Apple Wants You To Know It Chose Not To Take a Cut of $400 Billion in Physical Goods (theverge.com) 101
Apple is trying to convince a judge that it's not milking the App Store for all it's worth, and today the company dropped some big numbers to help make its case. From a report: Apple claims that its App Store drove $400 billion worth of physical purchases in a single year in 2019, and that -- unlike digital purchases and subscriptions -- Apple doesn't take a cent of that money. That's according to App Store boss and longtime Apple marketing exec Phil Schiller, who also testified that the company spends a staggering $50 million a year to throw its Worldwide Developer Conference (WWDC) event. The company's also building a new developer center at its Apple Loop headquarters in Cupertino, he says, though I didn't catch how much the company's investing in that. None of these are included in the App Store's budget, Schiller testified. Why isn't Apple trying to take a cut of physical purchases? During his testimony, Schiller explained that Apple couldn't guarantee they would actually arrive.
Re:Apple milks its app store for all it's worth (Score:5, Informative)
... its legal duty as a corporation to maximize profits for the shareholder.
That is utterly false [nytimes.com]. It has been debunked so many times, you should never quote it again.
Re: Apple milks its app store for all it's worth (Score:5, Interesting)
Oh, fuck off. Here is the quote from the article, which I will link to again [nytimes.com]:
To quote the U.S. Supreme Court opinion in the recent Hobby Lobby case: “Modern corporate law does not require for-profit corporations to pursue profit at the expense of everything else, and many do not.”
What you just said is completely false and utter ignorance.
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Generally, majority shareholders have an obligation of good faith and the duty to act in the best interests of both the corporation and all of its shareholders. The Court of Appeals has previously held that “[i]t is the fact of control of the common property held and exercised, and not the particular means by which or manner in which the control is exercised, that creates the fiduciary obligation on the part of the majority stockholders in a corporation for the minority holders.” Norman v. Nash Johnson & Sons’ Farms, Inc., 140 N.C. App. 390, 407 (2000). The individual duty to minority shareholders allows a minority shareholder to bring a direct action against the majority shareholder(s) for breach of fiduciary duties.
This is exactly what the parent said above. The notion that you and the NYT are making straw man arguments is not true, but it's a semantic argument - you and the NYT article are disputing the word "maximizing." And you're right, the word "maximizing" is inaccurate. This doesn't matter.
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I don't think your post is even coherent.
Re: Apple milks its app store for all it's worth (Score:1)
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The straw man is profit here. The reality is benefit.
No, this is wrong. It is an idea you came up with, but "benefit" isn't a legal duty, either.
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To begin with, you are quoting an appellate court ruling. Above, I quoted a supreme court ruling. Which one do you think takes precedence?
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Well there's a prime example of motivated reasoning you have there.
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This is exactly what the parent said above.
No, it's not.
Furthermore, you're making the same layman mistake they are.
Fiduciary responsibility requires that you operate in the bona fide best interest of the shareholders.
That does. fucking. not. mean the maximization of profit.
You can argue pursuing maximization of profit is a bina fide pursuit of the best interest of shareholders, but you can (and corporations do) argue that many things are in the best interest of the shareholders.
You are projecting your interests upon the shareholders as a who
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Now you've come along and said the same thing, except you've added a bunch of insults for some re
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I had thought you were referring to the person who said this:
If it didn't, it would contravene its legal duty as a corporation to maximize profits for the shareholder.
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I don't understand your point here at all. The parent said that there is an obligation to maximize corporate benefit, not profit. I said that this is correct, and added a quote from a law firm supporting this. I also identified the word "maximize" as being the issue. The other guy says now that I should have focused on "profit" instead, which... I guess that's true, although I don't think it changes anything. Now you've come along and said the same thing, except you've added a bunch of insults for some reason.
One easy point to make is that longterm sustainability of the business model and profits is in the interests of the shareholders. This includes things like public image, and avoiding being a target for legislation. Trying to become a gatekeeper and rent seeker for all activity on the Internet might seem like a good thing the first quarter, but might come crashing down very hard later.
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Re: Apple milks its app store for all it's worth (Score:5, Interesting)
Both you and the New York Times are making straw-man arguments
Here is my /. pet peeve: when someone accuses another of using a "straw-man" when they clearly do not. You look pretty silly when you use terms you clearly don't understand.
The OP claimed that corporations have a legal duty to maximize profits for the shareholder. phantomfive then cited an article that makes the case that this specific claim is untrue. Now go lookup "straw-man argument" and tell me how that fits.
You disagree with phantomfive and the NY Times article. No big deal. But don't accuse them of fallacies that have not been committed and then provide an argument that does not appear to be grounded in the law.
Re: Apple milks its app store for all it's worth (Score:1)
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The straw man in this case is profit and the reality is benefit, which is often hit now always the same thing. It benefits a company to pay employees well, and attain the best talent. That is counterproductive to short term profits, but the benefits long term are obvious. So yes, the OP is right, in that there is no duty to maximize profits. The law though spells out quite clearly they are duty bound to maximize benefit.
If that is the law, then cite it. Cite an actual existing law, in its entirety, that spells out quite clearly that corporations are duty bound to maximize benefits and for whom.
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"Profit" cannot be a straw-man because the OP specifically used the word "profit." It would only be a straw-man if he intentionally misrepresented the argument of the OP.
I see the sense you're using it: You're saying that profit is not the point and therefore arguments about profit are irrelevant. I'm not saying that's a bad argument. But phantomfive is not making a straw-man argument. Whose argument is he misconstruing? It's not Rosco's since Rosco made that argument.
When it comes to the NY Times article,
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This has been proven true so many fucking times by Greed that you should stop acting like the fool who assumes otherwise.
Debunkers are about as relevant as the US Supreme Court offering little more than a finger-wagging statement on the matter. There's not a damn thing morally or ethically valid about corrupt bankers either. But none of them go to jail for highly immoral and unethical behavior in the name of maximizing revenue. We're just too damn corrupt to call that behavior illegal.
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Show us where in the US Code it says that a corporation has a legal duty to maximize shareholder value.
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It was a joke...
Just pretend the above is enclosed in the non-existent <joke> tag.
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Re: Apple milks its app store for all it's worth (Score:1)
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You do not take a 'CUT' of something if you buy it and then sell it at what ever price you want. You take a cut of something, when you do not buy it, but sell someone else's stuff they are paying you to sell.
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There is no "legal" duty to maximize profit, you dongleberry. A corporation can set whatever charter it wants as long as those goals stay within the confines of the law.
Classic creative accounting (Score:1)
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If the judge/jury buys this, it means they've got the financial expertise of a first-year accounting major.
They almost certainly have that level of financial expertise or lower.
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Does apple take 30% from online gambling apps? (Score:2)
Does apple take 30% from online gambling apps?
I don't think that the states will let them have 30% service fee
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How would that work since Apple wouldn't know the payoff. e.g. if slot machines pay 95%, how could Apple take 30%?
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Might be doable if Apple pays 30% of the winnings as well.
I don't think that banks will give apple 30% zelle (Score:2)
I don't think that banks will give apple 30% of each zelle transfer. And if apple does then the banks will add fees or say does not work with ios.
Neither did firefox (Score:5, Insightful)
Mozilla foundation never took a cut of the trillion dollars in purchases from stores like Amazon and Walmart.com that have been made via its Firefox browser. Someone send them a Nobel Peace Prize for selfless generosity.
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If they had a cut in physical sales then they also get some liability and that's a whole mess of crap they don't want.
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One of those /dev/null scripts has pirated my $1 song a trillion times and I "chose not to take a cut."
I will be taking my receipt to the nearest tribunal and would like to exchange it for three murder-rape licenses, a two-pack of inside-trading waivers, or one of those get-out-of-monopoly cards that Microsoft didn't get in the 90's.
I will also accept ten trillion "don't discuss the morality when iT wAs LeGaL" dollars in tax deduction.
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Your forgot your ISP which also didn't get a cut of your Amazon or Walmart (or Apple for that matter) purchases. Want to send Comcast a Nobel Peace Prize?
Average credit card processing fees: 1.3% to 3.5% (Score:3)
30% is in way to much for things that apple is not hosting or running.
The $99/year dev fee should cover alot and if apple really wants to keep in house only in app subs and buys should be 5% max.
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Apple does a lot. They're hosting your app. They're handling payments, including foreign currency. They're handling taxes. They're handling the legal issues. They're handling the user licenses (you bought it, you can download it again on your account). They're handling the security of all of that.
And they're also do
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They're handling payments, including foreign currency. They're handling taxes. They're handling the legal issues.
Many companies seem to feel they could do that for a fraction of the price that Apple charges them. You argue that it's not worth it for them, but apparently it's worth it for Apple to process a 99c one off card payment.
In any case, if other companies feel they can do better then they should be allowed to do so. It works well enough on Android, and it's not clear what benefit Apple's way of doing things has (apart from making more money for Apple).
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They're handling payments, including foreign currency. They're handling taxes. They're handling the legal issues.
Many companies seem to feel they could do that for a fraction of the price that Apple charges them.
“Claim” being the operative word. Considering that, as Apple argued off the bat, a variety of other app stores on other devices were charging the same 30%, it may be that the burden of proof lies on the claimant to prove that to be the case.
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Well for example I imagine that Amazon could probably do the payment processing and customer service a lot cheaper, if their app was allowed to process sales on iOS.
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I agree with your post, just a couple of minor points:
They're handling payments, including foreign currency.
Their handling of foreign currency is actually a bigger issue for me than their 30% (now 15%) cut, as it is not spelled out anywhere and you have no say on the matter. Most of my users are in the US, I am based in the UK, I have USD accounts (in the UK & US), but I have no choice on the matter, Apple converts USD to GBP for me taking what seems to be around 5%, quite a lot higher than my banks' spread, annoyingly with no indication of how they come u
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foreign currency at an added cost on top of the 30% and hosting your app?? they are just hosting the download file. Not hosting your game servers.
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30% is in way to much for things that apple is not hosting or running.
Yes, it would be way too much for things they are not hosting or running. So, what you are saying is that for the app store, where they run an entire system for submissions/beta testing/analytics etc and actually host the apps, it would be fine, right?
Financial transactions I would expect to be the least of the cost. Although, payment processors charge that 1.3% to 3.5% you mentioned (which goes higher outside the US) ON TOP of a fixed amount, which actually makes a big chunk of small transactions (which i
Schiller (Score:2)
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I would expect a lot of shill from a guy named schill
"A staggering $50M?" (Score:1)
I'm assuming Slashdot are being sarcastic here
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It's quite a bit of money for a convention. The question is "What are they spending that money on?" Because the conference isn't good enough to justify the price.
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Especially since the admission isn't cheap at all.
Last time I went, Apple paid for the facility, bag lunches, subsidized the coffee bar, and paid for a few nice speakers to fly in for the evenings. Plus the usual convention decorations and such.
I think what they must be doing is adding up the salary of all the time of all the employees who give talks and organize and add that to the direct costs. It would be very Schiller to do that - he says things that are true from narrow perspectives.
Added into direct
Then why make all that hardware? (Score:2)
If your not making a cent of of it? Yeah it adds to your platform, but if you're not making a cent then that is spinning a lot of gears for no reason.
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Their point isn't that they aren't making money off of the hardware they make or even off anything they sell. Mindblowingly, it's that they don't make money off of physical goods that other people sell to iphone users. It's really revealing of the mindset they're trying to promote. Basically "yes, we get money every time someone sells an app to an iphone user but suppose they used their iphone to buy dinner - we don't get anything for that!"
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I don't believe that they aren't making money of thier hardware
Comcast would like to take 30% of any video servic (Score:2)
Comcast would like to take 30% of any video service that there internet subs uses even things like super chats and twitch subscriptions.
Apple needs to look out MS got into an lot of issue with trying to lock in IE and apple is doing the same.
How much of the $400B is Apple's? (Score:3)
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Go ahead Apple... (Score:1)
Apple could take more (Score:1)
Are you high? (Score:5, Informative)
Before iPhones, you didn't need app stores, because you could just download apps onto your phone from - gasp - websites.
There were plenty of free games, and the reason most of the games were simple Snake / Checkers / Match-Two affairs is because that's what the mobile hardware of the time could run. The free games, by the way, were actually free, they didn't litter your screen with bullshit ads or buzz your phone at two in the morning to say WE MISS YOU, DON'T FORGET TO COLLECT YOUR DAILY BONUS!
And you say "in app purchase didn't exist" like that's somehow supposed to be a bad thing.
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Oh man. Jar files. And we didn't worry all too much either because everything was locked down enough that your "apps" couldn't read your sms and call logs.
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.prc files for me, but yes it was a better experience all around than modern app stores.
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Do you work for apple!? I don't know anyone on the planet thinks apple needs more revenue except for apple fanboys or employees for all we know your Tim Cook.
I would argue apple needs less money, they money comes out of everyone's pockets and there is less to go around. That 30% gets passed on to app developers AND those who purchase the apps
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And apple is right, they could take a percentage of amazon and ebay sales made through the apps if they wanted, but they choose not to. Apple isn’t the bad guy here.
You sir, are a dumb fuck.
And I mean that in the least inflammatory fashion you can imagine. You're literally just a stupid fucking human.
Your argument is: Since Apple does not attempt to abuse their power in one way, they're a good guy, even if they abuse it in other ways.
Fucking brilliant.
Perhaps some day, you'll have the presence of mind to thank the person who just raped you for not killing you.
Re: Apple could take more (Score:1)
Do you remember how it was like to move around before the invention of cars? How shitty business was before being able to move fast among different cities?
Certainly Ford should get a chunk out of the businesses you would have lost without them. Say a 30% cut, it seems reasonable to me. Ford are not the bad guys here.
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Doesn’t anyone remember the absolute shit app stores we had before iPhones
This case isn't about whether Apple are allowed to operate a web store. Whatever happens you will still be able to choose to buy through Apple's store. You just may have the choice of others.
And apple is right, they could take a percentage of amazon and ebay sales made through the apps if they wanted, but they choose not to.
Well yes, they really do have massive power within a market defined by sales to ios users. This is why it makes so much sense for them to focus on defining the market to be more inclusive like 'all electronic games on any platform', even if it seems desperate at times. I'm not sure it's a great idea for them to emphasis
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Dry that one out (Score:4, Funny)
and you could fertilise fucking Saskatchewan with it!
How about just pay your fucking taxes? (Score:2)
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Or maybe it would be a lot better to just eliminate corporate income tax [theatlantic.com] and just tax the people getting wealthy from Apple's success.
Just be glad we don't take 30% of everything (Score:5, Insightful)
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> Re:Just be glad we don't take 30% of everything
Pray they don't alter the deal any further.
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> Re:Just be glad we don't take 30% of everything
Pray they don't alter the deal any further.
You know what? Fuck 'em if they do. The world existed before iPhones. Sure as hell can exist without them.
Tired of that bullshit attitude. Corporate Arrogance, needs to die soon. Otherwise, it will grow so big you can't kill it.
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If they did take 30% of everything they wouldn't be able to get people hooked on their platform so they can do some real damage to pocketbooks. The first one is free.
Loophole? (Score:2)
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$400bln of what physical goods? (Score:2)
I really wonder how they calculated the $400bln of physical goods. I guess something like a stock broker purchasing futures of 800,000 tons of coal using a stock market app downloaded from App Store on his iPhone is in a way "Apple Store facilitating purchase of physical goods".
Guess what would happen if Apple tried to take its 30% cut off purchases made that way.
DGFT and GST services (Score:1)
Only because it has not (Score:2)
Memo to Apple! Who Cares! How about spending 50M to improve XCode. That is something developers will notice.
staggering $50 million a year (Score:2)
Smartphones are a more serious vector than COVID (Score:1)
There's no longer any reason to use a smartphone. This headline basically tells us Apple is tracking everything you do in their browsers. There's too much risk and basically zero reward. Are cell phones even required today?
Actual people who need to be on call such as doctors use pagers. The rest of us are going to need at least a laptop anyway to even make use of an on call moment. Even if there was a 3rd option, you can be sure the goons at the TLAs will be sure to get their hooks into it, just to move
Evidently they forgot about MFi (Score:2)
Apple has often made money off of the 3rd party hardware that's sold. There's a known subscription for MFi [apple.com] of USD $99 [apple.com]* [sic] plus a royalty associated that is only available under NDA** (same link as $99). So this is at best, an oversight, in all likelihood, a lie.
* Program Enrollment -> Is there a program fee...
** Program Overview -> What is the royalty...
Apple doesn't need more money (Score:2)
It's bad for the economy, it's bad when all the money goes to the top, it leaves your region, your town and your neighborhood and it doesn't come back easily. To me this means more concentrated wealth. I don't have a problem with companies making money. I do have a problem when they use their power to squeeze every drop of revenue from their customers (customers include those who buy software and hardware).
But regardless, apple/google/facebook/amazon don't need more money or power, I think they need less of
The power of monopolies (Score:2)
The reason is very simple. They have a monopoly on selling software for iPhones, so they can dictate whatever terms they want. They don't have a monopoly on selling physical goods, so they can't dictate the terms. They want you to think they're being generous and it shows what a great company they are. Really it just shows how differently companies behave when they have to compete and when they don't have to.
Wait, what? (Score:2)
Seriously, they don't charge their commission structure on physical goods because they can't guarantee delivery?
How in the world are in-app purchases, or especially loot boxes that are mostly not worth anything close to the fees that are spent on them. not also included in this?