Take this example: Apple Music “pays” 30% to parent Apple Corp. That 30% payment cuts into Music’s revenue and now they’re operating at a 25% loss.
However, that rough calculation still allows parent Apple Corp to consider Music to be profitable, since it’s a net profit for Apple Corp. It’s happy to take the 25% “loss” in the music division because it’s just a paper loss. In cash terms, the Music division increases Apple Corps profit.
The only real way for this division to be fair is to spin Apple Music off into its own company that is not owned by Apple Corp.
In my view the potentially anti-trust advantages Apple has over Spotify mainly come from the fact Apple Music is preinstalled and is promoted to iOS users through push notifications.
Spotify would be free then and are now to make a web based player like youtube or soundcloud.
Let's be honest here, the 30% spent by Europeans is mostly going to anonymous bank accounts in Jersey.
Alternatively, if for some reason there's just a single lump of music streaming revenue to be earned, maybe it's still shitty if Apple steals spotify's business but breaks even on the opportunity cost.
So it is international already.
It picks my interest: Companies internally run as communist economies, all resources are merged and shared, employees are not individually associated with a revenue because the group is worth more than its sum, on the outer, liberal economy. At what size / on which criteria should a group inside a company be considered an independent product-and-loss entity, in order to avoid supercorporations to make use of monopolistic behaviors? Should a 100-billion-dollars marketing operation inside Apple be allowed to function at a loss if it pumps interest in all of Apple’s other products? Can Apple Music be disguised as a marketing operation instead of as an independent entity?
The reason products like Alexa and the Fire tablet have been so successful for Amazon is basically because they have been able to promote them for free on the worlds largest marketplace and then sell them at a loss offset by the profits generate from other segments of their business like ecommerce and AWS. I've been so underwhelmed by every Amazon product I've ever brought I'm 100% convinced their success in hardware has been almost entirely due to their cannibalistic business practises than their ability to make solid hardware that people want to buy.
This means in basically any market Amazon enters they don't need to make the best product, they just need to undercut and promote their products enough to kill off the competition. Google and Apple can also run this strategy very effectively with Google Search promoting Google products and Apple's hardware/appstore ecosystem promoting then locking users into their own hardware and software.
Yes it would.
1. Apple creates iPod, and iTunes serves as its music store.
2. Apple creates iPhone, which has an iPod app.
3. Apple introduces App Store so other apps can be used on the iPhone.
4. iPod (Apple Music) competitors emerge.
5. EU says "that's it, Apple can't have iPod anymore on the phone unless iPod (Apple Music) becomes a separate company".
No one (successfully) sued Apple for anti-competitive practices on iPod. Ergo if the iPhone never had an App Store, they'd be allowed to have 100% of the revenue of iTunes, and ban competitors out completely.
By opening the iPhone platform to third parties, EU sees them as another type of entity completely. In effect the EU penalizes the creation of market places, because once you're market place, you lose control over your own products to the government.
But even if we take this absurd argument at face value, it's still wrong: third party applications add value to iPhone and make them worth bying. If you could not install games, bank app, etc. On an iphone, iPhones would be useless and noone would buy them in the face of competition. The whole reason Windoes Phone died is that there were no apps. iPhone would simply follow
Counter to the narrative of Windows phone’s failure, why were BlackBerry and Nokia successful despite not having third party apps at the scale iPhone does?
Third party apps add value to the iPhone — you’re right. They can also add confusion, adware, and bundleware if allowed to reign free; a curated, expensive gatekeeper is the cheap way to keep the crappy third party apps out; not a foolproof way, just a cheap way.
They were in the process of dying around the same time as Windows Phone was and all for the same reason: the iOS/Android duopoly.
Because they never had the market share and power in the music market that they have now on the mobile market that's why. You kind of answered why they are getting sued now yourself.
Is that better? Become successful, get sued? Android has 87% market share, iOS has 13%. That's not even a monopoly.
Of course we can define arbitrary categories like "Apple has monopoly on the iOS market". Which makes the concept of monopoly absolutely nonsensical, because then everyone has a monopoly. I have a monopoly on the slver username on HN, so I guess EU might sue me any moment now.
Also, let's recall EU suing Microsoft and forcing them to offer Windows without a media player. So what did this result in? It resulted in lots of nephews children and grandchildren having to visit their relatives and help them install Windows Media Player. I'm from EU and I want to like all their decisions, I'm team EU. But they're complete idiots sometimes when dealing with tech.
Yes it's a duopoly and yes they are both abusing their market power. It got so bad that you have to get testimonials of mobile developers anonymously against those two companies because they are fearing retaliation against them (yes that does sound like a mafia).
Not only that, this change highlighted the App Store and Play Store cartel[1] that engages in price fixing[2]. Google also dropped their prices to match Apple's, but not any more or less.
Instead of mobile app distribution prices being dictated by the free market, they're dictated by the cartel. Prices have only changed once in a decade, and not in response to the market at all, but by the whims of the app store cartel.
Now, it's true that iTunes did get significant traction because of convenience for users of iPods, however there were definitely options for other music distributors. In fact, back in those days, I tended to still buy CDs because they were DRM-free and similarly priced, and I could rip the songs at my selected quality settings to transfer to my iPod.
But would people buy as many iPhones if they were restricted to Apple-only services? Some might. I would expect more people would buy into more "open" ecosystems. I could be wrong -- and Apple has every right to shut down their App Store to find out.
Nope. EU only forces you to compete in the marketplace on the same terms regardless of who owns the marketplace or the product.
This is bog standard anti-trust. Yes, if you become massively successful, in a market, then you are now no longer allowed to do certain things. That is how anti-trust law works.
If you take over a market, or become massively successful, you become a monopoly/duopoly, and have to follow certain laws.
These laws aren't hard to follow though. You just have to allow competitors to use your stuff, and you can't use your market power against them.
Operating a marketplace generates billions for Apple, and without the Apple Store I doubt the iPhone would have any value today. This comes with legal duties. Apple can't do whatever with their marketplace, but must compete fairly within it.
Totally legit