There is no denying that Apple makes some of the most beautiful and easy to use gadgets around with their iPhones and iPads. But outside of impressive industrial and software design, the companies focus on control and profit means that it relies on some rather anti-competitive and bad-for-the-consumer business practices to maintain its profit margins. We’ve previously covered how Apple continues to try to block innovation and standards invention in the eBook market, and here I’ll explain how they are using the app store to swell their margins at the expense of developers and progress.
Whilst the idealistic amongst us are still waiting for the emergence of HTML5 apps as good as their native counterparts, the App Store phenomenon continues to drive how most people add functionality to their phones and tablets. Apple was the first to recognise the power of integration, simplicity, and control that a unified app store could bring, and as such still rules the roost in terms of number of apps available – although the Android app store is pretty close these days. This centralised system allows Apple complete control over what apps iPhone and iPad users can install on their devices (without jail-breaking of course), and that has the benefit of Apple being able to avoid trojans and viruses affecting their users, and by centralising the payment system, people can pay just 99p for an app with the developer getting paid and it not all disappearing in Visa fees. App Stores definitely have their uses.
The problem, however, is how Apple treats its control over its App Store. People often raise the case of free speech, will Apple policing the store to prevent any more adult apps being made available, and also to protect the profits of its telco partners by preventing free-tethering. These are certainly points of disagreement between Apple users, but by making sure the store is family friendly, Apple is simply making sure its devices are suitable for everyone. Yes a password-protected adult section might have been a better solution, but Apple would obviously prefer to distance itself from any such explicit content in case it started to damage their impressively strong brand.
The real issue is how Apple treats apps that are similar or in any real form compete with Apple products. When Apple launched its Newsstand and subscriptions service from within the App Store, they made it almost impossible for magazines and other digital subscription services from working outside those services by charging a 30% fee of each subscription payment for App Store apps. This forced some magazines to move to Apple’s Newsstand service and losing control of their subscriber details to Apple, giving Apple even more control over content creators, and others, such as the Financial Times, to move to a pure HTML5 solution. Apple wanted control of subscriber details so they can sell other subscription services to them (such as iCloud), and they were happy to squeeze that out of the struggling content creators which are currently soft targets.
Even worse than the squeeze on digital subscriptions, is how they treat developers that compete with Apple’s own features. They left the Google Voice app in the waiting queue for months even though users were clamouring for it as they claimed that it competed with the iPhone’s phone capabilities. Now, whilst this is true, the real reason for blocking admission was that Google Voice offered users a service outside of the iPhone infrastructure that was transferable and would lose Apple some of its valuable “lock-ins”. Yes, Google Voice was eventually approved, but not before legal proceedings were issued – and Apple has not stopped with this policy.
Most recently, True Knowledge launched Evi – a direct competitor to Apple’s Siri that shares a reliance on Nuance’s voice recognition technology, and they have been informed that it will soon be removed from the App Store, as it “appear[s] confusingly similar to an existing Apple product”, which to you and me means “competes with Siri”. If the app was a poor competitor then Apple would have not had an issue with it, but as Evi actually beats Siri in a number of ways, and is cross-platform Apple is worried. The iPhone 4S was launched to collective sighs of boredom to the gadget-loving populace as the only real improvements over the iPhone 4 were the camera and Siri. The camera is still impressive, but with a cross-platform Siri competitor available for free, the reason for upgrading to the latest iPhone was suddenly greatly reduced.
If the App Store allowed competition, the launch of Evi should push Apple to improve Siri into doing things like understanding British accents, but with it under Apple’s control they can just exclude their competition from the marketplace and that is what they are doing – if you can’t beat them, squeeze them out seems to be the mantra. Microsoft gained its evil corporation tag by using the exact same anti-competitive practices about a decade ago and squeezing Netscape out of the browser market and were brought up in front of and fined by the US Anti-Trust and EU Competition Commissions for their actions. It looks like Apple might be next.
Even more worrying, is how Apple is pushing the App Store model with its popular line of MacBook laptops as well, by adding three tiers to software available for OSX – those in the App Store, those signed by registered developers, and everything else. Apple may be paying lip service to its “open” platform by allowing unregistered software to be installed from any location, you can be sure that the warnings will scare plenty of users away from installing any software that Apple has not had its 30% cut of the sale from. They can spin this policy as protecting users from malware all they like, but this is about control and profits – both of which Apple take from developers and content creators in their App Store.