Colorful Criticism
Marco:
my son learned a valuable lesson tonight this is ominous we were we were we were eating dinner at the table and i i had some uh jam band music playing by goose uh over the speakers and uh and he said can i put my music on after this song oh no oh no you know what the kids call that marco let's see how tuned in you are to your uh what tweezy tweezy tween now right the tween lingo what is that called
John:
I don't know.
Casey:
I have no idea.
John:
Casey doesn't know his kids are too young.
John:
All right.
John:
Well, I'll leave it as a mystery to you.
John:
No, I need to know now.
John:
Maybe I do know.
John:
You can't do that.
John:
Everyone who listens to our show is old like us, I feel like.
John:
Because when I say things like this, no one chimes in and is like, you old dummies, it's blank.
John:
So this is a test for people.
John:
I don't know.
John:
Should I do that?
John:
I don't know if we want a week's worth of follow.
Casey:
No, no, no, no.
Casey:
We don't.
Casey:
Let her rip.
Casey:
Let her rip.
John:
We should give the chat room.
John:
Give the chat room a chance.
Casey:
The chat room is just making fun of us and suggesting you old dummies as titles.
John:
Yeah, they don't have any idea either.
John:
They're all old like us.
John:
Young people in the chat room, what is it called?
John:
Adam, Marco's young son, wanted to be able to play his music presumably through the speakers or whatever you're listening to.
John:
What is that called?
Marco:
Isn't that just called being a kid?
Marco:
Doesn't every kid want to play their music instead of their parents' music?
John:
There is a modern slang phrase for that.
John:
I'm assuming DJing is not the answer.
John:
Do they even know what DJs are?
John:
We have a 23-year-old who doesn't know, a 35-year-old who doesn't know.
John:
No one knows.
John:
37-year-old is all the fogies.
John:
Listen, you're an IRC channel.
John:
Let's be honest.
John:
You're probably pretty old.
Marco:
An IRC channel for a podcast.
Marco:
Let's be clear.
Marco:
This is not a young person's game here.
Marco:
Yeah.
Casey:
Hit the aux, suggests somebody in the chat.
John:
There you go.
John:
Somebody knew it.
John:
Adam asked you to put him on aux.
John:
That's what they call it?
Casey:
I have never heard that before.
John:
And now, you know why?
John:
As olds, we know why they call it that.
John:
It's back in the old days when you had an aux input in a car, the auxiliary input.
John:
It was like a headphone jack that you could plug an audio source into in your car, and it would play.
John:
Or like in any stereo system, there'd be a headphone jack that says AUX on it.
John:
And you'd plug in...
John:
a walkman or an ipod or whatever so they say put me on aux it means give me control of the thing that is playing music so that i can play my music through it i'm going to go out on a limb here and say that the time of the walkman did not overlap the time of the aux jack very much the disc men maybe well no it did the aux jacks exist you'd buy those stereos i had you know you'd buy those stereos with dual cassette tapes in them so you could copy cassettes and they had an aux input on the thing so you put you can put the walkman into the aux input and then record on the
Casey:
But John, you're missing Marco's point.
Casey:
It wasn't a Walkman because you are even older than us.
Casey:
And normally that doesn't make a big difference.
Casey:
But in this one particular circumstance, it does.
Casey:
It would be a Discman or Discman or whatever you want to call it.
John:
No, I'm saying it went as far back as the Walkman.
John:
The one with the cassette tape in it.
Marco:
oxy jacks existed back then like on stereo equipment but you would never have one like in a car or what on any kind of speaker anybody was using no they were in cars still yeah in the era of portable cassette players they were they were oxy jacks and cars i don't think so yeah yeah no there weren't i really think marco's right about this they came out during the ipod era so you could play from your cassette player through the car stereo no but the car stereos cars had cassette players if you had if you had a car that didn't have a cassette deck or if your cassette deck was broken
Marco:
Cars that were so early or low end enough to not have cassette decks also wouldn't have had aux jacks.
John:
Anyway, aux jacks are not universal because I remember lots of my Accords didn't have them and I had to add one through a stupid header thing.
John:
So I'm not saying that they were commonplace, but they did exist because it's literally just a headphone jack.
Casey:
Are you really pulling an infinite timeline style argument on us right now?
John:
No, I'm clarifying that they weren't common.
Marco:
I mean, the funny thing is like Oxjacks actually did not have a very long era of popularity in cars because they were mostly added during the late stages of the iPod era and in the early stages of the smartphone era.
Marco:
But then Bluetooth took over pretty effectively.
John:
My cars still have them.
John:
I mean, I know my cars aren't that old, but at 2014 and 2017, they both have Oxjacks on them.
Casey:
Well, but Marco, you skipped a step.
Casey:
You are broadly correct.
Casey:
But yeah, they started becoming a thing during the iPod era to me.
Casey:
Yes, John, I'm sure a few cars had it before then.
Casey:
But realistically, the aux jack became popular during the iPod era.
Casey:
And then yes, there was Bluetooth not too long after, but you're skipping the USB, like what was that term?
Casey:
It was like an iPod protocol.
Casey:
And there was a couple of years of that.
Marco:
Don't forget the FM adapters.
Marco:
Those were so bad.
Marco:
Well, those were early.
Marco:
FM and cassette – yeah, and cassette adapters were actually pretty good.
John:
Yeah, because cassette adapters were better than FM, but only barely.
John:
Oh, no, they were way better.
John:
Yeah.
Marco:
They were almost a perfect line in.
John:
Like, it was a very, very close – I had a lot – I had bad luck with the cassette adapters in terms of them being reliable and continuing to function, and they sounded bad.
John:
And, yes, FM sounded bad, too, but –
Marco:
No, honestly, cassette adapter sounded very close to a real line because the way they worked is actually very clever and extremely simple.
John:
Maybe I just had bad ones.
John:
They kept breaking and flaking out.
Casey:
No, we had one for literally like 20 years.
Casey:
There's no moving parts.
Casey:
How did they break?
John:
Maybe it was the wire.
John:
Maybe it was like the little skinny wire that would dangle out of the thing.
John:
Maybe it was the cassette tape part and the stupid like, you know, like the way it clipped into the thing.
John:
I don't know.
John:
I just had really bad luck with them.
John:
And FM adapter things I also had bad luck with.
John:
Well, those were always garbage.
John:
Because Honda didn't have aux jacks forever.
John:
That's why I had to add them to my 2004 Accord.
John:
I had to remember that I opened up the whole dashboard and wired in the aux jack.
John:
Anyway, kids knew it from the iPod era.
John:
Like kids who say this, I assume they picked it up because when they were kids, they had an iPod and they wanted to hear it in their parents' old car and their parents' old car had a thing for iPods to play through.
John:
And so put me on aux, continue.
John:
And I bet a lot of people are using that phrase today who have no idea what it means because, you know, once it goes into the lingo, you don't really question it.
Marco:
put me on aux if that's the actual phrasing they are using like that doesn't make a lot of sense no it doesn't and also like how how would the parent connect the kid's phone themselves like wouldn't the kid have to like take the cable or let me go on aux or whatever like ask adam if he knows this phrase i will is he awake send him a message now no i'm not doing this now oh boo real-time follow-up we need it okay hold on
Marco:
oh gosh hey while marco's paging adam uh you know i was looking up a wikipedia link for the show notes and i'll give you one guess what happened in chrome just now come here we have a question for you okay all right hi hey what's up all right they want to know are you familiar with the phrase put me on aux no oh no oh no if you wanted me to have you put your music on the speakers is there a phrase you would use for that can you put on my music
Marco:
That's very straightforward.
Marco:
Thank you, son.
Marco:
You've proven my point.
John:
That is what I would say.
John:
Yep.
Marco:
Yeah, because that makes sense.
John:
I'm going to go play Forger now.
Marco:
Okay.
John:
All right.
John:
We have our follow-up.
John:
You're wrong.
John:
No, it is a phrase.
John:
It's just Adam doesn't know it yet.
Casey:
Anyway, thank you to Auntie Composite, the 23-year-old in the chat room with the rest of the old people who got us across the line on that, or got the two of us across the line on that.
John:
Yeah, people suggesting it's also past the aux or I'm on aux.
John:
Yeah, there are many variants.
John:
That's so weird.
Marco:
Anyway, so the lesson he learned earlier was when he did not ask to be put on aux, but when he instead asked, could he play his music over the speakers after my song was over?
Marco:
He has a jam band, dad.
Marco:
And my song was 35 minutes long.
Casey:
Easy peasy.
Marco:
And it was halfway through.
Marco:
It only had like 17 minutes left.
Marco:
Only.
Marco:
Oh, goodness.
Marco:
So I'm like, yes, sure.
Marco:
We agree to this.
Marco:
And then I told him like a minute later, by the way, there's 16 more minutes left in this song.
John:
He should learn to be text-saving.
John:
He's like, can I just glance at the now playing screen on your phone to see where the progress bar is maybe?
Marco:
How many minutes are left?
Marco:
Well, it would have looked, it was right in the, and thanks to our modern iOS design.
Marco:
It doesn't tell you time remaining.
Marco:
It does, but it's the tiniest, dimmest text on the screen.
John:
Good eyes.
Marco:
Yeah.
Marco:
And on the Mac, of course, it would require hover, but you know, on iOS, we don't have that luxury.
Marco:
So they, they designed it away into tiny little low contrast text.
Casey:
John, you have received your notes export.
Casey:
It came via Carrier Pigeon, I'm quite sure.
Casey:
What was the result?
John:
Disappointing.
John:
So it was 337 megabytes, which I thought was promising.
John:
I'm like, oh, this must have all the stuff that I want.
John:
And what I got was a whole bunch of folders, which I think were basically named after like my notes folders, kind of.
John:
And in those folders were .txt files, plain text files.
John:
So all my like...
John:
you know, bold, headings, all of my styled text, all of that, gone.
John:
All of my links, mostly gone or expanded into the plain URLs.
John:
And then a bunch of image files in subdirectories below that.
John:
So wherever I place those images in the document, however I scaled them or cropped them or did anything with them, all of that is also gone.
John:
So this is not a faithful reproduction of the work I put into each one of these notes, right?
John:
Like, for example, I was looking for my one about sofas, right?
John:
there's just a text file with a bunch of text and there's kind of like blank lines between sections of text where I know that images should go like this image goes with that.
John:
But also the images are like, as I originally downloaded from web pages before I crop them and everything.
John:
So you can show a smaller portion.
John:
It's just,
John:
it's it's not great like it's better than nothing if you really wanted to have a backup and like oh i really want to have that important text that was there and those important images but it does not preserve the rich text nature of notes which is a shame because remember this is apple's own export i know there are tons of utilities that will do this for you that will try to preserve it that will try to make an rtf file out of it that'll make a pdf out of them uh but apple should really up its game here it's great
John:
that they offer a text file and images.
John:
Like, I don't object to that being an option, but it's not a backup of all of the work that I put into my notes.
Casey:
James Anthony writes, the potential overlap between Apple's car project and Apple Vision Pro with regard to spatial computing could be huge.
Casey:
How about this?
Casey:
Instead of making a massively expensive, high-stakes, fully autonomous robot to transport human beings safely across Earth, try developing a robotic product at any size or price point that can transport anything of any size or weight any distance inside of my own home or office.
Casey:
Despite the advances in cameras and AI and robotics, in 2024, there still exists no consumer product at any price point capable of moving from room to room, locating a physical object and manipulating it.
Casey:
Nothing that can go press a button or turn a knob or open or close a cabinet drawer, lid, door or window.
Casey:
Nothing that can hide dust or fold laundry or check on and feed your pet, let alone make you a sandwich or bring you a beer.
Casey:
Hearing the car project people getting reassigned to the AI team makes perfect sense to me, and I'm glad to hear it.
Casey:
You know, this reminds me of – I can't remember the name of the thing, but there was this little, like, orb of a robot that I think I saw advertised on Instagram a lot that would follow you around.
John:
And the theory was – Jibo or something?
John:
What was that called?
Casey:
I don't remember.
Casey:
You know what I'm thinking of.
Casey:
And I think it was mostly meant for city dwellers, and I don't mean that derisively at all.
Casey:
But it was meant for city dwellers.
Casey:
Like, you're in New York City.
Casey:
You go –
Casey:
Oh, yeah.
Marco:
I've seen that though.
John:
I think it was on like college campuses or something.
John:
I don't remember.
John:
But yeah.
John:
They do have a lot of delivery robots on college campuses.
John:
We talk about delivery robots on robot or not a lot.
John:
They deliver food from place to place.
Marco:
Oh, that's probably what I heard about.
John:
It was probably on robot or not.
John:
Yeah, yeah.
John:
So on this topic, this is actually somewhat relevant mostly because of Elon Musk.
John:
Like he's got that – one of his many ridiculous things that he thinks he's doing is like we're going to make a humanoid robot, that whole thing.
John:
Uh, and had the person come out and like a person come out of like pursuit and say, this is what it would be like, but robot, um, ridiculous.
John:
The interesting thing about, uh, robots, like household robots that do more than like a Roomba, you know what I mean?
John:
Um,
John:
I'm not going to say the smarts part of it is not hard because it is, but surprisingly, the main barrier, as far as I can tell, is the boring parts.
John:
What cars have going for them is we figured out the thing about making a machine that you can ride inside that travels from place to place on roads.
John:
We figured that out.
John:
You put wheels, you have brakes, we have traffic controls and signs and roads that we've paved, and we plow them.
John:
It's like we've...
John:
We've got that part sorted out.
John:
Now we just need something to drive them.
John:
That turns out to be really hard, right?
John:
Inside the house, for a thing that you're going to buy for like a Roomba type level of device, I think the moving from place to place and doing useful things is actually...
John:
We're not even over that hurdle.
John:
That is the first thing that you have to do before you get to the point where, okay, now technically we have something that can do that.
John:
Now put in the smart so it does something useful.
John:
Because to make anything that can move around your house and do useful things, even if it's just like getting you something out of the fridge...
John:
It requires an amount of mechanical machinery that probably pushes the price of this too high to be useful in the market.
John:
Like Roombas could be better if they cost 10 times as much.
John:
You can make a house cleaning robot that is a lot better than a Roomba, but it would be so much more expensive.
John:
They really have to control costs on that.
John:
That's why it's so limited, right?
John:
That's why it's like, why can't you just make it go up and down stairs?
John:
We get robots go up and down stairs.
John:
College kids do it all the time.
John:
It's not hard.
John:
It's just expensive.
John:
And I think that is actually the difficult barrier, making a cost-effective thing that can traverse your home and grab things and transport them.
John:
And if you somehow are able to do that, then it's like, okay, now how do you get it smart enough to do that without killing your pets or anything?
John:
doing other terrible things that it can do like i'm not saying it you know it's easier than self-driving because the stakes are lower speeds are lower if it knocks over a drink instead of bringing it to you oh well it's not that bad you know probably won't kill your pet because you just make sure it's really weak and can't actually kill a pet but depends on the the the hard part of this i think is actually the robot for not too much money part and so i would suggest apple not go into this business
Marco:
It doesn't seem like it's exciting enough for them.
Marco:
And I don't think there's much of value to extract from the car project to apply to that kind of thing.
Marco:
By the way, I don't know if you saw yet, a couple hours ago, Mark Gurman published this giant feature story in Bloomberg.
John:
Yes, I was going to put that as the fourth topic.
Marco:
Yeah, all about the like just detailing all sorts of insider info about the car project over time, like all the different phases they allegedly went through, you know, angles they allegedly tried to, you know, and how they allegedly tried to do it.
John:
And by the way, I think everything that was in that article had been leaked before.
John:
But this is more like confirmation just reminding you now that people are willing to talk.
John:
All that stuff was more or less true because I remember reading about all those things individually.
John:
But individually, you're like, really?
John:
And now altogether as a summary when the product's done over, I'm like, OK, I kind of buy it now.
Marco:
Yeah, it just seems on so many levels.
Marco:
First of all, I didn't know all that stuff.
Marco:
I knew about half of it, I think, already.
Marco:
So a lot of it was news to me, at least.
Marco:
And there's a lot of commentary woven throughout from different sources of people who had allegedly worked on it.
Marco:
But it was really something to see what was basically a decade of this...
Marco:
of this failed project, like all the different phases that went through what they thought they wanted at each point, different partnerships from different companies that ended up falling through for whatever reason, there must be such a big story to tell there.
Marco:
And we're only getting a little bit of it.
Marco:
It's kind of shocking as, as an Apple fan to see like how long they, you know, wasted away for so long on that project for how much money and how much talent all for what seemed to have begun as a Johnny I vanity project.
Yeah.
John:
i don't know but it's not johnny vanity project but at one point they said they according to whatever their source was that they considered buying mclaren because it would make johnny ive happy it's like talk about a bad reason to do something he's becoming disengaged with the company he seems like he might leave we should buy mclaren because he likes that they need to have a car design studio in the uk it's like no
John:
don't don't buy a company to satisfy your super important person like that's i'm glad they didn't do that but oh yeah but yeah but i don't think it was a vanity project for him but like the problem is you know we'll put a link in the show notes to the article uh i think you need a bloomberg subscription to read it but like or apple news
John:
They had a bunch of different ideas, and we talked about this.
John:
That's why I didn't want to cover it this week because we kind of covered the car project, and there's nothing really new to talk about with really the project.
John:
But this kind of outlines the whole like it should drive itself and not have a steering wheel.
John:
Stuck around for a really long time, and there were proponents.
John:
Obviously, there were strong influential proponents of that strategy inside the company, and only towards the end when the rumor came out, they said, how about not, and we just put a steering wheel in.
John:
and that was like you know eight years into the program right uh and as we said it turns out they couldn't make the car without the steering wheel and all and by the way all their ideas of how of what the car without the steering wheel should be like i think would have been disastrous like this is one thing i didn't get to talk about with when we talked about the car thing of like that i think apple has vastly underestimates and also has no idea how uh car styling works like car styling is such an important part of making cars and it is
John:
and fraught and way more difficult than I think Apple realizes.
John:
All of their ideas were pretty bad.
John:
We just see vague rumors or whatever, but I think it shows a misunderstanding of what makes people buy a $100,000 car or an $80,000 car or, hell, any car.
John:
Car styling is so dangerous and so complicated and so culturally enmeshed.
John:
It's so easy to get wrong and so hard to get right, and I think Apple would have just...
John:
disastrously blown obviously if the car drove itself no one would care but they couldn't do that so if they if they feel that a regular car and they tried to style anybody johnny ive anybody the company like the only way it would be okay is if they got just actual car people from car companies to style it and didn't let johnny ive anywhere near it but every time i hear the the descriptions of the johnny ive influenced car i'm like yeah nobody nobody with that much money would want that
Marco:
And by far, my favorite little tidbit in this story was that allegedly Johnny Ive wanted to offer the car only in white.
John:
Are you serious?
John:
Yeah.
John:
With white interior, white cloth interior.
John:
Have you ever been in anything?
John:
And a white wall tires.
Casey:
I was rolling.
Casey:
Like, what is this?
John:
1950 all over again?
John:
For us, Johnny, I have to go to New England in winter.
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Casey:
Matt Johnson writes, I keep hearing tech people, including ATP, talking about Apple Vision Pro, saying various things indicating that Apple's ideal and eventual form factor for the Vision Pro is a pair of glasses.
Casey:
This seems logical, but it also seems like many of the touted features in this version one are dead ends.
Casey:
Theater mode, immersive environments and more all seem to rely heavily on a fully controlled VR environment, even when they are mimicking AR.
Casey:
that I think that any glasses will always struggle to provide.
Casey:
Maybe these are just features that sell the current product until Apple can get where it wants to go.
Casey:
And when it does, they're no longer important anyway.
Casey:
We've also had plenty of other devices that have tried to attack the problem from the AR side first.
Casey:
The Xreal, Rokid, Ray-Ban Meta, et cetera, have all tried various things, albeit with less polish than Apple can provide, and they've barely registered notice.
Casey:
And when they have, it's often received ridicule.
Casey:
For example, the way ahead of its time, Google Glass.
Casey:
So our glass is actually the end goal, and how can Apple Vision Pro get from here to there?
Casey:
Would working from the other direction, even with Apple's polish, have been a bad idea?
Casey:
And I've been thinking about this a bit in part because of Matt's feedback, and I've been thinking about it from hearing similar things from other people.
Casey:
I can't help but wonder if there will eventually be two versions of the Vision Pro, and whatever the naming may be, that's mostly irrelevant.
Casey:
But one of them is completely immersive like it is today, and one of them is a more sleek, more AR-oriented thing.
Casey:
Because Matt's right.
Casey:
Some of the best things to me about the Vision Pro today, anyway, are when it's fully immersive.
Casey:
Watching a movie in it is incredible.
Casey:
Looking at panoramas, it's incredible to do that.
Casey:
Some of those things, to Matt's point, would not be better with a more glasses-like form factor.
Casey:
So I wouldn't be surprised if they kind of forked this thing, for lack of a better term, and go two different directions concurrently.
Casey:
Because you might want to be immersed, say, on a plane or something like that.
Casey:
You might want that, or if you're watching a movie, or you might not want that if you're around family or in the real world or whatever the case may be.
Marco:
It seems like the glasses imagined version of this, that's just glasses, it's not like that's close.
Marco:
What the Vision Pro is today, all the different challenges it faces, especially just in terms of physical realities of the batteries required, the computer hardware required.
Marco:
Yes, a glasses version would have different requirements.
Marco:
Some of them would be lesser.
Marco:
There was no screen, obviously.
Marco:
Well, no traditional style screen.
Marco:
There was some kind of projecting something in there, but
Marco:
We are so far from that that I think it would have to almost be two different products.
Marco:
Because if that was actually their end goal for this product, we wouldn't even have this yet because we're nowhere near that.
Marco:
It's probably almost like the difference between an iPhone and an Apple Watch.
Marco:
Like, yeah, those are both based on a lot of the same core components and some of the shared software underneath it.
Marco:
But...
Marco:
An iPhone and an Apple Watch do a lot of very different things and are designed very differently with very different capabilities and different priorities.
Marco:
And similarly, the clear glasses version of whatever Vision Pro, whatever AR glasses that would be, that would have so many restrictions on it compared to anything that can have any kind of bulk to it, like a headset.
Marco:
It would be a very, very different feature set.
Marco:
Way fewer of the current Vision Pro's features.
Marco:
And I think it would be more like an Apple Watch in the sense that it would do a small number of focused things that can be done within a very, very tight power envelope.
Marco:
And that's not at all what the Vision Pro is.
Marco:
The Vision Pro is a whole laptop on your face.
Marco:
The Vision Pro is doing very, very different things with extremely different classes of hardware and classes of size and weight.
Marco:
So we're talking about different products at this point.
Marco:
Whether they can ever actually do those clear glasses thing, who knows?
Marco:
But I don't consider what we see the Vision Pro today, I don't consider that even in the same lineage as AR glasses.
Marco:
Because think about how many things are different.
Marco:
First of all, there's no closing out the world visually.
Marco:
You can't.
Marco:
That takes out all of the most popular features so far of the Vision Pro, which is mainly about immersion and movie watching.
Marco:
Those would both be terrible on clear glasses.
Marco:
It would also have an interesting challenge of like, well, how does it see your hands?
Marco:
Well, where do you put all these cameras?
Marco:
The Vision Pro right now has, what, like six cameras on it or something?
Marco:
Where do you put all those on glasses?
Marco:
And then where does the power come from?
Marco:
Where is the hardware?
Marco:
Where's the computational hardware?
Marco:
Is it just in the stems?
Marco:
There's not that much space or weight available there.
Marco:
So there's all sorts of major challenges.
Marco:
I don't think it's the same product at all.
John:
So the reason everyone talks about glasses in the context of Vision Pro, probably because that was one of the rumors and probably because Apple has always talked about AR so much and
John:
With respect to AR, obviously clear glasses solve the pass-through problem because, hey, you're looking at the world.
John:
It also solves the giant heavy thing on your face problem, the seeing people's eyes problem, like tons of problems that Vision Pro has are solved by the glasses form factor.
John:
I do think that it is the same lineage.
John:
If you look at some of the existing devices that are essentially glasses that you can see through that also have images they can project on them, HoloLens does that.
John:
What was the...
John:
What is the other one called?
John:
Magic Leap.
John:
Oh, I think the X-Real thing.
John:
There's a bunch of like sort of Ray-Ban has like kind of cheapish glasses that you can buy that stick a bunch of electronics in the stems, as we call them.
John:
But they're actually called the temples.
John:
So we always forget that and just call them stems.
Marco:
Oh, I thought I was going to say sticks.
Marco:
I knew that was wrong.
Marco:
I'm like, oh, I think I think it's called stems.
John:
Anyway, some of them have wires to go down or whatever.
John:
But there are a bunch of products that do this.
John:
Obviously, the screens in them are terrible.
John:
But anyway, that's why this process says people do that and they haven't really caught on.
John:
It's because the screens are terrible and because they're not actually as slim as you want them to be.
John:
The reason I think it's the same lineage is...
John:
you're going to need to do a lot of the same things setting aside where you hide the cameras.
John:
And I think there are clever places to hide them, especially if they get much, much smaller or whatever.
John:
Um, you still kind of have to solve a lot of the same problems with augmenting reality by painting things over the real world in a way that is useful.
John:
Um, you know, having the computing, working on screen tech, granted it's different screen tech, but it probably is vaguely related.
John:
If you look at the existing ones in the market, they don't, you know, they all use kind of screens that kind of project themselves into your field of view.
John:
Um,
John:
Um, the way I would think about it in a future when it actually is possible to get something decent looking in glasses for $3,500 or whatever, um, is that it's the necro robotic car, right?
John:
If you have the glasses and they can show high res bright stuff like vision pro can, um,
John:
That is a subset of the block out the world.
John:
If you have those glasses, it's pretty easy to put a thing over them that now makes it immersive.
John:
Because now, you know, you'd put the whatever, whatever you would call it, the light shield, let's say, over it.
John:
And now you've blocked all your vision except for the screens, which presumably would fill even more of your field of view than the current Vision Pro does, especially if they're like wraparound type glasses or whatever.
John:
And there you've got...
John:
your immersive VR vision pro experience.
John:
Uh, and maybe that the light shield thing has additional sensors for pass through or whatever, but like if you can do the glasses, you can do the VR thing.
John:
And I don't even think they need to be separate products.
John:
If you go naked robotic core and say, this is the smallest that can be, uh,
John:
But if you want the immersive experience, add add this thing onto it to essentially block out the rest of your vision.
John:
Blocking out your vision is pretty easy to do.
John:
It's all the other stuff that's hard.
John:
So I don't think this is anywhere close to being here.
John:
And Matt's question about, like, should Apple start in the other direction?
John:
I think the answer is definitely no, because everyone who started in the other direction.
John:
has sort of aimed to be like inexpensive, lightweight thing that you can watch movies on in like 1080p in a kind of dim way with poor color reproduction.
John:
That doesn't wow anybody.
John:
I really would not want to use like my Mac's virtual screen inside one of those things.
John:
The resolution is too low.
John:
To Marco's point, they don't have any cameras or sensors for hand control on them or whatever.
John:
it's not close enough to be useful it's not it's not anything impressive or useful now it's way more or less expensive than 3500 but vision pro at least what it has going for it is it does impressive things it does things better than anyone has done them and it fits into apple's ecosystem using your ipad apps controlling your mac it's trying to be useful today as opposed to just saying oh if you're on a plane you can watch
John:
not great looking movies and not great looking screens on these glasses that look like really bulky glasses.
John:
The Vision Pro says, if you're willing to put this giant thing on your face, we can look way better and we think you'll like it.
John:
So I don't think they started from the wrong direction, but it's going to be a long time before they can do the glasses, even as well as Vision Pro.
John:
And by the time they can, the Vision Pro caliber $3,500 thing that you stick on your face is going to be even better.
John:
So it's not going to be within the next few years.
John:
So just be patient.
Marco:
That's important, too, to point out that as the technology gets better and more miniaturized to do maybe the clear glasses down the line, everything else will also get faster and better and the resource levels will go up and expectations will go up.
Marco:
That's why even though the Apple Watch has now been out for almost 10 years, right?
Marco:
This is the 10th year, I believe?
Marco:
Yes.
Marco:
But it hasn't replaced phones.
Marco:
The current trajectory is for it not to replace phones effectively ever, probably.
Marco:
The reason why is because our expectations of what everything does and what technology is able to do with a given amount of space and power goes up over time.
Marco:
While the Apple Watches today might be as fast as the iPhones 10 years ago, and they might have a lot of the same hardware capabilities at the raw level,
Marco:
as phones 10 years ago did, our phones are now that much better when you apply more power and more space and more money.
John:
And also the watch's screen is still roughly the same size.
John:
Sure, yeah.
John:
Like that's the biggest limiting factor on the utility of the watch is it's just sort of small and it's on your wrist and you can't use it with two hands.
Marco:
Right, and that's the thing.
Marco:
Those are like physical form factor restrictions that will always keep the watch a certain amount behind the phone in terms of hardware capabilities.
Marco:
Well, the same thing is going to apply with these two types of eyewear, you know, the headset versus the glasses.
Marco:
They're both things in front of your eyes, though.
Marco:
They are, but the headset is always going to have way more space and weight budget in it for things like a bigger battery or higher computational power components.
Marco:
Whereas the glasses will always need to be lighter, smaller, thinner, like everything, everything will be more restricted there.
John:
Yeah, but what they both have going for them, though, is like the watch is limited by its form factor because it's a watch and human wrists aren't really changing size.
John:
And the fact that we only have two hands isn't really changing rapidly.
John:
But putting things in front of your eyes, eventually this is, you know.
John:
eventually eventually you uh you reach the limits of human perception audio quality in the music we listen to not that it is the best it could possibly be but it has reached a point where pursuing better audio quality for consumer audio is not fruitful um screens are getting close to that for like desktop screens like retina is you know i think they can go a little bit farther but you're pretty close to exhausting uh
John:
In terms of resolution, we could do better on color and brightness, but like we're getting close to limits of human perception.
John:
So for the VR thing, once the $3,500 thing or whatever equivalent is starts to reach the limits of human perception in terms of resolution.
John:
then the AR glasses can essentially catch up because there's no sense in going higher resolution.
John:
There's still light field cameras and being able to focus your eyes.
John:
There's always another frontier to jump to, but there is a reasonable point of equilibrium because they're both competing to put screens in front of your eyes.
John:
So I think there will be an area where there is overlap between them until the next breakthrough comes that requires a $3,500 thing.
Marco:
By the way, while we're in our Vision Pro corner, I discovered a new pro and a new con for Vision Pro usage this week.
Marco:
The con, which kind of goes along with what John was just saying, is in movie experience, I miss the subwoofer.
Marco:
Like when you watch a movie with decent speakers and a subwoofer, you get those awesome like low bass sounds and parts of the music and everything.
Marco:
And in the Vision Pro, since it's all headphone based, you don't get that no matter what you're wearing because headphones don't really do that.
John:
Just put your Vision Pro on aux.
John:
Hook it up to your stereo system.
John:
Send the sound through your home theater system, which has surround speakers, of course.
John:
Oh, no.
John:
At least you have a subwoofer.
Casey:
Sick burn.
Casey:
Wait, real quick, though.
Casey:
Are you using the audio pods?
Casey:
You're not using like AirPods or anything like that?
Marco:
I tried both.
Marco:
But the thing is, I love headphones.
Marco:
I'm a huge headphone nerd.
Marco:
Headphones in general do not have the kind of low bass response that subwoofers have.
Marco:
They can't.
Marco:
You run into physics problems.
Marco:
Even the very best headphones that have the very best low frequency response cannot reach as low as a subwoofer can.
John:
You're not going to feel that rumble in your chest.
Marco:
Exactly.
Marco:
And that is part of a good movie experience, in my opinion, for many movie types.
Marco:
So I do kind of miss that.
Marco:
The Pro, I discovered, is that the Vision Pro is the first computing device that I can use while I have moisturizer or other lotion on my hands without it, like, gumming up the screen.
Marco:
Like, it's winter.
Marco:
My hands are always so dry.
Marco:
And usually, like, before bed, I put moisturizer on my hands.
Marco:
Then I'm like, well, now what do I do?
Marco:
Like, I got to, like, wait for it to dry...
John:
Well, you've got to be careful touching the glass that's in front of the cameras, though.
Marco:
But you don't have to touch it.
Marco:
You put the Vision Pro on, and then you put the moisturizer in your hands, and then you can sit there and let it dry.
Marco:
Okay, all right.
Marco:
Well, then when you're taking it off... Yeah, well, by that time, it's dry.
John:
All right.
John:
I'm not a moisturizer person.
John:
I don't know the parameters of the moisture problem.
John:
I'm like, yeah, I wouldn't want to touch electronics with moisturizer either.
John:
Because you have to touch the Vision Pro on the glass and aluminum part.
John:
You can't grab it by the light shield.
John:
So, anyway...
Casey:
Look, John, not all of us are oily like you are.
Casey:
Some of us need a little synthetic oil.
John:
I'm like that all the time.
John:
I'm not putting anything on.
John:
It goes on all my devices.
John:
You don't need moisturizers.
John:
I don't.
Marco:
I don't use it.
Marco:
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John:
let's talk about the semi-breaking news there are now m3 macbook airs oh actually before we get uh german had a rumor right before this broke that he was saying hey there's not going to be uh any march event for apple stuff that they're releasing ipads macs etc and shortly after he posted that sure enough macbook airs came out and there was no event for them uh
John:
i when he first posted this i'm like really no event for the first redesign of the ipad pro in six years or wherever it's been but since apple press release you know you know released the macbook airs maybe maybe there's they don't want to have an event for like i just feel like for the ipads i would think they would want to explain stuff but who knows so so far he's one for one uh m3 macbook airs no event just a press release
Casey:
Yeah, it was surprising.
Casey:
There was a very brief gate, if you will, a very, very brief kerfuffle about the fact that it is stated in the, I guess, press release or whatever, that it now supports up to two external displays, which first of all, heck yeah, that was one of the biggest complaints I saw of the M1 and M2 MacBook Airs, that they only support one external display.
John:
Although, when you saw it, Casey, didn't you think, wait a second, I remember, as one of the hosts of ATP, that we had many discussions about how the M3 system-on-a-chip cannot support three monitors, and that's why the M3 don't, you know, the limitations from the M2 haven't changed.
John:
That thought occurred to you?
John:
I was pouring over the tech specs right afterwards.
Marco:
I'm like, how did they do this?
Marco:
I'm like, how is it different from the 14-inch M3 MacBook Pro?
John:
Right, we talked about it so much, it was like,
John:
we had a whole thing of, I guess, they just decided that for the M3, they, you know, they're sticking to what they did in the M2, and you can't have three monitors, right?
John:
But the answer to that was eventually evident.
Casey:
Yeah, so they say that the only way you get two external displays is if you close the lid on the MacBook Air.
Casey:
So you can clamshell it to get two external displays.
Casey:
And honestly, I don't think that's an unreasonable trade-off.
Casey:
Like, obviously, in a perfect world, you would want to be able to do three displays, you know, one, the onboard and two externals.
Casey:
But
Casey:
I mean, that's what the other chips are for.
Casey:
And we have a little bit more information about this.
Casey:
But it's supposed to say one external display up to 6K at 60 hertz.
Casey:
So you can drive your beloved XDR display.
Casey:
Or you can close the lid to get two 5K displays at 60 hertz.
Casey:
And I think that's pretty decent.
Casey:
I think that passes muster for me anyway.
Casey:
But how is this working?
Casey:
So Hector Martin, who is, I think, basically the primary, if not only developer of, what is it, Asahi, Asahi, something like that?
Casey:
Asahi.
Casey:
Something like that, thank you.
Casey:
The Linux that's destined... Asahi.
Casey:
The Linux that is destined for Apple Silicon Macs.
Casey:
Hector writes, Apple introduced this capability into the M2 already.
Casey:
What?
Casey:
What?
Casey:
It's why the M2 Mac Mini supports two displays over Type-C or Thunderbolt, while the original M1 Mac Mini does not.
Casey:
The laptops are logically equivalent to a Mac Mini, with the HDMI port hardwired to the internal panel.
Casey:
Whoa.
Casey:
The only reason this wasn't enabled on M2 laptops so far is that it requires extra firmware support to disable the internal panel and reconfigure the primary display pipe for external mode.
Casey:
The firmware has lots of special support for the internal panel, so it's not quote-unquote just another screen connected to the system.
Casey:
There's a lot of stuff that has to be done properly to make this work as intended.
Casey:
Now the question is whether Apple will backport this to the M2 or not.
Casey:
DCP firmware nominally has an identical interface synced between all platforms, so it should be a common code base, so it should be easy to do, but they might explicitly lock it out.
Casey:
Today I learned...
John:
yeah so this makes perfect sense because obviously we've known the m2 can support two displays so that's just because it doesn't have a built-in one and of course the macbook air supports two displays the built-in one and one external one and so allowing it to ignore the external one makes sense uh as for this being backported to the m2 this definitely smells like something that apple wouldn't bother doing unless they essentially get it free uh as hector was saying like look if it's if it's a shared code base and they just have this firmware everybody gets it and related to that
Casey:
So there was a brief window of time, several hours, where everyone was losing their mind, and mostly understandably, that, hey, there's a 14-inch M3 MacBook Pro that exists in the world that cannot do this.
Casey:
It's not the M3 Pro.
Casey:
It's not the M3 Max.
Casey:
It's just the straight-up M3 MacBook Pro.
Casey:
It can't do this.
Casey:
What the what?
Casey:
Yeah.
Casey:
Well, Apple gets on the horn with 9to5Mac and says, oh, we're going to backport that.
Casey:
So Apple's confirmed to 9to5Mac that software update for the 14-inch MacBook Pro will gain the ability to drive two external displays with the lid closed.
Casey:
This feature will work identically to how it works with the new M3 MacBook Air.
Casey:
We don't know yet which software update it.
John:
of course that's also an m3 so the question remains will it be backported to m2 and even if apple sort of gets it for free because it's like a shared firmware base or whatever this kind of strikes me as one of those cases where apple would be like you know what it's a good differentiator for the m3 models to be able to do this in the m2 not people who bought the m2 bought them without an expectation that they would have this feature even if it's technically possible it i do wonder if apple's going to bother backporting
John:
So I'm glad the M3s are all getting it.
John:
I'm glad they essentially backported it to an M3 product that existed before the M3 MacBook Air.
John:
I think this is a good compromise.
John:
I do continue to hope that in the M7 or whatever the hell timeline allows them to make changes based on feedback, they will say, you know what, two display controllers in the M3 line.
John:
Might be limiting not for desktops, but for the laptops because I mean we'll see we'll see how people like the m3 like people are annoyed like when I when I dock my laptop at work I can't use my two monitors Well now you can are you happy now?
John:
Are you still annoyed that you can't also have your lid open and use the built-in display?
John:
And you know as we pointed out when we looked at this When we were originally discussing this why it is why did they not make the changes in the m3?
John:
The display controllers take up space on the die.
John:
They cost money This is the lowest end m chip
John:
How do you want to spend the money in that space and that power budget or whatever?
John:
It still might be the right thing for Apple to do on its lowest end laptops to only support two.
John:
But at a certain point as transistors shrink, I think they should spend some of that bounty of additional transistors to put maybe another display controller on there.
Casey:
Indeed.
Casey:
So some of the features that are a little bit different for audio, voice isolation and wide spectrum microphone modes and enhanced voice clarity in audio and video calls.
John:
Do you think that is?
John:
Do you think that's just like software using the M3's better neural engine?
John:
That doesn't strike me as hardware differences.
Marco:
That sounds a lot like, because they've done similar tricks in the past where they're like, the webcam got better and it's like the same component just with better software and image processing.
Marco:
So it's probably the same thing.
John:
And why would it be M3 as opposed to M2?
John:
The M3 does have a better neural engine.
John:
I don't know.
John:
But anyway, there's not a lot of differences.
John:
So we're reading you all of them.
Casey:
Indeed.
Casey:
Connectivity moves from Wi-Fi 6 to Wi-Fi 6E.
Casey:
And with regard to the environment, the new MacBook Air is the first Apple product to be made with 50% recycled content, including 100% recycled aluminum in the enclosure, 100% recycled rare earth elements in all magnets, and in another first for Apple, 100% recycled copper in the main logic board.
Casey:
MacBook Air meets Apple's high standards for energy efficiency and is free of mercury, brominated, flame retardants, and PVC.
Casey:
The packaging is 99% fiber-based, bringing Apple closer to its goal to remove plastic from all packaging by 2025.
Casey:
Well done.
John:
Every product they come out with, it's nice to see they get new stuff to brag about to show that they're making incremental progress towards their goals, which is nice.
John:
There's one more important feature that the M3 MacBook Air has.
John:
It is, according to Apple's documentation, available in midnight.
John:
which features a breakthrough anodization seal to reduce fingerprints.
John:
Remember that coating that the black one, the black MacBook Pro has got?
John:
This makes me think that the midnight one is getting that coating too, which will really help because the midnight one looked awful when anybody touched it.
Casey:
The M2, not the M3, but the M2 13-inch MacBook Air is still for sale, starting at $1,000.
Casey:
This is in comparison to $1,100 for the M3.
Casey:
The M1 MacBook Air is no longer for sale, brand new.
John:
Sad.
John:
Sad the M1 MacBook Air is gone because basically the M2 replaces it in the line at the same price point.
John:
I'll miss the wedge.
John:
I think there was a Verge story about specifically missing the wedge, but I think we've all mourned this when the MacBook Air was redesigned.
John:
But I still think that M1 MacBook Air...
John:
is so great.
John:
Obviously, it would have been better if it had MagSafe, but you can't have everything.
Marco:
Yeah, this honestly, yeah, it had a great run.
Marco:
The M1 is pretty old now.
Marco:
It was time to let it go out of the lineup.
Marco:
I bid it a fond farewell.
Marco:
I love that computer.
Marco:
It was extremely important and amazing.
Marco:
But yeah, it's old now, so it was time to bid it farewell.
John:
And honestly, I was consulting with some people about like, should I buy this?
John:
Someone was asking, I want to buy a cheap laptop.
John:
What should I get?
John:
And I said, well, you should get an M2 MacBook Air, but the M3 is going to come out soon.
John:
And this was like weeks ago.
John:
Lo and behold, the M3 did come out.
John:
But what I said was like, look, the M3 is going to come out, but it's not better in any ways that you care about probably.
John:
So wait for the M3 to come out and then get the M2 cheaper.
John:
And you can do that right now.
John:
I don't know how long they're going to sell the M2.
John:
Maybe just like they did the M1 for the entire duration.
John:
But you can configure an M2 for up to several hundred dollars cheaper than you used to be able to configure it a couple days before.
John:
And are you going to notice...
John:
the m3 differences maybe the dual display thing if they don't backport it if that's important to you but the speed difference or anything like that and this class of machine is not going to be impactful to you the the battery life uh apple's rating them exactly the same this is a good time to get a cheap m2 maybe towards the end of this year uh then the m2 will be a little bit longer in the tooth but right now
John:
You can get a good deal on an M2 MacBook Air, and that's a good machine.
John:
And if you swapped out someone's M3 MacBook Air with an M2 one and they didn't use two external displays, how long would it take them to notice?
Marco:
Well, it depends on whether they got the navy blue model or not.
John:
They'll notice that one pretty quickly.
John:
The fingerprints would show up.
Marco:
And that's great because, again, the MacBook Air, it's so important to hit low price points with that computer.
Marco:
The M2 version has all the modern stuff.
Marco:
It has the MagSafe.
Marco:
It has the new design.
Marco:
It has the new finishes.
Marco:
All the stuff that the M1 version didn't have.
Marco:
And now it's that low-priced option.
Marco:
That is fantastic.
Marco:
I love the MacBook Air line.
Marco:
It is just a delightful computer to...
Marco:
It's amazing to pick up and hold and bring places.
Marco:
It is a great all-around computer, and it is by far the default choice for almost any needs.
Marco:
If somebody says, I want a computer, you can just say, get the MacBook Air.
Marco:
Unless you know specifically that they have some really good reason why they can't get their worth on a MacBook Air, that's the default for everybody, and it's great that it got better, and the low-end model got better, and it's just great news all around.
John:
yeah speaking of great news no actually what's the opposite of that uh speaking of i guess this is like a a category that's been a category in this show and a category in the news for it seems like years now i guess we would call it apple versus the world seriously
Casey:
All right.
Casey:
So Apple was fined approximately 2 billion U.S.
Casey:
dollars.
Casey:
That's billion with a B. Billion dollars by the EU for App Store practices.
Casey:
This is covered in The Verge.
Casey:
From The Verge's summary, Apple's been hit with a fine of 1.84 billion euros, or about 2 billion bucks, by the European Union antitrust regulators over its App Store rules and has been told it cannot stop music services from advertising cheaper subscription deals outside of Apple Store.
Casey:
Apple issued a scathing response to the ruling, which I'm sure we'll talk about, saying the commission failed to, quote, uncover any credible evidence, quote, of consumer harm or anti-competitive behavior.
Casey:
The company also says that Spotify wants to, quote, rewrite the rules of the App Store, quote, to gain competitive advantages while paying nothing to Apple, despite Apple claiming the App Store was crucial to Spotify's current market domination.
Casey:
Apple says it will appeal the decision.
Casey:
I think – maybe I'm reading this wrong, but the thing that struck me so funny about – I think it was from The Verge, the summary from The Verge, but the way they wrote it just stuck out to me.
Casey:
The quote is, "'This decision sent a powerful message.
Casey:
No company, not even a monopoly like Apple, can wield power abusively to control how other companies interact with their customers.'"
Casey:
And it's just so funny to me because this is an example of Apple's perspective leaking into The Verge's coverage of it.
John:
Well, who do you think there refers to, though?
John:
It's not clear.
Casey:
Well, that's the thing.
Casey:
That's why I said maybe I'm misreading it.
Casey:
But I read that as this is Apple yet again saying these are our customers.
Casey:
They're not Marco's customers.
Casey:
Your customers are my customers for CallSheet and Overcast and whatnot.
Casey:
It's Apple's customers.
John:
Yeah, I think your read is right for looking at the sentence again.
Casey:
That's gross, man.
Casey:
That's so gross.
John:
That's the way Apple always frames it.
Casey:
Oh, I know it is.
Casey:
I know it is.
John:
I forgot to give my framing of this.
John:
I got too distracted by Apple versus the world.
John:
I do want to talk about
John:
Just to summarize, this is a specific ruling and Apple's going to appeal and blah, blah, blah.
John:
And the news here is like the fine is bigger than they thought it was going to be because there was a leak that it was going to be like 500 million.
John:
Turns out it's 2 billion.
John:
And we'll talk more about that in a second.
John:
But I do want to sort of give the overview of this because I think it is...
John:
It is instructive and sketches the outline of this whole debate in a way that is easy to miss because of all the details that we're going to get into.
John:
This is the European Union.
John:
We've said this before, but we reiterate, deciding that there's insufficient competition.
John:
uh in certain markets and they want to increase the competition and i know this sounds stupid but bear with me in the u.s people are in the u.s we're familiar with you you know study history or social studies class or whatever the sherman antitrust act the idea that there's like say only one company in the united states that can sell cars that's bad for consumers because if you don't like the cars from that one company uh you don't have a choice where to buy something else and
John:
And you're like, well, someone will just start a competing car company.
John:
That's capitalism.
John:
But then if you try to start a competing car company and of course, car companies get all their parts from this part supplier network and you're like, I'm going to buy, you know, you start a new car company and you go try to get buy tires from the tire company.
John:
And the one big car company says, hey, if you sell tires to that startup, we're not going to buy any of your tires anymore and you're going to go out of business.
John:
That would be an example of abusing monopoly power.
John:
And we have laws against that.
John:
That's what the Sherman Antitrust Act is about in this country to say if there is what we call it a monopoly, one big giant company that controls too much stuff, it's bad for consumers for exactly that reason.
John:
It's not illegal to be a monopoly, but it is illegal to say to the tire manufacturer, if you sell tires to any of those startups that are trying to compete with us, we will cut you off and you will go out of business.
John:
That's abusing monopoly power.
John:
the eu says there's insufficient competition in you know smartphones or whatever like whatever whatever however they define the market there but in the eu they don't have the same rules as we do about like there needs to be one big giant company that is overall dominant they've decided that apple and android as sort of a duopoly with two companies more or less dividing up the entire market for like smartphones for example
John:
It doesn't matter that, you know, neither one of them is the only game in town.
John:
It's like, well, if you don't like Apple, you can go to Android.
John:
And if you don't like Android, you can go to Apple.
John:
See, competition.
John:
The EU has decided that's not enough competition.
John:
So everything they're doing is based on that theory that there's not enough competition.
John:
And when there's not enough competition, it's not good for consumers.
John:
More specifically, there happens to be a few important companies in Europe, like, say, Spotify, that obviously lobby them and have a vested interest in saying, you know, Apple is being real unfair to us on their platform and we don't like this and so on and so forth.
John:
That's kind of details, though.
John:
The big picture is...
John:
in theory, not enough competition according to the EU, and their rules are different than ours, and they want to find a way to make more competition with varying degrees of success.
John:
And I think keeping that in mind helps to frame this not as like, who's the good guy?
John:
Who's the bad guy?
John:
Who's right?
John:
Who's wrong?
John:
Apple should be able to do this.
John:
Why can't Apple do what it wants with its customers?
John:
Is the EU being mean?
John:
Is the EU being good?
John:
Like...
John:
You can have your opinions about it, but what the EU is trying to do makes sense if you understand their worldview.
John:
From a U.S.
John:
perspective, it doesn't make – like you just read in that thing like that Apple – was this quote from The Verge?
John:
No company, not even a monopoly like Apple, the thing that you just read?
Casey:
Yeah, I'm pretty sure it was from The Verge, yeah.
John:
a monopoly like apple american reads that and says apple's not a monopoly like in the smartphone in no market is apple a monopoly like they don't have like 99 smartphone share they don't have 99 share of like even like airpods or like they're they're not a monopoly and it's like that's the eu doesn't care that they don't dominate the eu cares that
John:
They're too big.
John:
There's no percentage market share, percentage profits or whatever they said.
John:
It doesn't matter that they're not the only game in town.
John:
There's too few games in town.
John:
There's not enough competition.
John:
And we read that and saying, that's unfair.
John:
I've said this in the past trying to say, according to US laws or whatever, it's like saying Honda has a monopoly on Honda cars.
John:
i mean they do it's kind of tautological right but it's like but there are other car makers and the eu has said there's not essentially there's not enough there's not enough competition and so we need to make this playing field more level gruber had a post about some of the things we're going to talk about today as well saying like well what is the eu saying who should decide who gets to like do things on apple's platform shouldn't apple get to decide that is the eu saying they should get to decide it and my answer to that is
John:
Yeah, that's what they're saying.
John:
They're saying, you, Apple, because you're too big and Android and whatever, we are going to impose rules on you.
John:
Even though you made the platform, it's your company, you do the thing, and in your American sensibilities and your American concept of monopoly, you say, I should be able to do whatever the hell I want.
John:
I'm a private company.
John:
Who is the government to tell me who I can and can't allow on the App Store?
John:
If I say Spotify can't put a link to alternate payment methods, it's my platform.
John:
If they don't like it, they can go somewhere else.
John:
The EU is saying...
John:
That would be fine if there was more competition, but there's not.
John:
And so we've decided we're going to imply impose rules on you.
John:
And that I think gets lost in a lot of this discussion.
John:
I mean, I feel almost like it kind of got lost in Gruber's thing of like him not understand, not even understanding what they're saying.
John:
It's like, yeah, that's a hundred percent what they're saying.
John:
That's their whole point.
John:
Not enough competition.
John:
Government steps into, in theory, restore competition for the good of consumers.
John:
Now,
John:
Are they successful at that?
John:
Like the DMA, we don't know how it's going to work.
John:
We talked about it in many past shows, but we have some questions and same thing here.
John:
But I do want to just put this long-winded framing up front to put everyone in the right mindset of like what's happening in the EU and why.
Casey:
we've talked about this so much and I don't know that there's much more.
Casey:
Well, of course, there's much more to say because the three of us, but I'm trying not to go down the rabbit hole that we find ourselves in so much about Apple's attitudes towards third party developers.
Casey:
But I mean, I'm, I'm not upset by this, to be honest with you.
Casey:
Like,
Casey:
I feel like the more I read about it, the more maybe it's a little more narrow than I want it to be.
Casey:
So let me read some excerpts from the EU's actual press release about it, which to the best of my knowledge is the only real documentation we have so far.
Casey:
But the EU press release reads in part, Apple is currently the sole provider of an app store where developers can distribute their apps to iOS users.
John:
This is them essentially saying Honda has a monopoly on Honda cars.
Casey:
Yeah.
Yeah.
Casey:
The commission's investigation found that Apple bans music streaming app developers from fully informing iOS users about alternative and cheaper music subscription services available outside of the app and from providing any instructions about how to subscribe to such offers.
Casey:
These anti-steering provisions are neither necessary nor proportionate
Casey:
for the protection of Apple's commercial interests in relation to the App Store on Apple's smart mobile devices and negatively affect the interests of iOS users who cannot make informed and effective decisions on where and how to purchase music streaming subscriptions for use on their device.
John:
This is them essentially like they're not saying this, but the implication is that, look, users don't have a choice to go elsewhere.
John:
If you assume users are stranded on iOS, like there's no real choice for them to go elsewhere, which we know is not true.
John:
They can go to Android, but they're basically saying like there's not enough choice so that your normal answer of saying, hey, whatever we do on our platform, man, they don't like it.
John:
They can leave.
John:
The premise of this is that they can't make effective decisions on how to purchase streaming music or whatever.
John:
Yeah, they can't do that on iOS because of Apple's rules.
John:
But why do they have to be on iOS?
John:
And the EU is like, it's too much, man.
John:
Like there's only two companies and they both do very similar things.
John:
And so the out is not for Apple or Android to say if they don't like it, they can go to our one competitor.
John:
The EU says, just assume they're stranded.
John:
Given that they're stranded, given that they have no choice, it's like the public airwaves.
John:
There's only one set of public airwaves or whatever.
John:
There's only air pollution.
John:
There's only one atmosphere for all of us, right?
John:
There's only one iOS for all of us, Android and iOS, and we all have to be there to live our lives.
John:
This is why the EU has decided there's insufficient competition on these two important platforms.
John:
They're dispensing with the notion that
John:
that there is any real competition and that people can make choice.
John:
And they're saying, given that people are essentially trapped, again, I know they're not, but that's what, given the people that are where they are and realistically, there's nowhere else for them to go.
John:
We have to make sure that this place where they're effectively trapped is fairer than it is.
John:
And that I think is really interesting because again, when Apple looks at this, they're like, what the hell, man?
John:
It's our platform.
John:
We should be able to do what they want.
John:
And the EU is like, well, given that people are stuck on your platform.
John:
I was like, well, how are they stuck on our platform?
John:
They can just go to Android.
John:
And Android does the same thing about Apple.
John:
And like,
John:
honestly it's not the way we do things in the u.s but i see their point of view and i also see how a duopoly is especially with respect to the sherman antitrust act and our monopoly laws having a duopoly like android and ios is a very convenient like kind of get out of jail free card according to u.s laws if it's like we're not a monopoly and never will be so now if we in android more or less do kind of similar things
John:
That's competition, right?
John:
And we all know we all have to have mobile phones.
John:
And there's no place for us to go except for the other company that does exactly the same thing.
John:
So I kind of do feel that there's insufficient competition in this market.
Casey:
Yeah.
Casey:
And just to quickly reiterate and recap, the issue, or at least the way I understand the issue, is that Apple forbids...
Casey:
generally speaking, forbids people from saying, hey, if you don't want to buy our thing on the app store using an app purchase or whatever, go to, you know, www.spotifyischeaperontheweb.com and we'll sell it to you there for less money because the implied thing there is we're not paying 30% to Apple.
Casey:
And Apple has made it very plain since I can remember that that is forbidden.
Casey:
That's the anti-steering thing.
Casey:
You are not allowed to steer your customers, not Apple's customers, your customers to your own website in order to establish a relationship with them.
Casey:
You're not allowed to steer them to your own website in order to sell at a cheaper rate than what you would sell on Apple's platforms.
Casey:
None of that is allowed.
Casey:
And that's the crux of the issue here.
John:
If Spotify doesn't like it, they can just get off the iOS platform, right?
John:
Isn't that a perfectly viable thing for Spotify to do?
John:
What's the problem?
Casey:
100%.
Casey:
I don't know why they're whining.
John:
That's what you feel like.
John:
Maybe there's a better analogy.
John:
Instead of users being trapped, that's not an option for Spotify.
John:
Just stop selling to 50% of the population.
John:
What's the big deal, Spotify?
Casey:
Yeah.
Casey:
In addition, the fine must be sufficient to deter Apple from repeating the present or a similar infringement and to deter other companies of a smaller size and with similar resources from committing the same or a similar infringement.
John:
So interestingly, the EU didn't like Apple's behavior.
John:
Like, they didn't seem very cooperative or nice, and so they punished them for it.
John:
Keep this in mind for a future topic.
Casey:
The commission has also ordered Apple to remove the anti-steering provisions and to refrain from repeating the infringement or from adopting practices with an equivalent object or effect in the future.
Casey:
Dear Apple, get f***ed.
Casey:
Love the EU.
John:
Well, I don't know if $2 billion is a, see, I'll do it nicely, is a get effed response because Apple might be like, this annoys us, but we make $2 billion in start the stopwatch.
John:
It's not nothing, but Apple makes a lot of money.
John:
So it's so hard to figure out what is a deterrent versus what is like, you know, what is the amount that makes Apple leave the EU?
Marco:
versus what is the amount that is too cheap for apple to notice i think this kind of hits the right level because apple seems pretty annoyed about it but i'm not sure it deters apple from anything i mean keep in mind though like you know the the amount the european commission is is you know assigning as a fine seems arbitrary enough that if apple does just blatantly say all right fine we'll pay it and keep doing what we're doing they can just then find them a lot more next time oh yeah no i don't think they're going to keep doing it i think they'll still
John:
I mean, because a lot of the stuff this is part of the debate on this is this is this is a previous ruling that is superseded by the DMA, which doesn't allow it has disallows the anti steering thing anyway, which is part of Apple's response.
Marco:
And I expect we're going to be debating and they're going to be going through court for years on whether their DMA response is compliant with the DMA or not.
Marco:
I don't know if that's a court for years thing, but we still haven't we still don't know the answer to that.
John:
yeah i think it's going to be you know i i assume epic's going to fight it with that in a bit we're going to i assume spotify might continue to kind of lobby against it in the background we'll get to that yeah no there have been many people filing filing briefs essentially saying hey we saw apple's response to the dma and we company that's out here thinks it's totally not compliant just for what's that worth what for what's that's worth uh go ahead european commission and tell us whether it's really compliant
Marco:
What hits home here for us is we have Apple continuing to tell this storyline to themselves and the press and the courts and the world that effectively says that developers bring nothing to the platform and that we owe Apple.
Marco:
for all of our business, and that we provide no value to the platform.
Marco:
Certainly, the iPhone doesn't need Spotify.
Marco:
Spotify needs the iPhone.
Marco:
The iPhone doesn't need any of our apps.
Marco:
The iPhone would sell itself without any apps whatsoever.
Marco:
We are just sucking on the value that they're providing, and we owe them everything.
John:
I don't think Apple has ever said that.
John:
That's how you feel.
John:
And that's a lot of things that Apple says in that direction.
John:
But Apple has never... I'm going to be fair to Apple.
John:
They've never come straight out and said that.
Marco:
No, but that's basically their argument here.
Marco:
And in their response to this, they really lean on that pretty heavily.
Casey:
Agreed.
Marco:
And by the way, this response... Is something.
Marco:
First of all, yeah.
Marco:
It's terribly written.
Marco:
Whoever wrote this...
Marco:
It had to be a very high up executive because whoever wrote it didn't get edited enough.
Marco:
And so it had to be somebody so high up that they couldn't get edited enough.
Marco:
Whoever wrote this should not be writing things for Apple's press releases.
John:
In a future topic, we have some things that Apple wrote that actually have names signed to them.
John:
So you can tell me if you think it sounds like the same person.
Marco:
It's poorly written.
Marco:
It sounds juvenile.
Marco:
It sounds petty.
Marco:
Oh, God, yes.
Marco:
And I wonder, the whole time I'm reading this, I'm wondering...
Marco:
Who is this for?
Marco:
Who are they writing this for?
Marco:
Is it for the public?
Marco:
Because it's not a good look.
Marco:
Is it for regulators?
Marco:
Because I don't think they need to write press releases to regulators.
Marco:
Is it to courts?
Marco:
I doubt it.
Marco:
That's not really the venue for that either.
Marco:
Who is it for?
Marco:
I think it's to the media.
Marco:
Did they think this would make them look good, though?
John:
The reason we have this link is because every single article that talked about this...
John:
linked to Apple's response and quoted it.
John:
So that's what it's for.
John:
There's going to be stories on this fine, and Apple wants to have its say on those stories, and this is Apple's say.
John:
Apple should not have this say.
Marco:
It's for their own good.
Marco:
They should not be saying this in this way.
John:
I don't know how well they dropped it, but that's the target audience, I believe.
Casey:
I think you're both right.
Casey:
I think Marco is 100% correct that this is extremely petty, extremely juvenile, extremely vindictive.
Casey:
Somebody in the chat room just said they're acting like a petulant child, couldn't agree more.
Casey:
But I also think that John is right.
Casey:
The purpose for this is to have some sort of official statement for the press.
Casey:
So let's read a few excerpts.
Casey:
Today, the European Commission announced a decision claiming the app store has been a barrier to competition in the digital music market.
Casey:
The decision was reached despite the Commission's failure to uncover any credible evidence of consumer harm and ignores the realities of a market that is thriving, competitive, and growing fast.
John:
So on that, on the consumer harm, again, from an American perspective and the various laws and cases that have been on things like this, they're usually pretty well-defined rules.
John:
Things that you have to show to be evidence of consumer harm, very often in U.S.
John:
law, it's fixated on prices.
John:
Has the price of X gone up or down over time?
John:
And if the price hasn't gone up, then where's the harm to consumers?
John:
Obviously, we know, and I think most people involved in these cases know, that consumer harm can take more forms than just high prices.
John:
Yeah.
John:
lack of choice, things that consumers never even get a choice to pay money for because they're disallowed.
John:
All of that is harm that is not as simple as saying, hey, look at the price of this thing.
John:
That would be such a ham-fisted way to do it, like the Amazon model.
John:
We'll put everyone else out of business, and once we have a dominant market share, then we'll just crank up the prices.
John:
That's like an evil pharmaceutical bro level of...
John:
Because that has happened to pharmaceuticals, right?
John:
And it's like nakedly evil.
John:
But like the smarter strategy is just to maintain your dominant position, reap your good margins, and not kill the golden goose by suddenly jacking up the prices a thousand percent or whatever.
John:
So Apple's saying there's no consumer harm.
John:
I think the whole EU thing says like, look, here's what we consider consumer harm.
John:
They don't have a choice.
John:
Spotify can't explain a better deal to them.
John:
And yeah, like the prices may be...
John:
the same or lower or flatter not you know not changing that much but there are many other ways to judge harm so this is a place where apple and the eu essentially disagree or apple is being disingenuous and saying we don't see any consumer harm show us the consumer harm the eu is like we're trying to show you the consumer harm but it's not as simple as look how the price has gone up
Casey:
If you took your fingers out of your ears, maybe we could talk to you about it.
Casey:
Anyway, going back to Apple's response, Spotify has a 56% share of Europe's music streaming market, more than double their closest competitors.
Casey:
According to who, I wonder.
Casey:
But anyway, and pays Apple nothing for the services that have helped make them one of the most recognizable brands in the world.
Casey:
A large part of their success is due to the App Store, along with all the tools and technology that Spotify uses to build, update, and share their app with Apple users around the world.
Casey:
See, this is where I think Marco and I jump in and say, this is it.
Casey:
This is Apple saying...
Casey:
We did all the work.
John:
Right.
John:
But they say a large part of their success is due to the App Store.
John:
They don't say all of their success, 100 percent of their success.
John:
They say a large part.
John:
They don't even do a percentage.
Marco:
Come on.
Marco:
I don't think a lot of people are discovering Spotify through the App Store.
Marco:
I'm pretty sure people know about Spotify who want to search for it and they just need to download the Spotify app.
Marco:
I don't think the App Store is really delivering a lot of value there.
John:
Apple is not saying that they're bringing no value to the, that Spotify brings no value to the iOS platform or the iPhone.
Casey:
They're towing the line.
Casey:
They're coming right up the line and saying, okay.
John:
I'm just saying, like, I know it makes you feel that way, and that is the emotional impact of it, but they literally aren't saying that.
John:
And as for the market share, this is a great one because I believe that Spotify has a free tier.
John:
Yes.
John:
That's a huge part of their business.
John:
And that's got to massively impact their market share.
John:
How many people pay for Spotify versus how many people pay for Apple Music?
John:
What does that share break down to?
John:
Because Spotify doesn't make money from free customers.
John:
It wants to convert them into paying customers, but it has to pay money for the music that the free customers stream.
John:
They are negative, right?
John:
And so, yeah, Spotify that has a free tier has 56% market share.
John:
That is actually damning for Apple to say, look, your competitor has a free option and they're barely ahead of you.
John:
Or I don't know what Apple share is.
John:
Maybe it's not the other, you know, remaining 44% or whatever.
John:
There's other players, but Apple's a pretty big one.
John:
But yeah, like citing this market share, and by the way, market share is not the be all and all, but citing this market share when Spotify has a free tier is really not particularly convincing.
Casey:
Continuing, we're proud to play a key role in supporting Spotify's success as we have for developers of all sizes from the App Store's earliest days.
Casey:
The European Commission is issuing this decision just before their new regulation, the Digital Markets Act, comes into force.
Casey:
Apple is set to comply with the DMA in days, and our plans include changes to the rules challenged here.
Casey:
What's clear is that this decision is not grounded in existing competition law.
Casey:
It's an effort by the Commission to enforce the DMA before the DMA becomes law.
John:
Okay.
John:
They're going to say, look, you already scolded us for this and we're changing it and we're totally compliant, aren't we?
John:
So I don't know what you're doing this fine for.
John:
And it's like, Apple, you got in trouble for this before the DMA.
John:
I know things take a long time and they overlap with each other, but it's a timeline of events.
John:
It's like, you did this bad thing and then we passed the DMA and now you have to comply with that.
John:
But just because you already passed the law that's making me fix this, you still get punished for doing it.
John:
I mean...
John:
again i don't necessarily agree with like you can say that you shouldn't it's like if you want to sell things in the eu you got to deal with the the eu and their rules and this is how their system works and you don't get to erase your past fine because now you're doing something that makes the bad thing you did impossible anyway as far as you're concerned again assuming you comply so
John:
not a strong response but i think it could have been worse and i i do think that apple is trying to thread the needle uh they even had a thing the one thing i think you can really call them on it's not quoted here also i'll try to do it from memory but at one point they said you know app store is great uh it's a level playing field for everybody like this is not the exact language but
Casey:
Today, developers compete on a level playing field on the App Store.
Casey:
Apps are reviewed according to a comprehensive set of rules which are designed to protect our users, and meeting those rules means developers of all sizes can reach more than a billion devices around the world.
John:
All right, so that's their level playing field argument, and they've said that before or whatever.
John:
And then in the same document, I believe they say, hey, we flew Apple engineers out to Spotify to help them with their app.
Mm-hmm.
John:
that's not a level playing field how many apple engineers has apple flown out to you casey to help you with your i'm not saying this is wrong i say it makes perfect sense but like apple can't do both arguments in the same document and say it's a totally level playing field everybody gets the same shot but we flew engineers to spotify just don't say it's a level playing field it's not
Marco:
And also, why might it have been valuable to fly engineers to Spotify?
John:
Right, yeah.
John:
Why does Spotify get different treatment?
Marco:
I mean, maybe it's because an iPhone that didn't have a Spotify app would be less valuable to iPhone customers.
Casey:
Hmm.
Marco:
Yep.
Marco:
What a concept.
John:
Yeah, and again, I've said since the first time we discussed this years ago, Apple should do that.
John:
big customers and the good customers that's one of my complaints about the app store that being a quote-unquote good developer that makes quality apps doesn't get you enough privileges in apple's book right agreed agreed so but all i'm saying is that in this in the same document they also want to say it's a level playing field and it's obviously not nor should it be in this way obviously the eu wants to make there be more competition and the main playing field they're
John:
different companies in the app store it is always between all the eu stuff is between all the companies in the app store and the person who owns the app store the company that owns the app store it's always between apple and n developers it's not between like spotify and title that the eu is not trying to level the playing field between spotify and title because they think spotify is getting unfair preferential treatment from apple that could be a thing that they could complain about but i but that's not what they're complaining they're complaining that apple
John:
who owns the platform and doesn't pay itself 30%, has a huge advantage over Spotify.
Casey:
We've even flown our engineers to Stockholm to help Spotify's teams in person, and the result is that when a user opens the Spotify app, listens to music on their commute, or asks Siri to play a song from their library, everything just works.
Casey:
And again, Spotify pays Apple nothing.
Casey:
That's good.
John:
Those engineers that they fly out there, they should have them work on Apple Music because sometimes it doesn't just work there.
Casey:
For real.
Casey:
Also, just a bit earlier in the same document, our app review team has reviewed and approved 421 versions of the Spotify app, usually with same-day turnaround, and frequently expedites reviews at Spotify's request.
Casey:
But yes, all of us are equal.
Casey:
Yeah, must be friggin' nice.
Marco:
Well, in all fairness, AppReview has been a lot faster recently for everybody.
Casey:
It has been.
Casey:
You're right.
Casey:
You're right.
John:
It is.
John:
But, yeah, they're getting nice treatment.
John:
And, again, I think they should.
John:
But, like, that's, you know, it's just weird for them to say in the same document, level playing field.
John:
Are all developers treated the same?
Marco:
And the thing is, and I think Apple actually, they do make some good points in this document, which is why, like, I see what they were going for.
Marco:
They do have some good points.
Marco:
One of the best points they make is...
Marco:
that Spotify, for some reason, does not use the reader app exception.
Casey:
We should explain real quick what it is.
Casey:
So reader apps, which is a very poor name, but it's the name that Apple landed on, are apps like e-book apps, Netflix, things where basically you're getting new content regularly and
Casey:
And, and certain apps fall into this category, like, you know, Netflix and Spotify, where they can apply for and get an exception to this anti-steering thing.
Casey:
And that only has happened in the last few years, I think.
Casey:
I don't remember exactly when it was.
Marco:
Yeah, I think it was a year and a half ago or so.
Marco:
And it's, it's specifically, it isn't just apps that have new content.
Marco:
It's apps where like the primary purpose of the app is to access media and
Marco:
that you have purchased on their website or have a streaming subscription or something.
Marco:
And so like Netflix, the Kindle, like stuff like that, that is the main purpose of the app is to consume certain predefined types of content, audio, video books.
Marco:
And this allows them to link out to their website by putting up, first putting up a scare sheet using Apple SDK, saying you're about to leave the web, you're about to leave this app and Apple can't protect you from the scary scammy website.
Casey:
Stuff's going to get stolen, huh?
Marco:
But you can get an exception.
Marco:
You can have a single fixed link that your app can link out to with certain design requirements around what the link has to look like that basically says you can create an account on Netflix.com and then Netflix.com can be an underlined blue label.
Marco:
that you can click on, and it will show the scare sheet, and then kick you out to Netflix in the web browser.
Marco:
And they are allowed to then have you purchase things there without paying Apple any commission with no... That's it.
Marco:
Apple's out of the game.
Marco:
No requirements after that.
Marco:
It is the one major exception to the App Store.
Marco:
No external payment kind of integration at all.
Marco:
It's the one big exception.
Marco:
Apple made this exception for this one category of apps, the reader quote category,
Marco:
And Spotify qualifies.
John:
And for some reason, they don't do it.
John:
I think I can understand why they don't, because it's so limiting.
John:
Like, they want more, essentially.
John:
Like, you know, they want freedom to basically be able to have a big flashing banner that says, say, 30%, lower price, dollar sign this.
John:
Like, all the rules that Apple has about that link are so incredibly restrictive.
John:
That's true.
John:
i think strategically decided like look let's continue to lobby the eu regulation body to say we're a european company we're getting screwed by apple we want you to fix things and it makes their case stronger to say uh look at the state of our app uh we don't even have a way to let people go over there like maybe if they had done this then apple would say look they're already linking to us there's no problem to be solved and i don't know if it makes their case stronger or weaker but either way i don't think spotify is satisfied with the reader exception and so
John:
their argument now has clarity of saying, look, here's the app.
John:
We can't link out to our things.
John:
We should be able to.
John:
We should be able to without draconian restrictions about it.
Marco:
Yeah, because the main restrictions on it are, first of all, the link you link out to has to be a statically defined URL.
Marco:
So you cannot have a user ID appended to the end of it or something.
Marco:
And so to use it to actually bump someone out of the app, buy something on your website, and then kick back into your app...
Marco:
can be very cumbersome for the user and would have a low conversion rate as a result and apple knows that that's one of the reasons why they require it to be a fixed url with no parameters so that's one reason but also they have actually rules against like you can't say around the link in your ui this is cheaper on our website go get it here for only ten dollars instead of 13 or whatever yeah let alone by how much cheaper it is like you can't you can't do like basic marketing like this you will save this amount of money by clicking here
Marco:
Yeah, you can't even say you will save money by clicking here.
Marco:
You can say nothing about it.
Marco:
You can simply say in neutral language, like, you can create an account on our website here.
John:
You can create an account on our website.
John:
You can attend a lab, but don't say anything else about it.
Marco:
And then also, if you use the external payment reader app exemption, that app is not allowed to also use an app purchase.
Marco:
So Apple's saying, fine, you know what?
Marco:
You're going to have competition with our system.
Marco:
You don't get our system at all.
Marco:
And so for some apps, they would rather offer both because then they can get the higher conversion rates of people who will only use an app purchase.
Marco:
Then they get them as well.
Marco:
But Apple says, nope, if you apply for this exemption, you are not allowed to use our system at all.
Marco:
We're going to take our ball and go home, which honestly, I think that's their prerogative to do.
John:
but but but at that point it's not it's not fair because they're it's like oh so we can make our own system that looks as nice as and works as well as an app purchase like no you're literally not allowed to not that you're not technically capable of it you're literally not allowed to make something that's as nice as an app purchase and that purchase can show you the prices it can send information and loop you back through like you don't lose any like it's just they they are disallowed by rules not allowed to make something that actually is competitive with an app purchase and that's ridiculous
Marco:
But that being said, I think the reader app exemption is by far the biggest hole Apple has opened up in their tight grip on IAP.
Marco:
Spotify qualifies to use it and they don't use it.
Marco:
I see why they want to do that because what you were just saying, like strategically, they want to be able to go to regulators and say, we're not going to do this highly restrictive half-baked solution because this is not what we want.
Marco:
But I think it leaves Apple a huge counter argument to then say, look, we gave them this door and they're willingly not taking it.
John:
I'm not sure that's much of a counter argument though, given who they're arguing to, which is the European commission and Spotify is the European company.
John:
And like, I just, when you're not in something, there's not like legal precedent or whatever, because these are government bodies made.
John:
Like it's the difference when we talk about these things in the U S and we'll talk about Epic in a second, but like when there's court cases and there's law and there's precedent and there's rules of evidence, it's different than like a lot of those court cases, what they say is like, look, if you don't like the decision, then, you know, Congress should pass a law that changes this.
John:
And in the EU, it's,
John:
It's not a court case where they're trying to interpret current law and say whether you're violated.
John:
The EU is basically just saying like, look, we're making a bunch of rules.
John:
The DMA is a bunch of new rules.
John:
That is the equivalent of like, here are some new rules that you have to follow if you want to be here.
John:
In the US, we just accept the fact that Congress can't actually pass any laws.
John:
but in the eu they can make up new regulations apparently with reasonable efficiency are those regulations good or well written no but they make them and so it's not like oh they have a good have a strong argument here because the eu will say yeah no we decided we we don't buy that that's why we made these new rules so do it
Casey:
I get the argument that Apple makes that, look, they put in a lot of money and a lot of time and a lot of effort making this platform that we are all as developers and as users eager to use.
Casey:
And they deserve to be compensated in some way, shape or form for that effort.
Casey:
And so far, so far, I think I'm with them.
Casey:
But it's what Marco said, right?
Casey:
First of all, they're pretty handsomely compensated.
Casey:
And second of all,
Casey:
I don't feel like I am getting 30% of value from what they give me.
Casey:
And that's, I think, the disconnect is if they were doing a whole bunch more, and maybe sometime we can argue about what that would look like, but if they were doing a whole bunch more for me, maybe I wouldn't grumble so much about 15% to 30%.
Casey:
But I feel like I'm getting very little from the App Store, and I feel like I'm getting poked in the eye from
Casey:
from apple on a regular basis with regard to all these policies well maybe not me i shouldn't say that i'm not personally getting poked in the eye but i'm seeing all of these other developers getting poked in the eye and it kind of makes you wonder all right when is when is it my turn and and it's tough because it's hard for me to
Casey:
taking trying to take myself out of this situation as much as possible and trying to be a neutral third party i get apple's point like they made the platform they want to be compensated for it i get that but i think that they've really lost sight of we said this a while ago they've lost sight of the fact that that platform would be a piece of if it wasn't for all of these third party apps right i don't think they've really embraced or understood this and
Casey:
I don't know that they ever will, short of all of us unifying and deciding to pull our apps from the App Store for a few days, which will never freaking work anyway.
Casey:
But I just don't think they'll ever get it.
Casey:
And it's that entitled attitude that it just makes my skin crawl.
Casey:
And that's what I find so upsetting.
Casey:
And so when something like this happens, I'm like, yeah, all right, cool.
Casey:
I'm here for it.
Marco:
Yeah, and again, it hurts them in so many other areas.
Marco:
Again, look at Vision Pro.
Marco:
Here's a brand new platform, desperately needs software, and no one's there for it.
John:
I don't know if we want to over-index on that.
John:
I know we said that, and it's a narrative that makes sense, but also, they haven't sold a lot of them, and it's expensive.
John:
I think it's part of the reason developers sat out as sort of a protest, but honestly, they're going to make apps for it if the platform is successful.
John:
In the end, that is...
John:
how these things usually work like maybe they'll make them gradually and maybe they won't be great and it won't be as popular as the iphone platform or whatever but i suspect that if if they sell it's many millions more vision pros all those companies that sat out will suddenly be like i guess we have to make an app for this thing too but but to your point it's not going to be the vibrant developer ecosystem where everyone is anxious to hop on board like the iphone was in the early days
Marco:
It just continues the sour attitude that Apple keeps creating among developers, small and large.
Marco:
Obviously, the large companies are not huge fans of Apple right now and have not been for a while because of all this stuff.
Marco:
They keep souring the small developers with their attitude, too.
Marco:
I think it's going to be...
Marco:
I think it's going to be difficult for them to keep drumming up developer interest in ways that will benefit their platforms tremendously.
Marco:
And it is, I think, a long-term strategic error, as I've said before, that they don't loosen up any further, and it causes all these problems that will...
Marco:
potentially affect their platforms in much larger ways.
Marco:
Whatever profit they're making on the difference between what they make now from the App Store and what they would make if they loosened the grip a little bit, that's nothing compared to what they make from a new platform's hardware sales, like the iPhone, like the Apple Watch, like the iPad.
Marco:
They have these platforms that need...
Marco:
good app ecosystems they need people to want to develop apps for them they need new apps that are coming on the market to be developed for them first or only and right now the customer volume on mostly the iphone is really the main driving factor there they're really losing a lot of the developer goodwill they've burned it all over the course of the last 15 years or so like they've lost so much of it
Marco:
Developers used to be willing to make a lot of apps for platforms that didn't have massive numbers of users, like historically almost everything Apple's ever made.
Marco:
And now that attitude has been severely eroded by...
Marco:
the tim cook era of like squeezing every single penny out of developers and then as you start seeing you know some of the hardware products mature and the growth slow down you start scrounging around the couch cushions hey where can we squeeze next and you start doing really ridiculous things like some of the internet purchase rules and you know starting to eye companies and saying hey you're making money how can we get a piece of that and
Marco:
I mean, it does make the money in the short term, but I think that is very much bean counter thinking and missing the big picture of what is this doing to the long term health of our platforms and specifically our hardware platforms where we make way more money than this little piddly app store tax.
John:
Yeah.
John:
Let's hear from one small developer who's happy about Apple.
John:
Oh, but only because of the rules that they just had to comply with.
Casey:
Exactly.
Casey:
So Riley Tested, who runs Alt Store, which is a kind of side-loading marketplace sort of thing.
John:
It was using enterprise certificates or some other technical test flight stuff.
Casey:
I don't recall exactly how it works.
Casey:
I thought you had to do something with the developer account.
John:
Yeah.
John:
Did that start in the jailbreak era?
John:
Yeah.
John:
Yeah.
John:
it's what it sounds like an alternative store was a place where you could go to install apps onto your phone that's not the app store and you're like wait a second i thought that was impossible well they were using every possible trick in the book to try to use apple's supported schemes like enterprise certificates or test i don't actually know what they use but like
John:
It was never a mainstream thing because it was always on the fringes of allowability.
John:
So as you can imagine with the Digital Marketplace Act and Apple's in theory compliance with it, now Apple supports third-party marketplaces.
John:
And you would imagine that Alt-Star would be first in line.
John:
And setting aside how the hell they got a 1 million euro... Oh, they don't have to.
Casey:
Did you not see that?
Casey:
Apple has changed the rules.
Casey:
Yeah.
John:
Oh, no, I didn't see that.
John:
Please tell me then.
John:
It was like yesterday, I think, that came out.
John:
Too much news, man.
Casey:
I know, it's a big week.
Casey:
Suffice to say, it might have even been on Apple's developer site.
Casey:
Again, I don't know if I'll be able to put my finger on a link for you.
John:
This should have been a follow-up.
John:
I'm sorry.
John:
If I had seen this, I would have put it there.
Casey:
Nevertheless, they made a few small tweaks to their rules and procedures and policies with regard to the DMA stuff.
Casey:
And one of them was, and I can't remember the specifics, but basically you don't always or perhaps don't ever need a line of credit or whatever that term is.
Casey:
Letter of credit, yeah.
Casey:
But basically they said it isn't always, always, always required as they had previously said.
John:
so anyway the story is alt store got its marketplace kit entitlement which in developer speak means they got the thing from apple that says you are now allowed to use the framework that you have to use to make a third-party marketplace so alt store is going to make a third-party marketplace if you're wondering whoever under these rules is actually going to make a third-party marketplace now that they don't have to have a million euros in the bank the answer is for one alt store so i guess
John:
Good for them, assuming what Apple has done is compliant with the DMA, which we still don't know the answer to.
John:
But hey, everyone's making app stores.
John:
And you know who else is excited to make an alternate marketplace for iOS?
Casey:
Before you get there, real-time follow-up.
Casey:
So from a different page linked from that newsroom post or that developer newsroom post,
Casey:
blah, blah, blah, blah, blah, blah.
Casey:
You can do either of the following.
Casey:
Number one, provide Apple with a standby letter of credit in the amount of 1 million euros from a financial institution that's at least A-rated or equivalent by S&P, Fitch, or Moody's, and maintain that standby letter of credit as long as your alternative app marketplace is in our operation.
Casey:
Or, and I think this is the new thing, be a member of good standing in the Apple developer program for two continuous years or more, and have an app that had more than 1 million first annual installs on iOS in the EU in the prior calendar year.
Casey:
What a weird set of requirements.
Casey:
I mean, yeah, I guess so.
Casey:
That is so weird.
Casey:
So I guess if your junk is popular and you're going to owe us the whatever it is, the fee, the core technology fee.
John:
There was also, like I said, the charity and nonprofit exceptions in there, but I guess that doesn't apply to Alt-Star.
Casey:
I don't think so, but who knows?
Casey:
Anyway, that's apparently the breaking news.
John:
so yeah so one of the bits of news that we didn't get too many weeks ago was that epic uh the game company that's been in big fights with apple uh had said we're totally going to have our own alternative marketplace for ios in the eu and you'd be like epic how can you do that you don't even have a developer account it's like no we got one we we made a new developer account in like sweden or something and apple gave it to us and that was a story several weeks back we didn't get to because we have too much content but basically epic got a apple developer account for like
John:
some other subsidiary name thing or whatever like it's not their old account back it's like a new account and now epic's like we're going to use this one to make a third-party store and they were super excited about it until like yesterday or today i guess yeah well because what changed yeah so on the verge uh epic says that its ios game store plans are stalled because why because apple has banned its developer account so
Casey:
no not that one the new one yeah exactly the new one oh my god so from the verge epic's plans to release its own third-party app store on the on ios and eu could be in trouble could be in trouble after apple terminated the developer account it planned to use in a blog post published today the company shared a letter sent by apple's lawyers which called epic quote verifiably untrustworthy quote apple does not believe that epic will comply with its contractual commitments under its developer agreement
John:
yeah so all right so let me let me just frame this epic we only have epic side of this which is always suspect because you know there's a lot of bad blood there or whatever epic posted a bunch of images of text because they're dumb um of email exchanges like the emails between them and apple i'm sure this is not an exhaustive list of emails so it's not every back and forth it's the back and forth epic wanted us to see but just in those back and forth there's lots of juicy stuff i don't know like apple did approve this account like they had to go through talks with apple and say
John:
hey, we know we're Epic and we would like to make a new account because we're going to make a third-party store.
John:
Is that cool?
John:
We didn't see that exchange, but that obviously happened.
Casey:
Apple didn't accidentally... I don't know that it did because it's all automated.
Casey:
If I wanted to create a new store account right now... No, no.
John:
I'm pretty sure Epic even said, hey, we work with Apple to get our developer account.
John:
It's not like Apple just noticed it appeared.
John:
Apple allowed this account to exist.
John:
And then I think...
John:
Through some ill-advised exchanges, like Epic was complaining to Apple that they didn't get access to something and they thought it should be treated well.
John:
Well, did you see The Verge had the emails?
John:
The Verge posted the emails between Epic's people and Phil Schiller.
John:
But again, we don't know if it's all the emails, but what I'm saying is how did Epic...
John:
begin conversing in an adversarial way that eventually led to and we're going to get to exactly how because it's funny led to their banning because it's kind of like you had the account if you had just kept your mouth shut and not antagonized apple and gotten into a fight maybe you'd still have your developer account because the reason their account was rejected again it's not because apple didn't know they created one and was surprised to see it and said oh we totally need to ban that apple allowed it to be created no knew it had been created but then essentially i think epic basically like
John:
made a poor choice to get in a fight with apple and so let's let's just go through the the broad strokes of that fight uh like you can you can you see the emails we'll link to them you can look at the stupid images or whatever but here here's what it boils down to you should read read phil schiller basically explaining why apple has decided to ban this account after allowing it to be created
Casey:
And by the way, you as this is Epic.
Casey:
He's talking to Tim Sweeney and Epic.
John:
Yeah.
Casey:
You also testified that Epic deliberately violated Apple's rules to make a point and for financial gain.
Casey:
More recently, you have described our DMA compliance plan as, quote, hot garbage, quote, a, quote, horror show, quote, and a, quote, devious new instance of malicious compliance, quote.
Casey:
And you have complained about what you called, quote, junk fees, quote, and, quote, Apple taxes, quote.
Casey:
Your colorful criticism of our DMA compliance plan, coupled with Epic's past practice of intentionally violating contractual provisions with which it disagrees, strongly suggests that Epic Sweden does not intend to follow the rules.
Casey:
Another intentional breach could threaten the integrity of the iOS platform as well as the security and privacy of users.
Casey:
You have stated that allowing enrollment of Epic Games Sweden in the developer program is, quote, a good faith move by Apple, quote.
Casey:
We invite you to provide us with written assurance that you are also acting in good faith and that Epic Games Sweden will, despite your public actions and rhetoric, honor all of its commitments.
Casey:
In plain and qualified terms, please tell us why we should trust Epic this time.
John:
So this is Phil Schiller, a named person in an actual email to Epic saying, hey, you burned us before.
John:
Remember that time where you intentionally broke the rules and we had a lawsuit and we won and we kicked you out of the store?
John:
Do you remember that?
John:
And now we let you have this, you know, Epic Games Sweden thing.
John:
And you're telling us you want an alternative app store.
John:
Tell us you're going to be good.
John:
Provide us with written assurance that you're acting in good faith.
John:
Tell us that you're going to follow the rules.
John:
So here's Tim Sweeney, CEO of Epic.
John:
Here's Tim Sweeney's reply.
Casey:
Thanks for reaching out.
Casey:
Epic and its subsidiaries are acting in good faith and will comply with all terms of current and future agreements with Apple and will be glad to provide Apple with any specific further assurances on the topic that you'd like.
John:
That's the entire email, by the way.
John:
That's it.
John:
So Phil Schiller says, Epic, you've been bad.
John:
Are you going to be good?
John:
Tell us in writing you're going to be good.
John:
Tim Sweeney says in a very, very short paragraph, we're totally going to be good.
John:
We will comply with all your terms, current and future.
John:
If there's anything specific you want us, any specific assurances, if you want us to say specifically, we won't like TP your house.
John:
Like we'll say it.
John:
Just let us know.
John:
So I saw this exchange and I'm like,
John:
All right.
John:
Well, so Phil Schiller is basically saying, look, we don't like you.
John:
You're bad.
John:
You're saying mean things about us.
John:
Seems like you're going to break the rules.
John:
Tell us you're not going to break them.
John:
Tim Sweeney says we're totally not going to break the rules.
Casey:
Here's Apple's response.
Casey:
Mr. Sweeney's response to that request was wholly insufficient and not credible.
Casey:
He's the CEO.
Casey:
How is that not credible?
Casey:
Anyway, it boiled down to an unsupported trust us.
Casey:
I mean, well, yeah.
John:
What did he want?
John:
What could be in that document in text in written form?
John:
that would not be trust is there some kind of like like blockchain derived like trusted intermediate like he needs it notarized you ask for written assurances you got written assurances and it's like yeah they were wholly insufficient like was there not enough groveling did he not apologize for the hot garbage
Marco:
I have to assume there's a lot more going on here that was not part of the correspondence.
Marco:
Yeah, like this is not all the emails, maybe.
Marco:
There has to be more to this than this.
Marco:
I mean, because first of all, I mean, look, this is really stupid that this even happened.
Marco:
It's like a flame war on Usenet.
Marco:
It totally is.
Marco:
It is.
Marco:
And I understand if Apple really wants to still stick their finger in Epic's eye.
Marco:
But then why let them create the second account in the first place?
Marco:
Yeah.
John:
It's almost like they changed their mind.
John:
Anyway, finish reading Apple's response or the part that we've excerpted from it.
Casey:
All right.
Casey:
So again, Apple's response.
Casey:
Mr. Sweeney's response to that request was wholly insufficient and not credible.
Casey:
It boiled down to an unsupported trust us.
Casey:
Not enough groveling.
John:
Okay, so now I think we have to, since we've made this running joke for years and years now, we have to now say, this is a legit example where running to the press did not help.
Casey:
That's true.
John:
Because they're like, you're still being mean to us in tweets.
John:
Basically, they're saying, you are verifiably untrustworthy.
John:
So, like, why ask for assurances from somebody who, no matter what you say, you're not going to trust them?
John:
And then they're saying, and also, you keep being mean to us.
Marco:
Well, and why, again, like, what, whenever they gave them that new account, like, two weeks ago, whenever that was, like, what changed between the lawsuit a few years ago and that, that then changed back to,
John:
I think Apple thought they were like this.
John:
The reason I refer this to like a flame war, like an argument online is like this is no longer company versus company.
John:
It's so nakedly person versus person.
John:
Like, I don't like you and I don't like your face and you're not being sufficiently deferential.
John:
and i don't trust you and i asked for assurances but you weren't nice enough and you're making mean tweets about us so yeah and again i'm not saying whether this is right or wrong legally legal or whatever i'm just characterizing what we're seeing here and in the end a lot of these corporate things do boil down to that because corporations are run by individuals and individuals have feelings and emotions and do stuff like this but you almost never especially when it comes to apple get to see this
John:
personal indignity and uh and and this final one by this apple we say apple response i think they had they went through their law firm to do it or whatever but it still reads like it's phil it still reads like it's phil schiller saying it personally yeah so continuing moreover a recent submission in the australian litigation suggests that epic games sweden ab is part of a global effort to undermine or evade apple's rules it's a grand insidious conspiracy
Casey:
And by the way, Epic Games Sweden AB, that's the account that they got to make their App Store.
Casey:
Please be advised that Apple has effectively immediately terminated the developer program membership of Epic Games Sweden AB.
Casey:
As you know, in addition to the concerns we have outlined above, the U.S.
Casey:
judgment expressly provides that, quote, Apple has the contractual right to terminate its DPLA with any or all.
Casey:
And then I lost the rest of the quote.
John:
Yeah, sorry.
John:
The last thing just got off.
John:
But what they're basically saying is, hey, remember that court case we won against in the U.S.?
John:
Part of the judgment was we can totally deny you for any reason.
Casey:
And guess what?
Casey:
We're going to deny you, and we don't need to tell you why.
John:
But they did.
John:
They said, you're mean to us, and we don't like you, and we don't trust you, and even though you said you're going to follow the rules, we don't think you are.
John:
In fact, we think this company is part of the wider effort to undermine us in other jurisdictions.
John:
Epic won a court case against Apple in the US, not in the EU.
John:
What the EU is going to say about Apple versus Epic, if anything...
John:
will be interesting to see but this is just like i say it's unseemly it's unseemly for all parties but epic like i feel like tim sweeney has always just been out there as a personality and he's he is who he is and especially in the gaming world this is unfortunately not as uh uncommon as you might think where there are big personalities trash talking each other in the press or whatever but that's not how apple usually works and this is not like
John:
discovery in a court case because we saw so many good things in the epic trial for example this is apple emailing with a big company and the big company doing one of the rudest things you can do as an individual is like i'm just going to post all our private emails that we've back and forth because they show you to be a jerk that's right up their alley right and by the way did epic show all the emails is epic you know like well we'll see that's apple's mo is usually not to say hey you didn't post all the emails but it's more like to you know give responses through their lawyers
John:
this is this is mostly i know this just seems like it's a silly thing and honestly it is i just thought it was super entertaining i don't think there's any big news here other than uh apple's dma compliance and third-party marketplaces that whole thing even if it is compliant it's not going great for anybody
John:
I mean, Alt Store got their marketplace kit thing, but they are a small player in the grand scheme of things.
John:
Epic, it seemed like Apple and Epic were patching things up, but somehow Epic got re-entangled and pissed off Apple again and got booted out again.
John:
And it's just, where are all these third-party marketplaces giving increased competition to the people in the EU?
John:
We talked about it when we talked about the DMA compliance.
John:
Is the DMA actually achieving the ends that the EU wants it to achieve?
John:
Yeah.
John:
I'm going to say the answer remains no.
John:
It's not.
John:
It's not working well.
John:
It's because Apple's compliance with the DMA is incredibly restrictive, because Apple is still wielding sort of personally vindictive power against the people it doesn't want to have stores, and the number of people who would even...
John:
Epic is one of the few people who would want to have a store because they'd want to have it out of spite, essentially.
John:
Even if it costs them money, they just want to have it and be in there.
John:
And everyone else is like, these terms don't look great.
John:
So things are not going well.
John:
I don't know if they're not going well for the EU.
John:
They're not going well for Apple.
John:
I say both.
John:
They're not going well for either party in this whole thing.
John:
and apple we didn't even have time to put this in the notes but apple just released ios 17.4 which has all their supposed dma compliance and all the scare screens and all the pick your default browser and all that stuff and people who are looking in that are saying this i mean the choice is good and you know making apple comply and giving people browser choice is good or whatever but the user experience is worsened because of the kind of passive aggressive way that apple has implemented all this so
John:
And here we are in the US where we don't get any of this, which is both a blessing and a curse.
John:
But we do get to watch it play out.
Marco:
I think part of the problem is that the EU regulations seem to be written.
Marco:
I mean, look, this is all maybe above our heads, but it seems from the outside that they are written with a certain degree of optimism about how they will be followed.
Marco:
And over and over again, we see Apple dodge and weave and find new ways to be prickly and stingy.
Marco:
It seems like no matter what regulation has in mind for how things, quote, should be in the regulator's mind,
Marco:
Apple finds ways around it very easily and very deftly.
Marco:
And then the whole thing is kind of a joke and doesn't really achieve what they wanted to achieve.
Marco:
I don't know why anyone thinks it's going to be different, you know, with different attempts at the same thing.
John:
Well, if they say Apple's DMA compliance is in fact not compliant, then...
John:
that Apple would have to go back and change things to make it more compliant.
John:
And I don't know how long that can go back and forth, but I think the teeth that the EU put on the DMA are bigger than the we'll just fine you.
John:
It's like some percentage or something.
John:
It's some number that would be monstrous for Apple.
John:
So somehow Apple and the EU are going to have to work this out.
John:
At this point, I really hope the EU doesn't say we looked at Apple's response and we have determined that it is compliant because that's basically them admitting we screwed up and we wrote our regulation.
John:
Because if this is compliant, you screwed up.
John:
If they say it isn't compliant, then how does that resolve itself?
John:
What do you want Apple to change?
John:
And they do that back and forth.
John:
This is not great.
John:
This is one of the benefits of the system that people in America are more used to.
John:
It's like, oh, it's competition between companies and they all work in their best interest and the marketplace sorts it out.
John:
But all these things that we're talking about here is like, well, when that stops working, when there's too little competition, how do you solve that?
John:
It's like, well, that's when the government has to step in.
John:
That's why we have antitrust laws.
John:
And doing that, essentially taking a competitive marketplace that has become insufficiently competitive, your opinion.
John:
And putting the competition back in, not by adding new competitors, but by essentially making the players who are dominating it now saying there's certain things that they can't do.
John:
It's really hard because it's like the government saying, be less successful, companies.
John:
And that's not...
John:
a thing that companies like and that's also kind of a form of impairing competition so trying to restore competition through regulation is actually really really hard it's an important thing and it's the role of government to do that they shouldn't shirk that because it's hard but i do want to acknowledge that it is hard because a lot of things that you can do either don't work or make things worse
Marco:
Thanks to our sponsors this week, Squarespace and Trade.
Marco:
And thanks to our members who support us directly.
Marco:
You can join us at atp.fm slash join.
Marco:
And we will talk to you next week.
Marco:
Now the show is over.
Marco:
They didn't even mean to begin.
Marco:
Because it was accidental.
Marco:
Oh, it was accidental.
Marco:
John didn't do any research.
Marco:
Marco and Casey wouldn't let him because it was accidental.
John:
It was accidental.
John:
And you can find the show notes at ATP.FM.
Marco:
And if you're into Twitter, you can follow them at C-A-S-E-Y-L-I-S-S.
Marco:
So that's Casey Liss, M-A-R-C-O-A-R-M-E-N-T-M-A-R-C-O-R-M-E-N-T-M-A-R-C-O-R-M-E-N-T-M-A-R-C-O-R-M-E-N-T-M-A-R-C-O-R-M-E-N-T-M-A-R-C-O-R-M-E-N-T-M-A-R-C-O-R-M-E-N-T-M-A-R-C-O-R-M-E-N-T-M-A-R-C-O-R-M-E-N-T-M-A-R
Marco:
Accidental Tech Podcast.
Marco:
So long.
Casey:
So we didn't have time for Ask ATP this week, but we have one relevant Ask ATP topic that we thought maybe we could bump into the after show.
Casey:
Mark Robinson writes, if you were Apple CEO for a day and only had enough time to resolve just one of Apple's many legal problems, which problem would you resolve and how?
Casey:
Very good question.
Casey:
John, can we get all your whining and moaning about the parameters of the question out of the way real quick so we can then answer it?
John:
yeah my main one is what defines a single legal problem of course because like take the eu for example the anti-steering thing is that one legal problem or can you combine that with the dma or are those two separate legal problems and you'd have to pick which one you want to resolve yeah is it one court case anyway difficult i know what they're getting at though i understand the spirit of the question if the letter of it is very difficult to define
John:
also we're gonna we're gonna breeze right over the fact that it's pretty much impossible to solve anything in one day yes we are no but it's it's the i think it's like a magic wand like you have you have a you know a magic wand that can do yeah solve one legal problem ish somehow yeah we're not saying how to solve it i'm i'm i'm gonna say it's the magic wand thing because otherwise it's like well how do you solve it if there was an easy solution apple would have done it by now or well not really anyway magic wand magic wand is in play
Casey:
Right.
Casey:
Magic wand is in play.
Casey:
So I'm going to pull a top four and deviate from the purpose of the question and answer a slightly different question entirely.
Casey:
If I were Apple CEO for a day and I only had enough time to resolve one problem that maybe is legal, but maybe isn't, I would get the heck out of China like as best as I can.
Casey:
And I think that includes, you know, having handed over iCloud.
John:
Is that a legal problem?
Casey:
I already said I'm taking a turn.
John:
You're bad at influence, Marco.
Casey:
I know.
Casey:
It's true.
Casey:
It's the devil on my shoulder.
Casey:
No, I think I would – it makes me feel really gross what they've done with handing over or having all their software running on China-controlled servers for iCloud.
Casey:
Or I forget the details.
Casey:
I might have that slightly wrong, but you get the point I'm driving at.
Casey:
I don't love that.
Casey:
I don't love that all the manufacturing is there.
Casey:
I get why.
Casey:
I get why they did the iCloud thing.
Casey:
I get why the manufacturing is there.
Casey:
But I would divest from China –
Casey:
Using my magic wand, I would divest from China as quickly and as effectively as I possibly could.
Casey:
Because to me, I think that is the number one thing that should keep Apple up at night.
Casey:
And I don't know that it is.
Casey:
It might be.
Casey:
But that's the thing that scares me the most.
Casey:
And that's what I would do.
John:
Which I know is not...
John:
in two ways so i think that in one way that's a good use of a magic wand because that is like incredibly hard to do i believe apple is doing it but it's going to take like just so many years and so difficult to do but on the other hand it is the worst thing to use a magic wand on because if you did have that magic wand and you used it that that would invoke maximum retaliation from china essentially apple would be out of china which is a huge market which part of the reason apple is doing things the way they are and slowly kind of trying to disentangle from china
John:
real slow, but not real, but real slow, is because they want to continue to sell products to the billions of people in China.
John:
And if you were to magic wand your way out of China, China would be like, sorry, you're gone.
John:
Kind of like Facebook, right?
John:
It's like, no.
John:
No more China for you.
John:
I hope you're happy with what you've done.
John:
By magic wanding a gigantic supply chain into existence, and presumably magic wanding millions of people to work that supply chain, this is definitely not a legal problem that you can solve, and it's really stretching the magic wand, because
John:
replacing china manufacturing is such a gargantuan problem that it's like multi-decade thing that only apple could possibly even have a chance of of doing and i still don't know if they're going to be successful but i i like your uh i like your chutzpah even though you can't read the question it didn't solve a legal problem right all right so marco since i i'm hoping that you will also take a left turn or perhaps a right turn to my left turn uh what is your answer
Marco:
I'm going to continue on the theme of the episode a little bit.
Marco:
My action would be to try to diffuse the tension around App Store payments in a way that is most likely to actually be somewhat palatable to Apple and least likely to disrupt their precious services revenue while also providing the maximum amount of relief on the pressure around this.
Marco:
And so my proposal here is...
Marco:
Remember that reader rule we were talking about earlier, the reader exception, where, quote, reader apps that have like, you know, AV services or books or whatever can link out to external payments after showing a scare sheet with a whole bunch of qualifications and restrictions on what the URL can be and how it's displayed.
Marco:
But once you're linked out to Safari for the payments, you owe Apple no commissions.
Marco:
You have to track nothing.
Marco:
You have to have them audit your books.
Marco:
Never like there's no other restrictions on it.
Marco:
But right now it's only for those reader apps.
Marco:
My proposal would be allow all apps except games to use that exception with a few modifications.
Marco:
So you would still have the ability to link out just like the current system.
Marco:
You would have to apply and get that entitlement so Apple can track it and look at it and make sure it works the way they want it to.
Marco:
It would still show the scare sheet first.
Marco:
To warn people, you're going out to a website.
Marco:
This is not going to be through Apple, etc.
Marco:
You still pay Apple no commissions on those sales.
Marco:
What I would modify, besides what apps are allowed to use it, would be remove the restrictions on the URL being a single URL.
Marco:
Let it have a query parameter.
Marco:
I don't care.
Marco:
Remove the restrictions on the language around the UI of the URL.
Marco:
Let people say, create an account on our website and save money.
Marco:
Whatever.
Marco:
They already can't use IAP.
Marco:
I would retain, though, the one rule that requires part of the reader exception rule now is you are required to use the StoreKit API to check to see if purchases are enabled on the device.
Marco:
Because there are situations, like if you have a device for a young kid, where a lot of times parents will use the parental controls to disable in-app purchase for that device entirely, just to keep the kid from getting in trouble.
Marco:
So that is one feature that makes sense.
Marco:
Other than that, remove all the restrictions on how it needs to be designed, not being able to tell people you can go make a purchase here.
Marco:
Just let all apps choose, if they want to, to link out using the scare sheet and using this framework.
Marco:
And they would still have the trade-off of then not supporting Apple's in-app purchase system, because that wouldn't be allowed anymore.
Marco:
But fine, if apps want to choose that, that's fine.
Marco:
And by not letting games do it, by letting all other apps do it except games,
Marco:
You remove a huge amount of anti-competitive accusations and regulatory pressure from them because most types of businesses that are being worst affected by Apple's internet purchase policies and taxes would then have this major relief valve to get out if they want to.
Marco:
And then by not letting games do it, you keep the vast majority of your services revenue.
Marco:
Because it turns out, as we've learned from various court cases and disclosures, it turns out that the huge vast majority, I think it was like 87% according to a court case like a year or two ago, the vast majority of Apple's in-app purchase tax revenue is from games.
Marco:
So it's not like the Netflixes of the world because most of them don't use internet purchase anymore anyway.
Marco:
They wouldn't even lose that much from this because the actual revenue they make is mostly game-based.
Marco:
If you did this and let all apps use this if they wanted to with those trade-offs, I think you really lift a lot of the pressure off Apple in terms of all the scrutiny of this and you give up almost no revenue.
Casey:
That's also a very, very good answer.
Casey:
I dig that.
John:
That's not very magic wandy, and I'm not sure which legal problem it's solving.
John:
You could say it's solving the anti-steering thing, but in a different way.
John:
But Apple would say they already solved the anti-steering thing.
John:
Only Apple believes that.
John:
Yeah.
John:
So I'm going to use that same loophole to say that the one legal problem I would solve is the DMA.
John:
And you would say, well, Apple already solved that, but we don't have a ruling on that yet.
John:
Apple thinks they solved it.
John:
Jury's still out, but it's not a jury.
John:
Anyway, so I'm going to pick the DMA, and I would magic wand that one.
John:
And the reason I would is because I think that is the...
John:
the most comprehensive legal challenge they face because it gets at the, as I said before, it gets at the heart of the issue, which is like, there's not enough competition and this is trying to restore that competition.
John:
And that is a legal problem for Apple because Apple doesn't want to do that.
John:
Uh, that's the one I would magic wand.
John:
How I would magic wand it to, uh, since both of you offered solutions, especially Marco with more details, I would say, um, essentially, um,
John:
So realign incentives within Apple to make your digital marketplace, the app store, compete based on the quality of the marketplace, as opposed to competing because it's, you know, because you make rules that make it so that you always win or that you have an advantage and all that other stuff, whatever.
John:
So open the marketplace up, run your own app store, not at break even, but do the Marco thing of like almost no commissions for anybody except for games because they can tolerate it and compete based on what you have going for you.
John:
It's, I mean, including some of the things that only the app store can do, but mostly do it based on like, look, you're not going to go to another store because your commissions are low.
John:
We basically do it at cost.
John:
We just charge for the, you know, our payment processing things 30%.
John:
How about 3% for everybody except for you games?
John:
Um, uh,
John:
in-app purchase is a good system no restrictions on what you can do you can make your own awesome system you can link out whatever but we think you'll use ours because it's good oh you don't uh you want some features from that purchase you want better features on app store connect we'll compete based on that compete like i think apple would still win that competition a because they have such a huge head start with historical like the historical momentum of what people expect from that platform that they could coast on not only being a little bit better for years
John:
But B, realign your incentives.
John:
Everyone working on the app store should have third-party app stores that they look at and say, we need to make our store better than those stores for consumers and developers by doing things that people like.
John:
not by applying rules to them to tell them they can't do things that developers like.
John:
They can't do things that customers like because we won't let them.
John:
How about we do things that developers and customers like to keep the 100% market fair we currently have?
John:
And yes, some of the market share would bleed out or whatever, but that's the legal problem that I would solve.
John:
And I would solve it by like, it sounds from today's Apple perspective, they say, what, do you mean give up?
John:
I'm like, if that's how you have to say it to yourself, yeah, but basically like,
John:
You know, I'm not saying run the app store at break even like you can still get your money from games because I think they will tolerate that.
John:
But make your app store, your purchase, your payment processing, your stuff win because they are the best for consumers and developers, not because you forbid anyone else from doing anything better than you.