End to End Ownership

Aug 8th, 2011 | Filed under Uncategorized

[Apple Subscription Stuff]

And this is why I’m never even tempted to think about developing anything for any Apple platform, and why I would never purchase an i-Anything, be it pod, pad or phone.

You can tell that somewhere within Apple, somebody has decided that they “need more money”. How then should money be obtain – through innovation? Nah, been there, done that, innovation bought Apple an 80% market share (based on my stats, not necessarily industry ones). Having used innovation to buy market share, can that be exploited in search of money? You bet!

And what’s the easiest way to make money? Find somebody else who is making money, and make them give you some of theirs, for nothing. Which is effectively what Apple are doing, by demanding a 30% share of any subscription charges collected through apps. I don’t know what you call that, but I call it a racket.

Now I don’t want to downplay the role of Apple in bringing the smartphone market to maturity, it genuinely is a very great thing that they’ve done for technology. Most brands are simply incapable of packaging their fairly geeky crap into something that’s aesthetically appealing enough to reach the mass market. But they’re milking it too far now, and it’s getting to be a joke.

So Apple will turn to an app provider and say “We like the $1 you collect from each customer every month, we want 30% of that”. Naturally the app provider would like to say no, but they can’t. The stranglehold Apple have over the end to end system is impressive – they own the market, and by extension the devices within the market. They lock those devices so they’ll only work with their own application delivery system. Then they put rules on the delivery system such that you cannot independently monetise your application or any aspect within.

It’s the equivalent of Microsoft not only owning your operating system, but also the company that builds the machine, all the shops that stock software, and has the whole thing locked down so that you can only install what they approve of, and they only approve of things that make them money.

Which, actually, is sort of how Apple used to operate, back in the ’80s and ’90s. That time, they lost out to more open, interchangeable standards – not entirely dissimilar to the way in which AOL managed to piss away their Internet market share by positioning their service as something of a walled garden.. Does Apple’s current market share protect them from that? Remains to be seen…

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