The Six Five team discusses Apple Reinforces its Monopolist Nature, Again.
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Transcript:
Daniel Newman: Let’s talk about Apple. So look, Pat, Apple can be a bad actor at times. And once again, that seems to be rising to the surface.
Patrick Moorhead: Yeah, Apple is a leader in consumer design and a leader in consumer experiences. They’ve also become a leader in leveraging their monopoly position to either squash competition, squash suppliers. And in this case, it’s with the DMA and with Epic Games. So literally, I don’t know what in the hell is going on at Apple? This happened in a couple of days. So first off, the EU asks Apple to stop its predatory monopolistic practices with something we’ve talked on the show before, that’s called the DMA. And the DMA essentially outlines gatekeepers for ecosystems, technology, pricing and power. And they asked all monopolists. By the way, it’s not against the law to be a monopolist. It’s against the law to limit competition if you are a monopoly.
So Apple kind of, sort of, maybe complies and says, “Okay, if you stand on your left foot and put your hand on your head and spin around a few times, then okay, we will let you put a payment mechanism in there. We’ll let you set up your own store in here.” So Tim Sweeney, Epic CEO, sends out a tweet that Apple doesn’t like. And they actually put, this is not me making stuff up, this is actually Apple put in their response Tim Sweeney’s tweet that essentially said that Apple Management is completely screwed up. They turned off Epic’s right to publish their App Store in the EU. Turned it off. They rescinded their developer contract and they cut them off. In a shocking speed, the EU, which typically, if you look at the Adobe Figma, operates at glacial speeds, really slow, fast tracks an investigation into Apple. And then the day after, Apple reinstates Epic Sweden to create their own game store.
And I got to tell you, if this was a one-off, Dan, it would be one thing. But it’s just not. I really, really think regulators should just take the double or the triple take. Who cares about a $1.3 billion judgment? Apple makes that, I don’t know, in half a day, Dan? Fines just don’t matter. Do they break them up? Do they put other restrictions on them? I think bringing in alternative App Stores into iOS globally should be the next step. Is it going to be as pristine? No. But charging 20%, 30%, and yet I know lower for very small companies, for something that you created how many years ago and you literally invest nothing into? The App Store basically streams out applications, does the security check. By the way, it’s not great, as we’ve seen from all the nefarious apps that Apple let in. I think we need change, Dan. Bigger change.
Daniel Newman: Listen.
Patrick Moorhead: One final thing. The guy that wrote a beautiful article about this, you can get this in the show notes, is Dean Takahashi. He’s At VentureBeat. He’s been there forever. I’ve known him almost 25 years. This guy never gets excited. He gets excited about a game, but he never gets excited about that. He wrote an opinion piece on VentureBeat that you really have to read. It’s very long, and it also talks about what does this mean for the Apple Vision Pro App Store? Should developers get on? Yes or no? I don’t know, Dan. I keep waiting for the shoe to drop with Apple. By the way, I was part of the Apple ecosystem. Steve Jobs put my product, the Compaq Presario 4540 on stage, flashed it up there during his iMac launch.
So yeah, I’m kind of part of Apple. Did I also tell you Apple tried to recruit me in this same timeframe? We will make another show about that, but that was fun. I’ll tell you the full story about Apple trying to recruit me to be a product manager.
Daniel Newman: You would’ve been a darn good product manager at Apple.
Patrick Moorhead: I think I would have too. In my twenties, I could take punishment a lot. And that’s very much the culture at Compaq Computer in the mid-nineties, ’95 probably to ’98. And by the way, Apple almost went out of business and they required-
Daniel Newman: You remember who wrote them a check? Remember who wrote them a check?
Patrick Moorhead: Microsoft.
Daniel Newman: Yeah, I bet you they regret that now.
Patrick Moorhead: Oh my gosh. But the Feds were so on Microsoft’s back, they had to. But Microsoft could have literally stopped doing applications for the Mac and killed it.
Daniel Newman: There’s a couple companies you could write a check for, maybe help out. Listen, I’ve got kind of a short, this is actually very contrasting to what I believe, but I want to just kind of put another side out here. I believe Apple is not only a monopolist, but continuously and pervasively acts in ways that are non-competitive everywhere, in every opportunity.
Patrick Moorhead: Qualcomm.
Daniel Newman: That’s just one of. Imagination Technologies. But they’ve got everything from small companies that they’ve used supplier power to put out of business, to bigger companies that they’ve used non-payments, threats of legal action. But here’s the thing, and here’s why antitrust needs to be completely rethought. And I’ve said this before on this show. This isn’t new. We’ve talked about this. But the reason it doesn’t work is because in order to drive competition, we also have to deal with how are consumers being harmed?
And what do I mean? Well, the bottom line is this, the consumers like the App Store. They like the experience and they don’t care about what Epic pays. They just don’t. And unless you can start to show them that by using some alternative App Store, they actually personally, financially are going to benefit, it’s going to be very hard to get the public rowdy and focused on actually seeing. It’s basically telling everybody that the company that they buy their favorite toy from is evil. Pat, the company likely performs or knowingly has slaves that build their stuff. Literally. I mean, this isn’t the worst thing they do.
Patrick Moorhead: No, no, no. And nobody talks about it.
Daniel Newman: So what I’m saying is, well, the gut interpretation of the law of the intent of the ethical, the moral bankruptcy of the people that do this stuff. But having said that, like I said, they’re doing that. So it’s like, are we really going to worry about the App Store? People are like, “Ah, my app works. I like it. It’s safe.”
Patrick Moorhead: Tim Cook is so cuddly and friendly. He is like my grandfather that I never had.
Daniel Newman: He’s just a nice guy.
Patrick Moorhead: He is.
Daniel Newman: He’s very nice.
Patrick Moorhead: Just a nice guy until he rips out your throat. By the way, a fun fact.
Daniel Newman: See Mortal Kombat? What’s that one, where they put the hand and pulls the heart out?
Patrick Moorhead: By the way, do you know where Tim Cook worked before he went to Apple?
Daniel Newman: Didn’t he work with you? You guys were on the path, side by side, and you went off to do Moor Insights and he went off to run Apple. And the rest is history.
Patrick Moorhead: I was a group product manager. That was the fancy name. I was a product manager that had other product managers working for me. And Tim was the SVP of operations. I got sideways with his people once because I wanted to take, my product, Dan, was the first high volume product that used ODMs in Taiwan. And Compaq had a bunch of factories. And his team did not like me taking products for final assembly out of his factories. And he said I was basically on my own. And that’s all I had to hear. I was like, great. I’m on my own. I’m 27 years old. I got a billion and a half dollar product line that I’m going to take out and make a ton and ton of money.
Author Information
Daniel is the CEO of The Futurum Group. Living his life at the intersection of people and technology, Daniel works with the world’s largest technology brands exploring Digital Transformation and how it is influencing the enterprise.
From the leading edge of AI to global technology policy, Daniel makes the connections between business, people and tech that are required for companies to benefit most from their technology investments. Daniel is a top 5 globally ranked industry analyst and his ideas are regularly cited or shared in television appearances by CNBC, Bloomberg, Wall Street Journal and hundreds of other sites around the world.
A 7x Best-Selling Author including his most recent book “Human/Machine.” Daniel is also a Forbes and MarketWatch (Dow Jones) contributor.
An MBA and Former Graduate Adjunct Faculty, Daniel is an Austin Texas transplant after 40 years in Chicago. His speaking takes him around the world each year as he shares his vision of the role technology will play in our future.
