So some guy conjures up a horrendous business idea that can only succeed if he has no overhead costs. And that’s Apple’s fault? TechCrunch is reporting that Phil Schiller from Apple says "No".
“Sitting here today, there’s not any changes to the rules that we are considering,” Schiller said. “There are many things that they could do to make the app work within the rules that we have. We would love for them to do that.” —Phil Schiller
The crux of the matter is that this guy has no pricing power because his business idea sucks. If more people wanted his product, he could cover his fixed costs and charge lower prices. Instead he’s hoping that a few people will pay $99 per year for e-mail services. In a world of free e-mail he expects to charge people $100 per year for e-mail? Good luck with that. And even that lofty fee isn’t enough if he has to follow the rules like everyone else.
So he creates a scheme whereby people download a free dummy app that doesn’t work. You ultimately bypass Apple’s AppStore and pay the company elsewhere. There’s nothing controversial about Apple rejecting his app. Imagine if eBay didn’t charge sales commission on shipping costs. People would price their products for a penny and put the full value into the shipping charge commission free. That’s essentially what Basecamp is trying to get away with.
I can’t believe that anyone would criticize Apple for expecting to be paid for providing services. This issue resurrects my previous point about some Apple tech sites being too slanted towards developers. How much Apple deserves to be paid is a valid question, but their right to charge a fee isn’t up for debate.
A rule of thumb is that for every 1,000 employees that support a business, it costs $100 million. If Apple starts to allow developers to offer their app for free and collecting revenue offline, guess what happens? The AppStore implodes.
I have a solution to the problem that is fairly simple. David Heinemeier Hansson and Jason Fried need to come up with a better business idea.
The crux of the matter is that this guy has no pricing power because his business idea sucks. If more people wanted his product, he could cover his fixed costs and charge lower prices. Instead he’s hoping that a few people will pay $99 per year for e-mail services. In a world of free e-mail he expects to charge people $100 per year for e-mail? Good luck with that. And even that lofty fee isn’t enough if he has to follow the rules like everyone else.
So he creates a scheme whereby people download a free dummy app that doesn’t work. You ultimately bypass Apple’s AppStore and pay the company elsewhere. There’s nothing controversial about Apple rejecting his app. Imagine if eBay didn’t charge sales commission on shipping costs. People would price their products for a penny and put the full value into the shipping charge commission free. That’s essentially what Basecamp is trying to get away with.
I can’t believe that anyone would criticize Apple for expecting to be paid for providing services. This issue resurrects my previous point about some Apple tech sites being too slanted towards developers. How much Apple deserves to be paid is a valid question, but their right to charge a fee isn’t up for debate.
A rule of thumb is that for every 1,000 employees that support a business, it costs $100 million. If Apple starts to allow developers to offer their app for free and collecting revenue offline, guess what happens? The AppStore implodes.
I have a solution to the problem that is fairly simple. David Heinemeier Hansson and Jason Fried need to come up with a better business idea.
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