On Wednesday, Apple Inc Chief Executive Tim Cook will face questions from U.S. lawmakers about whether the iPhone maker’s App Store practices give it unfair power over independent software developers. When the App Store launched in 2008, Apple executives viewed it as an experiment in offering a compellingly low commission rate to attract developers, Phil Schiller, Apple’s senior VP of Worldwide Marketing who oversees the App Store, told Reuters.
“One of the things we came up with is, we’re going to treat all apps in the App Store the same – one set of rules for everybody, no special deals, no special terms, no special code, everything applies to all developers the same. That was not the case in PC software. Nobody thought like that. It was a complete flip around of how the whole system was going to work,” Schiller said.
In the mid-2000s, software sold through physical stores involved paying for shelf space and prominence, costs that could eat 50% of the retail price, said Ben Bajarin, head of consumer technologies at Creative Strategies. Small developers could not break in.
Bajarin said the App Store’s predecessor was Handango, a service that around 2005 let developers deliver apps over cellular connections to users’ Palm and other devices for a 40% commission.
With the App Store, “Apple took that to a whole other level. And at 30%, they were a better value,” Bajarin said.
But the App Store had rules: Apple reviewed each app and mandated the use of Apple’s own billing system. Schiller said Apple executives believed users would feel more confident buying apps if they felt their payment information was in trusted hands.
“We think our customers’ privacy is protected that way. Imagine if you had to enter credit cards and payments to every app you’ve ever used,” he said.
MacDailyNews Take: Apple and their App Store provides developers with a safe, secure, highly lucrative distribution method to the richest personal computer, smartphone, and tablet demographics ever assembled.
Apple built the Mac. Apple built the iPhone. Apple built the iPad. Apple built the App Store. Apple created the most verdant ecosystem ever created for developers by far. Only the losers and those developers who can’t read and follow simple rules are whining incessantly.
If anything, Apple takes too little of a cut for all that the App Store provides developers.
We look forward to Apple CEO Tim Cook’s schooling of confused U.S. lawmakers this Wednesday.