Upgrade

00:00:00 ◼   ► [Music]

00:00:08 ◼   ► From Relay FM, this is Upgrade, episode 497 for January 29th, 2024.

00:00:16 ◼   ► Today's show is brought to you by Notion and Oodie Pizza Ovens.

00:00:20 ◼   ► My name is Mike Hurley and I'm joined by Jason Snow. Hi, Jason Snow.

00:00:24 ◼   ► Hi, Mike Hurley. How are we so close to Upgrade 500?

00:00:26 ◼   ► I know. I have a little task which is like check the 500 draft.

00:00:30 ◼   ► Yeah, really.

00:00:31 ◼   ► I'll be doing that soon.

00:00:32 ◼   ► Wild.

00:00:34 ◼   ► I have a Snow Talk question for you, Jason.

00:00:35 ◼   ► It comes from Eli, last name withheld, who says,

00:00:38 ◼   ► "Jason, did you enjoy the Flop House live on Friday?

00:00:41 ◼   ► I hope I wasn't too much of an overbearing fan of Upgrade."

00:00:45 ◼   ► No, Eli was very nice.

00:00:46 ◼   ► I did very much enjoy the Flop House live on Friday.

00:00:48 ◼   ► It turned out, although Eli did and his wife chatted with me and my wife briefly,

00:00:54 ◼   ► then Merlin and his kid sat down at their table.

00:00:58 ◼   ► And then we didn't speak to them again because they just talked to Merlin and Merlin's kid after that.

00:01:05 ◼   ► So, yeah.

00:01:06 ◼   ► That's pretty great. Did you speak to, did you see Merlin?

00:01:09 ◼   ► I gave a little hug to Merlin. Yeah.

00:01:11 ◼   ► I mean, he saw me, he spotted me and because, because I think Eli said,

00:01:14 ◼   ► "Oh, you know, we were just talking to Jason."

00:01:15 ◼   ► And then our eyes locked across, you know, two tables.

00:01:18 ◼   ► And he came over and gave me a hug and we chatted a couple of times and made jokes about John Syracuse.

00:01:23 ◼   ► You know, as you do. As you do.

00:01:25 ◼   ► Basically when any of us get together, there's always jokes about John.

00:01:30 ◼   ► Well, you gotta, you know.

00:01:30 ◼   ► Can you believe, by the way, can you believe the Mac Pro?

00:01:34 ◼   ► I just like, I feel like I can't believe from last time.

00:01:37 ◼   ► That John picked the current Mac Pro as the Hall of Shame?

00:01:41 ◼   ► Yes.

00:01:41 ◼   ► I just, I can't, I can't accept it.

00:01:43 ◼   ► I can believe it because it's John.

00:01:46 ◼   ► No, no.

00:01:47 ◼   ► I just, I can't.

00:01:49 ◼   ► I don't endorse it.

00:01:50 ◼   ► I'll put a link in the show notes to one of our video clips.

00:01:53 ◼   ► So you can see my reaction for when, for John's pick.

00:01:57 ◼   ► Because it's-

00:01:58 ◼   ► You were not happy.

00:01:59 ◼   ► No, I wasn't happy.

00:02:00 ◼   ► Did the two times people flipped off the camera,

00:02:03 ◼   ► make it into the video version?

00:02:04 ◼   ► Do we know that?

00:02:05 ◼   ► I don't know if that happened or not.

00:02:07 ◼   ► I don't, I don't know why-

00:02:08 ◼   ► There were two times where people got sniped for picks

00:02:11 ◼   ► and gave the finger to the picking person.

00:02:14 ◼   ► Anyway, I was a little behind the scenes about that.

00:02:16 ◼   ► Wow, look at you now.

00:02:17 ◼   ► Throwing it out there.

00:02:20 ◼   ► If you would like to send in a snow talk question of your own

00:02:22 ◼   ► to help us open a future episode of Upgrade,

00:02:27 ◼   ► just go to upgradefeedback.com and send it in.

00:02:30 ◼   ► We were talking a little bit about the 40th anniversary

00:02:33 ◼   ► of the Mac draft just there.

00:02:34 ◼   ► That's what we were referring to.

00:02:36 ◼   ► Jason spoke about the video.

00:02:38 ◼   ► This is, I think, the best video episode of the show so far.

00:02:42 ◼   ► So-

00:02:43 ◼   ► Certainly.

00:02:44 ◼   ► If you've been wanting, you know,

00:02:44 ◼   ► maybe you want to see what it's like,

00:02:45 ◼   ► maybe you want to see what a video version of the show

00:02:47 ◼   ► is like, wonderful video editor, Chip,

00:02:49 ◼   ► did a great job with this episode.

00:02:51 ◼   ► Absolutely.

00:02:52 ◼   ► We have video of every participant in the draft,

00:02:54 ◼   ► and so people can go and check that out.

00:02:57 ◼   ► I'll say, I also just wanted to thank so many Upgradients

00:03:00 ◼   ► who said so many nice things about that episode.

00:03:03 ◼   ► It was, I was terrified about that episode.

00:03:06 ◼   ► I didn't think it was going to work.

00:03:07 ◼   ► I thought it was too many people,

00:03:09 ◼   ► and I was worried that it wasn't going to work.

00:03:10 ◼   ► But as we were doing it, I was like, oh, this is working.

00:03:13 ◼   ► And so, Jason, you were right to push for that episode.

00:03:16 ◼   ► It was a good idea from you.

00:03:18 ◼   ► Like I said, it's the one, the funny thing,

00:03:21 ◼   ► I also heard from some people who don't know what a draft is,

00:03:23 ◼   ► and I had to explain what sports drafts are.

00:03:25 ◼   ► Oh, okay.

00:03:26 ◼   ► You pick, and then once somebody picks it,

00:03:28 ◼   ► nobody else can pick it, and you pick in sequence.

00:03:30 ◼   ► They clearly don't listen to Upgrad, these people.

00:03:33 ◼   ► Yeah, well, or they just don't understand.

00:03:35 ◼   ► It may be that they were new listeners to Upgrad,

00:03:38 ◼   ► which is great.

00:03:39 ◼   ► We welcome them.

00:03:40 ◼   ► But, so I had to explain that to a few people.

00:03:43 ◼   ► But what I've learned in the incomparable many drafts

00:03:47 ◼   ► that we've done over the years is that

00:03:49 ◼   ► while I am deeply reluctant to have a large panel

00:03:53 ◼   ► on a regular episode,

00:03:54 ◼   ► our panels are large enough as it is, right?

00:03:57 ◼   ► But for a draft episode, I'll put 10 people on.

00:04:01 ◼   ► I don't care.

00:04:02 ◼   ► Because although people do chime in and all that,

00:04:05 ◼   ► the fact that it's a turn-taking format

00:04:07 ◼   ► makes it a lot easier.

00:04:09 ◼   ► It's more manageable.

00:04:10 ◼   ► It's not perfect.

00:04:11 ◼   ► It is hard, but it's more manageable.

00:04:13 ◼   ► And so we had a smaller group than an incomparable draft.

00:04:17 ◼   ► And I know it was a lot and terrifying to you,

00:04:20 ◼   ► but I thought it would work because of the turn-taking.

00:04:24 ◼   ► And it did.

00:04:25 ◼   ► So, yeah.

00:04:26 ◼   ► Yeah, it came up really well.

00:04:28 ◼   ► And if you do want more on the 40th anniversary of the Mac,

00:04:31 ◼   ► Jason wrote a bunch of stuff on The Verge,

00:04:34 ◼   ► and on Six Colors.

00:04:35 ◼   ► I'll put links to all that in the show notes.

00:04:37 ◼   ► I was actually hoping we could talk about

00:04:38 ◼   ► some of this today,

00:04:39 ◼   ► but we got some other stuff that we need to cover.

00:04:42 ◼   ► Other stuff to talk about.

00:04:43 ◼   ► But yeah, I mean, we also gave,

00:04:46 ◼   ► did a long episode about the 40th anniversary of the Mac.

00:04:49 ◼   ► So this podcast has fulfilled its need.

00:04:51 ◼   ► But yeah, I wrote 1,500 words or whatever

00:04:53 ◼   ► about it at The Verge.

00:04:54 ◼   ► Always nice to see an article I written

00:04:56 ◼   ► at the top of The Verge.

00:04:57 ◼   ► That's fun.

00:04:58 ◼   ► And then I wrote another 1,500 words or so

00:05:00 ◼   ► at Six Colors about it.

00:05:01 ◼   ► And then I have a piece where I talked to

00:05:04 ◼   ► Greg Jostwiak a little bit, just very briefly about it,

00:05:07 ◼   ► because that's what I seem to do every 10 years,

00:05:09 ◼   ► is check in with Apple executives about

00:05:11 ◼   ► where they reassure me that the Mac is not going away.

00:05:14 ◼   ► That's a trend I've discovered

00:05:17 ◼   ► in how I apparently live my life.

00:05:20 ◼   ► So yeah.

00:05:21 ◼   ► - One last piece of follow-up here.

00:05:23 ◼   ► Apple has not been successful in winning the many appeals

00:05:27 ◼   ► that they've been going through with the Apple Watch

00:05:29 ◼   ► and the blood oxygen sensor.

00:05:31 ◼   ► And so it now has decided to continue selling

00:05:36 ◼   ► both the Apple Watch Series 9 and the Apple Watch Ultra 2

00:05:39 ◼   ► with the blood oxygen sensor disabled.

00:05:44 ◼   ► That's what they're doing.

00:05:45 ◼   ► So they've just disabled it.

00:05:46 ◼   ► It doesn't work.

00:05:47 ◼   ► It's still in there, I believe, but it's not happening.

00:05:50 ◼   ► And they're gonna continue down the lawmaking process

00:05:53 ◼   ► and the legal process here,

00:05:55 ◼   ► which I find the whole thing to be very strange.

00:05:59 ◼   ► But there you go.

00:06:00 ◼   ► If you're in the US and you don't have an Apple Watch

00:06:03 ◼   ► and you want one, well,

00:06:04 ◼   ► that feature's not gonna work for you.

00:06:06 ◼   ► And that's the way it is.

00:06:08 ◼   ► - I have some breaking follow-up.

00:06:12 ◼   ► - Okay.

00:06:13 ◼   ► I'm gonna put it here.

00:06:14 ◼   ► Is it follow-up?

00:06:15 ◼   ► I don't know, but I'm gonna put it here

00:06:16 ◼   ► 'cause we have so much to talk about today.

00:06:18 ◼   ► I'm just gonna say, we do this podcast on Zoom.

00:06:20 ◼   ► - Yep.

00:06:21 ◼   ► - Breaking just now, Zoom has announced

00:06:23 ◼   ► they are doing a Vision OS app.

00:06:25 ◼   ► It will support personas

00:06:27 ◼   ► and it will support a spatial experience

00:06:29 ◼   ► to make meetings immersive.

00:06:31 ◼   ► So will there be a immersive version of upgrade in Zoom

00:06:37 ◼   ► on a Vision Pro at some point?

00:06:39 ◼   ► Only time will tell, but this makes it,

00:06:41 ◼   ► I'd say, a little more likely.

00:06:44 ◼   ► - Huh.

00:06:44 ◼   ► - Yeah.

00:06:46 ◼   ► - So reading from The Verge,

00:06:48 ◼   ► "Zoom says it's planning on bringing more features

00:06:52 ◼   ► "to the app later this spring,

00:06:53 ◼   ► "including something called real-world pinning.

00:06:56 ◼   ► "This is supposed to make calls feel more immersive

00:06:58 ◼   ► "by letting Vision Pro users pin

00:07:00 ◼   ► "up to five Zoom meeting participants in a physical space

00:07:04 ◼   ► "while removing the caller's background."

00:07:06 ◼   ► - Hmm, yeah.

00:07:08 ◼   ► Well, they have some weird tech in Zoom now

00:07:11 ◼   ► where you can have a, it's like a fake meeting room

00:07:15 ◼   ► and it'll cut out the people's, just their body,

00:07:19 ◼   ► not the background and place them in that space.

00:07:22 ◼   ► - Yeah.

00:07:22 ◼   ► - So it's kind of,

00:07:23 ◼   ► they're already experimenting with stuff like this.

00:07:25 ◼   ► So I imagine there's gonna be more of that going on.

00:07:28 ◼   ► But I don't know, just, it seems like people are starting

00:07:33 ◼   ► to announce their Vision Pro apps, is what I'm saying.

00:07:36 ◼   ► I like, yeah, this is all,

00:07:40 ◼   ► this is all starting to happen.

00:07:42 ◼   ► I have multiple app announcements in my mailbox, right?

00:07:45 ◼   ► - Oh yeah?

00:07:46 ◼   ► - Yeah.

00:07:47 ◼   ► - Oh boy, well, that's exciting.

00:07:48 ◼   ► I'm excited about that.

00:07:50 ◼   ► - Mm-hmm.

00:07:51 ◼   ► - This episode is brought to you by Notion.

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00:08:49 ◼   ► that I want to send out and I ask Notion AI,

00:08:52 ◼   ► hey, can you, it's a very simple prompt.

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00:09:13 ◼   ► It just helps add to my work and help make it better.

00:09:17 ◼   ► - Does it make that noise?

00:09:18 ◼   ► Does it go dip-doo-doo-doo-dap?

00:09:19 ◼   ► - No, that's me.

00:09:20 ◼   ► I do that part.

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00:09:32 ◼   ► Doing tasks that normally take you hours

00:09:34 ◼   ► and just seconds.

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00:09:41 ◼   ► they end up sending less email.

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00:10:07 ◼   ► There's notion.com/upgrade.

00:10:10 ◼   ► Our thanks to Notion for their support of this show

00:10:12 ◼   ► and Relay FM.

00:10:13 ◼   ► All right, so, okay.

00:10:19 ◼   ► - Yeah.

00:10:21 ◼   ► - My plan for today's episode is we were gonna,

00:10:24 ◼   ► we were gonna like,

00:10:25 ◼   ► we were gonna do some Rumor Roundup stuff.

00:10:27 ◼   ► - Yep.

00:10:28 ◼   ► - We've been carrying some things over.

00:10:30 ◼   ► - B-Tails.

00:10:31 ◼   ► - Yeah, some B-Tails we could've done.

00:10:33 ◼   ► And then also I wanted to talk about the Vision Pro.

00:10:35 ◼   ► We are still gonna talk about the Vision Pro today

00:10:36 ◼   ► 'cause we are just a few days away.

00:10:39 ◼   ► But then over the last,

00:10:41 ◼   ► over the last Thursday, I think it was.

00:10:43 ◼   ► - Yep, mm-hmm, big week.

00:10:45 ◼   ► - Apple published their response and their kind of plan

00:10:49 ◼   ► for how they were going to deal

00:10:51 ◼   ► with the European Union's Digital Markets Act, the DMA.

00:10:55 ◼   ► And inherently they have upended tons

00:11:00 ◼   ► of what the App Store and what iOS could be to,

00:11:05 ◼   ► they have proposed a series of upendings to this

00:11:10 ◼   ► for their plan for how they will work

00:11:12 ◼   ► within the European Union's new rules guidelines.

00:11:17 ◼   ► So I'm gonna give a disclaimer to this.

00:11:19 ◼   ► All of this stuff that we're about to talk about

00:11:21 ◼   ► is incredibly complicated.

00:11:23 ◼   ► We have both worked for hours to try and understand this

00:11:27 ◼   ► the best we can.

00:11:29 ◼   ► But it is going to take longer than today's episode

00:11:32 ◼   ► to fully comprehend it.

00:11:32 ◼   ► So I expect you will hear us say things today

00:11:36 ◼   ► that may be wrong or may be misunderstood.

00:11:40 ◼   ► I have already listened to many podcasts

00:11:42 ◼   ► with many of my favorite creators who are doing that too.

00:11:45 ◼   ► They're saying something and I'm like, I know that's wrong.

00:11:48 ◼   ► But this is just where we are right now

00:11:49 ◼   ► because the complication of this is kind of massive.

00:11:52 ◼   ► So what I am going to try and attempt to do here

00:11:55 ◼   ► is to go through the salient points

00:11:59 ◼   ► of Apple's response to the DMA

00:12:02 ◼   ► and then we're gonna talk about them.

00:12:03 ◼   ► And Jason, I'm just gonna read,

00:12:05 ◼   ► I'm gonna start reading this stuff.

00:12:06 ◼   ► You can jump in wherever you want.

00:12:08 ◼   ► But other than that, we're gonna have

00:12:09 ◼   ► like a big conversation about it at the end.

00:12:11 ◼   ► But I feel like we have to kind of try

00:12:12 ◼   ► and set the table for this because I also know

00:12:16 ◼   ► a lot of our listeners are interested in this

00:12:18 ◼   ► but don't want to spend the three hours reading it.

00:12:20 ◼   ► So that is like what we provide you today.

00:12:23 ◼   ► So Apple is making a series of changes to iOS

00:12:28 ◼   ► and the available terms for developers

00:12:30 ◼   ► who distribute their apps in Europe.

00:12:32 ◼   ► The changes to iOS, they're more simple.

00:12:35 ◼   ► So there'll be the introduction

00:12:37 ◼   ► of alternative app marketplaces.

00:12:40 ◼   ► These are other app stores, third party app stores

00:12:43 ◼   ► but Apple doesn't call them that.

00:12:45 ◼   ► I think because app stores is a term that Apple owns

00:12:47 ◼   ► and so they don't want, that's their intellectual property.

00:12:51 ◼   ► So they will be called alternative app marketplaces.

00:12:55 ◼   ► As a communicator of technology,

00:12:57 ◼   ► I like that it has a different name

00:12:58 ◼   ► because it's easier for me to shorthand it.

00:13:00 ◼   ► Effectively, what users can do, they can install them.

00:13:05 ◼   ► So you install them from the app store, I believe,

00:13:09 ◼   ► or from websites, I think.

00:13:11 ◼   ► - From websites.

00:13:12 ◼   ► - Right, from websites, you can install the marketplaces.

00:13:15 ◼   ► Then you can install apps from those marketplaces.

00:13:18 ◼   ► And even as a user, set one of them

00:13:20 ◼   ► as your default marketplace for applications.

00:13:24 ◼   ► - Yeah, it doesn't have to be, but you can.

00:13:27 ◼   ► - Yes, any apps downloaded from a marketplace

00:13:31 ◼   ► do not have things like screen time restrictions

00:13:34 ◼   ► applied to them, which I do think--

00:13:35 ◼   ► - Yeah, shared family things.

00:13:38 ◼   ► There are other like app store niceties.

00:13:40 ◼   ► - I mean, that stuff's obvious, right?

00:13:42 ◼   ► Like the stuff that the app store,

00:13:44 ◼   ► which by the way, Apple's talking about refunds.

00:13:46 ◼   ► Has anyone ever successfully just gotten a refund from it?

00:13:49 ◼   ► - Oh, it does happen.

00:13:50 ◼   ► - But it's really, I know it's possible,

00:13:52 ◼   ► but it's very hard to do, right?

00:13:53 ◼   ► There isn't like a process for getting refunds.

00:13:56 ◼   ► You have to like speak to Apple support

00:13:58 ◼   ► and then sometimes they'll help you.

00:13:59 ◼   ► Although actually in Europe, there is a different law,

00:14:01 ◼   ► but nevertheless.

00:14:02 ◼   ► - I think the most important thing about this,

00:14:05 ◼   ► this is there is a line in the DMA

00:14:08 ◼   ► that is that companies like Apple

00:14:11 ◼   ► that are found to be gatekeepers

00:14:15 ◼   ► have to allow sideloading or alternative marketplaces.

00:14:20 ◼   ► And Apple has taken the or and run with it.

00:14:23 ◼   ► And I gotta be honest, I hate this.

00:14:26 ◼   ► And I think this is why Apple's doing it.

00:14:29 ◼   ► So Apple could have fulfilled the DMA by saying,

00:14:33 ◼   ► okay, we're not gonna let anybody create their own app store,

00:14:36 ◼   ► but you can go through a process, which we'll talk about.

00:14:39 ◼   ► There is a process for apps to be outside of the app store,

00:14:42 ◼   ► but you just go to their website and you click

00:14:45 ◼   ► and you go through the process and you get the app.

00:14:47 ◼   ► And Apple has said, nope, we're not gonna do it that way.

00:14:50 ◼   ► And I understand Apple's perspective here being

00:14:53 ◼   ► by concentrating availability in alternative marketplaces,

00:14:58 ◼   ► there's a little more visibility, understanding,

00:15:00 ◼   ► and honestly, there's a company that has to be responsible

00:15:04 ◼   ► for posting that app instead of it just being willy nilly.

00:15:08 ◼   ► Some company with an alternative marketplace has to say,

00:15:11 ◼   ► yes, we are gonna put your app in our marketplace

00:15:16 ◼   ► that's not an app store.

00:15:17 ◼   ► Don't call it an app store.

00:15:18 ◼   ► But what it means essentially,

00:15:22 ◼   ► and so I think Apple is making a smart for Apple move

00:15:26 ◼   ► because Apple's goal here is to make it as unpleasant

00:15:29 ◼   ► as possible to get outside of Apple's restrictions.

00:15:34 ◼   ► We're gonna see this time and again,

00:15:35 ◼   ► but the no sideloading, 'cause it's not,

00:15:37 ◼   ► there's no sideloading.

00:15:39 ◼   ► There's alternate loading through someone else's store.

00:15:43 ◼   ► And we're gonna get into some of the details

00:15:45 ◼   ► of what you have to do to become a marketplace.

00:15:48 ◼   ► And in addition then, apps that would be

00:15:51 ◼   ► in that marketplace have to go through a whole other process.

00:15:54 ◼   ► So it's extra complicated and not like what it is on the Mac

00:15:58 ◼   ► and how they could have implemented it,

00:16:00 ◼   ► but have chosen not to, which is I'm a developer.

00:16:04 ◼   ► I wrote about this last week on six colors.

00:16:09 ◼   ► There's a great iTunes or it's music, sorry,

00:16:12 ◼   ► the music app for Mac.

00:16:13 ◼   ► There's a utility for it called Sleeve

00:16:15 ◼   ► that does like a little floating palette

00:16:17 ◼   ► of the currently playing album and it puts in shortcuts

00:16:20 ◼   ► and it does scrabbling and it does all these things.

00:16:22 ◼   ► It's a great little app.

00:16:23 ◼   ► And if you go to their website,

00:16:25 ◼   ► you'll see download on the Mac App Store

00:16:27 ◼   ► or just buy it from us.

00:16:29 ◼   ► And it's like, you can't do that with this.

00:16:30 ◼   ► You can't do that with this.

00:16:32 ◼   ► It could be downloaded on the App Store

00:16:33 ◼   ► or downloaded on XYZ store, sorry, 123 store,

00:16:38 ◼   ► but I mean, sorry, 123 Marketplace.

00:16:42 ◼   ► Let's get the terms right here.

00:16:42 ◼   ► - 123 Marketplace, yeah, get it right, Jason, please.

00:16:44 ◼   ► 123 Marketplace.

00:16:46 ◼   ► But what they can't do is say, just get it from us.

00:16:48 ◼   ► You can't, even with this freedom in quotes that's happening,

00:16:52 ◼   ► you cannot sideload independently as a developer.

00:16:56 ◼   ► You have to go to some gatekeeper.

00:16:59 ◼   ► This is essentially what the way Apple has interpreted

00:17:03 ◼   ► the DMA and I think they've done it correctly

00:17:05 ◼   ► as far as I can tell for the words in the DMA,

00:17:08 ◼   ► not necessarily the intent, but the words in it

00:17:10 ◼   ► is the solution to having one gatekeeper

00:17:14 ◼   ► is to make more gatekeepers, which is,

00:17:19 ◼   ► if I was an independent developer or honestly as a user,

00:17:24 ◼   ► I hate it.

00:17:25 ◼   ► I understand why Apple's doing it, but it's like, oh good.

00:17:28 ◼   ► Alternate gatekeepers. - You can kind of see

00:17:30 ◼   ► a little bit though, right?

00:17:31 ◼   ► 'Cause that breeds competition.

00:17:33 ◼   ► Competition may breed different rights

00:17:35 ◼   ► and that may help some companies, but it's not simple.

00:17:38 ◼   ► It's not the simple move,

00:17:39 ◼   ► but it is a move that could at least change

00:17:42 ◼   ► what there currently is,

00:17:44 ◼   ► where Apple sets 100% of the rules, right?

00:17:47 ◼   ► - Sure, no, I'm not saying it doesn't address issues.

00:17:52 ◼   ► I think what I'm saying is, you and I know enough developers

00:17:56 ◼   ► that we know that one of the issues is the existence

00:17:58 ◼   ► of a gatekeeper intermediating the relationship

00:18:01 ◼   ► between the developer and the user.

00:18:04 ◼   ► And the DMA as implemented by Apple here

00:18:07 ◼   ► to the letter of the law, I think, is essentially saying,

00:18:11 ◼   ► gatekeepers are not the problem.

00:18:13 ◼   ► In fact, they're still required.

00:18:15 ◼   ► I just think that's hilarious 'cause it's the first in,

00:18:19 ◼   ► I assure you in this segment, a long series of things

00:18:21 ◼   ► where everybody goes, oh, oh, and is disappointed.

00:18:26 ◼   ► - And I guess from the iOS/user side,

00:18:31 ◼   ► another part about apps from marketplaces is,

00:18:34 ◼   ► let's imagine you have the Spotify app from the App Store.

00:18:37 ◼   ► Spotify moved their app to a marketplace.

00:18:39 ◼   ► You can't just download the Spotify app

00:18:42 ◼   ► over the place of the existing Spotify app.

00:18:44 ◼   ► You have to remove your current Spotify app from your phone

00:18:48 ◼   ► and then download the new one.

00:18:50 ◼   ► I see why that's the case, right?

00:18:51 ◼   ► Like, well, that sounds annoying,

00:18:52 ◼   ► but I also kind of like, from a technological perspective,

00:18:55 ◼   ► understand why that might have to happen,

00:18:58 ◼   ► even though I think there's probably,

00:19:00 ◼   ► there could be ways around it, but they haven't got them.

00:19:01 ◼   ► Anyway. - Yeah.

00:19:03 ◼   ► - Staying on the, what is changing in iOS,

00:19:06 ◼   ► web browsers can use engines other than WebKit.

00:19:10 ◼   ► So you'll be able to have a web browser on the iPhone

00:19:13 ◼   ► that is Chromium, which I think used to be the case,

00:19:16 ◼   ► and then it changed at a certain point when--

00:19:19 ◼   ► - I don't know.

00:19:19 ◼   ► - Anyway, it doesn't matter.

00:19:22 ◼   ► And European users will be given an option

00:19:24 ◼   ► to choose a default browser for their iPhone

00:19:28 ◼   ► from a list of options on the first use.

00:19:31 ◼   ► - Yes, a randomized list of options, no less.

00:19:33 ◼   ► And there is a defined list of which browsers

00:19:37 ◼   ► will be shown in each country.

00:19:39 ◼   ► Yeah, actually differs country to country.

00:19:41 ◼   ► MacStories has that list,

00:19:42 ◼   ► if you're so inclined to want to know.

00:19:44 ◼   ► Apple will also use a new system to check

00:19:48 ◼   ► if you're in the European Union.

00:19:50 ◼   ► So you can use the marketplaces

00:19:54 ◼   ► and all this other stuff as a user.

00:19:56 ◼   ► It features a combination of checking the billing address

00:19:59 ◼   ► on your App Store account,

00:20:00 ◼   ► the current location that you're in,

00:20:02 ◼   ► the device, the region your device is set into,

00:20:05 ◼   ► and the class of device,

00:20:06 ◼   ► 'cause all of this only applies to the iPhone,

00:20:09 ◼   ► the iPad, the Mac, everything else

00:20:11 ◼   ► does not get the app marketplace stuff.

00:20:16 ◼   ► And I guess one other thing,

00:20:16 ◼   ► which is I just think really feels like categorically good,

00:20:19 ◼   ► where everything else is a little murkier.

00:20:21 ◼   ► Worldwide now, Apple is going to be allowing

00:20:26 ◼   ► game streaming services to exist on the App Store,

00:20:29 ◼   ► which is fantastic.

00:20:30 ◼   ► - Right, but that's everywhere.

00:20:32 ◼   ► That's not just in the EU, it's everywhere.

00:20:35 ◼   ► So it's a different change that Apple is making.

00:20:38 ◼   ► - So no longer do they need to split the games

00:20:40 ◼   ► into individual apps, which Apple wanted them to do.

00:20:43 ◼   ► This is just a thing that will exist.

00:20:44 ◼   ► And so now Xbox Game Pass can have an app on the iPhone,

00:20:48 ◼   ► and that's that, which I'm excited about that hopeful future.

00:20:52 ◼   ► So that's the simple part, I think.

00:20:55 ◼   ► That's the simple part.

00:20:56 ◼   ► So that's like, if you are a user in the European Union,

00:20:59 ◼   ► these are the things that will become available for you

00:21:02 ◼   ► asterisk sometime in March, right?

00:21:04 ◼   ► So in 17.4, this kind of functionality

00:21:07 ◼   ► will become available for you.

00:21:09 ◼   ► If you are a developer,

00:21:11 ◼   ► this is where it gets significantly more complicated.

00:21:15 ◼   ► So everything that we're gonna talk about here

00:21:17 ◼   ► are part of new business terms that Apple has created.

00:21:20 ◼   ► And as a developer, you have the opportunity,

00:21:22 ◼   ► if you so want to, to opt into these new business terms.

00:21:27 ◼   ► You can stay with the current system,

00:21:29 ◼   ► if you want to, which we know,

00:21:30 ◼   ► we know everything about that system already,

00:21:32 ◼   ► but you can opt into these terms if you want to.

00:21:35 ◼   ► It changes the agreement,

00:21:37 ◼   ► it changes what is applicable to you.

00:21:38 ◼   ► But if you opt in, it's a one-time thing.

00:21:41 ◼   ► You cannot go back.

00:21:43 ◼   ► - And if you're asking yourself, why would they opt in?

00:21:46 ◼   ► Well, we're gonna get into the details.

00:21:48 ◼   ► It's required that they opt in

00:21:51 ◼   ► if they want to take advantage

00:21:53 ◼   ► of specific new EU-only features, right?

00:21:57 ◼   ► So you can't say, oh, here's a new freedom I have in the EU.

00:22:01 ◼   ► I want that, but I don't want to keep the old business terms.

00:22:04 ◼   ► That's not how it works.

00:22:05 ◼   ► You either are in sort of like plan A,

00:22:08 ◼   ► which is the way it's always been,

00:22:11 ◼   ► including all the rules, or at least most of the rules,

00:22:14 ◼   ► or plan B, which is all these new openings,

00:22:18 ◼   ► but you have to agree to these new terms as a developer.

00:22:22 ◼   ► - Yep.

00:22:22 ◼   ► Top line, new commission.

00:22:26 ◼   ► So what we consider as the 15 or 30%

00:22:30 ◼   ► that we've had for a long time now has changed.

00:22:34 ◼   ► It is either 10% for small developers, down from 15%,

00:22:38 ◼   ► or 17% for everybody else

00:22:40 ◼   ► if you're not in the small business program.

00:22:42 ◼   ► This also counts for digital goods and services.

00:22:45 ◼   ► These are at 17%.

00:22:46 ◼   ► This is the base commission.

00:22:48 ◼   ► If you use Apple's in-app payment system,

00:22:52 ◼   ► you pay an extra 3% on top of this,

00:22:55 ◼   ► making it 13% and 20%.

00:22:58 ◼   ► - Right. - Yep.

00:23:02 ◼   ► - So if you do the math here, by the way,

00:23:05 ◼   ► if you think of it as 13 and 20,

00:23:07 ◼   ► so let's assume that you're using Apple

00:23:10 ◼   ► for payment processing,

00:23:11 ◼   ► 'cause you don't have to now.

00:23:13 ◼   ► Let's not get into that just yet,

00:23:15 ◼   ► because that will probably also be roughly 3%

00:23:18 ◼   ► if you go with someone else.

00:23:19 ◼   ► You'll be paying it to someone who isn't Apple,

00:23:21 ◼   ► but you're still paying it.

00:23:22 ◼   ► Okay, so the small business program

00:23:25 ◼   ► for companies that have less than a million dollars

00:23:28 ◼   ► in sales a year,

00:23:28 ◼   ► so indie developers and things like that,

00:23:31 ◼   ► are already 15%.

00:23:34 ◼   ► So this is not really much of a deal for them.

00:23:38 ◼   ► If you are a larger developer

00:23:40 ◼   ► and you're currently having Apple take 30%

00:23:43 ◼   ► of everything you do,

00:23:44 ◼   ► 20%, including the credit card fee,

00:23:50 ◼   ► is a much better deal.

00:23:52 ◼   ► So on this one level, if you look at this,

00:23:55 ◼   ► you can see that this change is not much of an incentive

00:23:59 ◼   ► for a small developer, and there's more to come there,

00:24:02 ◼   ► but that it does provide a bit of a financial incentive

00:24:07 ◼   ► for some larger developers

00:24:10 ◼   ► who want to take more money away from Apple.

00:24:15 ◼   ► - And I wanna, this is something that,

00:24:17 ◼   ► we had this question in Discord just now,

00:24:19 ◼   ► and I've confirmed, I've struggled to get the exact answer

00:24:21 ◼   ► for this, but I think I understand it to be the case,

00:24:23 ◼   ► which is developers all around the world can opt into this,

00:24:28 ◼   ► but it just applies to your European Union-based business.

00:24:32 ◼   ► So you can be an American developer,

00:24:35 ◼   ► but then this will apply to the customers

00:24:38 ◼   ► and money made in the European Union.

00:24:41 ◼   ► Yeah, I just wanted to just double check that.

00:24:43 ◼   ► I thought that was the case,

00:24:44 ◼   ► but that was something which I struggled

00:24:46 ◼   ► to 100% confirm, so I'm happy that you read it

00:24:48 ◼   ► the same way.

00:24:49 ◼   ► So we mentioned payment systems.

00:24:51 ◼   ► As a developer, you are now able

00:24:53 ◼   ► to use your own payment system,

00:24:54 ◼   ► either in app or linking out to the web.

00:24:58 ◼   ► You are still expected to pay,

00:24:59 ◼   ► the aforementioned 10 or 17% commission to Apple,

00:25:02 ◼   ► if you remain in the app store.

00:25:05 ◼   ► This is no longer, there is no longer a requirement

00:25:07 ◼   ► to use Apple's in-app purchase if you opt to use your own.

00:25:11 ◼   ► - Right, you don't have to use Apple's system.

00:25:14 ◼   ► You can use your own credit card system.

00:25:16 ◼   ► - Yep.

00:25:17 ◼   ► - And if you're outside of the app store,

00:25:20 ◼   ► some different rules apply,

00:25:21 ◼   ► but this is even if you're in the app store,

00:25:23 ◼   ► you can use your own payment system.

00:25:25 ◼   ► You're still paying Apple this fee,

00:25:26 ◼   ► so why do you do it?

00:25:27 ◼   ► And the answer is you're not doing it to save money.

00:25:29 ◼   ► And this is an important point

00:25:30 ◼   ► because this comes up a lot when we're talking about this.

00:25:34 ◼   ► I believe because in part,

00:25:37 ◼   ► a lot of the developers that have been pushing for this

00:25:40 ◼   ► talk a lot about freedom and competition,

00:25:43 ◼   ► but what they really want is to make more money

00:25:45 ◼   ► by not paying Apple as much money.

00:25:48 ◼   ► And that's not the same.

00:25:50 ◼   ► And so this is a case where you have freedom

00:25:52 ◼   ► to use your own processor,

00:25:54 ◼   ► you're still gonna essentially be paying

00:25:55 ◼   ► the same amount of money, including a portion to Apple.

00:25:58 ◼   ► What it does give you is control of your credit card,

00:26:03 ◼   ► customer credit card data,

00:26:04 ◼   ► which means that you could then, they're your customer.

00:26:07 ◼   ► You could email them, you could track them,

00:26:10 ◼   ► you could sell their information, you could do whatever,

00:26:13 ◼   ► I mean, is allowed under the rules,

00:26:15 ◼   ► but like you would own that transaction

00:26:17 ◼   ► in a way that you don't when it goes through Apple.

00:26:19 ◼   ► So there still might be a reason to do it,

00:26:22 ◼   ► but it won't be in this one scenario

00:26:25 ◼   ► where you're in the app store

00:26:26 ◼   ► and you're using your own payment system,

00:26:28 ◼   ► it's not actually going to save you money.

00:26:30 ◼   ► - But there are things about control and data and information

00:26:35 ◼   ► that could be attractive to a business to do it this way.

00:26:38 ◼   ► - Could be.

00:26:40 ◼   ► - If you are in an app marketplace,

00:26:42 ◼   ► those commissions, the 10 and 17%,

00:26:46 ◼   ► you don't have to pay them.

00:26:48 ◼   ► So if you are not in the app,

00:26:50 ◼   ► these commissions, the 10 and 17 plus the payment 3%,

00:26:54 ◼   ► these are only applicable if you as a developer

00:26:56 ◼   ► choose to remain in the app store.

00:26:59 ◼   ► If you decide you wanna go out to an app marketplace,

00:27:01 ◼   ► you are free of the commission,

00:27:03 ◼   ► there is no more commission for you.

00:27:05 ◼   ► - From Apple. - You pay, yeah, from Apple.

00:27:08 ◼   ► You obviously, you're doing whatever deals you're doing.

00:27:10 ◼   ► - Because I'm gonna guess that

00:27:11 ◼   ► anyone who's running an app marketplace

00:27:13 ◼   ► is probably gonna want their cut too.

00:27:16 ◼   ► - Yes, but we don't, look, we can assume this is the case,

00:27:20 ◼   ► but these cuts could be much fairer,

00:27:22 ◼   ► they could be different, there might not be any at all.

00:27:24 ◼   ► Like, you know, whatever,

00:27:25 ◼   ► 'cause there could be reasons that some companies

00:27:28 ◼   ► wanna have a marketplace of their own

00:27:31 ◼   ► and they just need more apps in it

00:27:32 ◼   ► because you can't just have a marketplace of your own,

00:27:34 ◼   ► which we'll get to in a minute as well.

00:27:37 ◼   ► But the core technology fee,

00:27:38 ◼   ► I think this is the biggest part.

00:27:40 ◼   ► It is maybe the most confusing

00:27:42 ◼   ► and probably has the largest ramifications.

00:27:45 ◼   ► The core technology fee, in essence, is like a license.

00:27:51 ◼   ► - It's essentially a per active user license of apps.

00:27:55 ◼   ► It's, it is, and there's been a lot of confusion about like,

00:27:58 ◼   ► oh, it's per install, per update, all of these things.

00:28:02 ◼   ► But the way it works is it's per Apple ID and it's one,

00:28:06 ◼   ► and once it's one, that's it.

00:28:08 ◼   ► So essentially, if you have an app

00:28:09 ◼   ► and you update it or download it during a 12 month period,

00:28:14 ◼   ► you're essentially considered an active user,

00:28:17 ◼   ► but that's all they're really tracking

00:28:19 ◼   ► is that download or update for it.

00:28:23 ◼   ► And Apple is then saying, okay,

00:28:25 ◼   ► so now we know how many people

00:28:26 ◼   ► are active annual users of your app

00:28:30 ◼   ► and you will pay us half a Euro for each.

00:28:35 ◼   ► - Yep.

00:28:37 ◼   ► I'm gonna do it, I'm gonna explain it again,

00:28:39 ◼   ► because again, very complicated, right?

00:28:41 ◼   ► It is 50 cent fee for an individual.

00:28:46 ◼   ► The threshold is calculated on a rolling 12 month basis.

00:28:50 ◼   ► This is a fee for using iOS, essentially.

00:28:53 ◼   ► - Yeah, it's for being, for access to Apple's,

00:28:56 ◼   ► it's the same argument that they've been making all along,

00:28:58 ◼   ► which is it's access to Apple's platforms,

00:29:00 ◼   ► to its intellectual property,

00:29:02 ◼   ► to its developer tools and to its APIs.

00:29:04 ◼   ► They feel that they are entitled to a payment

00:29:09 ◼   ► that was previously embedded in the percentage

00:29:12 ◼   ► they took from the app store.

00:29:13 ◼   ► And now they're going to take it a different way,

00:29:17 ◼   ► which is by charging on active installs.

00:29:20 ◼   ► So for example, rough back of the envelope calculations,

00:29:23 ◼   ► if you're Spotify and you have maybe 40 million

00:29:27 ◼   ► iPhone users in the EU, something like that,

00:29:31 ◼   ► they would be paying Apple, not 20 million Euro,

00:29:35 ◼   ► but 19 and a half million,

00:29:37 ◼   ► because the first million is free.

00:29:39 ◼   ► After that though, it's 50 cents per user.

00:29:42 ◼   ► And that would be, even if they were a free user,

00:29:45 ◼   ► Spotify would still need to pay 50 cents a year

00:29:47 ◼   ► for that free user.

00:29:48 ◼   ► - Yep.

00:29:49 ◼   ► It is inclusive of new downloads,

00:29:51 ◼   ► it is inclusive of updates,

00:29:52 ◼   ► but it's tied to the individual, as Jason said, right?

00:29:56 ◼   ► The first million is included in your developer program fee.

00:30:00 ◼   ► So you pay Apple to be a developer,

00:30:03 ◼   ► as part of that payment,

00:30:04 ◼   ► they give you the first 1 million downloads.

00:30:07 ◼   ► That is whether you are in the app store

00:30:09 ◼   ► or in an app marketplace.

00:30:12 ◼   ► You only pay the core technology fee for over 1 million.

00:30:15 ◼   ► So 1 million and one.

00:30:17 ◼   ► And it's not like,

00:30:18 ◼   ► I remember the small business program,

00:30:21 ◼   ► basically once you got over a million dollars,

00:30:23 ◼   ► I think you kind of lost it.

00:30:24 ◼   ► It isn't that.

00:30:26 ◼   ► So if you get to a million and one, you pay for one.

00:30:29 ◼   ► You don't pay for a million and one.

00:30:31 ◼   ► The first million is included as your fee

00:30:35 ◼   ► for being a developer.

00:30:36 ◼   ► So you only pay for what's on top.

00:30:39 ◼   ► The way that Apple bills developers for this

00:30:42 ◼   ► is even more complicated.

00:30:44 ◼   ► It is billed monthly divided into 12ths.

00:30:48 ◼   ► I have, I felt like my brain was leaking out of my ears

00:30:52 ◼   ► trying to understand this part.

00:30:53 ◼   ► - The idea is you're not gonna get a bill.

00:30:57 ◼   ► So I said, Spotify is gonna get this bill

00:30:59 ◼   ► for 19 and a half million euros, right?

00:31:04 ◼   ► But they're not.

00:31:06 ◼   ► They're gonna get 12 bills for 1.6 million euros

00:31:11 ◼   ► every month.

00:31:13 ◼   ► That's how it's gonna work. - Well, but it could change.

00:31:14 ◼   ► If you get more users, you pay even, it goes up and down.

00:31:18 ◼   ► - Sure, sure.

00:31:19 ◼   ► Because it's a rolling 12 month install thing.

00:31:23 ◼   ► The idea there, I think this is reasonable.

00:31:25 ◼   ► The idea there is to smooth out this

00:31:27 ◼   ► and have it fairly accurately reflect

00:31:30 ◼   ► your 12 month moving basis user base.

00:31:34 ◼   ► So if you have a bunch of people install your app

00:31:36 ◼   ► and you go over a million,

00:31:37 ◼   ► and then half of them or a quarter of them delete it,

00:31:42 ◼   ► you're gonna come back down over time.

00:31:46 ◼   ► - And so there's obviously Apple has this stuff.

00:31:51 ◼   ► They have lots of stuff about this.

00:31:52 ◼   ► They have a graphic where they've created an app

00:31:55 ◼   ► and like shown how it would be billed.

00:31:57 ◼   ► So you can kind of look at that.

00:31:57 ◼   ► But they also built a calculator tool.

00:32:00 ◼   ► So you can go in and you can say what type of app you are,

00:32:03 ◼   ► if you're in or out of the store

00:32:04 ◼   ► and they have all the different options and permutations,

00:32:07 ◼   ► and you can plug in a bunch of information

00:32:09 ◼   ► and it will tell you how much money you'll owe Apple

00:32:12 ◼   ► over a yearly basis.

00:32:13 ◼   ► It will estimate that for you.

00:32:15 ◼   ► Some of these numbers get really high

00:32:17 ◼   ► and it becomes really hard to wrap your head around.

00:32:20 ◼   ► Apple state that less than 1% of developers

00:32:23 ◼   ► would have to pay the core technology fee

00:32:25 ◼   ► if they remained in the app store.

00:32:28 ◼   ► They also say that under the new business terms,

00:32:31 ◼   ► 99% of developers would pay less or the same

00:32:35 ◼   ► of what they are currently paying to Apple.

00:32:38 ◼   ► The core technology fee applies to paid apps and free apps,

00:32:42 ◼   ► educational institutions, government agencies

00:32:45 ◼   ► and registered nonprofits do not pay the CTF.

00:32:49 ◼   ► It is for any other type of app though.

00:32:51 ◼   ► If you're a free app, you have no monetization,

00:32:53 ◼   ► you still pay the fee once you go over a million.

00:32:56 ◼   ► I think that is the explanation of the CTF

00:33:00 ◼   ► probably taken care of for a bit.

00:33:03 ◼   ► I wanna talk about it in more detail in a minute

00:33:05 ◼   ► if you're okay with that, Jason.

00:33:07 ◼   ► - Sure.

00:33:08 ◼   ► - So alternate app marketplaces,

00:33:11 ◼   ► they all need to be approved by Apple

00:33:12 ◼   ► before they can be created.

00:33:15 ◼   ► They require a 1 million Euro letter of credit

00:33:18 ◼   ► to make sure that they can pay fees to Apple.

00:33:21 ◼   ► This is not as big as it seems.

00:33:23 ◼   ► You can get a letter of credit for a smaller fee from a bank

00:33:27 ◼   ► is essentially showing your solvency as a company

00:33:30 ◼   ► because you're gonna have to pay Apple money.

00:33:33 ◼   ► You cannot create an alternative app marketplace

00:33:37 ◼   ► as a developer to only distribute your own applications.

00:33:41 ◼   ► It must be set up as a store that accepts submissions.

00:33:45 ◼   ► You can specialize to a subject area.

00:33:47 ◼   ► So Epic have already announced they're gonna be bringing

00:33:51 ◼   ► the Epic Games Store to iOS in Europe

00:33:54 ◼   ► because the Epic Games Store is a game store.

00:33:57 ◼   ► People apply to be in the Epic Games Store.

00:33:59 ◼   ► It's not just Epic's apps.

00:34:01 ◼   ► So that is an example of how that would work.

00:34:03 ◼   ► But like Facebook couldn't create a alternate app

00:34:07 ◼   ► marketplace to put Instagram, Facebook

00:34:09 ◼   ► and threads inside of, they can't do that.

00:34:12 ◼   ► - Right, they could create,

00:34:13 ◼   ► in fact, I was thinking about this.

00:34:14 ◼   ► I don't think Facebook's gonna wanna do this

00:34:16 ◼   ► unless there, we may see some shenanigans where there's like,

00:34:19 ◼   ► we're gonna set up a company

00:34:20 ◼   ► or we're gonna work with a company

00:34:22 ◼   ► that is going to be owned by or partially owned by Facebook

00:34:25 ◼   ► that's gonna be an app marketplace.

00:34:27 ◼   ► There are ways that they could do it.

00:34:28 ◼   ► But I was thinking about this,

00:34:29 ◼   ► that if you're Facebook, probably what you wanna do is not,

00:34:32 ◼   ► you don't need necessarily your apps

00:34:34 ◼   ► to be in that marketplace,

00:34:36 ◼   ► but I could see it being like a games marketplace

00:34:40 ◼   ► that is run by Facebook or a Facebook proxy

00:34:44 ◼   ► so that they can get basically people to,

00:34:47 ◼   ► to get back to directly click on a link in a Facebook ad

00:34:51 ◼   ► and go and get it from that marketplace, right?

00:34:54 ◼   ► I could see a scenario there.

00:34:56 ◼   ► Complicated though, 'cause we don't know what Apple will do

00:34:58 ◼   ► and what will be allowed and it's,

00:35:00 ◼   ► and there's more to this 'cause then you add in

00:35:02 ◼   ► how many free app installs does Facebook have

00:35:05 ◼   ► and that means that they're now paying

00:35:07 ◼   ► for a thing that previously they didn't pay Apple for

00:35:10 ◼   ► and that's part of the overall thing, but we'll get to it.

00:35:12 ◼   ► - There isn't an app review, but there is notarization.

00:35:17 ◼   ► So if you want to submit your application

00:35:22 ◼   ► to the Epic Games Store,

00:35:24 ◼   ► which will be an alternate app marketplace,

00:35:26 ◼   ► it still has to be submitted for notarization.

00:35:30 ◼   ► - Yeah, so let me explain what notarization is

00:35:33 ◼   ► 'cause it happens on the Mac,

00:35:35 ◼   ► but it's gonna be different for this process,

00:35:37 ◼   ► but it's based on the Mac.

00:35:38 ◼   ► It's what we said all along,

00:35:40 ◼   ► which is Apple has been testing this technology on the Mac

00:35:43 ◼   ► and it's clear that they will use that

00:35:45 ◼   ► when they have to do something like this.

00:35:46 ◼   ► So you submit your app to Apple.

00:35:49 ◼   ► Yes, even though it's not gonna go in the app store,

00:35:51 ◼   ► you submit your app to Apple.

00:35:53 ◼   ► This happens now with Macs that are not in the Mac app store

00:35:56 ◼   ► or Mac apps that are not in the Mac app store.

00:35:58 ◼   ► You submit the app to Apple.

00:36:00 ◼   ► On the Mac, you don't have to do this,

00:36:01 ◼   ► but it makes it way easier for everybody if you do.

00:36:04 ◼   ► What Apple does is they have an automated scan

00:36:07 ◼   ► and then they cryptographically sign it,

00:36:09 ◼   ► which helps in terms of your security

00:36:13 ◼   ► because it means that if the app is then modified later,

00:36:15 ◼   ► it doesn't match the signature and the system can say,

00:36:17 ◼   ► whoa, something happened to this app.

00:36:19 ◼   ► So you get, as a developer,

00:36:21 ◼   ► some reassurance that the system is making sure

00:36:24 ◼   ► your app isn't monkeyed with after the fact

00:36:26 ◼   ► for some sort of nefarious purpose.

00:36:28 ◼   ► Great.

00:36:29 ◼   ► So with this version, what they're also doing

00:36:32 ◼   ► is they're gonna add some layers of review

00:36:33 ◼   ► because they want to make sure that,

00:36:35 ◼   ► again, that the app is not malicious.

00:36:37 ◼   ► They're barred by the DMA from making kind of judgment calls

00:36:41 ◼   ► about the kinds of app they want on the platform,

00:36:44 ◼   ► but they can have some authority

00:36:46 ◼   ► in terms of misrepresentation or danger to the user.

00:36:51 ◼   ► So they're gonna add basically app review.

00:36:53 ◼   ► A human version of the scan that is incredibly limited,

00:36:58 ◼   ► but still a review that happens.

00:37:01 ◼   ► And on top of that, another interesting thing

00:37:03 ◼   ► is you're thinking, oh, well, notarization,

00:37:04 ◼   ► it's not in the App Store.

00:37:06 ◼   ► The developer who is submitting to notarization

00:37:10 ◼   ► actually supplies description, screenshots,

00:37:15 ◼   ► all the kinds of things you would expect

00:37:16 ◼   ► would be App Store metadata.

00:37:19 ◼   ► And the reason for that is that'll all get consumed by Apple

00:37:22 ◼   ► and wrapped and signed and then kicked back to the developer

00:37:25 ◼   ► to put in the marketplace.

00:37:27 ◼   ► But what it means is that when you're in the marketplace,

00:37:30 ◼   ► no matter what the marketplace says about that app,

00:37:33 ◼   ► when you tap to install it,

00:37:36 ◼   ► you see what the description was that was submitted to Apple.

00:37:41 ◼   ► And this is important because Apple is envisioning a scenario

00:37:45 ◼   ► where somebody misrepresents what their app does

00:37:48 ◼   ► in the marketplace,

00:37:49 ◼   ► and it actually does something very different.

00:37:52 ◼   ► And in this scenario, what happens is

00:37:54 ◼   ► they have to represent what it does to Apple,

00:37:57 ◼   ► and it has to match what the app is.

00:37:59 ◼   ► And if it doesn't match, Apple can say,

00:38:01 ◼   ► no, this is misleading, nefarious, whatever, and block it,

00:38:04 ◼   ► even though it's not an App Store app.

00:38:06 ◼   ► And that data rides along.

00:38:08 ◼   ► So even if somebody were to lie

00:38:10 ◼   ► on their marketplace description about what the app was,

00:38:13 ◼   ► when you tap, you're gonna see what they told Apple.

00:38:17 ◼   ► And that supposedly will give you greater confidence

00:38:20 ◼   ► and safety that this app is what they say it is.

00:38:23 ◼   ► But what it does mean is that App Store metadata essentially

00:38:26 ◼   ► is gonna ride along with the app,

00:38:28 ◼   ► even if it's not in the App Store.

00:38:30 ◼   ► - I have lots of thoughts, concerns,

00:38:34 ◼   ► questions about lots of things here.

00:38:37 ◼   ► I think this is maybe the thing

00:38:38 ◼   ► that makes the most sense to me.

00:38:40 ◼   ► Because I would not expect that

00:38:44 ◼   ► if you are a good faith developer,

00:38:45 ◼   ► that you would be rejected from this process.

00:38:48 ◼   ► I think that the eyes of the regulator are on them.

00:38:51 ◼   ► The language in the regulation is clear

00:38:54 ◼   ► that they cannot kind of pick and choose what they want.

00:38:57 ◼   ► It's only for bugs, safety, malware,

00:39:02 ◼   ► it's trying to steal your information.

00:39:06 ◼   ► It's like literally there is a very limited remit

00:39:09 ◼   ► of what Apple can scan.

00:39:10 ◼   ► And I would also say we had what, six years, seven years

00:39:15 ◼   ► of notarization on the Mac App Store.

00:39:17 ◼   ► And a lot of people are on the Mac,

00:39:19 ◼   ► not even the Mac App Store, on the Mac.

00:39:21 ◼   ► And a lot of people at the time were like,

00:39:22 ◼   ► "Oh, here we go, Apple's gonna take."

00:39:24 ◼   ► The fact is Apple's notarization, and it's not the same

00:39:27 ◼   ► as it is gonna be on iOS and the EU,

00:39:29 ◼   ► but Apple has not used that

00:39:33 ◼   ► as a de facto App Store rejection system.

00:39:36 ◼   ► And I don't expect them to do it here.

00:39:38 ◼   ► If you submit a porn app or an emulator

00:39:43 ◼   ► or any other category of thing that Apple says,

00:39:45 ◼   ► "No, we're not gonna let you do this,"

00:39:48 ◼   ► they can't turn you away if you aren't buggy,

00:39:54 ◼   ► causing harm, containing malware,

00:39:56 ◼   ► misrepresenting who you are, right?

00:39:58 ◼   ► They're not allowed to do that.

00:40:00 ◼   ► And so theoretically, they will just pass those apps through.

00:40:04 ◼   ► - I heard something today

00:40:07 ◼   ► that they're still enforcing app tracking transparency.

00:40:11 ◼   ► - Yes. - Which I find

00:40:12 ◼   ► to be very frustrating.

00:40:14 ◼   ► But it's part of what Apple considers to be security, so.

00:40:17 ◼   ► - Right. - So be it.

00:40:18 ◼   ► - And it's an API.

00:40:19 ◼   ► I mean, it's an API, so they're basically saying,

00:40:21 ◼   ► you need to ask.

00:40:22 ◼   ► And that's how they've done it up to now, right?

00:40:24 ◼   ► Which is you need to ask, and then people say no,

00:40:25 ◼   ► and then they don't get to track.

00:40:26 ◼   ► And they're using that API

00:40:29 ◼   ► because they're still running on iOS, right?

00:40:31 ◼   ► So that's a place where Apple can enforce.

00:40:34 ◼   ► Like, Apple has looked very clearly, they have mapped out.

00:40:36 ◼   ► There's a whiteboard somewhere inside Cupertino

00:40:38 ◼   ► where they have very cleverly mapped out

00:40:42 ◼   ► what they're allowed to do

00:40:43 ◼   ► and what they're not allowed to do

00:40:44 ◼   ► and placed certain features inside or outside that area.

00:40:49 ◼   ► - With this notarization,

00:40:53 ◼   ► it also gives Apple malware protections.

00:40:55 ◼   ► I assume that these two things are linked together

00:40:57 ◼   ► because by doing this, you are giving,

00:40:59 ◼   ► like, Apple is kind of like granting you

00:41:01 ◼   ► the ability to run on iOS,

00:41:03 ◼   ► which means there is some kind of link

00:41:04 ◼   ► that the system is aware of the app as it's running.

00:41:07 ◼   ► So for example, if an app became malware,

00:41:10 ◼   ► Apple can shut it down, even if it's not in the app store.

00:41:13 ◼   ► This is the case on the Mac right now.

00:41:14 ◼   ► If you download an app, a notarized app,

00:41:18 ◼   ► from an unknown source on macOS

00:41:22 ◼   ► and Apple has identified it as containing malware,

00:41:27 ◼   ► it will not run it.

00:41:30 ◼   ► And in fact, even if it's not notarized,

00:41:33 ◼   ► Apple has a kill switch,

00:41:34 ◼   ► but they also will do things

00:41:35 ◼   ► like they can kill the developer account

00:41:37 ◼   ► 'cause the developer account associated with the signed app

00:41:40 ◼   ► is known by Apple.

00:41:41 ◼   ► So Apple can also say that developer is shut down

00:41:43 ◼   ► and all their apps will then not work on macOS.

00:41:48 ◼   ► So they have a big hammer that they can slam down.

00:41:52 ◼   ► But again, it has to be in the name

00:41:54 ◼   ► of an actual security threat.

00:41:57 ◼   ► - 'Cause we've seen this before on the Mac,

00:41:58 ◼   ► that one of the classic ones,

00:41:59 ◼   ► there was a, I think it was a BitTorrent app

00:42:01 ◼   ► called Transmission,

00:42:02 ◼   ► and there was a server hack for them

00:42:06 ◼   ► where malware was put into the application

00:42:09 ◼   ► and it was not known by the developer,

00:42:11 ◼   ► but because it had been notarized,

00:42:12 ◼   ► Apple was able to shut it down.

00:42:13 ◼   ► So when people tried to open the application,

00:42:16 ◼   ► where it would probably try and install malware

00:42:17 ◼   ► on their Mac, it wouldn't open.

00:42:19 ◼   ► And like, so that's the benefit of having this.

00:42:22 ◼   ► So it gives them that. - That's the idea.

00:42:24 ◼   ► That's the idea.

00:42:25 ◼   ► So I get people being uncomfortable with the idea

00:42:27 ◼   ► that it makes, the system that makes Apple

00:42:30 ◼   ► no longer a gatekeeper

00:42:31 ◼   ► immediately reinstalls Apple as a gatekeeper.

00:42:34 ◼   ► I totally get the optics of that,

00:42:37 ◼   ► but even written into the DMA,

00:42:40 ◼   ► it's saying, look, we're not saying that platform owners

00:42:45 ◼   ► don't have the authority to shut down things

00:42:47 ◼   ► for security, privacy, safety reasons.

00:42:52 ◼   ► And I think that's sensible, right?

00:42:54 ◼   ► This is not quite the wild West here.

00:42:58 ◼   ► Apple has some authority to protect its users

00:43:02 ◼   ► on its platform, but it doesn't have the level of power

00:43:06 ◼   ► in this scenario that it does on the App Store.

00:43:09 ◼   ► - They don't get to make decisions about content,

00:43:11 ◼   ► which I think is like,

00:43:13 ◼   ► or like what types of businesses can run.

00:43:15 ◼   ► - Yeah, we don't like this app because,

00:43:17 ◼   ► and we've seen so many App Store rejections

00:43:18 ◼   ► that are also things like,

00:43:19 ◼   ► we just don't like this app

00:43:20 ◼   ► because it doesn't do anything we think is valuable.

00:43:23 ◼   ► - There's not enough features.

00:43:25 ◼   ► - Yeah, it's the old no fart app rule

00:43:27 ◼   ► that has been extended to all sorts of apps

00:43:29 ◼   ► that are actually useful.

00:43:31 ◼   ► Plus it's things like, we don't want emulators.

00:43:33 ◼   ► We don't want, you know, we don't want pornography.

00:43:36 ◼   ► We don't want, I mean, there are classes of apps

00:43:38 ◼   ► that they're just like, like if somebody wrote

00:43:40 ◼   ► a really great iOS, and sadly not on the iPad

00:43:43 ◼   ► 'cause it's not covered here,

00:43:45 ◼   ► emulator for Mac OS, let's say.

00:43:49 ◼   ► Apple's gonna go, nope, uh-uh, no,

00:43:52 ◼   ► we're not gonna let that in there.

00:43:53 ◼   ► But that's not, they can't reject that

00:43:58 ◼   ► under these agreements.

00:43:59 ◼   ► They would have to let it go, just like they do on the Mac.

00:44:02 ◼   ► There's all sorts of weird Mac apps that they notarize

00:44:06 ◼   ► because that's not what it's there for.

00:44:09 ◼   ► - All right, final few things, and then we can talk about,

00:44:13 ◼   ► we can have more of a conversation about this.

00:44:15 ◼   ► So developers have access to using the NFC chip

00:44:19 ◼   ► for banking or wallet apps,

00:44:20 ◼   ► so you don't have to go through Apple Pay

00:44:22 ◼   ► if you don't want to,

00:44:24 ◼   ► so Apple doesn't take their cut from your transaction.

00:44:26 ◼   ► There are some, I think the most nebulous thing

00:44:29 ◼   ► out of all of this is the creation

00:44:31 ◼   ► of what is called an interoperability request,

00:44:33 ◼   ► where a developer can submit a request to Apple

00:44:36 ◼   ► to ask for access to other iPhone hardware or OS features.

00:44:40 ◼   ► I expect this email address just goes straight

00:44:42 ◼   ► into a trash can, and you can also enable,

00:44:47 ◼   ► and to enable all of this functionality,

00:44:48 ◼   ► so everything we've spoken about here today,

00:44:50 ◼   ► there are over 600 new APIs available for developers,

00:44:55 ◼   ► which includes, as you would imagine,

00:44:56 ◼   ► lots of new warning screens that Apple has designed

00:45:00 ◼   ► if a customer wants to choose to use any other system

00:45:02 ◼   ► in the Apple Zone, payments, marketplaces, stuff like that.

00:45:05 ◼   ► Shout out to Mark Gurman here.

00:45:07 ◼   ► 13 months ago, in December of '22,

00:45:13 ◼   ► he reported that Apple's OS group was gearing up

00:45:16 ◼   ► to do a major update to iOS that would address the DMA,

00:45:21 ◼   ► and we see now with over 600 new APIs,

00:45:23 ◼   ► this is what he was talking about, and it's funny,

00:45:27 ◼   ► I would argue this might be the biggest unannounced

00:45:31 ◼   ► iOS feature rolled out in a dot release ever.

00:45:36 ◼   ► Because this was, 'cause I had somebody ask me,

00:45:39 ◼   ► what does this mean about the next version of iOS?

00:45:41 ◼   ► Is it gonna be scant because they had to build

00:45:44 ◼   ► all this stuff for the EU?

00:45:45 ◼   ► And my response was, no, no, no,

00:45:47 ◼   ► this was always part of last year's iOS development cycle.

00:45:52 ◼   ► They knew they didn't have to ship it until March,

00:45:55 ◼   ► 'cause that was their deadline,

00:45:56 ◼   ► but based on Gurman's reports,

00:45:59 ◼   ► and based on the scope of this,

00:46:01 ◼   ► clearly last year's iOS development cycle

00:46:05 ◼   ► included all of this planning and work, because it's huge,

00:46:11 ◼   ► and there was no way they were gonna do

00:46:13 ◼   ► sort of just a late cycle kick in

00:46:15 ◼   ► to get it to work with the DMA.

00:46:17 ◼   ► It's a much more expansive set of features.

00:46:20 ◼   ► It is, in fact, and I think Apple knows this,

00:46:23 ◼   ► there will be other places where things like this

00:46:25 ◼   ► will be necessary, and so they might as well build it

00:46:27 ◼   ► into the operating system and in their mind, do it right.

00:46:31 ◼   ► Not have it be a hack, but have it be like,

00:46:34 ◼   ► no, there's a whole API for marketplace apps,

00:46:36 ◼   ► and here's how it works.

00:46:37 ◼   ► There's a whole API for apps that are outside the app store

00:46:40 ◼   ► and a whole system for submitting them,

00:46:42 ◼   ► and here's how that all works.

00:46:43 ◼   ► And they've built it now.

00:46:45 ◼   ► The rules may change, the laws may change.

00:46:47 ◼   ► In fact, if some country said,

00:46:50 ◼   ► you just have to allow sideloading,

00:46:52 ◼   ► I think all those APIs are in there.

00:46:54 ◼   ► I think you could do that in a different country.

00:46:56 ◼   ► If Korea, if South Korea said,

00:46:59 ◼   ► just turn on sideloading, it's the law now,

00:47:01 ◼   ► Apple has done that work,

00:47:03 ◼   ► even though it wouldn't behave exactly like

00:47:05 ◼   ► it's behaving theoretically in the EU with the marketplaces,

00:47:09 ◼   ► because they've done all this work,

00:47:10 ◼   ► work they didn't ever wanna do,

00:47:12 ◼   ► but now they have to do, and they've done it.

00:47:15 ◼   ► And I think that is also interesting,

00:47:16 ◼   ► because now that work is there.

00:47:18 ◼   ► - Yep, it's, you wouldn't do it,

00:47:22 ◼   ► you wouldn't do all this work,

00:47:23 ◼   ► and it only work in this one instance, right?

00:47:24 ◼   ► Like, well, you gotta hope, you really gotta hope.

00:47:28 ◼   ► That they put the, this is like the foundations are in place

00:47:32 ◼   ► for all types of things being split up into pieces,

00:47:35 ◼   ► or in all different types of regions.

00:47:37 ◼   ► All of this would go into effect in March,

00:47:42 ◼   ► provided that it meets what the EU want.

00:47:47 ◼   ► My understanding though,

00:47:49 ◼   ► is that they don't get told this beforehand,

00:47:54 ◼   ► and people are submitting their objections

00:47:59 ◼   ► to the European Commission right now

00:48:01 ◼   ► about what Apple has put out there.

00:48:04 ◼   ► So while this may all look very final,

00:48:06 ◼   ► it is actually Apple's proposals

00:48:09 ◼   ► for how they would comply with the Demarcus Act.

00:48:12 ◼   ► - And I, if there was one piece of writing about this

00:48:14 ◼   ► that I think is the perfect sort of chef's kiss,

00:48:17 ◼   ► it is, John Gruber wrote a very, very,

00:48:20 ◼   ► very long piece about this.

00:48:23 ◼   ► I know for a fact he talked to a lot of people

00:48:25 ◼   ► inside Apple about this, to get their perspective on it.

00:48:28 ◼   ► But the last section of Gruber's thing is so good,

00:48:31 ◼   ► because basically what he says is, well, look here,

00:48:34 ◼   ► just as developers over the years

00:48:37 ◼   ► have submitted their apps to Apple,

00:48:39 ◼   ► and hoped that they would be approved

00:48:42 ◼   ► by a somewhat untrustworthy, capricious,

00:48:45 ◼   ► you just never can tell with those guys

00:48:47 ◼   ► what's gonna happen.

00:48:48 ◼   ► Now Apple has effectively submitted their work

00:48:52 ◼   ► to the EU and the European Commission,

00:48:55 ◼   ► and said, what do you think, sirs?

00:48:57 ◼   ► And they are in the same boat, right?

00:49:01 ◼   ► Which is, they might get rejected, right?

00:49:04 ◼   ► Just like a developer gets rejected.

00:49:05 ◼   ► And that is a very funny,

00:49:08 ◼   ► and I think trenchant observation by Mr. Gruber.

00:49:12 ◼   ► - Yep.

00:49:13 ◼   ► So, how do you,

00:49:20 ◼   ► is it too big a question to ask how do you feel about this?

00:49:23 ◼   ► - Feels, let's talk about the feels.

00:49:25 ◼   ► I'm surprised by some of it.

00:49:30 ◼   ► - Yeah.

00:49:31 ◼   ► - I sort of thought that they would go with the approach

00:49:36 ◼   ► that they've done elsewhere, where they've said,

00:49:40 ◼   ► okay, you can use your own thing, but you still owe us 30%.

00:49:45 ◼   ► And it must be that they're reading of the DMA

00:49:47 ◼   ► that they can't do that.

00:49:48 ◼   ► - I think they know they can't get away with it,

00:49:49 ◼   ► otherwise they wouldn't have done this.

00:49:51 ◼   ► 'Cause they've made it quite clear

00:49:53 ◼   ► what they think they should have

00:49:54 ◼   ► everywhere else in the world,

00:49:56 ◼   ► but this time they've changed that, right?

00:49:58 ◼   ► The commission is different.

00:50:02 ◼   ► And for some people, as Apple have said, lower.

00:50:05 ◼   ► - Yeah, so I think that's interesting

00:50:08 ◼   ► that they have done more than I thought,

00:50:10 ◼   ► but what really has struck me in reading it

00:50:14 ◼   ► and thinking about it and writing about it

00:50:16 ◼   ► is that this is Apple, like I said before,

00:50:21 ◼   ► it's Apple very carefully mapping out

00:50:23 ◼   ► what they're required to do

00:50:25 ◼   ► and what they're not required to do.

00:50:27 ◼   ► Okay, so I need to back up and say,

00:50:29 ◼   ► we've talked about these issues

00:50:30 ◼   ► for the last couple of years here on the podcast.

00:50:32 ◼   ► And one of the things that I've said a few times,

00:50:34 ◼   ► I'm gonna repeat now,

00:50:35 ◼   ► 'cause I think it's super important,

00:50:37 ◼   ► which is there are regulators and governments

00:50:41 ◼   ► that are comfortable regulating specific kinds of behaviors,

00:50:46 ◼   ► but are much less comfortable telling a company

00:50:51 ◼   ► essentially that their product

00:50:54 ◼   ► doesn't belong to them anymore,

00:50:56 ◼   ► that their method of making money,

00:51:00 ◼   ► their internal business costs and calculations

00:51:04 ◼   ► that are going to be seized essentially

00:51:08 ◼   ► and taken control of by the regulator of government.

00:51:10 ◼   ► And I say this because Apple structures a lot of this stuff,

00:51:14 ◼   ► including everything they've done here.

00:51:16 ◼   ► I mean, if I wanna be incendiary,

00:51:19 ◼   ► I can say they're daring them to do this,

00:51:21 ◼   ► but I think also Apple has this feeling

00:51:25 ◼   ► like there is a limit beyond which the regulators

00:51:27 ◼   ► won't step with a company.

00:51:29 ◼   ► So what you see here is Apple has built these structures

00:51:34 ◼   ► essentially to make it so unpalatable

00:51:38 ◼   ► that nobody will want to do them

00:51:41 ◼   ► and or that very, very few people,

00:51:43 ◼   ► very few companies will want to participate.

00:51:45 ◼   ► And that core technology fee is a really great example

00:51:48 ◼   ► of a poison pill, because I thought immediately,

00:51:52 ◼   ► well, Facebook will clearly do this

00:51:54 ◼   ► and Epic will clearly do this.

00:51:57 ◼   ► And what will happen with Spotify

00:51:59 ◼   ► and how are they gonna handle this?

00:52:01 ◼   ► But charging 50 cents for every free install

00:52:05 ◼   ► is a shot across the bow of the model most cultivated

00:52:08 ◼   ► by the App Store economics, which is the freemium model.

00:52:11 ◼   ► Get our thing, use it for free,

00:52:13 ◼   ► we'll make money somewhere else or we'll upcharge you later.

00:52:16 ◼   ► And so like if you're Facebook,

00:52:19 ◼   ► you gotta be confident that going outside

00:52:22 ◼   ► or using your own payment processor

00:52:23 ◼   ► so you can do more tracking or whatever,

00:52:26 ◼   ► you gotta be really confident that that's worth it

00:52:30 ◼   ► because your business is run on free apps

00:52:33 ◼   ► that will now be charged by Apple

00:52:35 ◼   ► at a rate of 50 cents per year.

00:52:38 ◼   ► - Which that amount of money,

00:52:40 ◼   ► so okay, huge amount of money it can become, right?

00:52:43 ◼   ► 50 cents a year for per customer

00:52:48 ◼   ► is not a large amount of money

00:52:51 ◼   ► if you have a decent business model, right?

00:52:53 ◼   ► Like if you have a business model that is working for you.

00:52:56 ◼   ► - But the challenge for Facebook is,

00:52:57 ◼   ► there's a part of Facebook that's like,

00:52:59 ◼   ► oh man, wouldn't it be great if we could just put those web,

00:53:01 ◼   ► like in the old days,

00:53:02 ◼   ► put those web links in Facebook to app sales

00:53:05 ◼   ► and then we follow them and we can charge them

00:53:08 ◼   ► 'cause it's our marketplace

00:53:09 ◼   ► and like all of these things about it.

00:53:12 ◼   ► I'm sure there's a group in Facebook that's like,

00:53:14 ◼   ► yeah, let's do that.

00:53:14 ◼   ► But my question is,

00:53:16 ◼   ► what revenue does that generate in the EU?

00:53:20 ◼   ► And does it, 'cause it's not 50 cents per user

00:53:21 ◼   ► who is buying those apps,

00:53:24 ◼   ► it's 50 cents per every user of Facebook

00:53:27 ◼   ► and every user of Instagram

00:53:29 ◼   ► and every user of WhatsApp, right?

00:53:31 ◼   ► And every user of Messenger.

00:53:34 ◼   ► It is everybody, it's 50 cents.

00:53:38 ◼   ► And those are big apps that are used by lots of people.

00:53:42 ◼   ► So the price tag is gonna be big.

00:53:44 ◼   ► Can Facebook afford it?

00:53:45 ◼   ► Of course it can.

00:53:46 ◼   ► But my question is,

00:53:48 ◼   ► you better be able to offset that.

00:53:51 ◼   ► Otherwise you're better off just staying

00:53:53 ◼   ► with the current terms.

00:53:54 ◼   ► - We know Facebook can though, right?

00:53:57 ◼   ► We know how much money they make.

00:53:59 ◼   ► We know they can afford that.

00:54:01 ◼   ► - But that's not my point.

00:54:03 ◼   ► Not my point.

00:54:04 ◼   ► So you're Facebook and you're given two choices.

00:54:07 ◼   ► Choice A is stay with the status quo.

00:54:10 ◼   ► Choice B is spend 30 million euros a year on free apps

00:54:15 ◼   ► in exchange for what you get out of it,

00:54:21 ◼   ► which is some reduced terms for payments,

00:54:23 ◼   ► which you're not really taking,

00:54:25 ◼   ► and some enhanced ability,

00:54:27 ◼   ► but not as much as you'd think to track

00:54:29 ◼   ► in terms of web clicks and credit card transactions

00:54:34 ◼   ► and the like.

00:54:35 ◼   ► And my argument would be,

00:54:37 ◼   ► the group of people that's into that stuff in Facebook

00:54:39 ◼   ► is gonna be like, yeah, yeah, yeah, let's do it.

00:54:41 ◼   ► Let's do it.

00:54:42 ◼   ► But if I'm running Facebook

00:54:43 ◼   ► and I'm looking at the whatever it is,

00:54:45 ◼   ► 40 million, 50 million, whatever that fee is,

00:54:50 ◼   ► I have to be confident that by making this move,

00:54:53 ◼   ► I'm gonna make that money back and then some.

00:54:57 ◼   ► And if I can't, why would I do it?

00:55:00 ◼   ► Why would I do it?

00:55:01 ◼   ► Right?

00:55:02 ◼   ► Like, 'cause then I'm losing money to make,

00:55:04 ◼   ► I'm making a move to make less money.

00:55:06 ◼   ► That is bad business, right?

00:55:09 ◼   ► And that's the poison pill here for a lot of people.

00:55:11 ◼   ► Also, anybody who's an indie developer, right?

00:55:13 ◼   ► First off, the terms aren't as good.

00:55:15 ◼   ► So your terms will improve by a couple of percentage points.

00:55:19 ◼   ► It's not really much of anything.

00:55:20 ◼   ► And you risk any of your free apps.

00:55:22 ◼   ► And let's face it,

00:55:23 ◼   ► most indie developers have a freemium model

00:55:25 ◼   ► because the app store really pushes you

00:55:28 ◼   ► to have that freemium model.

00:55:29 ◼   ► Suddenly, our friend James Thompson just told us

00:55:32 ◼   ► in the Discord, like even a little, sorry, James,

00:55:35 ◼   ► little app like Peacock Lite

00:55:37 ◼   ► is over the threshold in the EU.

00:55:40 ◼   ► So he would be on the hook for a large amount of money

00:55:43 ◼   ► from his free app that is, because it's a free app,

00:55:46 ◼   ► not generating revenue.

00:55:49 ◼   ► So like that's the poison pill at the center of this,

00:55:51 ◼   ► I think.

00:55:52 ◼   ► - I feel like a company,

00:55:57 ◼   ► we'll just keep using Meta as the example here, right?

00:56:00 ◼   ► I could imagine a scenario where

00:56:04 ◼   ► if this becomes the worldwide model,

00:56:07 ◼   ► which I think we both assume it could, right?

00:56:10 ◼   ► That like governments in America, governments in the UK,

00:56:14 ◼   ► governments all over, you know,

00:56:15 ◼   ► governments in Japan might look at this and say,

00:56:18 ◼   ► that's the model, thank you Europe.

00:56:20 ◼   ► - And Apple's already built it.

00:56:21 ◼   ► - Yeah, because it's done.

00:56:22 ◼   ► - Apple's already built it.

00:56:23 ◼   ► So Apple can't say, oh no, that's gonna be onerous for us.

00:56:26 ◼   ► They built it, it's done.

00:56:27 ◼   ► - It's done.

00:56:28 ◼   ► So this is like the easy way to say we've regulated Apple,

00:56:31 ◼   ► da da da da da.

00:56:32 ◼   ► If this became the model in say 60, 70%

00:56:37 ◼   ► of where Facebook has its customers,

00:56:40 ◼   ► I could imagine a scenario in which they are willing

00:56:44 ◼   ► to lose or pay the fee to have a bit more control.

00:56:49 ◼   ► - Yeah, it comes down to the details.

00:56:53 ◼   ► Like I don't know what happens when you tap

00:56:55 ◼   ► on an app download ad in Facebook in this model

00:57:00 ◼   ► and you go to a webpage and they track you,

00:57:03 ◼   ► like does Apple do some anti-tracking?

00:57:05 ◼   ► Like I don't know some of the details

00:57:07 ◼   ► that probably won't be known until this gets launched

00:57:12 ◼   ► in your Facebook and you're trying to figure it out.

00:57:14 ◼   ► Like I wouldn't, do we think Apple's not trying

00:57:18 ◼   ► to make that as hard as possible for Facebook to do

00:57:21 ◼   ► on top of everything else?

00:57:23 ◼   ► But let's say you could get the leverage,

00:57:25 ◼   ► let's say you could get value in it,

00:57:28 ◼   ► then that's your business decision, right?

00:57:29 ◼   ► Is it worth it for me to pay 50 cents for every parent

00:57:34 ◼   ► and grandma that's using Facebook to look at pictures

00:57:39 ◼   ► of cats in order to be able to monetize somewhat differently

00:57:43 ◼   ► with this one part of my business?

00:57:45 ◼   ► That's the question.

00:57:46 ◼   ► I'm not saying it's not.

00:57:47 ◼   ► I'm just saying it's not as obvious as you would think.

00:57:51 ◼   ► - And maybe even like a better, like a different example,

00:57:54 ◼   ► like a very interesting example is Epic, right?

00:57:56 ◼   ► They have the Epic Games Store.

00:57:58 ◼   ► They have, I don't remember what it is,

00:58:00 ◼   ► but I know that their fee on other platforms

00:58:03 ◼   ► is smaller than what Apple's cut is.

00:58:05 ◼   ► I think it might be similar now

00:58:06 ◼   ► because of this reduced thing.

00:58:09 ◼   ► But that is a business where there is sense to be made

00:58:13 ◼   ► for having your own app store, right?

00:58:15 ◼   ► Because it is tailored.

00:58:18 ◼   ► - I think an app store with a product

00:58:20 ◼   ► that is generating a lot of money is,

00:58:25 ◼   ► or sorry, an app marketplace.

00:58:26 ◼   ► - A marketplace where the inherently

00:58:28 ◼   ► all of the apps within that marketplace

00:58:31 ◼   ► are expected to be paid, which is video games.

00:58:34 ◼   ► Or they have a very lucrative freemium model.

00:58:39 ◼   ► - Yes, and that's it.

00:58:40 ◼   ► You know, like Epic knows how many people play Fortnite

00:58:45 ◼   ► or whatever and don't pay versus pay.

00:58:49 ◼   ► What's the average?

00:58:50 ◼   ► And it's ARPU, right?

00:58:51 ◼   ► Average revenue per user is the term there.

00:58:53 ◼   ► And if your ARPU is above whatever that breakeven is,

00:58:56 ◼   ► whether it's like above 50 cents or a dollar or whatever,

00:59:01 ◼   ► then it starts to be worth it, right, to do that.

00:59:03 ◼   ► And I think that high generating apps like games

00:59:08 ◼   ► are the scenario that is the most likely for this.

00:59:11 ◼   ► Now it is irrevocable and it means

00:59:13 ◼   ► that you're gonna be paying Apple that

00:59:14 ◼   ► regardless of whether you're in the app store or not.

00:59:17 ◼   ► But I can see how being,

00:59:20 ◼   ► how somebody like Epic could construct a place

00:59:22 ◼   ► where gamers in the EU know, like there are good games

00:59:26 ◼   ► and they will install the marketplace

00:59:31 ◼   ► because there are good games there.

00:59:35 ◼   ► And those games are generating enough revenue

00:59:38 ◼   ► that it's worth paying the tax to Apple on the downloads,

00:59:43 ◼   ► on the active users.

00:59:44 ◼   ► It's not even downloads, it is.

00:59:45 ◼   ► So like if you get Fortnite and you delete it,

00:59:48 ◼   ► you will fall off, but you will no longer be counted.

00:59:54 ◼   ► So there's that too.

00:59:54 ◼   ► Yeah, I think it's quite possible that games is the place

00:59:58 ◼   ► where you might see this scenario.

00:59:59 ◼   ► - It's the easiest one, it's the easiest one, right?

01:00:02 ◼   ► Because you should as a game developer

01:00:06 ◼   ► be making 50 cents per year.

01:00:09 ◼   ► - Right, you should not be able,

01:00:10 ◼   ► and if you're not, you need to rethink your model, right?

01:00:12 ◼   ► This is the whole, like I've been playing like Marvel Snap

01:00:15 ◼   ► for more than a year and I did finally buy something in it.

01:00:18 ◼   ► After more than a year, I paid $5 for something.

01:00:22 ◼   ► And I thought, well, they've now gotten $5 out of me

01:00:25 ◼   ► in 14 months, is it worth it for them?

01:00:28 ◼   ► I don't know, I have that thought, which is I'm not sure

01:00:32 ◼   ► because I was able to, like as a user,

01:00:35 ◼   ► I'm very happy to not have to pay to play that game.

01:00:39 ◼   ► But thinking about the business, I thought,

01:00:43 ◼   ► maybe it's a little too easy to play this game for free.

01:00:46 ◼   ► But the business is no, and the game companies

01:00:48 ◼   ► are very good at monitoring and doing the mechanics

01:00:51 ◼   ► and knowing what the ARPU is.

01:00:53 ◼   ► And that's the figure here is average revenue per user.

01:00:57 ◼   ► And if you can say, and you just do the math,

01:00:59 ◼   ► like, okay, we'll throw in Apple's tax,

01:01:01 ◼   ► but we get this back and we control this

01:01:04 ◼   ► and we're gonna, and Epic is gonna take this cut,

01:01:08 ◼   ► which is smaller, and then we're left with,

01:01:10 ◼   ► let's run the numbers.

01:01:11 ◼   ► And the answer is, oh, it's worth it for us to do it

01:01:14 ◼   ► and they'll do it.

01:01:15 ◼   ► And I can see that scenario, but what we're not gonna see,

01:01:17 ◼   ► I think, is this incredible flourishing of marketplaces,

01:01:20 ◼   ► let a thousand marketplaces bloom.

01:01:22 ◼   ► I don't think that's gonna happen.

01:01:23 ◼   ► And even stuff that I thought on Thursday

01:01:26 ◼   ► was more likely to happen,

01:01:28 ◼   ► like Alt Store said they're gonna go there.

01:01:30 ◼   ► And it's like, okay, fine, Alt Store, fine.

01:01:32 ◼   ► That's an existing sort of outside the App Store,

01:01:36 ◼   ► gray market, the kind of marketplace.

01:01:39 ◼   ► But like, I thought SetApp would be a good example of this.

01:01:42 ◼   ► But the problem is a lot of those SetApp apps

01:01:44 ◼   ► are utilities that are very useful

01:01:47 ◼   ► and that are also in the App Store,

01:01:49 ◼   ► because right now they have to be.

01:01:50 ◼   ► And presumably they would stay in the App Store,

01:01:53 ◼   ► but for them to be in the marketplace,

01:01:54 ◼   ► they have to opt into the new terms.

01:01:57 ◼   ► And will that make sense for them?

01:01:59 ◼   ► I don't know, right?

01:02:00 ◼   ► So it gives me pause for something

01:02:04 ◼   ► like a subscription service like SetApp to do it,

01:02:07 ◼   ► because all their partners have to opt into the new terms

01:02:12 ◼   ► and that might be economically unhelpful.

01:02:15 ◼   ► So there are just lots of questions here.

01:02:18 ◼   ► - But someone could make something else like that, right?

01:02:21 ◼   ► And in such, you model the business in a way

01:02:24 ◼   ► that you understand that the CTF exists

01:02:28 ◼   ► and that you kind of, for every user,

01:02:30 ◼   ► you have to generate 50 cents a year.

01:02:32 ◼   ► - It's just a different model.

01:02:33 ◼   ► And honestly, having an ARPU for a free app above 50 cents

01:02:38 ◼   ► is not hard.

01:02:39 ◼   ► - No.

01:02:40 ◼   ► - But in the App Store,

01:02:40 ◼   ► the way that Apple has had the App Store

01:02:43 ◼   ► for the last 15 years, you haven't had to do that, right?

01:02:46 ◼   ► Like this is Apple weaponizing the fact

01:02:49 ◼   ► that they've let free apps be completely free of charge

01:02:54 ◼   ► in the App Store.

01:02:55 ◼   ► Now they're saying basically like,

01:02:56 ◼   ► "All right, you want better terms,

01:02:57 ◼   ► "we'll give you better terms.

01:02:58 ◼   ► "You want more freedom, we'll give you more freedom."

01:03:00 ◼   ► But free apps aren't free anymore.

01:03:03 ◼   ► Bottom line, again-

01:03:05 ◼   ► - Because they weren't in the first place.

01:03:07 ◼   ► - Huge hit free apps aren't free anymore.

01:03:11 ◼   ► We should put it that way, right?

01:03:12 ◼   ► Because it is over a million.

01:03:13 ◼   ► So congratulations to James Thompson.

01:03:15 ◼   ► Pcalc Life is a huge hit.

01:03:17 ◼   ► It's over a million.

01:03:18 ◼   ► - You can see through all of this, right?

01:03:20 ◼   ► You see through all of this,

01:03:21 ◼   ► how much money Apple's making

01:03:23 ◼   ► from in-app purchases from games.

01:03:25 ◼   ► - Yes.

01:03:27 ◼   ► - That's what the CTF is.

01:03:28 ◼   ► - That's what this is all about.

01:03:30 ◼   ► That's why I get frustrated

01:03:31 ◼   ► when indie developers talk about this.

01:03:33 ◼   ► 'Cause the truth is that if you look at Apple's policies,

01:03:36 ◼   ► everything resolves itself.

01:03:38 ◼   ► Why did they do the small business program

01:03:40 ◼   ► and cut the fees to 15%?

01:03:42 ◼   ► It was one, to get the heat off of them.

01:03:44 ◼   ► And two, they don't really care

01:03:46 ◼   ► about people who are making small amount,

01:03:48 ◼   ► under a million dollars a year in the app store.

01:03:50 ◼   ► They don't.

01:03:51 ◼   ► They just don't care.

01:03:52 ◼   ► There are a few huge game developers

01:03:56 ◼   ► who are selling digital goods.

01:03:58 ◼   ► It's what John Syracuse always calls what?

01:04:01 ◼   ► Casino games for children.

01:04:02 ◼   ► But it's not just children, it's also adults.

01:04:06 ◼   ► And it's buy more gems or buy more spins

01:04:10 ◼   ► or buy that beautiful set of Marvel snap art,

01:04:14 ◼   ► which is what I did.

01:04:16 ◼   ► And those few companies that are excellent

01:04:21 ◼   ► at monetizing all digital items in their apps,

01:04:25 ◼   ► obviously are the vast bulk of app store revenue.

01:04:30 ◼   ► Obviously.

01:04:32 ◼   ► And that's what Apple cares about is in the end,

01:04:35 ◼   ► Apple is trying to protect the money they get

01:04:38 ◼   ► from the big players in the game space.

01:04:42 ◼   ► That's it.

01:04:43 ◼   ► - When I read about the CTF,

01:04:45 ◼   ► I'm kind of like, I wished it was just this way always.

01:04:48 ◼   ► I wished it was this way from the beginning.

01:04:51 ◼   ► When I read about it,

01:04:52 ◼   ► I wished Apple had a fixed amount of money

01:04:55 ◼   ► they could make from a developer

01:04:57 ◼   ► over a million downloads in a year.

01:04:59 ◼   ► Then we would not have had all of the stuff

01:05:02 ◼   ► we have had around in-app purchases.

01:05:04 ◼   ► We would not have had all of this terrible monetization

01:05:06 ◼   ► in video games.

01:05:08 ◼   ► It would have saved so many bad things from happening,

01:05:11 ◼   ► like the thousands and thousands and thousands of people

01:05:14 ◼   ► getting laid off across the gaming industry

01:05:16 ◼   ► each year at the moment,

01:05:17 ◼   ► because games exploded with the freemium models

01:05:20 ◼   ► during the pandemic.

01:05:22 ◼   ► I wished there was just a flat fee and that was it.

01:05:26 ◼   ► And that people built their business models around that.

01:05:29 ◼   ► And if you're like, how could you say that, Mike?

01:05:31 ◼   ► I'm an idiot.

01:05:32 ◼   ► No, 'cause you wouldn't have built your business

01:05:33 ◼   ► the way you've built it.

01:05:35 ◼   ► To me, the idea that you run a business,

01:05:38 ◼   ► look, I have a very different business, right?

01:05:39 ◼   ► To me, the idea of running a business

01:05:42 ◼   ► and not being able to afford 50 cents per user,

01:05:45 ◼   ► like that is, you will run in on some odd margins

01:05:49 ◼   ► to the way that things seem simple to me, right?

01:05:51 ◼   ► - Right, but there's zero cost to it.

01:05:53 ◼   ► So I can sort of see like,

01:05:55 ◼   ► if your ARPU is below 50 cents,

01:06:00 ◼   ► but you are able to monetize,

01:06:03 ◼   ► like, again, I don't know,

01:06:06 ◼   ► you've got 5 million users

01:06:09 ◼   ► and the percentage of them who buy the upgrade

01:06:11 ◼   ► is relatively small,

01:06:13 ◼   ► but it doesn't have to be that big

01:06:15 ◼   ► for it to be material to you.

01:06:17 ◼   ► And it doesn't matter that your conversion rate is low.

01:06:20 ◼   ► And what the 50 cent charge is,

01:06:21 ◼   ► it matters if your conversion rate is low.

01:06:23 ◼   ► You can't run that business.

01:06:26 ◼   ► You can't have a deeply inefficient freemium app business

01:06:30 ◼   ► under this scenario.

01:06:31 ◼   ► You can't do it.

01:06:32 ◼   ► And I take your point, which is,

01:06:34 ◼   ► you're running a bad business

01:06:35 ◼   ► if you can't monetize your free app like that.

01:06:37 ◼   ► Like, I mean, it's true.

01:06:38 ◼   ► That's just the truth of it is.

01:06:39 ◼   ► The whole purpose, okay,

01:06:42 ◼   ► we should say there are free apps

01:06:45 ◼   ► that people just do for love.

01:06:47 ◼   ► - Probably they're under the million.

01:06:48 ◼   ► - And can't be monetized.

01:06:49 ◼   ► They're probably under the million,

01:06:51 ◼   ► or they are just under the old terms, right?

01:06:55 ◼   ► It doesn't matter.

01:06:56 ◼   ► They're completely free.

01:06:57 ◼   ► It doesn't matter.

01:06:58 ◼   ► But yeah, if you're trying to make money from a free app,

01:07:02 ◼   ► which means it's got an in-app purchase,

01:07:03 ◼   ► it's got an upgrade of some kind,

01:07:06 ◼   ► you should be able to convert.

01:07:08 ◼   ► Whatever you're charging,

01:07:09 ◼   ► you should be able to convert

01:07:11 ◼   ► probably at a level above 50 cents a download,

01:07:14 ◼   ► an active user.

01:07:15 ◼   ► You've got 5 million active users

01:07:18 ◼   ► and can't convert them at that level.

01:07:22 ◼   ► That's not great.

01:07:24 ◼   ► - It's weird. - It's not great.

01:07:25 ◼   ► - Like, on the face of it, it just seems strange to me.

01:07:28 ◼   ► It's like Spotify is saying they can't afford it.

01:07:30 ◼   ► And it's like, yeah, Spotify, you have a bad business,

01:07:33 ◼   ► model everyone already knows this.

01:07:36 ◼   ► Like, I don't think there's anything that Apple can do

01:07:39 ◼   ► for you that's gonna help your business model.

01:07:40 ◼   ► We all know that.

01:07:42 ◼   ► - If you've got 5 million active users

01:07:44 ◼   ► and you can't make $2 million a year on them,

01:07:47 ◼   ► there's something wrong.

01:07:49 ◼   ► - Yeah.

01:07:50 ◼   ► - 'Cause that's, right?

01:07:51 ◼   ► That's $2 for every five users.

01:07:54 ◼   ► - Yeah.

01:07:55 ◼   ► - So you're converting whatever that is, 40%.

01:07:58 ◼   ► And that's for a dollar, you're converting at 40%.

01:08:01 ◼   ► For $4, you're converting at 10%, right?

01:08:04 ◼   ► I like, again, I'm just doing the math in my head here,

01:08:07 ◼   ► but like, anyway, but what I will say, Mike,

01:08:09 ◼   ► is free ride on the App Store means nobody cares

01:08:14 ◼   ► what your conversion rate is, right?

01:08:15 ◼   ► They don't care.

01:08:16 ◼   ► It's like, oh, I just put it out for fun

01:08:18 ◼   ► and there's a tip jar and sometimes I get money for it.

01:08:21 ◼   ► - That's why I'm saying- - That's okay.

01:08:22 ◼   ► - I wish it started this way, right?

01:08:25 ◼   ► Like, I know why now this is hard.

01:08:27 ◼   ► I'm just saying I wished the 30% thing never existed.

01:08:31 ◼   ► - Right, because Apple has, I don't wanna say distorted,

01:08:35 ◼   ► but like the terms of the App Store have led the App Store

01:08:38 ◼   ► in this direction and one of the terms

01:08:41 ◼   ► from the moment Steve Jobs unveiled it was,

01:08:43 ◼   ► if it's free, it's free.

01:08:44 ◼   ► We don't charge you anything.

01:08:45 ◼   ► You can just be there.

01:08:46 ◼   ► We'll pay for your downloads and all those things

01:08:49 ◼   ► and your hosting, you don't have to worry about it.

01:08:51 ◼   ► Free apps are just free.

01:08:52 ◼   ► And that was from the beginning.

01:08:54 ◼   ► And one of the reasons they did that

01:08:56 ◼   ► is because there was this fear, I think,

01:08:58 ◼   ► that nobody would, if you tried to put an app up for free,

01:09:03 ◼   ► Apple can't charge you for it, really.

01:09:06 ◼   ► Like, that's really rough,

01:09:08 ◼   ► but they're not letting you out of the store.

01:09:10 ◼   ► And so they were like, okay, look,

01:09:12 ◼   ► we're gonna control everything,

01:09:14 ◼   ► but if you're not charging, we'll just let you ride.

01:09:16 ◼   ► And that's fine, but what happened with the,

01:09:18 ◼   ► and remember, Mike, at the beginning,

01:09:20 ◼   ► you couldn't be free with in-app purchases.

01:09:22 ◼   ► - I was just about to say that.

01:09:23 ◼   ► It's one of my favorite facts that I think

01:09:25 ◼   ► is hard to wrap your head around,

01:09:27 ◼   ► that when they introduced in-app purchases,

01:09:29 ◼   ► they were only for paid apps.

01:09:31 ◼   ► - Yes, free apps were not,

01:09:34 ◼   ► freemium was not there on day one,

01:09:35 ◼   ► free apps were there on day one.

01:09:37 ◼   ► And the premise originally for free apps was,

01:09:40 ◼   ► look, they're never gonna make any money for this thing.

01:09:42 ◼   ► It's just free.

01:09:43 ◼   ► Or it's happening somewhere else.

01:09:45 ◼   ► So it's just free.

01:09:46 ◼   ► But the moment that you could do free with in-app purchase,

01:09:49 ◼   ► everything was different about what a free app was

01:09:51 ◼   ► and how it was there.

01:09:52 ◼   ► And then everybody has followed it.

01:09:54 ◼   ► And I'm not saying it's a fundamentally wrong model.

01:09:57 ◼   ► It's proven to be incredibly successful as a model.

01:09:59 ◼   ► Try it for free and then pay.

01:10:01 ◼   ► And we have lots of friends

01:10:02 ◼   ► who have made very successful businesses

01:10:05 ◼   ► on the free with in-app purchase model.

01:10:08 ◼   ► Most, actually, I would say all the developers we know

01:10:11 ◼   ► who are successful have made money on this model.

01:10:14 ◼   ► But this is how it works.

01:10:15 ◼   ► 'Cause this is how the App Store works now.

01:10:18 ◼   ► - Yeah, I see what you're saying there,

01:10:20 ◼   ► but I think there's like a slight,

01:10:22 ◼   ► there's a twist in that, right?

01:10:23 ◼   ► Which is just like, they follow the rule,

01:10:25 ◼   ► like how the App Store's supposed to work.

01:10:27 ◼   ► You know what I mean?

01:10:28 ◼   ► But like if the App Store was paid upfront,

01:10:30 ◼   ► they still could have been,

01:10:31 ◼   ► but it's a different reality to the one that we're in.

01:10:35 ◼   ► - That's absolutely true.

01:10:36 ◼   ► But yes, because of the way it's worked,

01:10:38 ◼   ► it has led lots of developers to work this way.

01:10:41 ◼   ► Like, we know lots of developers

01:10:45 ◼   ► who've had apps for a long time

01:10:46 ◼   ► where the apps used to be paid.

01:10:49 ◼   ► And now they're all free with in-app purchase

01:10:51 ◼   ► because that's where the market went

01:10:54 ◼   ► and they had to go there.

01:10:55 ◼   ► And I don't like it either.

01:10:57 ◼   ► I understand it because Apple also didn't offer

01:11:00 ◼   ► like free trials or things like that at various points.

01:11:02 ◼   ► And so try it for free and then pay for the features

01:11:05 ◼   ► has just become the model.

01:11:06 ◼   ► But there are certain kinds of apps that are gonna look,

01:11:08 ◼   ► and that's how it can be a poison pill,

01:11:12 ◼   ► is that Facebook has lots of free apps.

01:11:14 ◼   ► And that means they're gonna pay Apple a lot of money

01:11:16 ◼   ► if they switch to this new system

01:11:19 ◼   ► and they have to make a pencil out

01:11:21 ◼   ► because they don't get those apps for free anymore.

01:11:24 ◼   ► - I wanna talk about the 1 million threshold a little bit

01:11:26 ◼   ► because you're right.

01:11:27 ◼   ► I think understandably,

01:11:29 ◼   ► a lot of indie developers in the community

01:11:31 ◼   ► are freaking out, right?

01:11:32 ◼   ► Like, "Oh, I'd go overnight and be an overnight success

01:11:35 ◼   ► and now I owe hundreds of thousands of dollars."

01:11:38 ◼   ► That is incredibly rare.

01:11:40 ◼   ► Can you name one other person other than David Smith

01:11:43 ◼   ► that that happened to?

01:11:44 ◼   ► - He's the example.

01:11:46 ◼   ► - Yes.

01:11:49 ◼   ► He's the one?

01:11:51 ◼   ► - I'm sure like Flappy Bird Man.

01:11:54 ◼   ► - That's a game though.

01:11:57 ◼   ► I'm talking like, I think like,

01:11:58 ◼   ► if I'm talking about like the listeners of our show,

01:12:00 ◼   ► the people in our community

01:12:01 ◼   ► tends to be independent app developers, right?

01:12:05 ◼   ► It is incredibly rare for that to occur.

01:12:09 ◼   ► And David can speak to this for himself

01:12:14 ◼   ► if he ever wanted to,

01:12:15 ◼   ► but maybe he had that and had enough success

01:12:18 ◼   ► that he could have afforded it, right?

01:12:20 ◼   ► But like it happened,

01:12:21 ◼   ► but David has a subscription in his app.

01:12:24 ◼   ► Maybe it was successful enough

01:12:25 ◼   ► that he could have paid for what would have happened.

01:12:28 ◼   ► I genuinely don't know the answer to that,

01:12:30 ◼   ► but that might, you know,

01:12:31 ◼   ► so like you're like, "Oh, what if I wake up

01:12:33 ◼   ► and I have 2 million users?"

01:12:35 ◼   ► It's like, "Well, how many people signed up?"

01:12:36 ◼   ► You know, maybe you're okay now, I don't know.

01:12:39 ◼   ► - It goes back to what we said before too

01:12:40 ◼   ► about your business model.

01:12:42 ◼   ► Like David launched WidgetSmith

01:12:43 ◼   ► not knowing it was gonna be an enormous viral hit,

01:12:47 ◼   ► but with $2 a month, $20 a year premium upsell in the app

01:12:52 ◼   ► to get features that people were gonna want.

01:12:55 ◼   ► Calibrated carefully,

01:12:56 ◼   ► and I'm sure he learned a lot as he took that ride,

01:12:59 ◼   ► but like he benefited

01:13:00 ◼   ► from having an enormous amount of installs.

01:13:03 ◼   ► He got to see how people were using it.

01:13:05 ◼   ► He got to craft his app

01:13:06 ◼   ► so that the premium features would have real reasons

01:13:10 ◼   ► for you to buy them.

01:13:11 ◼   ► And certainly his goal there

01:13:13 ◼   ► is to make a pretty good average revenue per user,

01:13:16 ◼   ► even though a bunch of people

01:13:17 ◼   ► are just gonna use the free version.

01:13:19 ◼   ► - As Nathan in the Discord is saying,

01:13:22 ◼   ► if you are in these terms,

01:13:24 ◼   ► all you need is a one euro a year subscription, right?

01:13:27 ◼   ► Which I think a lot of people pay anyway,

01:13:30 ◼   ► but look, my point of that is, right?

01:13:32 ◼   ► Like if you are a developer

01:13:35 ◼   ► and you like the sound of some of this stuff,

01:13:36 ◼   ► you just have to prepare for this possibility,

01:13:40 ◼   ► which is about having a business model.

01:13:44 ◼   ► But if you don't wanna have a business model,

01:13:47 ◼   ► don't do this, right?

01:13:49 ◼   ► But there is, I think for a lot of people,

01:13:51 ◼   ► there is more money to be made for your business

01:13:55 ◼   ► outside of the app store potentially,

01:13:58 ◼   ► on paper, on paper there is.

01:13:59 ◼   ► - I would say if you're a developer of a small app

01:14:03 ◼   ► that is already doing fine in the app store

01:14:06 ◼   ► and you're under the 1 million threshold,

01:14:09 ◼   ► so you're in the small business program,

01:14:11 ◼   ► I would say it would not be impossible

01:14:14 ◼   ► but it's gonna be a harder sell.

01:14:16 ◼   ► - You just gotta look into it though, right?

01:14:17 ◼   ► Like you have to work out what it could mean for you.

01:14:20 ◼   ► - Everybody should do the math,

01:14:21 ◼   ► but I'm just saying the reduced commission

01:14:24 ◼   ► is not as great for the people under a million

01:14:25 ◼   ► as it is for the people over a million.

01:14:27 ◼   ► The people, the business is over a million,

01:14:29 ◼   ► that's a substantial, you're going from 30 to 20,

01:14:33 ◼   ► but going from 15 to 13 or whatever is not fantastic.

01:14:37 ◼   ► And now presumably you're paying

01:14:40 ◼   ► for all of your freemium installs

01:14:41 ◼   ► if you're over a million, which we know,

01:14:44 ◼   ► Pcalc Lite is, so like there are gonna be

01:14:46 ◼   ► a lot of longstanding apps that are gonna pick up those.

01:14:48 ◼   ► So you're gonna have to run the numbers.

01:14:49 ◼   ► I think that there are gonna be a lot,

01:14:52 ◼   ► a lot of developers who are gonna look at this and say,

01:14:56 ◼   ► I am just gonna stay with the terms I've got

01:14:58 ◼   ► because I'm comfortable and I'm just gonna stay

01:15:00 ◼   ► in the app store and there's no opportunity here.

01:15:01 ◼   ► Some will find opportunity here,

01:15:03 ◼   ► but I do think it's gonna be more the big guns

01:15:08 ◼   ► that are gonna be seeking the opportunity.

01:15:10 ◼   ► And it is funny how Tim Sweeney of Epic posted on Twitter

01:15:15 ◼   ► about how this was terrible and Apple is evil

01:15:18 ◼   ► and blah, blah, blah, blah, blah.

01:15:19 ◼   ► - There's nothing Apple can do with Tim.

01:15:21 ◼   ► What I, I'll tell you what I love.

01:15:22 ◼   ► - Well, just wait, just wait, just wait.

01:15:24 ◼   ► What I'm saying is Tim Sweeney can say all of that.

01:15:26 ◼   ► But what also happened?

01:15:28 ◼   ► Epic posted, we're totally coming back in the EU

01:15:31 ◼   ► with Fortnite, here we come, right?

01:15:33 ◼   ► So it's like, yeah, I hear you, Tim, you still hate Apple,

01:15:37 ◼   ► but your company is immediately going to take advantage

01:15:40 ◼   ► of this deal, this bad deal that Apple is offering you.

01:15:44 ◼   ► So you tell me.

01:15:46 ◼   ► - What I love about Tim Sweeney is he's consistent.

01:15:49 ◼   ► You know, like there is nothing they can do

01:15:52 ◼   ► that he will be happy with.

01:15:53 ◼   ► And you know what? - No.

01:15:54 ◼   ► - I respect it.

01:15:55 ◼   ► I respect it.

01:15:56 ◼   ► Like he has an opinion and his opinion is complete freedom

01:16:00 ◼   ► or it's criminal.

01:16:01 ◼   ► And there are times where I agree with him

01:16:04 ◼   ► because here's the thing, right?

01:16:07 ◼   ► Why does the 10/17% commission exist on the App Store?

01:16:12 ◼   ► Why does that still exist?

01:16:15 ◼   ► If you want to be in the App Store,

01:16:17 ◼   ► what are you paying Apple 10% for?

01:16:21 ◼   ► If the core technology fee exists, Apple consider that,

01:16:25 ◼   ► they consider 50 cents per customer per year

01:16:31 ◼   ► to be their fee for you using iOS, right?

01:16:35 ◼   ► - For using core technology, yes.

01:16:36 ◼   ► I would say the App Store- - So what is the 10% for?

01:16:39 ◼   ► What is the 17% for?

01:16:40 ◼   ► - It's marketing.

01:16:41 ◼   ► It is being- - Who markets you?

01:16:44 ◼   ► - Apple. - Do they?

01:16:46 ◼   ► - Yeah, well, yeah.

01:16:47 ◼   ► So it's being in the App Store.

01:16:50 ◼   ► It's being eligible for highlights and promotion

01:16:54 ◼   ► and editorial pieces in the App Store.

01:16:57 ◼   ► And it's, wait for this, Mike, 'cause I gotta say it,

01:17:00 ◼   ► it's being in the EU's premier iOS marketplace,

01:17:05 ◼   ► the App Store, and everything that comes from it

01:17:09 ◼   ► because so many users are always

01:17:12 ◼   ► just gonna use the App Store.

01:17:13 ◼   ► And so by being in there, that is worth it to you.

01:17:18 ◼   ► That's the argument.

01:17:19 ◼   ► That's the argument.

01:17:20 ◼   ► - Look, I think in 2024, the claim about its marketing,

01:17:25 ◼   ► I just don't think it holds up.

01:17:28 ◼   ► Like there may be 0.00001% of applications

01:17:33 ◼   ► benefit from this, but they're all paying 10%.

01:17:37 ◼   ► - Being in the search results is your number one reason

01:17:40 ◼   ► you're in the App Store, and that is marketing of the sort.

01:17:42 ◼   ► - Well, but these days, Jason, you have to pay

01:17:44 ◼   ► to make sure you're gonna be at the top of the search.

01:17:46 ◼   ► - Sure, that's true.

01:17:47 ◼   ► You get to pay Apple in order to pay Apple.

01:17:48 ◼   ► - This is what I'm saying.

01:17:49 ◼   ► Like the terms of the deal has changed so significantly

01:17:52 ◼   ► since the App Store was introduced.

01:17:53 ◼   ► I'm not sure why they take a commission anymore.

01:17:56 ◼   ► - We will see, well, because they want your money

01:17:58 ◼   ► and they think that-

01:17:59 ◼   ► - But like I don't know what grounds

01:18:01 ◼   ► in which they can argue it.

01:18:02 ◼   ► - Well, I just said it.

01:18:03 ◼   ► So let me- - But I don't agree with it.

01:18:06 ◼   ► - Okay, well, let me repeat it then.

01:18:08 ◼   ► I think for a lot of apps, it's just better

01:18:10 ◼   ► to be in the App Store and you're gonna have more app sales.

01:18:12 ◼   ► And I'll say this, we're gonna find out.

01:18:16 ◼   ► Because if some apps decide, if they decide

01:18:19 ◼   ► that it's just way better to either be in the App Store

01:18:23 ◼   ► and another marketplace or just not be

01:18:26 ◼   ► in the App Store anymore and be in an alternate EU

01:18:28 ◼   ► marketplace where they're gonna make more money

01:18:31 ◼   ► and have more customers and whatever else,

01:18:34 ◼   ► then I guess we'll have our answer.

01:18:36 ◼   ► My guess is that lots of people don't wanna install

01:18:40 ◼   ► app marketplaces, they're just gonna stay with the App Store

01:18:43 ◼   ► and those developers are not gonna want

01:18:46 ◼   ► to abandon being in the default.

01:18:49 ◼   ► I think that the default is powerful enough.

01:18:51 ◼   ► Now, if 10 or 17% is still too much

01:18:56 ◼   ► and that they're better off being on the outside,

01:18:59 ◼   ► then Apple will have been proven wrong.

01:19:01 ◼   ► But to me, the power of the default is so great

01:19:04 ◼   ► and they're not yet putting up a randomized list

01:19:08 ◼   ► of marketplaces for you to use, right?

01:19:10 ◼   ► It's the App Store by default and then you have

01:19:12 ◼   ► to find another marketplace and install it.

01:19:14 ◼   ► I think being in the default is probably worth 10%.

01:19:18 ◼   ► - See, you actually started leaning into what I was gonna

01:19:20 ◼   ► talk about next to kind of wrap this back around again.

01:19:22 ◼   ► So I've been seeing lots of people and hearing lots

01:19:25 ◼   ► of people really concerned that Chrome is gonna become

01:19:27 ◼   ► the most popular web browser on the iPhone

01:19:30 ◼   ► because people will be given the choice

01:19:31 ◼   ► rather than Safari, right?

01:19:33 ◼   ► They're like given the choice, they'll choose Chrome

01:19:36 ◼   ► rather than Safari 'cause it's what they're used to.

01:19:38 ◼   ► It's what they choose on their Mac,

01:19:40 ◼   ► it's what they choose on their PC, they choose Chrome.

01:19:42 ◼   ► And I've seen people being like,

01:19:43 ◼   ► "Ah, well, this is what people choose, they choose Chrome."

01:19:46 ◼   ► So Apple has to work to make them want Safari, right?

01:19:50 ◼   ► Instead.

01:19:51 ◼   ► So my point is that yeah, Apple has the premier default

01:19:56 ◼   ► App Store place to get apps because they have been

01:20:01 ◼   ► the only one and even now when there is the opportunity

01:20:05 ◼   ► for there to be marketplaces, they have set the terms

01:20:10 ◼   ► for the other marketplaces to be in their favor.

01:20:13 ◼   ► So it's like, I agree with you, right?

01:20:14 ◼   ► You are making, that is the point, right?

01:20:18 ◼   ► That you will stay and pay your 10 or 17%

01:20:22 ◼   ► because you wanna be in the main place,

01:20:26 ◼   ► but Apple set that table for themselves.

01:20:30 ◼   ► - Sure.

01:20:31 ◼   ► - And so, and just at this point, I don't understand,

01:20:35 ◼   ► like I just, why, well, I know why, no, look,

01:20:38 ◼   ► I understand why, obviously I understand why.

01:20:41 ◼   ► But in a, this is a business relationship

01:20:44 ◼   ► between Apple and every developer,

01:20:46 ◼   ► what do the developers actually get for giving Apple a cut

01:20:51 ◼   ► of every transaction and then an additional one on top

01:20:57 ◼   ► when they hit a million, you know?

01:20:58 ◼   ► It's like, what is the deal?

01:21:00 ◼   ► And then you look at things like the, you know,

01:21:02 ◼   ► we haven't really spoken about this,

01:21:04 ◼   ► but obviously I would assume most of the listeners

01:21:05 ◼   ► are aware of it.

01:21:06 ◼   ► So a lot of like hand wringing about how many apps

01:21:09 ◼   ► are gonna be on the Vision Pro and how many developers

01:21:12 ◼   ► are not bothering and, you know, I think John Gruber

01:21:17 ◼   ► we spoke about earlier has been referencing the idea

01:21:19 ◼   ► of like Apple is reaping what it's sown at this point

01:21:22 ◼   ► because they have not engendered themselves to developers.

01:21:27 ◼   ► They have not made it feel like an ongoing relationship.

01:21:32 ◼   ► It has been an ongoing set of adapting rules

01:21:37 ◼   ► and guidelines that people need to just accept

01:21:40 ◼   ► they have no choice.

01:21:41 ◼   ► And even when given a choice, most developers feel now

01:21:45 ◼   ► like they actually can't even make the choice

01:21:49 ◼   ► because they're worried that it won't work out

01:21:51 ◼   ► for their businesses.

01:21:52 ◼   ► - Yep, yep.

01:21:54 ◼   ► What I would say about the competition in the marketplaces

01:21:57 ◼   ► is if there is true competition,

01:21:58 ◼   ► Apple gets the home field advantage, right?

01:22:01 ◼   ► Which I think they should because they're the platform owner

01:22:04 ◼   ► but I think it shouldn't be that they shut out

01:22:06 ◼   ► everybody else.

01:22:07 ◼   ► But in a scenario where people can choose different

01:22:09 ◼   ► app marketplaces, which I agree that, I mean, Apple

01:22:14 ◼   ► because of the poison pill, lots of things,

01:22:16 ◼   ► Apple has stacked the deck here.

01:22:17 ◼   ► I don't think that those marketplaces are gonna be successful

01:22:20 ◼   ► except for very specific niches of product.

01:22:22 ◼   ► But what I would say is if you were in an environment

01:22:24 ◼   ► where there was true competition, then we would find out

01:22:27 ◼   ► whether being in Apple's app store was worth it or not.

01:22:30 ◼   ► But I think it's because the competition is limited

01:22:32 ◼   ► and it's the default, it's probably worth it

01:22:34 ◼   ► for most developers to be there regardless.

01:22:37 ◼   ► But yes, in a true competition environment

01:22:39 ◼   ► which is not strangely what the DMA is asking for

01:22:42 ◼   ► or at least not how Apple has interpreted the DMA's rules,

01:22:46 ◼   ► we're in a situation where we don't get to see Apple

01:22:51 ◼   ► have to decide does it lower its commission

01:22:53 ◼   ► in order to make itself more palatable for app developers.

01:22:58 ◼   ► And look at the Mac App Store, it's not required

01:23:00 ◼   ► and it's pretty quiet.

01:23:02 ◼   ► There's stuff, there's a lot of stuff in the Mac App Store.

01:23:04 ◼   ► There's also a lot of stuff that's not in the Mac App Store.

01:23:06 ◼   ► And even with the Mac App Store being more expansive

01:23:09 ◼   ► than it used to be and maybe being a place

01:23:11 ◼   ► that some developers are like, it's worth it being in there

01:23:13 ◼   ► because some people are gonna use the Mac App Store.

01:23:16 ◼   ► It doesn't have the power that something like iOS does

01:23:19 ◼   ► because of all of the limitations

01:23:21 ◼   ► and the fact that there's no competition.

01:23:22 ◼   ► Now, Safari, I wanna mention here too,

01:23:25 ◼   ► because like if everybody starts using Chrome,

01:23:28 ◼   ► is that a bad thing?

01:23:30 ◼   ► Because they chose it.

01:23:31 ◼   ► And that means that Apple has to compete

01:23:33 ◼   ► on browser with Chrome.

01:23:35 ◼   ► And if Chrome is better, shouldn't it win?

01:23:39 ◼   ► If Chrome is better on iOS than Safari,

01:23:41 ◼   ► and I hear people say, oh no, but Chrome is bad

01:23:43 ◼   ► 'cause it kills the battery.

01:23:44 ◼   ► Hey, if it kills your battery on iOS

01:23:48 ◼   ► like it does on a Mac laptop,

01:23:50 ◼   ► don't you think people will notice and say,

01:23:52 ◼   ► oh, I'm not gonna use Chrome

01:23:53 ◼   ► 'cause it kills my battery? - That will get out there

01:23:54 ◼   ► pretty quick. - That's part

01:23:55 ◼   ► of the competition.

01:23:56 ◼   ► That's part of the competition of all of this is that.

01:24:00 ◼   ► So again, I don't have,

01:24:03 ◼   ► like I think Apple should welcome competition

01:24:07 ◼   ► because I think it makes Apple, it keeps Apple honest.

01:24:11 ◼   ► And Apple will always say, well, no, we're always just,

01:24:14 ◼   ► our dedication to our users is the most important thing.

01:24:17 ◼   ► That's what drives us.