Apple is in for a loss here. The company must compromise on the fee structure. Not just compromise for Musk. Apple is in for a loss here of revenues.
If Apple fails to compromise Musk will key in on offering cellphone users an alternative app store. Tim Cook’s winning personality wont save the day. No amount of strategic blundering will save the day. Either Apple reduces the fees considerably or loses the business to major competitors. If Musk builds a universal app store then Microsoft and a few Indian entities may follow suit concurrently as Musk moves forward in development of a store.
I have been saying Musk wants Twitter for the Crypto and NFT traders but there is more to this for content producers. Musk wants to lead Web3. Not as a niche Web3 producer or coding team. But as a place that allows Web3 producers to have a generalized platform.
For creatives Web3 means getting royalties if someone wants to see your work. Basically an example of a company Musk would work with across Twitter would have its own blockchain and a relationship to an exchange. The content creators would get partial crypto payments as those tokens for the views.
In some ways this works till in many cases it does not work.
But Musk’ Twitter need not necessarily be a Web3 developer but have Twitter as a place for Web3 to operate.
When Musk goes after Apple for free speech in the scheme of things he is right. Apple crowds out the content creators and does not properly compensate them. There is more to speech than Apple’s opinion of speech. No matter how Apple came up with the constraints on trade.
As bjurasz points out, Apple has the vastly stronger position. They have virtually zero risk of competition from any third-party app store. Not because their app store has better features, or better coding, or any of that. Not because of Tim Cook’s personality. Because it’s the default that comes with the phone.
Musk can’t duplicate that. He can’t engineer around it. He can’t just build a “better” app store and expect it to actually gain ground against the Apple app store - because this is a customer knowledge and convenience problem, not a coding problem. It takes a certain amount of technical skill to use an alternative App Store rather than the default on the phone. Most customers won’t have that technical skill - and of those which do, most will be like bjurasz and prefer not to bother.
The only threat to the App Store is regulatory, specifically anti-trust. Musk’s history has little to indicate that he would have any better chance of success at shifting government policy on that front than others who have tried in the past.
I agree with that but for another reason. Most of the people using Iphone’s are old farts that have no idea what jail breaking a phone means. Tell them to jail break a phone and they would be heading down to the police department to bail out their Iphone.
Android OS holds 71 percent of the worlds market share not because it is cheap but because it is ubiquitous. Anybody can use Android OS where only Apple can use the Iphone OS. Yes some of the phones are inexpensive but some of the phones are priced at the same level as Apple.
The comment about most of the iphones being used by old farts is erroneous. Most of the young people embrace iphones IMHO and based on my extended family. I think the androids are popular with the old farts as my 80 something in laws have them because they are cheaper than iphones and some of their children have them for the same reason…doc
I am too. I switched to iPhone about two years ago after using Android the whole time prior to that. My viewpoint as an Android user was that Android does basically all the same things as iPhone, only cheaper. That’s still technically true, but I like every aspect and feature of the iPhone better than a comparable Android. Now that I’ve switched, I’m a convert and won’t be going back. I’m certain that most iPhone users are like me, they like Apple and don’t want anything else.
The thing Musk doesn’t understand is that the App Store is a money printing machine and Apple is very protective of its machine. Apple kicked Fortnite off of the App Store over fees. I don’t know how much that cost Apple, but Epic Games generates billions in revenue. Safe to say it was a lot of money. So how much revenue does Twitter generate for Apple? No real idea, but probably not very much. No way Apple kills the golden goose for Elon.
I’m not a lawyer, but it seems that Musk’s case here is extraordinarily weak. For one, Apple has about 55% market share in the US. That’s a long way from monopoly territory, and you can buy an Android phone for cheaper. Plus Twitter works fine in a browser. You don’t even need the app to use it on a mobile device.
This is an extremely foolish fight for Musk to pick in public. Apple is Twitter’s largest advertiser. Which is to say Apple is Twitter’s biggest customer. Very, very dumb move on Musk’s part.
It may be that Musk is fully committed to moving Twitter away from an advertising model into a subscription model. Apple’s cut on subscription fees in that model (30%) would utterly dwarf the amount they currently spend on advertising. It might be large enough to seriously affect whether a subscription-based Twitter is viable.
There are workarounds. Netflix, for example, doesn’t let you purchase a plan through their app - it pushes you to an outside link to complete the subscription process there, thus avoiding Apple’s cut. But customers are already habituated to paying a subscription fee for Netflix in a way that they are not for Twitter. Having that extra minor step may loom larger as Twitter tries to roll out this new thing and Apple will try really hard to make it difficult for them to implement it.
The play here certainly isn’t to kill the App Store or create a competitor, but perhaps to use the public foofaraw to try to cut a bespoke deal with Apple, as Apple and Google are alleged to have offered to Netflix in an ultimately unsuccessful to try to keep them using their IAP systems.
Musk can push Apple around with a bigger stick. Apple is already under the congressional watch for antitrust over the app store. The incoming house wants to cut Apple down to size. Apple is going to be on the losing end of this regardless but it can be drawn out by Apple.
If Musk is saying he wants to build a third party app store…then congress maybe asking why he cant do so? If Musk wants to ask then Microsoft and others will want to ask. Including Google who could create a third party app store as well.
The Genie is coming out of the bottle either way.
You are completely correct Apple has control. Monopolistic control until Apple does not have control.
Twitter’s a relatively small company. Much smaller than Facebook, Netflix, and other companies that have tangled with Apple and Google Play over these issues. Heck, Twitter’s probably a smaller company than Epic Games - which also has been unable to move the needle on this.
Musk has shown no real past practice of being especially effective in shaping regulatory or Congressional action. He’s never really invested much in cultivating a big lobbying presence on the Hill for Tesla, nor done much personal effort in trying to make nice with Congress. Congress may or may not do anything about this (with a divided Congress with razor-thin majorities on both sides, I think it’s pretty unlikely) - but there’s no reason to think that Musk can do much to affect that outcome.
Google already has an app store, BTW, and they (like Apple) charge 30% for in-app purchases. They’re on Apple’s side in this.
As a long, long time Apple user, from ][+, //c, //e. Macs, iMacs, Pros, Air, MB, iPad, TV4K, TV+, Watch, iCloud, and the initial early OS’s to nearly the current Mac OS, and current iOS, this old fart has dabbled in all of it, and now have watched, helped family, friends with issues over the years, so obviously I’m prejudiced… There is a resistance, really only on my DD’s inlaw’s side of the family, but he was an old DOS guy, so we’ve sorted it out, but now he’s retreated into not even activating WiFi on his Droid phone. Some just can’t be helped…
Looking back to even Apple ][+ days, it cost a bit more than the Commodore and other early computers, but it was open to machine language tinkering, magazines were dedicated to all sorts of tinkering, even in Byte back then… There are FB groups still fiddling about in the innards of Macs, iPhones if one looks… Many of our old fart buddies have slipped away, many long time collectors, wondering what to do with that //e, floppy drives, binders of floppy disks… PR#6 to boot it back then… A TTY for its printer… Fun times…
Apple may be forced to open the door a bit, all we can do is keep an eye on how it goes…
The problem for Apple is that 50%+ of the US is aligned with Elon.
How would that manifest in impacting Apples business moats, revenues, profits is anyones guess. However if Elon provides a viable alternative to the millions of users, Apple is in trouble. Apple is by far anchored in US for revenues and profits. Its market cap is priced for perfection as well.
The above sentence is both true, and incredibly unlikely. Musk can’t really provide a viable alternative to Apple.
If we’re talking about an alternative to the App Store (the post wasn’t clear), it literally cannot be done. The salient feature of the App Store has nothing to do with its specs or coding. The salient feature is that it’s the default on the iPhone. Same music, different words for Google Play on Android phones.
If we’re talking about an alternative to the iPhone itself, it almost certainly cannot be done. At least, not by Twitter. Numerous companies have tried to launch their own phones in order to promote their own competitor to Apple’s walled garden: Microsoft, Amazon, Facebook (to say nothing of the electronics companies that just couldn’t make it work in the cutthroat smartphone market, like LG). Twitter likely doesn’t have the resources to launch an iPhone or Android competitor.
The more we talk about it, the more that this seems like an effort aimed less at influencing Apple’s app store fees, and more about trying not to have Twitter pulled from the store for violating Apple’s TOS on user-generated content if Twitter really relaxes its moderation policy.
That could be the case, but he mentioned earlier that subscribers would see fewer ads, so at that point in time at least, he was looking at a hybrid model. And I don’t think Musk or anyone knows if a subscription model is even viable. Until that is known for sure, it is an astonishingly dumb move to pick a public fight with what is likely Twitter’s largest customer.