iPhone maker Apple, the target of EU antitrust investigations into key segments of its business, on Tuesday rejected accusations of market dominance, saying it competes with Google, Samsung, and other rivals.
Earlier this month, the European Commission opened investigations into Apple’s App Store and mobile payment system Apple Pay, concerned about its role as a gatekeeper to its lucrative platform.
“We compete with a wide variety of companies, Google, Samsung, Huawei, Vivo, LG, Lenovo, and many more,” Daniel Matray, head of Apple’s App Store and Apple Media Services, told a Forum Europe online event.
“In fact, Apple does not have a dominant position in any market, and we face strong competition in every category, in tablets, wearables, desktop and notebook computers, maps, music, payments, messaging, and more,” he said.
Matray defended Apple’s App Store, saying the same rules apply to all developers, large and small, with 85 percent of apps not required to pay a 30 percent fee to the company which is only valid for those which use its in-app payment service.
The EU is investigating whether this requirement and rules preventing developers from informing users of cheaper products elsewhere are anti-competitive.
It is also probing Apple’s terms and conditions on how its mobile payment service Apple Pay should be used in merchants’ apps and websites, and also the company’s refusal to allow rivals access to the payment system.
The EU investigations were prompted by a complaint by Swedish music streaming service Spotify and an e-book rival.
Matray said the App Store has boosted competition, rather than harmed rivals.
“In the nearly 12 years since the App Store debuted, the best measure of its success is the dynamism it has unleashed and the state of the app economy today,” he said.
© Thomson Reuters 2020
Facebook, Microsoft Voice Concerns Over Their Games Appearing on Apple’s App Store Amidst Antitrust Probes
By Reuters | Updated: 11 August 2020
Facebook and Microsoft’s grievances over how their gaming apps appear on Apple’s App Store may feed into an EU investigation into the iPhone maker’s business as EU antitrust regulators said such concerns are on their radar.
The European Commission in June opened four probes into Apple, three of which are into its App Store and its restrictive rules, including requirements that app developers use its own in-app purchasing system.
US social media giant Facebook and Microsoft are the latest companies to voice concerns about the rules, which have drawn criticism from app developers who say they create an uneven playing field to compete with the iPhone maker.
Asked about Facebook and Microsoft’s issues with Apple, Commission spokeswoman Arianna Podesta said in a statement: “The Commission is aware of these concerns regarding Apple’s App Store rules.”
She did not provide details.
Apple dismissed criticism of its App Store rules, saying that all apps are reviewed against the same set of guidelines whose aim is to protect customers and provide a fair and level playing field for developers.
Facebook last week said its gaming app was only available on Apple’s App Store as a streaming service and that users will not be able to play games.
Facebook Chief Operating Officer Sheryl Sandberg said the company had to remove gameplay functionality entirely to secure Apple’s approval of its Facebook Gaming app.
Microsoft, which has a game-streaming service called Project xCloud said: “Apple stands alone as the only general purpose platform to deny consumers from cloud gaming and game subscription services like Xbox Game Pass.”
“It consistently treats gaming apps differently, applying more lenient rules to non-gaming apps even when they include interactive content,” it added in an emailed statement.
© Thomson Reuters 2020
China Will Not Accept US ‘Theft’ of TikTok, Says State Media
By Reuters | Updated: 4 August 2020
China will not accept the “theft” of a Chinese technology company and is able to respond to Washington’s move to push ByteDance to sell short-video app TikTok’s US operations to Microsoft, the China Daily newspaper said on Tuesday.
The United States’ “bullying” of Chinese tech companies was a consequence of Washington’s zero-sum vision of “American first” and left China no choice but “submission or mortal combat in the tech realm”, the state-backed paper said in an editorial.
China had “plenty of ways to respond if the administration carries out its planned smash and grab”, it added.
Microsoft said on Monday it was in talks with ByteDance to buy parts of TikTok after US President Donald Trump reversed course on a plan to ban the app on national security grounds and gave the firms 45 days to strike a deal.
US Secretary of State Mike Pompeo said over the weekend that Trump would take action shortly against Chinese software companies that shared user data with the Chinese government.
The Global Times newspaper, which is also government-backed, said US treatment of ByteDance and Huawei Technologies, now on a US trade blacklist, was indicative of US efforts to separate its economy from China’s.
China had “limited ability” to provide protection to these Chinese companies by retaliating against US companies because the United States had technological superiority and influence with its allies, it added.
“China’s opening-up to the outside world and disintegrating the US decoupling strategy should be priorities,” it said in an editorial.
The Global Times is published by the People’s Daily, the official newspaper of China’s ruling Communist Party.
© Thomson Reuters 2020
Apple Expands News Offerings With Audio, Local Newspaper Stories
By Reuters | Updated: 16 July 2020
Apple on Wednesday expanded its news offerings with audio versions of stories narrated by voice actors for subscribers, a morning newscast hosted by two journalists and more access to local newspaper stories.
Apple says it has 125 million monthly active users of its Apple News product, but it does not disclose revenues or the number of subscribers to the paid version, Apple News+, which costs $9.99 a month (roughly Rs. 750) for US users. The iPhone maker maintains a staff of editors that curate the stories in both the paid and free versions of its app.
Apple said Wednesday that paying subscribers will gain access to audio versions of longer stories from magazines such as such as Esquire and Vanity Fair, along with newspapers such as The Wall Street Journal and the Los Angeles Times.
The audio effort intensifies competition with Amazon and Alphabet’s Google, both of whom offer audio news options on their smart home speakers, as well as Spotify, which has been expanding its podcast business with news content.
Apple is also launching a weekday morning audio news program called Apple News Today, which will be hosted by New York-based journalists Shumita Basu and Duarte Geraldino and highlight stories from the publishers that work with Apple. The show will be available to both free and paying users, and both it and the audio stories will also be adapted for Apple’s CarPlay, the system that connects iPhones to many newer vehicles.
Apple also said it would offer expanded access to local news in its app, starting with five metro areas in the United States: San Francisco and the rest of the Bay Area, Houston, Los Angeles, and New York. Apple will maintain editors in each area to curate local stories, and paying News+ subscribers will get access to premium content from the local newspapers that take part in the program.
Last month, the New York Times left Apple News, saying publishers should be fairly compensated for their content and that the program is not align with its strategy of building direct relationships with paying readers.
© Thomson Reuters 2020
Apple-EU Tax Case Appeal Ruling Due on July 15, Irish Government Says
By Reuters | Updated: 8 July 2020
The European Union’s second highest court will next week rule in an appeal by Apple and Ireland against an EU ruling for the US company to pay EUR 13 billion (roughly Rs. 1.10 lakh crores) in back taxes, the Irish government said on Wednesday.
The European Commission ordered Apple in 2016 to pay the taxes it said were owed to Ireland. But Apple and Ireland, whose economy benefits from hosting a number of multinational firms, began an appeal against the decision in September.
“The State has been formally notified that the General Court of the European Union (GCEU) will deliver its judgment in the Apple State Aid case on July 15,” the Department of Finance said in a statement.
Deputy Prime Minister Leo Varadkar said the judgment was likely to be appealed by one of the parties.
“I think that no matter what the judgment is, this case will almost certainly be appealed by one party or another to the European Court of Justice,” Varadkar told journalists.
With the legal challenge expected to run for years, Ireland’s debt agency has invested the disputed taxes in low-risk, highly rated euro-dominated bonds, mainly short- to medium-term sovereign securities.
Apple Chief Executive Tim Cook said Apple’s commitment to Ireland, which became its first European operation in 1980 and where it employs 6,000 workers, was “unshakable”.
© Thomson Reuters 2020
Apple Modifies App Review Process After Outcry, Will Let Developers ‘Challenge’ Guidelines
Apple on Monday said it would let software developers “challenge” the guidelines that govern its app review process and will end its practice of blocking routine bug fixes over minor violations. Apple’s App Store is the only way for developers to distribute their software to consumers’ iPhones and iPads. Apple keeps between 15 percent and 30 percent of revenues generated by developers in the store, making it a key part of its growth strategy as the pace of iPhone upgrades has slowed.
To get into the store, apps undergo a review process governed by Apple guidelines. Some rules, such as requiring apps to offer an option to use Apple’s in-app purchasing and split revenues with the iPhone maker, have become a flash point.
Software makers have long been able to appeal Apple’s rulings, but several told Reuters they are frustrated by the fact Apple retains the final say.
AWeber, a Pennsylvania-based maker of email marketing software, went back and forth with Apple for months last year over whether it needed to remove account creation links from its app and add in-app purchasing.
“They’d flag something, we would make some modifications, and they would flag something different,” Tom Kulzer, the company’s chief executive, told Reuters.
In a news release, Apple said it will now provide a “mechanism” for developers to “challenge” the guidelines. A spokesman declined to elaborate.
Apple also said it will no longer delay routine bug fixes over App Store guideline violations unless they relate to “legal issues,” instead requiring fixes at the next major release.
Developers said those delays angered customers.
“The fact you don’t learn about it until you’re trying to push a bug fix has a really negative impact on customers,” said Andy Fowler, chief technology officer at Michigan-based sales software maker Nutshell.
© Thomson Reuters 2020
WWDC 2020: Apple Expected to Sell Developers on Building New Apps Amid Pushback
Apple will walk into its annual development conference facing one of the biggest backlashes from its giant community of creators since the App Store started almost 12 years ago.
The third-party developers fuel a services business that generated more than $46 billion (roughly Rs. 3.49 lakh crores) for Apple in its last fiscal year, almost 18 percent of the iPhone maker’s total revenue. Some of the group’s anger was sparked by the rejection this week of a popular email app, and comes as Apple needs to sell developers on building apps for the company’s latest platforms, including a wholesale shift of the underpinnings of the Mac.
Hanging over the Worldwide Development Conference (WWDC), which begins Monday, is the recent announcement by European regulators of an investigation that could fundamentally change the way Apple and developers make money from the App Store.
The past week started with the Cupertino, California-based company touting that the App Store generated $519 billion (roughly Rs. 39.46 lakh crores) in revenue for the global economy last year. It ended with the rejection of the Hey email app, in part, because the developer won’t give Apple a cut of the subscription revenue.
“We thought Apple realised that developers made the platform, but this incident has explicitly made clear that Apple sees developers as a source of revenue only,” said Aaron Vegh, a longtime software developer. “And that’s a difficult pill to swallow.” He noted that the action of the past week would be front of mind at the conference.
In a letter rejecting the latest software for the email app, Apple said the developer, Basecamp, hadn’t created revenue for the App Store in eight years. “It reads as ‘you have no value to us unless you’re earning us tons of cash,’” Marc Edwards, an experienced App Store developer, wrote on Twitter. Apple generally requires developers to use its App Store payment service, which takes a cut of 15 percent to 30 percent of most app subscriptions and in-app purchases.
— Marc Edwards (@marcedwards) June 19, 2020
Other developers said that Apple’s slice of their revenue is the cost of doing business and they are happy to let the company handle app promotion and credit card processing. Some said the past week’s events wouldn’t affect their relationship. “I’ve had Apple capriciously reject my apps for over a decade now,” David Barnard, developer advocate at RevenueCat, said. “At some point you just come to accept the fact that Apple is a for-profit company doing everything they can to maximize shareholder value.”
In a statement, Apple said it “developed the App Store with two goals in mind: that it be a safe and trusted place for customers to discover and download apps, and a great business opportunity for entrepreneurs and developers. We’re deeply proud of the countless developers who’ve innovated and found success through our platform.” The company added that 84 percent of apps are free and don’t provide Apple a share of revenue.
Apple’s dealings with developers also are under scrutiny from US lawmakers. In an interview Friday on Bloomberg Television, Representative David Cicilline, a Democrat from Rhode Island and chairman of the House Antitrust Subcommittee, called the App Store policies “highway robbery” and said the company demands a “ransom” from developers, referring to the 30 percent revenue share. He said the chief executive officers of the major technology companies including Apple would be asked to testify before Congress. Thus far, Apple has declined to make CEO Tim Cook available.
Still, Apple needs the backing of the developer community for the changes expected to be unveiled at the conference.
The company plans to announce a transition from Macs based on Intel chips to computers running its own processors. The shift will force developers to update their apps to support the hardware, which could be a lengthy process. Apple also wants the latest iPhone, Apple Watch, and iPad software features to excite developers into building fresh apps for the devices.
While the App Store generates revenue, its almost 2 million apps also give consumers reasons to buy Apple’s hardware, which still make the company the vast majority of its money.
Besides the major Mac chip transition, look for an update to the macOS operating system that improves porting iOS updates to the computers. Last year, the company started letting users move iPad apps to Macs, and earlier this year, let developers begin selling merged iPad and Mac apps while only charging consumers once.
Apple plans minor upgrades for the Apple TV set-top box’s software with a new version of the hardware in the works for as soon as later this year, while the Apple Watch is expected to get new faces, a mode for kids and, most notably, a new sleep tracking app. Bloomberg News reported in 2019 that Apple expected to add sleep tracking to the Apple Watch this year.
The company also plans updates to the HomePod speaker, including adding the ability to use third-party music services such as those offered by Spotify. And it is working on a new smaller HomePod for later this year.
For the iPhone and iPad, Apple is expected to announce several new features, including the ability for the iPhone to serve as a car key, a new feature that works like Google Translate, upgraded tools for the developers to build augmented reality apps and updates to the Podcast service. Apple has also weighed opening up iOS further to third-party apps, letting users change their default mail app and web browser.
Perhaps most important to iPhone and iPad users who quickly upgraded to iOS 13 last year, Apple has revamped its software testing process with plans to improve software quality and reduce bugs.
The software updates will set the stage for a range of new hardware devices also launching this year, including a new Apple Watch, four redesigned iPhones, the new HomePod and Apple TV box, as well as updates to the iMac and MacBook Pro. The company also plans its first pair of over-ear headphones as well as an accessory for finding physical objects, which will integrate with the new software.
For Apple engineers, putting together this coming week’s conference has been a challenge. COVID-19 related precautions have made the event Apple’s first to be held wholly online and most engineers developed their products and planned the gathering from their homes.
© 2020 Bloomberg LP
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