HEY Apple, you’re out of touch.

Apple rejects the wrong app this time, and the Mac is centre of attention

“The 478 Dreamers at Apple are members of our collective family. With creativity and passion, they’ve made us a stronger, more innovative American company. We're glad for today’s decision and will keep fighting until DACA’s protections are permanent.” Tim Cook on this week’s Supreme Court decision

WWDC 2020 to put the Mac centre stage

It’s the eve of Apple’s 31st Worldwide Developer Conference (aka mid-year Christmas), and for the first time it will be held entirely virtually. Forced online due to the ongoing COVID-19 pandemic, Apple has unsurprisingly set a similar structure to previous years, hosting a keynote on the Monday (10am pacific, 1pm Eastern, 6pm London, 1am Beijing, 3am Sydney), followed by the usual Platforms State of the Union—both will be streamed but neither mention that they’ll be happening live. For the rest of the week Apple will host one-on-one labs by appointment only, more than 100 recorded sessions, and they’ve given the developer forums a refresh to encourage discussion.

As is de rigueur Apple will primarily focus on the key platforms that its products sit upon. So we’ll see new versions of iOS, iPadOS, watchOS, and macOS. This gives the keynote structure, and Apple will weave the other announcements around these pillars. It’s also the first time we’ll get a sense of how much the coronavirus outbreak has impacted Apple’s usual timelines, e.g. will we see developer builds of these new releases or will the timeline be pushed out several months?

The strongest and most consistent reports suggest that the Mac will once again switch CPU architecture, this time from Intel to ARM (x86-64 to RISC for the geeks). Many will remember that the last time Apple did such a move was back in 2005 when it switched from PowerPC to Intel. As I write this on a small portable Mac, the result of that switch in 2005 is evident in our daily lives now. It was clear back in the mid 2000s that the PowerPC processors were too power hungry, too hot, and not powerful enough. The switch to Intel allowed Apple to push forward with a strategy of portable Macs with excellent power efficiency, and extremely powerful pro Macs.

But as times goes on everything is viewed in a new perspective. This new perspective is a world of iPads and iPhones. Take a new iPad Pro for example and compare this to a new MacBook Air, they are both a similar price and a similar size, but in terms of the performance an iPad Air produces GeekBench scores four times that of the MacBook Air. Even an iPhone 11 Pro produces better single- and multi-core performance compared to a 2020 MacBook Air. So it’s evident that Intel has begun lagging in the area of performance, certainly at this consumer level. The other big area of difference is battery life, an iPad Pro will comfortably get 10-hours or more of battery life, in a package that weighs half a kilogram (1.4 pounds for the Americans amongst us); to be fair to the MacBook Air it also pulls in more than 10 hours of battery life, but in a package that weigh twice as much as the iPad and with 25% of the computing power.

Apple is able to provide such incredible performance on the iPad and iPhone for three reasons:

  1. Excuse the geekery for a moment, ARM stands for Advanced RISC Machine, and this is because it uses an architecture called RISC. RISC or reduced instruction set computing is built well for mobile usage as it usually requires fewer transistors than those of a CISC (c for complex) processor. Fewer transistors mean lower cost, lower power draw, and less heat. That’s why these ARM processors have become incredibly popular since the inception of mobile computing.

  2. It has invested years of money and expert resources into designing its own in-house system-on-chips (SoCs), which combines the CPU, the graphics processor, the memory, and other bits, on a single chip. It’s able to do this in perfect balance with the batteries and displays it can buy; in other words it’s able to produce a close to perfect combination of hardware.

  3. Apple controls every single bit of the software stack, including the software that runs at a hardware level and talks to the processor; but it’s also able to design software that runs extremely efficiently on the hardware it builds.

With this new perspective fleshed out, the choice for Apple is obvious—switch to using its own ARM-based chips in the Mac and leave Intel in the dust. Not so quickly padawan. It goes without saying that switching an entire operating system and its associated first and third party software is not simple and takes time and planning; the 2005 switch went well and took around a year to release a flurry of new Intel-based Macs. The version of Mac OS X that Apple announced for the Intel Macs could run PowerPC software using an emulator called Rosetta. Expect similar moves this time around, and possibly a similar time frame.

However there is a problem… Whilst Apple’s A-series chips in the iPad and iPhone are fast, and very power efficient, they are not pro fast. The current chips that we see, and have seen, would make fine processors for use in the MacBook Air, Mac mini, and even the low-end iMac and MacBook Pro but they are not match for the brawn of the Mac Pro. We don’t currently know how Apple might approach this problem, and whilst the reports do speak to the details of some of the forthcoming chips it still doesn’t look like Apple has cracked this problem.

Expect Apple to push a dual strategy approach, continuing to support Intel Macs at the top-end whilst pushing out Apple ARM-based portables.

The final piece of this puzzle is cost. We don’t have to look too far into Apple’s product line-up to see that Apple clearly designs and produces its A-series ARM chips at a vastly lower cost compared to what it buys Intel chips for; the best example of this is the new iPhone SE which packs Apple’s latest A13. Apple analyst Ming Chi-Kuo suggests that Apple would reduce its processor costs by 40 to 60 percent. The result is likely to mean cheaper Macs, or Macs with more features and higher storage and memory for the same price or, indeed, a combination of both.

For Mac users around the world this news will come as a breath of fresh air, as it did in 2005, and it’ll reaffirm Apple’s commitment to the platform for years to come.

Apple may also see this as an opportunity to iPhone-ify the Mac in terms of choice. Back in the day, and to an extent to this day, people bought computers primarily based on the marketed speed of the processor, 3GHz vs 2.5GHz, 1-core vs 2-cores, etc. As time has gone on, the progress in CPU improvement has slowed (See: Moore’s law) so the marketing shifted but something else also happened. Phones and tablets are not sold on spec, in fact you’d be hard pushed to know the hardware specification of an iPad or iPhone beyond the screen size and internal storage (see image below). This simplicity fits Apple’s narrative, it can sell iPhones and iPads by leaning on more ‘fluffy’ things like colour, design, battery-life, and the number of cameras.

Currently Apple’s cadence of chip production is yearly, with some variation depending on which device it goes into. For example last year Apple announced the A13 (brand name A13 Bionic) for the iPhone 11, 11 Pro, and 11 Pro Max in September; despite this Apple’s new iPad Pro released in 2020 uses the A12 design—although it has be improved and branded the A12Z Bionic. The point is, none of this matters because it only gets mentioned briefly in the product keynote, and it scantily mentioned in the marketing. Is this the future of the Mac? Fewer specification choices?

In relation to cadence, which could see Macs getting updates more often, is also scale. In April 2020 that same A13 used in the new iPhones was introduced inside the new iPhone SE. The latter move was shocking to some, how could a CPU that is inside a $1000 iPhone also be inside a $400 iPhone? Part of the answer is scale, the more that are produced the cheaper it gets as the manufacturing process becomes more and more efficient. With the introduction of the Mac into this cycle, all the devices in Apple’s product line that use A-series chips will benefit.

We possibly face a future where some elements of the Mac lineup are updated yearly and that performance numbers are not a leading marketing factor.

Share World of Apple - Delivered

HEY vs Apple

First, let’s go back and understand how we got to where we are with the App Store, in-app purchases, and subscriptions.

Following the release of the first iPhone in 2007 there was no official way to install apps on the iPhone, the only apps it ran were the dozen or so it came out of the box with. Steve Jobs had, early on, shown off web-based apps that would run in a hidden browser on the phone—but a burgeoning community of developers built amazing apps and used vulnerabilities in the operating system to install them on the iPhone against Apple's wishes. However, it clearly sparked some interest at Apple, with them launching the App Store less than a year later.

This was the start of something new, something so revolutionary that it changed almost every interaction we have with every person, service, and product in our daily lives. Without this switch of strategy in late 2007, without that community of developers forcing Apple’s hand, it’s possible that today we would not have Uber, WhatsApp, Instagram, Candy Crush, and many more.

But the App Store was also very different to what we were used to in terms of computing and apps (more commonly known as programmes at the time). In the 90s and the early 00s we installed apps by buying discs and installing them, or in later years by downloading them off the internet. There were no restrictions on what we could and couldn’t install, and that led to problems. For the best part of a decade the Windows PC was well known for viruses and other bad actors being able to run rampant across networks and people’s home computers. Windows was, of course, a big target for those with bad intentions but it was also an easy target because anything could be installed with a double-click. Enter the walled garden of the iPhone App Store.

With the iPhone, Apple was aiming for the most positive customer experience possible in the world of computing. There were no file systems or browsers, no complicated screens of tick boxes, no lengthy setup processes, no background software that needed managing, no need to be worried about viruses or malware. A huge part of this strategy was a safe place to download software—an App Store—a place where Apple had individually vetted each app, every download came with the Apple seal of approval and safety. All well and good when your App Store has hundreds of apps on millions of iPhones—today the App Store features 2.2 million apps with an install base of more than 1 billion devices.

As the years went on and the base of apps and users grew, so did the model. In 2011, at the launch of a new “iPad newspaper” called The Daily run by Ruper Murdoch’s News Corp, Apple also announced the first in-app purchase model. Aimed squarely at publishers and music apps the new system allowed these apps to list in-app subscriptions that could be taken out with a single tap and billed through their iTunes account. Apple would take 30% of every payment, giving 70% to the app owners. At the time Steve Jobs said:

“Our philosophy is simple – when Apple brings a new subscriber to the app, Apple earns a 30% share; when the publisher brings an existing or new subscriber to the app, the publisher keeps 100% and Apple earns nothing.

"All we require is that, if a publisher is making a subscription offer outside of the app, the same – or better – offer be made inside the app, so that customers can easily subscribe with one click right in the app.”

In the nine years since this statement the in-app subscription model has been a point of contention for antitrust authorities and companies alike. There have been rulings that forced Apple to change the button on the App Store from “Free” to “Get” when the app includes in-app purchases, and for years commentators have argued that Apple’s 70/30 split is antiquated and needs a rethink. In 2016, Apple reneged a bit and adjusted the model to reduce the split to 85/15 if a user stays subscribed to the developer's app for a year.

Apple argues that for the 30% cut it takes it offers a platform with a billion users, a free marketing tool, a seal of approval and safety, and a super easy one-tap method of purchase. Many others think it’s greedy and anti-competitive.

Fast forward and it’s the week before WWDC 2020, the week just gone, and Apple finds itself in a very public fight over a decision it has made that relates directly to the history we’ve just explored.

HEY is a new email provider, it’s different to the likes of Gmail and iCloud so doesn’t work in existing email clients and requires a subscription, starting at $99/year. In early June, Apple rejected an update to the HEY app from the App Store on the grounds that the app violated rule 3.1.1 of the App Store. HEY, developed by long time iOS developers Basecamp, thought the rejection was a mistake as it’s not possible to sign up or pay for HEY within the app, as per the rules. HEY’s iOS app does not even encourage a user to leave the app and sign up on the website, as per the rules. The rejection was not a mistake and the company has since tripled down on its position [1, 2, 3], writing in a letter to the CEO of Basecamp that Apple itself released to the media:

“Thank you for being an iOS app developer. We understand that Basecamp has developed a number of apps and many subsequent versions for the App Store for many years, and that the App Store has distributed millions of these apps to iOS users. These apps do not offer in-app purchase — and, consequently, have not contributed any revenue to the App Store over the last eight years. We are happy to continue to support you in your app business and offer you the solutions to provide your services for free — so long as you follow and respect the same App Store Review Guidelines and terms that all developers must follow.”

So rather than this being about the Apple seal of approval and safety, it’s about profit. Apple wants a piece of Basecamp’s pie. It goes without saying that that paragraph is the single most misguided piece of communications that has come out of Apple for many years—and the week before its big developer conference at that.

This is all made more galling as many, many apps do not contribute revenue to the App Store and do not follow the same rules being laid out.

HEY has rightly fired back, with CEO Jason Fried offering this excellent retort:

“Apple, please just give your developers the choice! Let us bill our own customers through our own systems, so we can help them with extensions, refunds, discounts, or whatever else our own way. It’s our business, not your business. And Phil Schiller’s suggestion that we should raise prices on iOS customers to make up for Apple’s added margin is antitrust gold.”

I couldn’t say it better myself, and I’d suggest you go and read Jason’s letter in full to see all those points fleshed out fully.

Apple does find itself in a tricky corner. It could lower the cut it takes to say 5%, but that’s unlikely to make the problem go away overnight, primarily because as the market has grown it’s seen that Apple is stifling choice and standing between big businesses like Netflix and their customers (ever wondered why you can’t subscribe to Netflix in the app? Now you know). Not only is choice removed, but by giving up the 30% to Apple for the simplicity of having users sign up, they actually become customers of Apple. If you have a newspaper that has an in-app subscription, you will learn nothing about that customer because they belong to Apple.

Some would argue that the end customers like this lack of choice and ease of use. There’s generally no concerns about being ripped off, Apple is always there to help with refunds and support, and again Apple provides a safe payment platform with its stamp of approval. In reality it’s not this simple, and no doubt the consumer is frustrated by not being able to buy a book directly in the Kindle app, or being unable to take out a subscription to their favourite magazine because the magazine didn’t want to give up 30% of the revenue and the associated data.

The solution here is not simple, but by pushing out statements suggesting that developers who don’t contribute revenue to the App Store ecosystem should somehow be more obeying of Apple’s rules than others is flat out nonsense and will do nothing for developer relations.

Apple’s executive team needs to stop fighting and read the room, they feel very out of touch right now. They should pick up the phone and speak to developers, big and small, and open a dialogue. There are a myriad of opinions, and between them are solutions.

What we do know is that the App Store we have today is more what Apple wanted an App Store to look like in 2011 than what an App Store should look like in 2020.

What I’ve been reading:

Next time…

I’ll take a deep dive into all the happenings from this year’s WWDC.