping mall of the 21st century. They're the virtual gathering spot of many, who use the "service" the app provides them, the same way you walked into a store in the mall to buy something. Apple handles promotion via the App Store, making it easy for "shoppers" to be able to "enter" the app and gain access to the "store" where you can then pick the product off the virtual "shelf" on the screen. In the case of Uber, you can pick between Pool Express, Pool, X, Plus, Black, SUV just like you can choose between XS, S, M, L, XL or XXL.

With big brands like Netflix and Spotify "pulling out" of the Apple iOS In App Purchase model in effect they want the traffic the mall brings, without paying the rent. While this is good for them, in essence they're applying the "share of stomach" model of not wanting to feed the competition, which is Apple or perhaps, are choosing to 'bite the hand that feeds them."

Let's face it. App stores existed long before Apple's came to be in 2018. Nokia, Microsoft and RIM's Blackberry all had them. What they didn't have were thriving mobile app development programs (though RIM, under Alec Saunders did breath amazing life into the Blackberry program earlier in this decade.) Without the app store and the core technology that Apple provides developers to use the ability for so many Netflix and Spotify subscribers to view or listen to content on iOS devices wouldn't be possible. 

The flip side of course is that without the apps, the audience for using the Apple devices would be less. 

This is all heading towards a showdown of sorts, where both sides hunkerdown and play digital chess with one another, with an eventual outcome where Apple buys one or both.



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