> Your list of services where you claim Apple has a dominant position is entirely products where it does not have a dominant position.
I am not claiming that. I am claiming that Apple has a very dominant position over the most important sales channel lots of companies have to rely on to compete.
Just one example is the at this point famous App Store tax. From a 10$ Apple Music subscription, 9.8$ (lets use these cents for processing) goes to Apple.
For a 10$ Spotify subscription, Spotify makes 7$ after Apple takes their 30% fee. Sure one may say, hey, but Spotify isn't forced to use Apple's service for payments, except they are. Otherwise they loose access to *the* platform most people listen to their music nowadays. Spotify also isn't allow to make Apple subscriptions more expensive and inform users about cheaper subscriptions on their website, because otherwise they'd loose access to the important platform. I guess one can see how this could be considered a abuse of the dominant marked position?
Strictly speaking, for this example past tense would have been fitting. Not because Apple is so generous, but because the EU also considered much of this behavior to be anti-competitive. Hence me wondering if the US courts would be following this line of thinking.
What frustrates me the most is Apple's double dipping. They argue that those fees are required for the development of the platform and technology, pretending as if they didn't already charge a hefty price tag on the products they sell. And in the end, its still the user who is getting screwed. It's not like Spotify or any other provider is eating the platform cost, they charge it up to the user by making their services more expensive.
Also, in their defense in the EU hearings Apple argued that Spotify's success is in large part thanks to the App Store, so it would only be fair for them to pay that amount. The amount of arrogance in that statement is astonishing imho. Developing for a platform is a mutually beneficial relationship, not an altruistic development aid by Apple. What would iPhone sales look like if there was no third party Mail client, no Twitter app and no Instagram or Facebook for their phones?
TD;DR: easy demonstration of how Apple makes more money selling the same product, not because they're more efficient but because they make all the rules.
Your stylized example is unrelated to reality. Users cannot subscribe to Spotify in app, so Apple makes no money from them while providing all the R&D they use to play audio on the device for free. Next, people say that the hassle of subscribing to Spotify outside the app is an insurmountable friction for Spotify, yet somehow Spotify is the dominant streaming music provider.
So Apple has built all the key innovations which make mobile music streaming a viable product, gives it to the biggest music streaming service for free, and then gets slammed because it doesn’t also go out of its way to allow that service to integrate with Apple’s assistant AI product (except when it does build that functionality, the streaming service doesn’t even adopt it!).
> Users cannot subscribe to Spotify in app, so Apple makes no money from
They don’t? This is because of the limitation puts on the App. Apple Music users can easily subscribe thanks to Apple being not negatively affected by its own restrictions.
> while providing all the R&D they use to play audio on the device for free
So you’re saying the developers fees pay for their R&D. So am I with my phone purchase. So I’m simply paying twice. To quote yourself, that is
> Simply absurd logic.
> Apple has built all the key innovations which make mobile music streaming a viable product, gives it to the biggest music streaming service
Have they? Spotify was a thing on the desktop way before it was on iPhone. Apple didn’t invent mp3 and all sorts of other stuff. They built the platform for their phones, no more, no less.
> gives it to the biggest music streaming service for free
It’s not free, quite the opposite. It comes with a steep fee when you sell on their platform.
> They don’t? This is because of the limitation puts on the App.
Just because there’s some reason for why Apple does not make money from Spotify does not invalidate the fact. Meanwhile, your entire argument depended on a false premise.
> Have they? Spotify was a thing on the desktop way before it was on iPhone.
And Rhapsody was on desktop way before Spotify. There’s a reason it didn’t take off.
> It’s not free, quite the opposite. It comes with a steep fee when you sell on their platform.
What steep fee? The one that the biggest music streaming company does not pay? How can a fee be both required and uncollected?
It doesn’t matter. I’m not the one whose arguments depend on Apple making money from Spotify.
> The device owner paid for their device and the OS.
I have to assume people writing on Hacker News are not so naive about software business models. The vast majority of software is not sold with a free license to developers to build anything they want packaged with the hardware sale.
This entire comment is wildly misinformed. Are you forgetting Apple charges like $1200 for a phone these days? They’re the most profitable company on the planet. Are you suggesting that in order to cover the extensive research and development costs of music playback (sorry did you really say this?), they need to take a 30% cut of every song played on the device?
As far as I can tell, you don't dispute a single statement in my comment.
> Are you forgetting Apple charges like $1200 for a phone these days?
This is a strawman. iPhone starts at $429 in the US, and there is no law saying companies can only monetize with up-front hardware costs. Such a law would be unprecedented in software.
> Are you suggesting that in order to cover the extensive research and development costs of music playback (sorry did you really say this?)
I didn't say that. I said mobile music playback. Streaming the world's music catalog to a mobile phone reliably with all-day battery life would be unthinkable 17 years ago, and the primary innovator making it happen was Apple, not Spotify. Core Media APIs are simply the tip of the iceberg, yet are widely recognized as best in class by a lot. Android took over a decade to catch up to iOS audio latency in 2013: https://android-developers.googleblog.com/2021/03/an-update-....
Remember when Spotify released their take on music playing hardware with Car Thing? They literally couldn't sell their first run of inventory and ended up taking a 8+ figure write down. That project probably cost Spotify more than they've paid Apple in fees in the last decade, yet the Spotify in-car experience is great because of CarPlay, an Apple technology!
> they need to take a 30% cut of every song played on the device?
I made no claims about how much Apple should be paid for this. I simply pointed out that Apple is paid nothing for it by Spotify, yet people still are upset by that.
> the world's music catalog to a mobile phone reliably with all-day battery life would be unthinkable 17 years ago
The reliability of the streaming is more dependent on the internet connection and the quality of Spotify's services. Apple made bluetooth reliable, but most music enthusiasts see Apple's killing of the audio jack (because innovation?... no wait it was greed) was a huge step back for audio quality. Samsung phones have better battery life while Sony has better audio hands down.
> the primary innovator making it happen was Apple
Based on what metric? Apple utilized patents from Nokia, Qualcomm, Sony, etc.
> there is no law saying companies can only monetize with up-front hardware costs.
I didn't say there was. Your assertion that "so Apple makes no money from them while providing all the R&D they use to play audio on the device for free", is what I was responding to. Consumers are paying for that R&D. You strawmanned my strawman... Apple's most popular phone is $999.
> Core Media APIs are simply the tip of the iceberg, yet are widely recognized as best in class by a lot
Best in class by what measure? It's no surprise that when HackerNews attempts to explain the ins and outs of the music industry they start and end with APIs... Have you heard of Beyonce? I promise you Apple's customers don't give a shit about what APIs are used to listen to their music. They'll listen to their music on car speakers. It's completely irrelevant to customers. And the people that really do care about audio quality want cables, which again, Apple killed. The audio latency article you referenced has absolutely no bearing on music playback, it pertains to real-time communications and games with user interaction. Listening to music isn't impacted by this metric, unless you think an extra 80ms after hitting play on Spotify is worth a 30% cut of Spotify's revenue. But somehow I suspect you'll attempt to justify that.
I am not claiming that. I am claiming that Apple has a very dominant position over the most important sales channel lots of companies have to rely on to compete.
Just one example is the at this point famous App Store tax. From a 10$ Apple Music subscription, 9.8$ (lets use these cents for processing) goes to Apple.
For a 10$ Spotify subscription, Spotify makes 7$ after Apple takes their 30% fee. Sure one may say, hey, but Spotify isn't forced to use Apple's service for payments, except they are. Otherwise they loose access to *the* platform most people listen to their music nowadays. Spotify also isn't allow to make Apple subscriptions more expensive and inform users about cheaper subscriptions on their website, because otherwise they'd loose access to the important platform. I guess one can see how this could be considered a abuse of the dominant marked position?
Strictly speaking, for this example past tense would have been fitting. Not because Apple is so generous, but because the EU also considered much of this behavior to be anti-competitive. Hence me wondering if the US courts would be following this line of thinking.
What frustrates me the most is Apple's double dipping. They argue that those fees are required for the development of the platform and technology, pretending as if they didn't already charge a hefty price tag on the products they sell. And in the end, its still the user who is getting screwed. It's not like Spotify or any other provider is eating the platform cost, they charge it up to the user by making their services more expensive.
Also, in their defense in the EU hearings Apple argued that Spotify's success is in large part thanks to the App Store, so it would only be fair for them to pay that amount. The amount of arrogance in that statement is astonishing imho. Developing for a platform is a mutually beneficial relationship, not an altruistic development aid by Apple. What would iPhone sales look like if there was no third party Mail client, no Twitter app and no Instagram or Facebook for their phones?
TD;DR: easy demonstration of how Apple makes more money selling the same product, not because they're more efficient but because they make all the rules.