Interesting. I still think that will make it difficult for the content providers to make money. That's a big chunk.

But that program doesn't seem to provide much of an analogy to what Apple is doing. Google isn't locking down their platform to companies that don't use that service...

The guy at the local newsstand makes exactly jack-shit when you subscribe to a magazine he sells. That's how much Apple should be making from subscriptions. Exactly 0. Unless they take on the full burden of hosting all the data, which would, for some apps, cripple them. Or a tiny percentage if they handle the billing/transaction only.

Apple's 30% cut on app sales and in-app purchases is also far far too rich, but that's a whole other argument. We're talking about subscriptions here, for a majority of apps that are not iOS-exclusive.

Antitrust: Apple is changing the terms for apps that are already in the store now, some of which have been in the app store since the beginning, most of which spent their own dime becoming popular and building their customer base. Now Apple wants to come in and eat 30% of their revenues.

Let's get a few things straight though. Amazon is nothing to Apple. Amazon might as well be an indy developer with a staff of 2 as far as Apple in concerned. The Kindle app does nothing to boost iDevice sales and I'm sure Apple would love to see it gone from the store if they're not going to get a cut of Amazon's take. Currently this subscription deal doesn't apply to book purchases.

Now back to subs... How about this. Vogue (or whatever other magazine you'd like to think of) creates an app to add value to their magazine. It's either exclusively for their subscribers or contains some content that's only for their subscribers. They include a subscribe link in the app to send people to their web page where they can subscribe - to the print edition and they of course get access to this special app and content while they remain subscribers.

By Apple's rules, they're going to want to take a cut of those subscriptions. They're going to make it mandatory for Vogue to offer the subscription from within the App, they're going to prevent them from linking out to their website.

Even if Vogue agreed simply to remove the link to the website, Apple would still require in-app subscription at a 30% cut, simply because the app is tied to their subscription system.

Then we of course have the problem of requiring actual user shipping information to be able to fulfill a mailable subscription like a magazine.

This whole thing is a powder keg. I don't have any vested interest in subscriptions at this time as a developer or user. Even if I weren't a developer, I'd still think this move was a total dick thing for Apple to do. It's 30% off the top for doing jack shit.

Apple should collect a maximum of about 2% for in-app billing of content they don't host. They'd still be making a BUNDLE on that, since they must have credit card contracts that are lower than 1%. PayPal makes a ton of cash charging businesses 2.5% (US/Canada). Apple isn't paying more to VISA/MC than PayPal is.

Clearly a very interesting subject.

I guess we will have to see what all the publishers decide to do.

I still think business is business, from Apple's point of view I can see that they have created the platform, have set up the app store and have the right to set it's terms. I think the only thing they are doing wrong is fixing the pricing to match subscriptions made outside the app store, surely that can't be fair.

From the publishers point of view they get access to a huge audience in return they have to give up a bit of the profit they would have lost in traditional distribution methods anyway.

Agreed that a newsstand makes no money from a subscription made directly with a magazine, but he does if the user has to come in his store to pick it up on a regular basis.

Time will tell.

Cheers

Cris

Still not seeing this as an antitrust situation. (Just to be clear, I'm going off my understanding of the US specific Sherman Antitrust act). Retail stores change their policies all the time, and don't run afoul of the law, including removing products from sale in said retail establishments. Removal of the products may break contract law depending on the contracts in place, but it's not an antitrust issue. And Apple doesn't have a monopoly position in the tablet space, so this move is not restraining competition or interstate commerce.

The easy way for me to remember antitrust rules is to look back at the Microsoft case. Microsoft obtained monopoly power by becoming the dominant OS for desktop PCs (through other illegal actions, though the monopoly its self wasn't illegal). Microsoft became the only reasonable source of an OS for other businesses independent of Microsoft, such as Dell, Gateway and HP. Microsoft then used their monopoly power to crush Netscape, by both bundling a browser into the OS (still shady, but not the tipping point), and then also forcing said independent companies to not bundle Netscape (the action that violated the competition part of the US antitrust act).

I think you're grossly underestimating the number of people who use their iPad to read their Kindle books.

Then again, apparently a high percentage of iPad owners also own a Kindle, so I could be wrong.

Still, I think there's a public perception issue if big companies start exiting the platform (if it came to that, not that it will).

Don't get me wrong, I hope it happens. I want to see a stink about this, and so far, it's been really quiet apart from that note from Rhapsody. I'm frankly surprised as hell this isn't getting more coverage.

There's plenty of opportunity for Apple to keep making money hand over fist and rule the kingdom without trying to rape other companies. Leave the pillaging for when they sack the competition's market share.

I'm just being real with regards to the Amazon situation. Apple doesn't make any money from hosting their Kindle app. And I can't honestly believe that anyone bought an iPad or any iDevice (primarily) because the Kindle app was available.

When will Apple start taking 30% from online bill payments you process through your banks iOS app? Or mortgage payments? Need to transfer money into that 401K? Oh, Apple needs a slice of that too.

I think I feel more insulted and upset about this as a consumer rather than as a developer. I really like Apple products, and I've admired the company for what they've been able to accomplish. But I don't actively like the company. I don't want to see them fail, because I want the great software and products to keep coming, but I do want them to face reality check and get their hands out of everyone's pockets.

Anyway, anyone else think that we're likely getting really close to iTunes music subscriptions? That huge datacenter Apple has built needs to move data for something.

Going further down the slope, how long before Apple want to take 30% of sales of hardware that interfaces with your iOS app? Not feasible at the moment given the constraints of their iTunes store, but you never know what the future may hold.

And how will all of this eventually trickle to the Mac app store? Scary scary scary.

I thought there is a fee for getting the works with iPod/iPhone/iPad logo anyway? Also I thought they added some kind of authentication chip into some of their cables a few years back?

http://techcrunch.com/2011/02/16/why-are-you-people-defending-apple/

And a decent discussion on reddit about this topic: http://www.reddit.com/r/technology/comments/fn4d5/why_are_you_people_defending_apple/
They bring up a good point of non-Apple users possibly having to subsidize Apple users.

Sure, there's a licensing fee for the connector, but plenty of products don't use the connector and don't necessarily use Apple's certification logos. Such as anything Bluetooth, WiFi, etc. Plus passive things like stands, cases, screen protectors, cleaning cloths, whatever.

And Apple don't currently charge a licensing fee based on the price of the product, and certainly not 30% of the price of the product.

That amount is simply untenable for anything but high volume sales without any other overhead.

Looks like the FTC, DOJ, and the EU are monitoring the situation and deciding if it's worth a full investigation. The antitrust possibility is mentioned, along with this:


I also found this interesting, looks like Amazon's conditions for subscriptions on the Kindle are much worse.

(from here)

I didn't know that it was that bad for the Kindle platform. I know that there are significant restrictions on how you charge for your app. If its a app that doesn't use any or < 100KB a month then you can put it up for free. If your paid app is < 100KB a month then you can charge a one time fee to purchase. If your app wants > 100KB a month then you must charge a subscription fee.

[edit]Blargh. I can't read it seems.[/edit]

I've seen that link somewhere before...

Gah. I've done it again. Sorry!

First app rejection for violating these new terms...

http://www.tuaw.com/2011/02/21/apple-rejects-readability-due-to-subscription-policy-where-wi/

This is a program that apparently gives you access to something the company has already been doing for some time.

This isn't a subscription issue, but it perhaps points the way things are going with Apple. Is this opening up an opportunity for Android? Below is the contents of an email that SWMBO received today.

It is with a deep feeling of loss and regret that I must announce that I am ceasing all development of IPA Palette. The software will no longer be available for download, and will not be supported in any way.

Apple's new Mac App Store is an unmitigated disaster for open source developers. You should expect that over the next few releases of Mac OS, users will have fewer and fewer options for installing software that has not been "approved" by Apple.

My Mac Pro is completely secure. I have no internet connection. I have no wireless card. It is invulnerable. According to Apple's new policy, I am now a non-entity. It is literally impossible for me to download the new XCode 4.0 legally. I can't buy it at work and then transfer it to my Mac at home because of Apple's DRM. I called the Ann Arbor Apple store and asked if it will be available for purchase on DVD; the answer was an emphatic no.

I can continue to use the free version of XCode (3.2.6) but how soon will it be before Apple decides to change its binary format or deliberately introduce incompatibilities in future OS versions that make it impossible to develop for the Mac without buying into its monopolistic App Store scheme? How soon before I have to "jailbreak" my Mac Pro to install my own software on it?

Don't think it won't happen.

Open source developers are ditching Apple like rats leaving a sinking ship, and so am I.

Effective immediately, all development of my open-source Mac software will cease permanently.

I am grateful for all of the kind words and support I have received from my users, and I am deeply sorry that it has come to this.

Perhaps this is another example of "Apple's gone way too far..."

tanstaafl.

That "developer" seems very heavy on the FUD. XCode has always been, and continues to be, available for free. Including the brand new 4.0 version. But that said, the 3.x versions have not been deprecated and continue to work perfectly fine.

It is now newly available on the Mac App Store as an alternative download for those that wish to download it that way. It costs $5 to do this. I don't know why it has a price at all. I suppose it's a way for non-developers to download it, but that's besides the point. It's also still available directly from Apple on the web for anyone registered as a developer. Oh, did I remember to mention it's free?

XCode also comes with every new Mac. I suppose XCode 4 isn't on any of the current install media yet though.

The major difference in the state of the distribution of XCode now versus the past boils down to the following I believe:

You used to be able to register as a developer with Apple for free - this had several limitations, but the paid memberships could run $500 to a few thousand dollars per year.

Now it's going to cost you $99 per year to be a registered developer. Not great for the people who used to get by on free, but fantastic for those that used to have to pay without the benefit of support incidents (the premium stuff is still available in multiple Apple Developer Connection tiers as far as I know)

If you don't want to register as a developer it's going to cost you $5 ONE TIME for XCode. That will include all updates, as the Mac App Store doesn't allow charging for them.

Seriously, what's the big deal here? The time to complain was back last year when Apple announced that you couldn't register as a basic developer for free anymore. The $5 XCode thing is rather a convenience for a lot of people.

I don't think you're going to see many people stopping development and closing up shop because they don't want to move to XCode 4 because of the changes over the past year.

Uh, it seems XCode 4.0 is not free. You either have to buy it for $5 on the App Store or pay $99 for a developer program membership. Lame.

Technically it was never "free" since you also had to buy a Mac to use it. That's how I've obtained the base version of every version of XCode I've had installed.

Now that I think about it, perhaps this is this IPA guy's conundrum. He doesn't want to pay $99 to register as a developer and he can't install the $5 version without connecting his machine to the net (at least once).

Oh well, sucks to be him. Worse, it sucks to be dependent on his software. Good thing it was open source, so someone else can compile it in the future and take over if they wish. Because Open Source is FREE as in beer.

The absolute bottom line for me is that this guy is acting like a total douche bag. In abandoning his user base he's showing that he doesn't really give a rat's ass about them at all and instead would rather put himself on a self-righteous pedestal.

This "issue" is a small blip when compared to the iOS/Mac App store rules I've mentioned previously. I'm not saying Apple is "right" here either, just that what this guy is doing is definitely not the way to go.

Yeah, I don't see the issue this developer has as a legitimate one. He's intentionally keeping his Mac off the internet for some reason, and yet wants to develop apps for distribution over the internet. Seems strange to me.

XCode 4.0 will be bundled with OS X Lion, just as 3.whatever came with Snow Leopard, and every version before had the tools on the install media. For now, XCode 4 is a paid upgrade ($5 via App Store, or via the $99 developer program) due to the accounting practices Apple has. This is in line with previous items they charged minimal amounts for, due to not recognizing revenue for the particular item as a "subscription".

Apple has shown no indications (yet) of locking down the Mac OS to allow only App Store apps. And I have a feeling they never will. The developer in question could keep maintaining his software with XCode 3.2 until the next OS X comes out, with no issues. XCode 3.2 will continue to make binaries that run on OS X 10.6, 10.5 and 10.4. And since he has an "impenetrable" machine, there is no way an Apple update could sneak something in.

This is the one thing that bothers me with some open source developers. They go so far with their religion that it ends up harming the very cause they claim to support. I see them as no different then the extreme evangelicals out there.

Like Apple fanboys, for example.

You called? Oh it was just a bit of hyperbole. Nevermind.

BTW, you're going to hell. <winks>

That's nonsense. They don't charge for Quicktime, iTunes, or Safari. Someone made a decision that they needed to start charging for XCode, probably so they could make some extra revenue off of iOS developers.

What makes it that much worse is that XCode is built on top of a lot of open source software, like gcc and dtrace.

The bigger problem, though, is that if there is a non-free barrier to the development environment, the software becomes that much less free. There's not much point in giving the software away for free, if everyone you give it to has to spend money in order to build it.

It'd be nice as a free download.

But Apple do sell a number of things they also give away for "free." All the iLife software for instance comes pre-installed and on the OS installation disks of (pretty much) every Mac sold.

QuickTime Pro used to cost $30 and it had a lot less value than XCode, especially when compared to what was already included with the OS.

From an accounting perspective, you do have to have income as a goal to be able to book expenses against a project. But I'm sure there are plenty of ways to work that situation.

Anyone who says Apple is the epitome of consistency is very much out to lunch. They're like an enigma machine. You can see what comes out, but you don't know what went in, nor why.

I have to agree with this, if it is down to accounting practices, then why the $4.99, why not the minimum $0.99 charge? Or maybe just a statement "guys, we can't continue to give Xcode away for free, but we're making it as cheap as possible".

I'm usually pretty apathetic about things that Apple do (or don't do), but I find the decision to start charging for Xcode a bit bizarre. I'm sure it'll come free on the Lion discs, although will it update through the software update rather than the app store? Does anybody know how upgrades work with Facetime as that is pre-installed on the new macs.

Mostly the app store has been excellent for those who would be interested in purchasing Apples applications, the separation of the iWork apps at a low price point was good for the end user.



Yeah, the only rational behind the charging for Xcode 4 as far as I can see is "because we can".

Is "because we can" the new "think different"?

I should have bolded some and expanded a bit, but I was in a rush out the door, my appologies. Most of my recent bitterness over some open source developers comes from the ffmpeg drama. The recent "coupe" is completely over the top, unprofessional, and does more harm then good because some of the developers feel the need to just flame people badly in public instead of rationally trying to solve an issue. These are some extremely talented programmers that have done some amazing things, but they also let even little things like top posting vs bottom posting get in the way of having new contributors approach the project and help out. It's just frustrating to see.

My comparison to extreme evangelicals comes from a similar angle where people take the base cause to such an extreme that they do more harm then good. In no way was meant as an insult to you John, or any of the other religious participants in these boards. It's more aimed at the people who I'm used to seeing in the news due to my time in Colorado Springs, the ones so busy trying to tell other people how to live that they end up somehow forgetting what they preach. John, I have great respect for you because you seem to not only believe in what you do strongly, but you also have made a major life choice to move to where you now reside to help make a difference in that area.

On the good side of open source, I'm extremely pleased with the Mozilla folks. I've been working very closely with several of their engineers on the Socorro project, and they all have a great mindset, one that to me speak highly of the benefits of the open source mentality.

And Mark, none of the frustration is directed towards you either. I definitely haven't seen any indication from your posts here, or your postings elsewhere that would ever have me lump you in with the types of people I see causing the drama in the ffmpeg community.

From what information I've gathered, it's not nonsense. Well, it's accounting nonsense, but heres how it goes:

XCode is lumped in with the OS financially, due to it being bundled on the OS discs and with new machines. On the books, part of that $29 of the OS fee, or the part factored into every machine goes into the XCode bucket. Both computer sales, and OS sales revenue are recognized instantly on Apple's books, instead of being deferred over time. In accounting terms (or the limited knowledge of the terms that I do know), it's always the same in the non GAAP and GAAP numbers, due to the instant revenue recognition.

The XCode 4 release is a major upgrade of the product, one that clearly had a lot of engineering time spent on it. Engineering time on the books is a negative, bundled alongside the positive revenue from the product to (hopefully) show a net gain. All the engineering time for Snow Leopard, and Xcode 3.x was already on the books. Thus, XCode 4 can't be lumped in the same pile, otherwise a shareholder could potentially challenge it with a lawsuit, saying that Apple is spending more on engineering time after revenue recognition occurred, thus impacting financial statements and ultimately the stock price. "Cooked books" would be another term for it.

For your examples of Quicktime and Safari, notice how Apple only upgrades to a major version of either when releases of OS X also occur. Back when Quicktime still had the Pro model, they could use that revenue as justification for updates mid OS cycle, but thats now gone. So all the Quicktime X improvements are sitting waiting in Lion, instead of coming to Snow Leopard. Same for Safari.

iTunes, I'm not certain on this, but I assume it's probably bundled in with the overall iTunes store operation on the books, so they can update that whenever, and label it as keeping the store front up to date or some other accounting excuse. It's a "free" app only in that it's a free way into the marketplace they run that generates revenue. It's also possible a portion of every iPod revenue goes into the iTunes bucket.


Pricing it too cheaply would also potentially raise the risk of a shareholder lawsuit. As for making a statement about it, I haven't heard one specifically for XCode, but they have issued statements when it came to the 802.11n fee, or the iOS upgrade fee for iPod touch units.

All of this accounting nonsense is a direct result of the Sarbanes–Oxley Act of 2002 thanks to the mess Enron caused. And it's not specific to Apple either. I had some high level discussions with top executives at a previous company over the accounting nightmare virtual items and currency bring to the table in a post SOX era. It's been a pain for some public companies accounting wise when they want to release something for free too.

To me, $4.99 seems as arbitrary as $0.99, and if you want to avoid being accused of under valuing it then pricing it at say $99 (the price of the developer programmes) might be a better bet as it would make the dev programmes a no brainer and nobody could accuse it of being undervalued.

I'm still sitting firmly in the "not convinced" camp!

It's irrelevant to me anyway as I have paid for the iOS developer programme.

Personally, I still think it's more about booking expenses to break even, which in turn helps boost the bottom line in tax savings. Unclaimed expenses would create an artificial gain upon which taxes would be due.

But I have no real clue how they decide how much to charge.