Wow, John Gruber’s socialist leanings really came out in his latest episode of The Talk Show.
I could spend hours rebutting every point at which he is wrong but I’m just going to address two that come immediately to mind.
I could spend hours rebutting every point at which he is wrong but I’m just going to address two that come immediately to mind.
Myth #1 - Shareholders Demand That Apple Squeeze Every Penny From Consumers
John sets up a straw man here in which he portrays a company’s due diligence to it’s shareholders means screwing the customer. When in fact, nothing could be further from the truth. The shareholders want a sustainable business. IT’S BAD MANAGEMENT that will usually cut corners and screw customers in order to try and become superstars.
John has it backwards. More often than not, the board of directors actually has to stop management from making short-sighted decisions. It’s just like a restaurant owner which has to keep an eye on his manager to make sure that the manager isn’t ruining his restaurants reputation. Managers come and go but the owner has a long-term stake in the business.
Furthermore, the shareholders can actually fire Tim Cook if they so chose. John seems to think that corporate management can ignore shareholders. They can’t. Shareholders own the company. The CEO is simply a hired hand who minds the store. Even if the board of directors doesn’t want to fire a CEO, a majority of shareholders can replace the board members and get their wish. That’s checkmate right there on who’s boss.
The shareholders will allow Tim Cook to be CEO as long as they like where the company is going. Tim serves at their pleasure.
Myth #2 - Apple Defenders Only Argue That Developers Aren’t Paying Their Fair Share
John boils down the arguments of anyone who supports Apple as being only “Developers are trying to avoid paying their fair share”. He is completely oblivious to the fact that Apple isn’t just charging for services, but for access to the platform. Since John hates references to Bricks-and-mortar retail lets stick with examples from the services arena. Let’s say that you sell insurance and you want new customers. You could contact a broker for access to potential new customers. But that broker will charge you a fee for access to his contacts.
Access to the market is the value. Not just the record keeping. Apple didn’t even want to offer an AppStore at all in the early days. They wanted the iPhone environment to be completely designed by Apple. In the eyes of the iPhone designers even letting outsiders sell their software to iPhone users was a huge concession. The caveat was that the apps had to be curated by Apple. Could Apple do a better job at curating it's AppStore? Perhaps. But are they the best at what they do? Definitely.
Also, John seems to think that in-app purchases are an especially shady area for Apple to charge fees. That is crazy. The services that Apple provides are especially taxed by those in-app purchases. Anything that involves the exchange of money is a huge record keeping job. I’m an accountant so don’t argue with me here. Cash and bank accounts need to be reconciled. Returns need to be processed. Charges can be rejected or reversed. Etc. Fraud with accounts is widespread. Future revenue needs to be forecasted. Resources to handle the record keeping needs to be budgeted. And a host of other issues that no one but an accountant would be interested in.
Whether the AppStore sells you a $20 app or a $0.99 in-app purchase makes no difference. They are all an equal amount of work. In fact, in-app purchases are probably a much larger burden for Apple because there could be many more of those.
John sets up a straw man here in which he portrays a company’s due diligence to it’s shareholders means screwing the customer. When in fact, nothing could be further from the truth. The shareholders want a sustainable business. IT’S BAD MANAGEMENT that will usually cut corners and screw customers in order to try and become superstars.
John has it backwards. More often than not, the board of directors actually has to stop management from making short-sighted decisions. It’s just like a restaurant owner which has to keep an eye on his manager to make sure that the manager isn’t ruining his restaurants reputation. Managers come and go but the owner has a long-term stake in the business.
Furthermore, the shareholders can actually fire Tim Cook if they so chose. John seems to think that corporate management can ignore shareholders. They can’t. Shareholders own the company. The CEO is simply a hired hand who minds the store. Even if the board of directors doesn’t want to fire a CEO, a majority of shareholders can replace the board members and get their wish. That’s checkmate right there on who’s boss.
The shareholders will allow Tim Cook to be CEO as long as they like where the company is going. Tim serves at their pleasure.
Myth #2 - Apple Defenders Only Argue That Developers Aren’t Paying Their Fair Share
John boils down the arguments of anyone who supports Apple as being only “Developers are trying to avoid paying their fair share”. He is completely oblivious to the fact that Apple isn’t just charging for services, but for access to the platform. Since John hates references to Bricks-and-mortar retail lets stick with examples from the services arena. Let’s say that you sell insurance and you want new customers. You could contact a broker for access to potential new customers. But that broker will charge you a fee for access to his contacts.
Access to the market is the value. Not just the record keeping. Apple didn’t even want to offer an AppStore at all in the early days. They wanted the iPhone environment to be completely designed by Apple. In the eyes of the iPhone designers even letting outsiders sell their software to iPhone users was a huge concession. The caveat was that the apps had to be curated by Apple. Could Apple do a better job at curating it's AppStore? Perhaps. But are they the best at what they do? Definitely.
Also, John seems to think that in-app purchases are an especially shady area for Apple to charge fees. That is crazy. The services that Apple provides are especially taxed by those in-app purchases. Anything that involves the exchange of money is a huge record keeping job. I’m an accountant so don’t argue with me here. Cash and bank accounts need to be reconciled. Returns need to be processed. Charges can be rejected or reversed. Etc. Fraud with accounts is widespread. Future revenue needs to be forecasted. Resources to handle the record keeping needs to be budgeted. And a host of other issues that no one but an accountant would be interested in.
Whether the AppStore sells you a $20 app or a $0.99 in-app purchase makes no difference. They are all an equal amount of work. In fact, in-app purchases are probably a much larger burden for Apple because there could be many more of those.
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