Apple’s Platform Advantage

May 7, 2021 • Extra Ordinary

From Daring Fireball, Apple and the Built-In Advantage¹:

The basic idea is evergreen, and is in no way specific to Apple. Smaller companies make products that build upon, or fill gaps within, platforms from larger companies. The best of those ideas — ideas that truly would be better “built in”, eventually do get built in. The small innovators need to adapt or die (or get acquired, and become the built-in version).

If you have a good idea for a third-party product on a big platform, you need to expect that the platform maker will eventually use your idea. If they don’t, maybe it wasn’t that good an idea in the first place. If they do, you should be ready to keep your product viable by going further than the platform maker is willing to go.

John Gruber’s take, distilled, reads to me that Apple will build into its platform whatever it sees fit as a feature that would work better if it were offered out of the box from Apple over a third party. Third party developers can build on top of that platform whatever apps they may, but they must not get too comfortable or stop innovating, as they risk Apple building their own implementation into the next software update. Apple’s implementation will be baked into the operating system in a way third party developers cannot emulate, so developers should do their best to compete with features, instead.

This perspective is what justifies an anti-trust complaint

Back up for a moment and consider a question that has been brushed over: Why would a feature work better built in to Apple’s own software? Your phone is simply an app console, so—barring the fact that Apple’s apps come preinstalled—Maps, Safari, Camera, Find My, etc. should be equal players against anything from the App Store, right?

That is not how it plays out.

Exhibit A: Maps

For many years, Apple Maps was an objectively less accurate map of the world, its streets and its businesses than Google Maps. Conceding this, I used Apple Maps anyways because Apple Maps was integrated into iOS in a way Google Maps was (and still is) totally unable to compete with.

Begin navigation in Apple Maps and the map takes over your lock screen. Just tap the screen and you can see the directions exactly as they appear when the phone is unlocked. It only takes a cursory glance at Apple’s Platform Security white paper to realize how weird this. It is so obvious Apple cares deeply about quarantining apps to their sandbox—yet this is an app view that is allowed to run exactly the same as it normally does when the device is unauthenticated.

Hell would freeze over before Apple would ever allow, say, Facebook to take over the lock screen of your iPhone as freely as they let the Maps team.

Even the notifications take a leap above what is possible for developers. Ordinary notifications are designed to be noticeable enough when you are focused on the screen, but easy to ignore or swipe away. Maps notifications take on a big, high contrast, impossible-to-ignore design.

Obviously it should be this way—you don’t want turn-by-turn directions to be easy to miss. Apple does not have to make their product worse to make it fair; they should allow their competition the same affordances they give themselves. Let Google Maps and Waze have big notifications and a lock screen display, too.

Exhibit B: Camera

Camera moved into the most prime of iOS real estate in 2011 when a camera shortcut was added to the lock screen and once again two years later when it was one of four immutable buttons in Control Center.

Imagine how much of a leg up third-party camera apps like Halide would have if users were able to switch the camera shortcut for a different app.

Exhibit C: FaceTime

Despite offering CallKit for voice calls, FaceTime remains the exclusive beneficiary of this rich video call interface. No dice for Skype, Snapchat, Microsoft Teams nor Zoom.

The point here is that Apple does not treat Maps, Camera or FaceTime as though they are simply another app for your app console. Apple has created an unfair playing field not by including their apps on their phones by default, but by preventing third-party apps from implementing the same basic features as their own.

Hardware and software, and their adopted younger brother, services

“People who are really serious about software should make their own hardware.”
– Alan Kay

– Steve Jobs

Apple’s mantra throughout all of Steve Jobs’ Apple was their sweet mix of hardware and software, the two tenets of great product design. Under Tim Cook’s Apple, they have built up services as the third tenet².

The cut

Unless you are too big to ignore, third-party services lose 30% of their revenue to get placed on the App Store. Effectively, Apple is allowing its team to run a 350m race instead of a 500m race because it owns the track and field.

Spotify must operate their iOS platform with 70% of the revenue where Apple Music gets 100%. Netflix removed payments through the App Store so they could get their full revenue, pushing users through a confusing set of web pages in order to sign up for a subscription, whereas Apple TV+ can advertise itself from the TV app preinstalled on iOS while giving Apple 100% all along.

Apple is proud to tout whenever they’ve crossed a new milestone for how much money they have paid out to developers. If you take ³⁄₇ of that number, do you arrive at the break-even cost of maintaining the App Store data centers and processing payments? I would bet my house that it’s not even close.

The precedent

The definitive antitrust complaint of the technology industry³, United States v. Microsoft Corporation, seems like child’s play in 2021. Internet Explorer was developed and put on sale on 1995 and shipped as a built-in program with Windows 98. Internet Explorer soon gained extra features outside of the HTML specifications, so other browsers like Opera and Netscape Navigator had to choose between following web standards or playing catch-up.

That’s all it took.

While there are platform benefits to making your own web browser, Microsoft did not directly profit from Internet Explorer—in fact, they lost money by including it for free after selling it as a standalone product between 1995 and 1998.

Contrast that with Apple’s services. Their built-in apps also extend beyond the feature set available to everyone else, preventing them from working with an even playing field. Apple’s paid services give them 100% of their revenue while their competitors must operate on a slimmer margin because Apple takes the revenue of their direct competitors, too.

What can they do?

Apple, likely reading the room, is on the right path, allowing for third-party web browsers, mail clients and music players⁴ to be set as defaults. The process to be approved is rigorous and strict. They don’t want people setting their default web browser to a poorly-implemented app that crashes when people open URLs from Calendar or a thinly-veiled data collection nightmare that scans your photo library when you upload a picture.

Apple could—and, if they want to maintain their position as judge and jury for their own App Store, should—make iOS 15 all about empowering their developers.

Oh, and while they’re at it, maybe they can beef up their documentation, too.

Footnotes

1. Which is, itself, a response to Marques Brownlee’s Apple vs The Paradox of Choice. ↩
2. Which, under Steve Jobs, did not always make for great products. ↩
3. The definitive antitrust complaint of the technology industry so far. ↩
4. Kinda. ↩