I just happened to catch a CNBC video about the Apple vs Epic court case. The host showed a screenshot of a tweet by Ben Thompson that was as follows:
Imagine people arguing in 1998 that Microsoft deserves 30% of all software sales with zero alternatives allowed lmao – Ben Thompson
Ben is completely wrong on his point.
Imagine people arguing in 1998 that Microsoft deserves 30% of all software sales with zero alternatives allowed lmao – Ben Thompson
Ben is completely wrong on his point.
For starters, Microsoft never sold computers. They didn’t have any equivalent to a Windows “console” the way that Sony or Apple does. The product which Microsoft sold was a license for Windows. They couldn’t lock down their “device” because they didn’t make one.
Gateway, HP, or Dell would purchase a Windows license just like buying RAM or CPU chips. And it is the PC maker who could have locked down their device so that they received a 30% commission on all application sales. They would have had every right to do so. Why didn’t they? Because they didn’t want to lose sales to other PC makers.
Now Gateway, HP, or Dell could have all made the strategic decision to no longer use Windows but write their own operating system. They than could’ve become the gatekeeper to all software on their consoles just like Apple or Sony. However, developing an operating system is enormously expensive and a huge commitment of company resources.
Plus, smaller companies like Gateway might not have had the volume to attract developers. Why take the risk when it was far cheaper to simply pay Microsoft for a Windows license.
But Apple is in a far different position from Microsoft, Gateway, or Dell. Unlike any of those companies, Apple makes both the operating system and the hardware device. I don’t know if Ben just hasn’t thought through his logic or is willfully ignoring inconvenient facts. But comparing Apple to Microsoft makes no sense.
An apples-to-apples comparison is someone like Sony who makes both the hardware and operating system for the Playstation. Or even Microsoft who is in a similar position with the Xbox. And guess what? When Microsoft controls both the software and hardware for something like the Xbox, they behave just like Apple. How about that Ben? Microsoft charges a 30% commission to get onto the Xbox and they can deny anyone entry to the platform.
You can’t simply say that Apple should underwrite the whole operating system costs via hardware sales. After someone takes home a new iPhone, there is an expectation that Apple will keep the operating system up to date for many years in the future. What if hardware sales start declining? They need a method which matches current revenues with current operating system expenses. That is why the commission method makes so much sense.
I have a hard time listening to all of the developer gripes about Apple when no one is forcing them to be on Apple’s platform. Why not just go to Android? Oh wait, they charge a commission too? But at least you can bypass the Google PlayStore on Android. But then it is less secure, piracy is rampant, and the customers are reluctant to leave the official store the developers say. Which brings us full circle back to the value that Apple provides. Developers want Apple to raise an army and protect the borders but not charge any tax.
So Ben’s Tweet is just plain wrong because Microsoft never made an exclusive Windows hardware “console”. And when they finally did, like with the Xbox, they behaved just like Apple.
Gateway, HP, or Dell would purchase a Windows license just like buying RAM or CPU chips. And it is the PC maker who could have locked down their device so that they received a 30% commission on all application sales. They would have had every right to do so. Why didn’t they? Because they didn’t want to lose sales to other PC makers.
Now Gateway, HP, or Dell could have all made the strategic decision to no longer use Windows but write their own operating system. They than could’ve become the gatekeeper to all software on their consoles just like Apple or Sony. However, developing an operating system is enormously expensive and a huge commitment of company resources.
Plus, smaller companies like Gateway might not have had the volume to attract developers. Why take the risk when it was far cheaper to simply pay Microsoft for a Windows license.
But Apple is in a far different position from Microsoft, Gateway, or Dell. Unlike any of those companies, Apple makes both the operating system and the hardware device. I don’t know if Ben just hasn’t thought through his logic or is willfully ignoring inconvenient facts. But comparing Apple to Microsoft makes no sense.
An apples-to-apples comparison is someone like Sony who makes both the hardware and operating system for the Playstation. Or even Microsoft who is in a similar position with the Xbox. And guess what? When Microsoft controls both the software and hardware for something like the Xbox, they behave just like Apple. How about that Ben? Microsoft charges a 30% commission to get onto the Xbox and they can deny anyone entry to the platform.
You can’t simply say that Apple should underwrite the whole operating system costs via hardware sales. After someone takes home a new iPhone, there is an expectation that Apple will keep the operating system up to date for many years in the future. What if hardware sales start declining? They need a method which matches current revenues with current operating system expenses. That is why the commission method makes so much sense.
I have a hard time listening to all of the developer gripes about Apple when no one is forcing them to be on Apple’s platform. Why not just go to Android? Oh wait, they charge a commission too? But at least you can bypass the Google PlayStore on Android. But then it is less secure, piracy is rampant, and the customers are reluctant to leave the official store the developers say. Which brings us full circle back to the value that Apple provides. Developers want Apple to raise an army and protect the borders but not charge any tax.
So Ben’s Tweet is just plain wrong because Microsoft never made an exclusive Windows hardware “console”. And when they finally did, like with the Xbox, they behaved just like Apple.
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