Hewlett-Packard created a bit of a stir this week it promoted its PCs by announcing that it was bringing back Windows 7, the operating system that Microsoft replaced nearly a year and a half ago. Despite claims such as “HP really wants people to buy a Windows 7 PC instead of a Windows 8 machine” by The Verge‘s Tom Warren, the promotion was more of a marketing stunt than a retreat from Microsoft’s flagship operating system by one of its most important partners.
Still, HP’s willingness to trade on the perceived unpopularity of Windows 8 is an indication of the steep challenge facing Microsoft as it considers the design the the next versions of windows, which may or may not be called Windows 9 but which is expected to be introduced, in at least preliminary form, at Microsoft’s Build developers’ conference in April.
The Vista challenge. The last time Microsoft faced a somewhat similar challenge was in 2007, after Microsoft released Vista as an overdue replacement for Windows XP. Vista opened to less-than-enthusiastic reviews, made worse by the fact that the launch, the first major update of Windows in more than five years, was heavily hyped by Microsoft.
Vista was not as bad in reality as it is in memory, but it did have some very serious problems. First, Microsoft, as it usually did, grossly understated the hardware requirements. Customers who upgraded older systems faced serious performance issues and even some new machines weren’t up to the job, even though Vista automatically disabled some processor-intense graphics features on slow systems. A lot of user interface features were changed for no apparent reason. And Windows XP’s notoriously promiscuous willingness to install any software it was offered was replaced with a nagging feature called User Account Control that required an administrative password for the simplest of configuration changes. Bottom line: People hated it.
But there were two saving graces for Microsoft in the situation. First, computer users saw no real alternative to Windows. Mac market share was growing, but not so much as to be threatening. The dislike for Vista might cause people to delay PC purchases or to demand machines that could be downgraded to Windows XP (sound familiar?), but the customers weren’t going anywhere.
Superficial problems. The problems of Vista were mainly superficial. Some tuning and upgrades to faster systems, whose prices were falling quickly, took care of performance. The more objectionable user interface issues were fixed and UAC was tamed. Windows 7, released in mid-2009, was a fairly minor reworking of Vista, a fact revealed by its Windows 6.1 internal version number. It was a relatively easy fix and was an immediate critical and popular success.
There is no easy fix for Windows 8. The Windows 8.1 update dealt with some of the most obvious issues: The UI formerly known as Metro is now somewhat more flexible and less space-wasting on big displays, Metro users have less need to run the Desktop, and users of traditional desktop apps on traditional desktops or laptops now get to spend more of their time in the legacy Desktop environment without bouncing out to Metro.
But the vexatious reality is that Windows 8 remains a two-headed operating system that does everything, but nothing well. Apple has wisely understood that the worlds of touch devices and of keyboard-and-pointer devices are separate and irreconcilable. The iPad can’t do everything a Mac and do, the Mac can’t do everything an iPad can do, and Apple and its mostly very happy customers are just fine with that.
Fundamental duality. It would be a major shock if Microsoft announces that Windows 9 will change the fundamental dual nature of Windows. I think Microsoft really should pull the two halves of Windows 8 apart and come out with two operating systems (or at least two user interfaces, not quite the same thing), each optimized for its own usage. Tablets should get a touch interface–son of Metro. Traditional PCs, likely to be the smaller market in the future, need a UI designed to work primarily with a keyboard and a pointing device, and that would probably look more like legacy Windows than Metro.[pullquote]It would be a major shock if Microsoft announces that Windows 9 will change the fundamental dual nature of Windows.[/pullquote]
I’m not convinced there is much of a future for touchscreen notebooks. I have used Windows 8 and 8.1 on both conventional clamshell touch notebooks and convertibles of varied design and I am not convinced that any of them come close to a MacBook. In fact, running Windows on a MacBook is a superior experience to most Windows notebooks because of the superiority of Apple’s touchpad.
The big question is just what will make a Windows 9 tablet an attractive proposition? The answer has to be what Microsoft has always thought it was: Office. Though consumers have learned to live without Office, the productivity suite remains extremely important to business and professional users. Unfortunately, Office 2013, Microsoft’s companion to Windows 8, changed just enough to be annoying to Desktop users while being all but unusable with a purely touch interface. If Office is the big selling point for the Surface (Pro or otherwise), it is also the reason you never see a Surface without a keyboard attached.
Office is the key. The mystery Office for Metro, about which Microsoft has been very, very quiet, is the key to the whole project. If Microsoft can come up with versions of Word, Excel, Outlook, and PowerPoint that provide the features users demands while working well on a touch device, it has a chance for a dramatic revival of the franchise. Of course, this is a very difficult thing to do and Microsoft, working in Apple-like secrecy has thus far provided almost no clue about where it is headed.
The Build conference, to be held in enemy territory in San Francisco April 2-4, is looking to be the most important milestone for Microsoft in a long time.
144 thoughts on “Windows 8 is Worse Than Vista (for Microsoft)”
Remember DOS Shells? Metro is the more modern version of those. The Win8 desktop is better than the already very good Win7. Vista was and remained an abomination. I actually had no problems with Win Me, Vista was worse.
If you do a whole lot of configuration work, particularly changing file associations, it is possible to use the Windows 8.1 Desktop and rarely see a Metro screen. But it takes a lot of effort. I think Microsoft has to go a lot further to unscramble these eggs.
But the worse problem is on the Metro side, where you still need to dive into Desktop for too many things. though less than in the original Windows 8. That’s why I say Office is the key.
Stardock puts out a program called Modernmix that loads Metro apps in a window on the desktop. This is but one example of why I keep harping on “open” vs. curated.
Office seriously over-serves the vast majority of Windows users and frequently confuses most of them. There is not a lot of love for Office outside the corporate sector.
As an Office power user myself, I thought I needed similar software on my iPad. Having used Pages and Numbers, I can only conclude that a keyboard is absolutely necessary for serious text editing and building spreadsheets. Doing these things using a touch interface is like sweeping the driveway with a toothbrush (yes it can be done, but it takes ages and is a miserable experience). Instead I frequently use a tablet side-by-side with a laptop.
In summary, I’m not convinced that Office can be leveraged in a meaningful way in the mobile space.
I believe it’s us that have a difficult time adopting to the touch interface. My son, in grade 6 and his friends can touch type incredibly fast and swap out apps and create presentations with ease. They play with interface like it’s a game. It quite something to see. For science, the kids use Numbers and whizz through the process of creating very cool tables that looks similar to the available templates.
I believe the touch was not necessarily meant for us, but the future generations that are familiar with moving around so quickly.
This is not an envious position to be for MS, is it? On the one hand Metro was really MS admitting that traditional Windows does not serve the mobile market. But in their attempt to address this they ended up with something that neither the traditionalists nor the Modern market cared for.
I think this is an example of where a large market share can work against you. If you futz around with what built that huge market and the market doesn’t like what you do you end up like MS.
If you build something completely different or in addition to, which doesn’t depend directly on that market but can benefit both them and you, you don’t lose as much if they don’t follow along. Here you have Apple. If either the iPhone or the iPad did not ramp up successfully, it would not have really affected their Mac user base.
From that perspective, MS trying to _build_ on Windows was actually a pretty bold move. It could be perceived as safe in that they were simply trying to leverage the one who brought them to the dance. Or, unfortunately, it turned out to be not so smart as it seems to be more alienating their dance partner.
Not being afraid to kill off your own product line doesn’t, necessarily, mean killing it off with that very product, I think. At least kill it off with a replacement (think iPhone as the iPod killer).
No question. You’re right. Apple did exactly what you described. They had two things going for them.
a) An extremely talented, lunatic, product manager as head of the company.
b) Desperation. They knew they would never lead in PC’s so they changed to where they can.
For Microsoft it boils down to this: After years and years of operating a virtual OS monopoly in the personal computing market, they completely lost the ability to design an appealing product. They thought they were selling lots of Windows machines because they were building great product when in reality, it’s because their customers had no other choice.
Here’s a glaring example. Apple is very careful about evolving the user interface when they introduce a new or upgraded product. Because they had to fight for every point of market share, they have a very good idea of just how much they can change the interface without alienating customers. If they do a really drastic change (e.g. FCP), they only do so if they believe that the new interface is so much better that the long term benefit is worth the immediate cost of irate customers. They still might be wrong in their cost-benefit calculus, but they seriously think about it before undertaking a UI redesign. Obviously, nobody in Microsoft even thinks about the problem of how fast one can evolve a UI.
FCP is a great example. Not only did Apple piss off much of their old guard, they figured the new guard didn’t care for the old FCP anyway. Besides it was getting too cumbersome to add much desired features into the old framework.
That should have been MS’s clue on how to handle the shift. I still contend the only reason RT/Metro didn’t catch on is because MS didn’t give it a chance, they didn’t go whole hog and full bore RT (at least with mobile devices, anyway). they were (and are still) too wishy washy about it. Cut your losses and don’t look back. Commit!
Or maybe they think committing to ambiguity is some sort of virtue.
Windows 8 and Final Cut Pro are interesting examples of how Microsoft and Apple approach these issues. Apple has always been willing to take risks to shed legacies. At least as far back as the original iMac, with its lack of any ports other than USB, Apple has been excoriated for eliminating one or another legacy feature deemed essential to success. Apple’s innovation has not always been mistake-free–remember, for example, the hockey puck mouse?–but its judgment has been sound. And when it erred, as in the de-featuring of FCP, it has typically moved quickly to correct the problem.
M9crosoft, on the
Criminy. I must be the only person who liked the hockey puck mouse.
Nope. I liked it too… got the carpal tunnel wrist to prove it…
“Exactly what Microsoft was trying to accomplish in windows 8 is less clear, but it definitely is not serving users well.”
I think Microsoft wrongly believes that people like touch for the sake of touch. Rather than trying to build products which fill a use case that touch enhances, they try to slap touch on everything thing thinking that it is the underlying reason for the mobile boom. (see Windows Server 2012)
Yeah, it’s almost like a bunch of business school grads are running a software company.
And probably those grads had only a C average.
I really wonder why no one at Microsoft ever sat down to simulate working on a desktop or laptop computer that relies heavily on touch gestures. It’s just ergonomically unworkable. You get arm and shoulder weary and unless you’re careful about your movements and the screen position, your carpal tunnel gets a work out.
Touch screen is really overrated. It makes sense for phones and tablets, they’re mobile devices; nobody wants to carry a separate pointing device around. But for larger screens, if users are enamored of the whole touch gesture vocabulary, a properly designed trackpad interface offers pretty much the same utility with economy of motion thrown in as a bonus.
I already dislike having to switch between using a mouse and the keyboard (and use a lot of keyboard shortcuts). Introducing a third input method — involving fat fingers aiming for tiny targets — does not make any sense ergonomically. However, if Microsoft had tasked you to solve the business problem of how to leverage their desktop dominance into the mobile space, then it is easy to see why you would have come up with this “solution”.
An angled touchscreen plus keyboard is actually a great combination. I use this all the time with a ZAGGFolio and my iPad 2. I prefer it now, over mouse and keyboard. I think my screen is sitting at around 45 degrees? Anyway, a bit of angle on the screen and it becomes very comfortable and easy to use. I do all my writing/editing on the iPad now.
But yeah, this wouldn’t be practical on my 27 inch iMac screen, unless I could tilt it down like a drafting table. I loved working at an angled drafting table (years ago).
HP makes a big touchscreen desktop that tilts between nearly vertical and nearly horizontal. Of course, it runs Windows, not OS X.
Yeah, it would need to run a touch-specific OS, not a kludge. I’m especially interested in a larger screen iPad, I would love a 13 inch iPad. Apple could probably leave the hardware keyboards to the accessory market, there’s some good stuff available. I can’t recommend the new ZAGG iPad case though, I got it for my parents and their iPad Air, what a pain, and it doesn’t fold flat either. We sent it back and are now going to try the Belkin Ultimate case, which has three viewing angles held in place with magnets, and the case can be folded flat like a book. What was so nice about the ZAGGFolio was how easy the iPad could be slipped out when necessary. Not so with the new ZAGG cases, plus no way to fold the iPad flat like a book for when you need to hold it in vertical orientation. But I digress.
I just bought the Zagg iPad Air keyboard cover. You can just slide the iPad out of the hinge. Once you’ve done that you can turn the iPad over and put it back in the hinge to use it as a very thick iPad Air tablet. I don’t have much use for flipping over the Air in the Zagg Cover hinge but I love that I can remove the iPad from the cover in seconds to use it as a tablet.
Sorry for furthering the digression.
Ah, we tried the other one ZAGG has where you have to cram the iPad Air into a fully enclosed part, it’s waaaaaay too tight a fit, I could barely get it back out, and the hinge rubbed on the screen cover, plus there’s no way to fold it flat. This one you’ve linked to looks much easier. Still, what I didn’t like about the very first ZAGG keyboard case was that it required both hands. The ZAGGFolio is so nice because you can one hand it, open and closing. That’s why we’re trying the Belkin next, one handed operation, and it folds flat.
@spacegorilla:disqus I’m hoping for a 15 inch, 1.5 pound iPad Pro, personally, but 12-13 inches is the most likely size.
I would totally go for a 15 inch iPad. I have a carry bag already, so 13 inch, 15 inch, it wouldn’t make a difference, I’m carrying the bag anyway. I’m really getting to love working on a touchscreen. So much that when I’m at meetings with clients I accidentally touch their laptop screens, I’m so used to it. And I find myself annoyed that I can’t just touch the screen to make stuff happen.
Well, let’s hope. Using an iPad is so intuitive. The larger screen would be incredible for so many types of design work.
I don’t think anything bigger than 15 inches would be workable, just because of heft.
One reason why I’m so fond of iCloud (when it works) is that I pick my device for the day based on the screen size and feature set I need (keyboard, optical drive). Worst case, I still have my iPhone. It’s a strangely carefree lifestyle to work on an 11″ MacBook Air on the plane, then go to a work meeting regarding the same project and not give a second thought to moving files or syncing. Instead, it’s Cogito ergo voila! — I thought about it, therefore here it is…
And AirPlay in the conference room is so incredible that I’m considering rejecting clients and vendors for whom we need to drag out “the PC”, even though AirParrot runs well on Windows. Our meetings have this…flow…to them, with partners able to AirDrop files to each other, collaborate and coordinate over iMessage and, when something needs to be discussed by the group, just pop it onto the big television over AirPlay. It’s addictive!
Yep, I’m getting spoiled with the iPad in my day to day business work. I use OmniFocus exclusively on the iPad because I like it better on iOS. All meeting notes are in Pages. It’s a subtle difference but with the iPad I can lay things flat and type notes, it doesn’t feel as intrusive as my MacBook in a meeting. I use Paper to sketch rough ideas and wireframe goo for clients. Simple is good, I’m getting to like it. I cannot stand the trackpad on my MacBook now, it feels so old fashioned and dumb.
Your workflow sounds similar.
One of my clients is creating a luxury journal on using the Apple ecosystem as a competitive advantage. As a result, I’ve been spending a lot more time with my iOS devices. Lately, it has been like the moment when I figured out that using Spotlight is preferable to meticulously sorting all my e-mails and documents into folders. I keep asking myself why I wasted so much time babysitting my tech devices instead of benefitting from them.
The fundamental change the MS needs is this – with all the money and resources that it has got, it is time for it to be really creative. Until now, it has been a company that saw others come up with something and do well, chase them, hound them out by using the bullying tactics, wipe them out and keep the territory for itself. It was like the lion making its territorial markings in the Serengeti. What has happened is that the plain is now seeing hyenas, wolves, cheetahs and others invading the territory and taking away what the lion guarded against other lions. With no more lions to challenge its dominance, it decided to sit and enjoy its life. Now it is finding itself unable to chase every challenger that is swifter, faster and and energetic. MS has to fire most of its old guard and make a paradigm shift in its approach towards the industry that is becoming more consumer based. Humvees are great vehicles during warfare. It has its place. But if the company thought that a modified Humvee that looks like one, but can double up as a Lexus would be welcomed by all practical people. Windows 8 was one such vehicle. Microsoft could have remained as a software provider – create a competing mobile OS to Apple’s and let the OEMs compete with Apple. Google just did that. MS could have given it for a very small price per unit. It could have created an app department that made MS apps for both Android and iOS platforms. MS Office app for both systems would have taken over by now. There was no need for a Bing. There was no need for the Zune. There was no need for a Windows 8 Humvee+Lexus version that ended up with two of the wheels being larger than the other two. May be MS can hire Marissa Meyer for a change. One never knows. She is from Google and still looks at the world the way Google does. She could change MS from inside out. She is young and has many years left in her career. She might be the one who could change MS. Windows 9 or Window-Dressed 9 wouldn’t cut it.
No wonder they call you Sensei! Very insightful.
Apple seems to have read the same tea leaves and, as a result, we have a “free” iWork on Mac, iPhone and iPad, along with web-based ecosystem tie-ins (iWork in the cloud). I’m told that Apple continues to seriously invest in iWork.
There are so many cards in play…
Although it’s not obvious to the casual observer, Microsoft is fighting for its livelihood. Windows 8/RT/Phone have not failed, but they’re very weak. For the first time in a long time, Office isn’t an automatic “must have” and, as a result, neither is Windows, nor a PC.
I suspect this is one of the reasons why Apple is expending energy toward its Mac Pro line and their 64-bit ARM tablets and phones. They want to get the halo/aspirational products in place.
The Windows empire is not facing a frontal assault; it’s facing growing malaise. Direct consumer sales of Windows licenses has never been as great as the number licensed as part of a PC sale. What happens when consumers say “Y’know, between my iPhone and my iPad, possibly my Mac, I don’t have a pressing need for a Windows/Office machine. Maybe next year.” Then, next year becomes 3 years out and the spell is broken. Few people are fanatical about Windows and Office. I can’t remember the last time someone raved to me about a feature in Word, or even Powerpoint.
I would love to see Apple integrate multi-party iMessage/iChat/Facetime Audio. Surprisingly, Microsoft Lync is the last corporate service that Linux and OS X corporate users can’t substitute.
What we’re going to see in the next 2-3 years is apps on tablets and smartphones that make PC’s seem redundant, more presentations given from mobile devices, more in-the-field creation and collaboration. Those “desktop-grade” 64-bit mobile processors? Your smartphone, plus an HD TV/monitor (over DLNA or AirPlay) and a Bluetooth keyboard will ***BE*** your PC, as well as the personality for your car, one that’s always with you. Microsoft doesn’t have a horse in that race, and it’ll take too long to adapt the Windows Phone infrastructure.
I also suspect Microsoft will be hit hard in the enterprise with “server” compute becoming more local and low-latency. Stores will need compute power that can respond quickly as you pass by all those iBeacons. That’s the killer app for the Mac Pro, live customer modeling and content generation. You can’t change the laws of physics, and you can’t give real time responses from a server that’s 3000 miles away, over a low-bandwidth connection. Data doesn’t move faster than the speed of light, and some things need response times in the milliseconds. It’s a replay of our transition from mainframes/terminals to client-server to PC’s, except this time the stakes and the compute capability are 4-5 orders of magnitude greater.
Heady times. I’ve been trying to come up with a scenario where Microsoft regains its footing, but all I see is Chromebooks ripping away the low-cost PC market and Microsoft clinging to legacy businesses through Office while Amazon and Apple decimate the cloud and personal markets, respectively.
I could care less about MS’s fortunes, and I otherwise wouldn’t object to Apple taking their place. But I ask you…Who will provide the open (as in unimpeded) standard under which everyone gets to play? Today’s Apple isn’t that leader.
I’m not sure such a thing will exist again. I think curated app stores are the way of the future.now. The concept of a “free for all” platform was only necessary until the details got worked out, both in hardware and software terms. Future computing devices will be closer to modern gaming consoles. If you don’t like my standards, go make your own gaming console and build your own ecosystem.
Oh, and, though I love your posts, I must correct you…
“I could NOT care less about Microsoft.” If you COULD care less, then you must already care, which is okay, but I don’t think it means what you intended…
I could care less about other people’s grammatical and spelling mistakes, but it bothers me tremendously when otherwise bright people can’t communicate their ideas clearly. What’s the point of being brilliant if you’re so difficult to understand that others ignore you.
Your correction is appreciated. Thanks for your kind words.
There are huge vulnerabilities to platforms that adopt that approach. Such an ecosystem is one stubborn “killer app” away from being seen as inferior. Currently, MS is only 10% there. What Apple will do with the Mac is anyone’s guess. I’m afraid there’s Linux in my future…
Also, do we really want to give a 30% cut of all software to the platform maker? Hardly seems consumer friendly. It probably helps small developers, but impedes the large ones. Look at Wolfram Research… why in the world isn’t there Mathematica for the iPad, Android, or Windows marketplace? These devices would be the “quantum leap” for such software. A natural way to use it. One reason could be (I’m guessing) that users who would buy the software already know about it. What value does a singular, platform specific app store offer Wolfram? Does MS need Apple to sell a hypothetical version of Office for the iPad? Why would I develop an independent app for my field, if I have to share the profits with the device maker? I see it as an obstacle to bringing innovation to market. How would we have felt if MS did this in the bad old days?
Well, that 30% gets the consumer a lot…
No searching for lost license keys or disks/floppies
A cursory check that an application doesn’t have malware/viruses
A primitive check that an application isn’t so poorly written that it will damage other data
Sandboxing so that the app can’t accidentally do something bad to your machine
Subsidization of iCloud storage and services
No concerns about using the software on multiple machines
No concerns about sending your credit card number and other information to umpteen sites and services so that you can buy an app
Of course, developers would rather have the extra 30%, but I’m certain that large customer base makes up for it. I tell my customers to charge 25% more if they must and suck it up…
Merchant services are not free.
Bandwidth for downloads is not free.
Providing customer support is not free.
Sanity checking apps is not free.
Gaining access to such a huge market is not free.
You’re not really losing 30%.
Microsoft will either bring Office to the Mac/iOS App Stores, or will find that it has become irrelevant. Many Mac-based companies I know of have shifted to iWork and moved on. Even if Office for iPad is released tomorrow, they’re no longer interested.
I would be much more concerned if Apple were not “allowing” Google or Microsoft or any other competitor to sell its apps through their store. That would bring about anti-trust litigation quickly.
In general, 30% is a fair price. In the bold days, when software was sold on disks in boxes and brick and mortar stores, the publisher was lucky to get 50% of the retail price–and had to pay for the packaging, plus extra for and end cap or any decent display. Even today, Amazon.com’s gross margin across all products is around 25%.
I doubt that many software developers could net 70% of retail if they had to bear all the costs of distribution themselves.
Is 30% a fair price? No question, going digital is a less expensive price, but a fair price implies competition, including the publisher’s own site.
Not necessarily. A fair price implies an understanding of the time, effort, and costs involved and incurred.
The debate over Apple’s 30 percent cut seems like a case of stepping over dollars to pick up pennies.
In the context of other alternatives…both real and possible.
Well, there are real alternatives. Android, Amazon, Blackberry, Windows, to name a few. If you think you are getting screwed with Apple, don’t buy. If you are a developer who thinks you are getting screwed by Apple, there are other platforms to develop for.
You have an idée fixe about competition that you keep repeating as though it were a law of nature. Exactly why would consumers be better off of there were competing iOS app stores? They’d be able to get some apps that Apple doesn’t allow (though jailbreaking is always an option if you really want them), but they’d be trading Apple’s curation for the swamp of Android apps. There is a notable lack of clamor for such a change.
You are entitled to dislike Apple’s approach, but I see no basis for asserting that it is bad for either consumers or developers.
By the way, Google Play charges developers the same 30% for what is arguably a worse deal (because the Apple store is far better at delivering sales.).
Because competition is a fundamental aspect of free markets. Competition has been proven time after time to benefit the consumer and the economy. Also, computing is too important a resource to leave that much control with one entity. Isn’t that why MS almost got busted up?
Android does not force you to use Google Play. You can even sideload.
“Android does not force you to use Google Play. You can shop anywhere. You can even sideload.”
If that’s a benefit to you, then you should go Android. A lot of us consider that one of the pitfalls of Android. That would not be a desirable feature in my book. That would be a compromise riddled with malware and attempts to grab my most personal of information.
There are compromises everywhere, even with your concept of “open”. You have to decide which ones are most important to you.
Microsoft’s legal troubles stemmed not from the existence of a monopoly–a monopoly can be legal so long as it is achieved through legal means–but from its abuse of monopoly power. That’s a critical difference, often overlooked.
Apple users are not shy when it comes to complaining about things they don’t like. Being restricted to the iTunes App Store does not seem to be high on that last, nor is there any evidence that it is having a material impact on sales of iOS devices.
People who don’t like Apple’s restrictions are free to not buy Apple products. My issue is with your belief that people who make a rational choice to accept, or even welcome, Apple’s restrictions are making a mistake.
Because the users that choose to “stay in the fold” would be un-impacted either way. They are not mistaken, that’s their choice. Inhibiting, or supporting the inhibition of other’s choices is what’s wrong.
Well…this just came up. A lot of the arguments sound awfully familiar. Based on the arguments in favor of curation, I suppose you are in favor?
I have no idea what this has to do with the question of app store curation. (In the U.S., federal law requires the filing of a Currency Transaction Report on any cash transaction for more than US$10,000. It’s an anti-money laundering measure.)
With all the repeat publication, I should have sent you these additional links…
Sorry. I was thinking “collectively”. 🙂
As you say (sort of):
“The policy change was part of the bank’s efforts to comply with anti-money laundering regulations, which require banks to report suspicious behavior, such as withdrawing large amount of cash.
For example, banks operating in the United States are required to report cash transactions above $10,000 to the government, as well as transactions that occur under dubious circumstances.
“Cash presents more risk, and in particular financial crime risk, than other payment methods. It also leaves customers with very little protection if things go wrong,” the bank said.
“Therefore, we need to monitor particularly closely movements of cash in and out of the banking system. This is why we ask our customers about the purpose of large cash withdrawals when they are unusual and out of keeping with the normal running of their account.”
“HSBC said in a statement: “We ask our customers about the purpose of large cash withdrawals when they are unusual and out of keeping with the normal running of their account.
“Since last November, in some instances we may have also asked these customers to show us evidence of what the cash is required for.”
“The reason being we have an obligation to protect our customers, and to minimise the opportunity for financial crime. However, following feedback, we are immediately updating guidance to our customer facing staff to reiterate that it is not mandatory for customers to provide documentary evidence for large cash withdrawals, and on its own, failure to show evidence is not a reason to refuse a withdrawal.”
Monitoring is one thing, but needing to explain?! So HSBC is simply acting in their customer’s protection… This Sir is curation, and control over other’s property.
Replace “money laundering” and “fraud” with “viruses” and “malware” and it sounds very familiar.
This has gotten too weird. HSBC seems to have gotten overly aggressive in implementing money laundering regs, but they aren’t curating anything. If you replace the words “money laundering” and “fraud” with “viruses” and “malware,” you are left with gibberish.
I don’t even like the term curation to describe what Apple does in the App Store. Curation is what museum directors do. Apple makes decisions about what products its chooses to carry.
The question you should answer is who or what, other than some abstract principle, has been harmed by Apple’s decision making. Other than certain types of programs, such as compilers and emulators that are prohibited for technical reasons, the only material that has been keep of the App Store as a class is pornographic material. Personally, I don’t have strong feeling about pornography one way or the other, but I think Apple’s position is a defensible one.
Well here’s where we will never agree. What is gibberish is limiting what people can do with their property.
Yeah, ’cause I’ve never had a homeowner’s association insist that I mow the yard or keep me from painting my house burnt orange with green polka dots. And I’ve never had the government require me to put a bumper on my monster truck so that I can’t run over the poor souls in Mazda Miata’s. Nobody is going to stop me from having a sawed-off shotgun, like the one I gave my five-year old for his birthday.
I fully admit that I don’t like being told what I can do with stuff that I paid for, but we have more limits imposed on us than one would think.
If Apple were the only smartphone company, just as if Microsoft were the only OS vendor, I would be much more concerned. Since there’s choice, I stand by their ability to impose limitations as part of a design decision. If you don’t like it; don’t buy it.
You know, I had that very thought a couple of hours after my post!
The difference? When you buy into a homeowners association, you don’t buy real property. You really buy shares. That’s how these controlling pompous twits can get away with it.
And there are other property examples. If you buy a house that is officially historically significant or buy in a neighbourhood that is historically significant, the are major restrictions about things such as paint type and colour, never mind if you are even allowed to do anything structural or even tear it down.
Thanks for the opportunity to look into this, as I learned something new.
Basically, on the Federal Level, you can do whatever you want as long as there are no Federal Monies attached to it. At the state level the respective State Historic Preservation Offices have a say as well. I assume the same for municipalities. From a “common sense” perspective, there is some ownership of a landmark by a society, so they have some say over it’s disposition. What ownership does Apple have over my device?
The point is that except in libertarian dreams, absolute property rights rarely exist. At least in the U.S., deed covenants, easements, and zoning laws frequently restrict what you can do with your real property. I own my car, but I can’t modify it in ways that violate certain safety and emissions requirements. And the question of just what you own when you buy software or a product based on software is an area of still-evolving law.
Yes. Under law. That is, under law prepared by duly elected officials, not some corporate entity. But you do bring up a very critical point. Since something has to give, is it our actual ownership of these devices?
OK, your use of the property may also be subject to the rules of a homeowners’ association, a private entity. Their rules are a legally enforceable contract.
Yeah, we covered that already…
That’s not always true. Likely more true with a condo association as it is shared property. But a neighborhood or home owners association is not the same. Everyone really owns their property. Having relatives who live in such neighborhoods in Florida have seen associations dissolve.
Okay, let’s go with that. This is a personal appliance, like owning a house, not a community appliance like a condo association. Though a fine community has sprung up around it. I bought a gizmo, I didn’t join a club (with rules, etc.).
Well, according to your own research there are actual legal rules at play. So, yeah, the gizmo is _not_ entirely your property. So, you can’t complain that it is. Just as with a condo association (of which I was a member for many years so I’ve been through this) there are parts that are your property with which you can do whatever you want and there are parts you can’t. This over-simplified, reductionist property theory is wrong, legally, that is.
Petition to change (or at least clarify) the law.
“the gizmo is _not_ entirely your property”
Which should be emphasized for the sake of informed decisions. Would you tolerate the same regarding your Mac?
Depends. Just as with the condo association, there is a legally binding contract. I either see the value in the arrangement or I don’t. If I do, yes. If I don’t I would buy something else (just like I no longer own a condo)).
(But you can still legally jailbreak your iPhone, for the sake of informed decisions).
It’s also the reason you hire an attorney when buying dwellings. Should we be bringing ours to the store to negotiate EULA’s? 🙂
“But you can still legally jailbreak your iPhone, for the sake of informed decisions”
You really can’t since the same process unlocks it.
From what I’ve read (albeit not in depth as I don’t care to jailbreak my iPhone) you are clear until at least 2015. [add, The librarian seems to differentiate between jailbreaking and unlocking]
I already states you are free to jailbreak your iOS device and do with it what you want. Having done that Apple is free free from obligation to support your choices. Choice exists for everyone, not just the consumer.
There is more to that story from where you left off. The Librarian of Congress ruled that the actual firmware that’s included in your device is NOT your property, thus subject to DMCA and making jailbreaking and unlocking ILLEGAL.
That misreads the Copyright Office’s action in several ways. Under 17 USC 1201, circumvention of technical measures to prevent copying of “protected material” is prohibited, but the Librarian of Congress is empowered to grant temporary exemptions in the public interest. Such an exemption had been granted for SIM locking of mobile phones. Librarian allowed the exemption to expire last year.
1) This has nothing to do with ownership. People seem to have trouble getting their heads around this, but you may own something and still b restricted in what you may do with it.
2) Although Apple has worked hard to prevent jailbreaking–relatively successfully of late–by locking down the code, it has never asserted DMCA against jailbreaking efforts. All it has done is voided (usually temporarily) the warranties of jailbroken phones.
3) The DMCA prohibition on unapproved unlocking applies only to SIM locking, not to other modifications of the software.
4) Apple sells SIM-unlocked iPhones. All iPads are unlocked.
Since you must jailbreak in order to unlock, it’s tantamount to the same thing. Even if they were possible separately isn’t the firmware protected under the same DMCA statutes?
Hands off the iPad…
Apple’s stance during LOC ruling:
Apple’s position during first LOC case…
“Apple maintains that its closed marketplace is what made the success of the iPhone possible, and sold more than three billion apps. Apple also told regulators that the nation’s cellphone networks could suffer “potentially catastrophic” cyberattacks by iPhone-wielding hackers at home and abroad (.pdf) if iPhone owners are permitted to legally jailbreak their shiny wireless devices”
Hands off iPad…
Edit: Apologies for the double post. Disqus got borked.
Apple, like every other phone manufacturer, takes the legal position that DMCA prohibits unlocking. But as a practical matter, Apple has not gone after jailbreakers, not individuals, not the Dev Team which develops the jailbreaks, not Cydia, an app store for jailbroken devices.
This strikes me as a reasonable course for Apple. They defend their legal rights for the record, but turn a blind eye to violations by some of their most loyal supporters. It’s a little like Google sending out letters complaining about the use of “google” as a verb. They do it because they legally must to protect their rights, but in fact they are somewhere between indifferent and pleased.
Let’s not forget those signs in store windows “No shirt, no shoes, no business.”
On THEIR property, that’s their right.
Whose property is irrelevant.
Taste aside, it’s property rights that lets businesses set rules of conduct on premises, such as “no shirt, no service”, and dress codes in general, etc. With the exception of protected groups and reasonable accommodations in other cases, they are actually allowed to discriminate.
But you can do whatever you want with your iOS device. I think there was a court decision not too long ago when I think it was Apple going after iOS jailbreakers, or maybe it was someone else or some other decision that affected them. There is even an app store for jailbreakers.
You lose a lot of the benefits Apple provides, but, just like any other business, Apple gets to decide the terms by which you do business with them. Just like in any contractual transaction, all parties get to decide the basis on which they will do business. If those interests coincide, then business is conducted. If they don’t, no transaction occurs. If enough customers did not coincide with Apple’s vision I am sure they would either rethink their position or simply go under.
Apple is not doing anything underhanded, under the table or under the hood to inhibit competition. They are very clear and upfront how they want to conduct business so every one can make an educated decision to do business with them or not. Just because Apple does not want to do business in the environment of your definition of “open” does not make them wrong. It just means you guys disagree.
Even with the App store, with the few (and I really mean this is the exception, not the rule) cases where apps were denied, the issues got worked out, except as Steve mentioned with pornography (although even there I believe that is simply an App store issue. Web apps are certainly another option a developer could go and bypass the dedicated app entirely).
Everyone has choice available. No one is forced to do anything they don’t want to do. If that were the case, your objections would have more weight and merit.
Exclusivity is not a monopoly (though I realize you haven’t accused Apple of being a monopolist as some have). Apple has traditionally always taken an integrated approach. “Open” per se isn’t better.
So what is different now, that causes your reaction? I guess the difference now is that the iOS platform is more integrated and tightly controlled on mobile than OS X is on desktop. Does that suddenly signal an issue of “that much control with one entity”?
Apple simply sees the product as the hardware and platform intertwined — more so than ever. Thus, selling their own product in their own store and opening their own store and platform to the participation of others is already allowing others to share in the exclusivity.
Perhaps we are only having this discussion because iOS is popular nevertheless — if iOS was the size of Win Phone 8 we wouldn’t be having this discussion. Perhaps it is popular in the first place because this direction Apple has taken with it provides more benefits than the issues you perceive could outweigh.
You have to consider there may be good reasons that iOS is more controlled. Perhaps the even more personal nature of mobile computing (always with you, etc.) places more pressure on user experience, ease of use, reliability and security; stuff like that.
You clearly took the time to see my point. That’s really cool. Thanks.
“I guess the difference now is that the iOS platform is more integrated and tightly controlled on mobile than OS X is on desktop. Does that suddenly signal an issue of “that much control with one entity”?”
Yes! Bingo! Absolutely! It violates one of the most fundamental attributes for which a personal computer was originally positioned.
This statement was descended from Bill Smith’s assertion that the days of “openness” are behind us and that computing will become more like game consoles in their containment. He may be right, but I sure hope not.
You also have to understand my temperament. I thought MS in the 90’s went WAY over the line in the control they exerted over the industry. I also feel Apple is WAY worse than that in their behavior because that control has extended down to their customers. Whether they want it, or not. It’s not only a curated (as in protective) environment, it is a censored environment.
You are mixing two types of control: industry, vs. product/platform. Most people would say industry control is worse. We perhaps didn’t notice the industry control so much at the personal level (unless it was in the form of our IT Dept overlords) — perhaps because “PC’s” weren’t as personal as Mobile.
But “openness” is overrated, for most people — most people are not hobbyists or power-users. It is certainly overrated at the hardware and platform level. People choose one because of the differentiation it offers.
But at the data, content and protocol level, it’s a whole other story. Apple has actually played far better with open standards than anyone else, and promotes open standards far more heavily. This was where MS was (and still is) even more “closed” than Apple.
I prefer the accessibility to my data and content on various platforms — but also having the special, robust tool that I have chosen in my Apple products in order to manipulate my data and content.
I’m very impressed with your insight. I’ve been calling Apple their user’s de facto IT department for a while now. That’s a feature if you want it, and a curse if you don’t.
I won’t defend MS. I’ll contrast Apple and MS, and “calls them as I sees them”. I agree that MS, through extensions tried to commandeer the internet. They got their just desserts. By the same token, didn’t Apple kill Flash, Java, and a bunch of programming languages and apps on iOS, by fiat? Do they not forbid an alternative store by fiat? Didn’t Jobs ban Wiley publications by fiat? I don’t care about Wiley, I care that it was possible to be done.
I haven’t called Apple a monopolist in this thread. You correctly pointed that out. If, however, you consider the iOS platform as a market unto itself, well then…
All the various platforms, due to technical reasons are distinct. There is no compatibility at the software level. Does that create a “market”? You can say “Buy an Android”, which is true, but I can say “But I own an iPhone”. Why should I have to change?”. Still, I digress. I look at the behavior of a company. That they don’t have sufficient market share to be declared a monopoly, does not justify the behavior.
FInally, “openness”, like freedom is never overrated. In these immortal words…
“If you choose not to decide, you still have made a choice!”-Rush
(yes, the band, not the blusterous right winger)
The key thing has to be whether there is a monopoly or near monopoly in place. Apple refused to accept a future where Flash and Java were supported on their devices, but it’s Adobe’s inability to make a version of Flash that met Apple’s criteria on memory and power consumption that kept them off the device and, eventually, caused them to be rejected from other devices that aren’t sold by Apple.
As for Java, being the #1 malware vector doesn’t help. Oracle is a client, so I can’t comment further.
What do you think of the EC’s attempts to have Apple use MicroUSB instead of its proprietary 30-pin and (now) Lightning connectors? I personally believe Apple should be able to use any connector it desires, but if they had the only connector and patents or other issues kept anyone else from entering the market, then I would complain.
Again, the behavior is just as distasteful (to me) whether they are monopoly, or not. Flash is Adobe’s problem, and their user’s. The users are the arbiter of Flash’s “suckage”. The users should decide whether that content is valuable to them or not. Whether Flash’s drawbacks are worth it. Android averts this problem with a simple reversible checkbox allowing installation from “unknown sources”.
As far as Java being the #1 malware vector…Do you know that 100% of drug deals involve a cell phone? Baby/washwater…
I agree that the EU is overreaching in their consumer protection with stupidities like microUSB. In this case it should just be a bragged about feature.
And the users are the arbiter on Apple’s decision. If the users believed Flash was important enough they wouldn’t buy an iOS device. Choice is not inhibited. (and not being a big fan of Flash, even before iOS, IIRC, there is an app or apps to help bypass Apple’s Flash decision, or so I’ve heard. Certainly researchable if one really cared, which I don’t).
Apple’s rejection of Flash had three effects: YouTube and other video sites were forced to transcode their Flash content into h.264 for iOS. iOS users would have to forego Flash gams, which didn’t work very well with a touch interface anyway. And sites–especially a lot of restaurants–that had built their web sites in flash would have to redo them if they wanted iOS users to see them (Some still haven’t.)
In any event, the great Flash flap repidly became irrelevant as it became apparent that Adobe could not develop a version of Flash for Android that actually worked. It eventually abandoned the effort, and that was that.
It’s odd that anyone still brings this one up, because the Flash decision was a knockout for Apple.
Too much of a binary choice. Either you’re in or you’re out…
While I agree that apple appears to exert too much control over iOS, I would dearly like the option of being able to choose my own level of control, much like in osx. This would be great for nerds and newbies or the otherwise generally ignorant in my opinion, but I don’t understand why apple hasn’t or cant enable this option.
For the purposes of a fuss free, difficult to screw up, reliable OS, I completely understand why they do it though and the 30% service charge is a freakin bargain for smaller developers for the amount of services and distribution they get. Obviously large developers aren’t happy, but it makes it an unbelievably level playing field.
Wholeheartedly agree. Openness is not incompatible with ease of use. Where there is conflict, the owner of the device should decide.
-Merchant services are not free.
True. Many merchants are better than one.
-Bandwidth for downloads is not free.
Also true. Many providers are better than one.
-Providing customer support is not free.
True again. Who’s providing the support?
-Sanity checking apps is not free.
Also true. Sanity is in the eyes of the beholder.
-Gaining access to such a huge market is not free.
Probably the most legitimate value add, but these devices have been sold already, so the merchant service is another matter. Conversely, apps like MS Office would likely sell more devices. Who’s the beneficiary here, and who should be paying whom?
-You’re not really losing 30%.
I don’t understand this one…
As far as Apple “not allowing”, that’s been demonstrated many times.
“‘You’re not really losing 30%.’
– I don’t understand this one”
Because the 30% covers many business costs. Take Mac software so we can compare selling the same thing on the App Store vs selling it on the developer’s own website.
Off the top of my head, by selling on the App Store, the developer no longer has to pay for: credit card transaction fees; chargebacks and returns; buying, building, and maintaining a web store/shopping cart; or creating a software update mechanism and paying for the update server. Oh, and reduced support costs as customers will no longer wonder “will this run on my system?” or buy something that won’t run on their system by mistake.
Add in that the developer will no longer have to allocate an employee’s time to handle any of these tasks, and the hit for selling on the App Store
Thanks for explaining. I touched on the big guys, they do a lot of what you say already. Much of what you say makes sense to me. That is, I understand, but I don’t necessarily agree in all circumstances.
Here’s the thing….forced exclusivity negates opportunity for a better deal.
Also, these developers likely have their own website already. If volumes are small, as they too often are, bandwidth charges are low. Should volumes rise, and it becomes more advantageous to go to the App Store, they could do it then.
It’s totally conceivable to me that a developer would choose to sell in a hypothetical small specialized store, more suited to their application, rather than get lost in the huge monolithic store. It’s not only Apple that wants to control their distribution, you know.
Regarding returns. Doesn’t Apple charge the developer back for returns. As far as support, doesn’t the developer provide that for their app? Apple doesn’t do that.
Retail competition is good for all involved, except maybe “you know who”. It also can foster innovation like Swype (to pick but one example) which has been disallowed for a long time.
For the customer that insists on the “safety” of Apple’s store, they can simply CHOOSE to shop only from there.
“Also, these developers likely have their own website already. If
volumes are small, as they too often are, bandwidth charges are low.
Should volumes rise, and it becomes more advantageous to go to the App Store, they could do it then.”
I think you missed my final point. It’s the big developers who are more able to afford selling outside the app store and the small ones who are going to find selling on the app store a better deal.
Two kinds of costs that the app store eliminates:
1. direct costs. Web hosting, Visa/Paypal fees, the cost of buying/setting up shopping cart software and creating the web store, etc. The biggest cost in dollars is probably paying someone to create the web store, with payment processing fees in second place (assuming enough sales to pay a living wage, if you’re selling apps as a hobby, then that’s a different matter). These costs are more or less fixed, and every company big or small is going to have to pay them if they want to sell outside the app store. Small companies are less able to handle these costs than large companies, obviously.
WHatever percent of each sale these direct costs add up to is money that the developer would have to pay out anyway, which is why Apple’s 30% is actually at the very most around 25% (remember payment processing costs 3% all by itself), and depending on sales volume vs website development costs, it can be a good deal less than that.
2. Indirect costs, mostly in the form of time. Contracting the creation of the store out to a web developer still means a big chunk of hours spent hiring the right person, explaining to them what is wanted, providing feedback as the webstore is built, and testing the finished product. The smaller the company is, the more expensive that time becomes. A shop with only a handful of people isn’t going to have anyone whose time can be easily spared to do anything that isn’t absolutely essential. A shop with a dozen or more people will have a full time admin assistant and setting up a web store wouldn’t be a huge burden for them.
If you convert indirect costs into dollars and then into a percent of sales, there are almost certainly many small developers for whom apple’s 30% cut is effectively negative — that it saves the developer money to not have to spend any time mucking around with running a store.
“It’s totally conceivable to me that a developer would choose to sell
in a hypothetical small specialized store, more suited to their
application, rather than get lost in the huge monolithic store. It’s
not only Apple that wants to control their distribution, you know.”
Promoting an app and making sure it gets noticed is 100% on the developer, as it always has been. The App store is like a department store for software. You can find anything and everything there, but you have to know that it exists or you will never find it. But the alternative to having your product lost amidst all the other stuff in a store that millions of people shop at, is having your product easily findable in a store that only thousands or hundreds of people shop at. Unless you’re selling something very specialized, you’re better off selling it in the store with lots of customers, and spending the money you might have spent putting your product into a second smaller store into a promotional campaign to make as many people aware of your product as possible.
“Regarding returns. Doesn’t Apple charge the developer back for
returns? As far as support, doesn’t the developer provide that for
their app? Apple doesn’t do that (as far as I know).”
Yes, Apple probably deducts any refunds they have to issue from the developer’s paycheck. But again, the key is that the developer doesn’t have to spend any time whatsoever dealing with irate customers who want a refund.
I think I was unclear talking about support. The App store eliminates the need for a lot of *sales* support (issuing refunds, dealing with buyer’s remorse, making sure that the product is compatible with the buyer’s system, etc). The developer still has to provide tech support, naturally.
And how does any of that negate having options of who to sell through. Including the option of selling it, more expensively, yourself? The self control may be worth the cost to some. Even if it’s the principle of the matter.
Pixelmator is a good example of a big shop. They are a PS replacement at 30 bucks. They soon went all in on the App Store after it was announced, and committed to selling there exclusively –claiming it allows them to focus on updating their software. It is one of the top-grossing Mac Apps. And they do offer deals now and then.
On the Mac side, they do have a choice of where to sell through, so I have nothing to say about that. It’s their decision, they chose to go exclusive.
On a Mac, Apple can’t say what you can run, use, develop, or consume.
@klahanas @Glaurung-Quena Let me go a little bit further in saying that the reason why Wolfram does not bring Mathematica to the App Store, why Adobe doesn’t bring all of its products, why Microsoft does not bring Office, is because they want as much of the profit as possible.
Ask yourself this question: who benefits the most by the existence of the App Store? The one-man shop developer or the Adobe/Microsoft/Wolfram Alpha monolith? As Glaurung-Quena mentioned, a small developer would need to spend great effort on things orthogonal to development of his software to have his own app store. His upfront investment would be much higher, around $50K beyond the cost of actually developing the app, which would mean small developers would typically bankrupt themselves after over-estimating how many sales they will get.
You say “I see it as an obstacle to bringing innovation to market.” If the 30% is an obstacle, it’s in the form of taxing those who have the most to benefit. The most innovative apps have typically come from the tiny developers, not the huge conglomerates. Is Microsoft Office really better than it was 2 years ago? Is Adobe Photoshop dramatically improved? Which “must have” features are in Mathematica that changed the world this year? Yet, I can list several apps from developers I had never heard of, on both OS X and iOS that have changed or dramatically improved my workflows in the past 12 months.
There is no way Wolfram could bring Mathematica as it exists to the iPad, independent of its pricing model (which is another story.) Mathematica is a complex system that runs on Macs, Windows, and Unix as server and client programs (which may or may not be running on the same physical or virtual hardware.) This architecture is not possible on the iPad, so the program would have to be totally redesigned. It is also a huge program because of the vast library of functions it supports.
Wolfram Alpha, especially with a Pro subscription, offers most of the Mathematica capability most tablet users are going to need.
Yes, the small publishers likely derive more value from the App Store. They operate under non-negotiable terms. The presence of alternate stores would benefit them even more (maybe).
Whatever their motive, the big publishers are less inclined to operate on non-negotiated rules. This impedes those high ticket applications from coming to iOS. In MS’s case, why would they strengthen a competitor? Apps bring value to Apple far beyond the money they make from them.
It gets Apple insanely huge profit margins, that’s about all.
I’ll say it once more: A 30% gross margin is not at all out of line for a retailer and is not fate nought to produce more than a few points of profit.
This isn’t a product they’re selling. The analogy is absurd.
Sent from my Windows Phone
Of course it’s a product. And it’s not an analogy, it’s some elementary business analysis.
Analysts look at three margins. Gross margin is simply sales less cost of goods sold. In the case of the App Store, that’s 30 cents, since Apple sells an app for $1 and the 70 cents passed to the developer is the cost of goods sold.
The operating margin, typically a much more significant number, is gross margin less other direct costs, including labor, facilities costs, depreciation and amortization directly attributable to the product, and general selling & administrative costs. There are a lot of merchant costs associated with the operation of the App Store including the management of the store itself, payment processing, hosting, bandwidth, and a share of corporate overhead. Apple does not publish operating margins by business units, but the company reported total gross profit (using a somewhat different definition than the one I just gave for gross margin) of 38% of revenues and operating profit of 29%. What this tell us is that the margins of the App Store are lower that the overall company average margins.
Finally, net margin is gross margin less interest, taxes, and extraordinary items.
Chris, if you’ve paid attention to any of Apple’s earnings reports, you would understand that the 30% commission Apple gets from app sales is, quite literally, less than 1% of their revenues, you wouldn’t make a statement like that.
That’s before considering the actual costs Apple incurs in running the App Store and maintaining the infrastructure for the App Store, paying the software reviewers, the folks who do the App Store marketing, etc.
Of course every developer would love it if Apple were to provide this as a free service, but if you were to investigate the actual costs of running a software store, you would quickly understand that this would mostly benefit the “large” software developers, who can afford to bring up their own distribution infrastructure, and hire staff to provide support, be on 24-hour call to ensure the servers are up, handle chargebacks and software updates.
Think of it this way…who would benefit most if the App Store did not exist? Companies like Microsoft and Adobe, who already have to have all that infrastructure sitting around. Who would lose the most? The one-man development shop that would rather invest its time making great software than handling payment processing issues, and lets not consider the cost of maintaining something like iCloud.
Less than 1% of their revenues has nothing to do with the profit margin, which is huge because they don’t develop the software, they just pay some minimum wage loser to put it through a few automated tests. Their costs are a pittance compared to the massive 30% bite they take. Man, if mobile software companies kept that extra 30% of the sale price, perhaps more than a few of them might make an actual profit.
I did a quick check of what our clients who sell Windows apps have as overhead for their software sales. Neither sells millions of copies per year, but it is substantial.
payment processing – 7.2%
phone and e-mail support for chargebacks – when a chargeback occurs, you need to respond to the bank’s inquiries in a timely manner, especially if you’re going to challenge the charge. – 4%
e-commerce site fees – 1.3%
CDN download bandwidth – 6%. Note: includes download of trial binaries
There’s other stuff, like site monitoring (to check whether everything can be reached over the Internet) and relay server costs, that can’t be expressed in terms of percentages.
This doesn’t include any marketing charges, cloud services (iCloud), etc.
So it comes out to 18%
[moved to correct place — Disqus is bouncing me around]
I think you meant to say…”I could NOT care less about other people’s grammatical…”
Ha ha…for those who didn’t get the joke, I meant that I COULD care less, but I don’t; I do care very much about understanding every word when a smart person is speaking to me…
You had me at vexatious reality.
But, I hope you are wrong. I don’t want multiple operating systems. What about with wearables? With the connected home? Televisions? I hope Microsoft can figure this out because multiple OSes make life hard.
I assure you that you’re already using dozens of OS during a typical day. Just because Microsoft calls the different Windows variants “Windows”, doesn’t make them the same OS. Just because Windows RT has the same brand name attached doesn’t make it the same OS that your desktop has.
What we need is purpose-driven and purpose-selected OS for the task at hand. Microsoft’s mistake is thinking they could make a Windows Venn diagram that encompasses every possible form of computing.
Disagree. That’s like saying “I don’t want many programs. I want one program that does it all.” You will be a sad person if you believe that one operating system can work well on a desktop, TV and wearable.
It will never happen.
This is very similar to the thinking that led to Windows Mobile, which was literally Windows 95 crammed into a tiny screen. It actually had a Start Menu and required a pen to operate! Even the approach to the hardware and software was very loose, just like Windows on the desktop.
Even then they were trying to cram one OS and interface into a completely different use case and form factor. MBA idiots.
Brian – you want things to be similar (familiar) although not necessarily identical. It’s not “multiple operating systems” that you dislike but rather, dissimilar ways of working.
Apple has done a decent job of this but it’s not perfect. I have an iPad and MacBookPro and still have a bit of a bump when some (a few) gestures don’t work on one as they do on the other. I certainly do NOT want the two to become the same – as others have written, this would be a disaster. But there are a few small things that would make things easier.
It seems to me that Microsoft is building for the 30+ age crowd and both Apple and Google are building for the 8 year olds to 30 age crowd.
It seems the older users are the ones most resistant to touch in Windows. Some of them are still clinging to XP. If by 30+ you mean people who have a job, then maybe you’re right.
Opinions like this are the very reason why I absolutely loathe Windows’ userbase.
What was the biggest complaint year in and year out about Microsoft every time it came out with a new release? “Oh, nothing’s changed under the hood; it’s just a reskinned O/S with prettier buttons and graphics/ why can’t Microsoft be like Apple and be more innovative and creative in its O/S?
So finally Microsoft put out an O/S with a radical new interface and design, and now the very same userbase that complained incessantly about Microsoft putting out the same O/S in a new skin are complaining about how radical Metro is and what a big failure it is, and blah blah blah.
It’s like no matter what Microsoft does, everyone is just determined to bash it. It sucks if it innovates and sucks if it doesn’t innovate. Even Windows 7, which now everyone sees as their saving grace, was ridiculed as the new “Vista” when it first came out. Go figure. Even before 8, that was the version of Windows that everyone bashed to hell and back as being no real improvement over XP, as being a reskinned version of Vista. Now that 8 is the new O/S to bash, everyone’s suddenly in love with 7 and 8 is the new Vista.
I can’t tell what’s going on here with this nonsense, but all I know is this: if Windows 8 is a “disaster” from a design perspective, the only people to blame are Microsoft users, who keep sending out mixed messages about what they want in an O/S. The reason why Apple is so good at what it does is that its users aren’t so conflicted over what they want. They want what they want. Microsoft users from day one have been nothing but conflicted, frequently changing their complaints.
This huge uproar over 8 is a classic example. Users complained for years that they wanted Microsoft to be radical and innovative, but as soon as Microsoft did that, it turned out that they were so married to its GUI that they couldn’t even handle not having one little button (the start menu) removed and acted as if Metro was the end of the world.
I never thought in a million years that I’d say this, but Windows users are really coming across as self-entitled brats at best, and at worst, crotchety curmudgeons that just love to complain no matter what. With users constantly complaining, it’s no wonder Microsoft is having such a hard time putting out the perfect O/S.
I’m not sure what you are trying to say here, other than that a lot of people who comment on software are ignorant.
Looking at the history of consumer Windows:
Windows 95 was an enormous change, both in UI and under the hood (though it retained a DOS core.)
Windows 98 and ME were mostly cosmetic.
Windows XP, by many standards the most successful version of Windows ever, retained most of the Win 95/98 UI, but rebuilt the platform on the Windows NT kernel, unifying business and consumer versions. Windows XP SP2 made major changes under the hood, mostly to improve security.
Vista has a long and tangled history. It sort of began life as Cairo,, the most ambitious remaking of Windows ever, but along the way, all the radical stuff–especially adding the WinFS filesystem and eliminating the Registry–were chucked. What was left was a mess. The UI demanded more processing power than many systems could deliver, important security changes were marred by boneheaded UI implementation, and a new driver model rendered lots of hardware unusable for months while peripheral makers struggled to catch up. Of course everyone hated it.
Windows 7 mostly cleaned up the mess. Consumers liked it, but enterprise was very, very slow to adopt it.
Windows 8 actually makes fairly modest changes under the hood (mostly for the better) but has a radical new UI. I would salute Microsoft for finally breaking away from a lot of legacies if the implementation weren’t so bad.
I’ve lived through two major architectural overhauls on the Mac, the replacement of Mac OS by OS X and the switch from PowerPC to Intel processors. The first couple of versions of OS X were pretty bad an Apple new it, but they were careful to support a gradual change, including providing good emulation that allowed Mac OS programs to run under OS X for a long time. The Intel transition was amazingly smooth, against with emulation of the PPC easing the way.
The big difference between the Mac and Microsoft experience, especially since 1997: Apple always puts user experience first and foremost. Apple is not afraid to challenge users (for example, by eliminating floppy and optical drives) but it does it because it knows users will fairly quickly come to see the wisdom of the choice.
A Mac user is not the most qualified person to give insight on Windows. More importantly, why did you mention Apple so many times in the article? The subject has nothing to do with Apple. Mac users are a tiny fraction of PC users. Reading your thoughts about why you’re happy with your Mac and don’t want to use Windows provides no value to anyone.
Ha! If you think this is an Apple fan site, you haven’t been reading many of the articles. As a Microsoft and Apple acolyte, it seems to be neutral to somewhat pro-Google. It depends on the trend of the day and which columnist happens to have been the most prolific.
I would say that many Mac users are indeed Windows users. I’ve used every version of Windows since 1992 dialy. In 2007 I made a decision to try a Mac for home use. Still use Windows at the office, and for the most part with no complaint. I use a Mac exclusively at home now because since I’m in charge of anti-virus, updates, software maintenance etc, and I made the executive decision to switch to the system that I view as the easiest to maintain. At work it’s a different story. We have an I.T. Dept! Though I understand and appreciate what you are saying, I feel your statement is for the most part false. Most Mac users use/have used Windows computers in some capacity or another, but not vice-versa.
I would also point out the 32-bit to 64-bit overhaul.
You have just written an excellent, succinct, 20 year history of the operating systems from Apple and Microsoft.
To me, the difference between OS9 and OS X, was the addition of the Application menu, and the Window menu. The changes in Windows were endless.
I wholeheartedly agree with you. I would argue that Sinofsky out-Apple’d Apple with Windows 8. If they had dropped the “desktop” or made it seem more like just another Metro app, it would’ve been a very Apple-like move. Even then, it was the complainers who made Microsoft back-track.
Now, Apple has similar issues. Look at what happened with Final Cut Pro and, more recently, iWork.
Microsoft has some great tech. I’ve been in love with Windows NT since 1990. It is fantastic tech, even better than OS X for the underpinnings. I feel I can say that having worked on the bowels of both OS. It has always been the UI department that Windows NT lacked in. Windows 8, for the first time, gave us a new direction, one that had integrity (that is, Sinofsky designed it around a set of rules rather than just cobbling stuff together).
If Microsoft were my client, I would have suggested they release Windows 8, under a different name, in parallel with a Windows 7 upgrade. Their mistake was trying to keep their entire user base on the same page as part of “One Windows” and “Windows Everywhere.”
The primary reason why Apple users didn’t revolt over iOS is that it was always a separate product. OS X and iOS cross-pollinate, but Apple users have never been forced to accept a complete overhaul.
Do you remember all the jokes people made about the “Start” button when Windows XP was introduced? Now, it’s an act of war to remove it!
Windows 8 is just fine. People need to calm down. You can boot it to the desktop if you don’t like the start screen, but to me the start screen is a lot better than mousing through a myriad of folders to open a program from the start button. Tablet computing is the future and Wildstrom is a dinosaur if he thinks there is no future there.
If you have read anything I have written, you know that I believe fervently in tablets. However, there is and will remain a (smaller) place for traditional PCs for certain classes of work.
The problem with Windows 8 is that it insists on one operating system doing the work of two and you can neither avoid the touch OS on a traditional PC nor the Desktop OS on a tablet. On a tablet, you must use Desktop for Office (which Microsoft;s promotes as its big competitive advantage). for file management, and for a lot of the less frequently used management functions. In Desktop, clicking on any of a wide variety of file types will launch you into a Metro app unless you have painstakingly changed all of the associations.
I think Microsoft still has a chance to fix this in Windows 9, but time is running short.
I was going by this quote: “I’m not convinced there is much of a future for touchscreen notebooks.”
I have a Surface Pro 2, and I think it is great as a both a tablet and with a mouse and extra monitor attached to do serious work. It’s extremely portable and I love the touchscreen. To me, as technology and software adapts, it makes sense that this is the direction things are headed. Otherwise, why the rumors of an iPad Pro?
Frankly, I don’t care where a program opens, whether it’s metro or desktop, as long as the program does what I need it to. I could see how people using a desktop may not like the metro interface, but it’s fantastic on the Surface Pro. If you really want Office to open in Metro, Microsoft is working on a metro version, but I have Office 365 on my Pro and it works just fine. It’s actually pretty touch-friendly in my opinion. And if you don’t like metro at all, just boot it into desktop mode, and you have a faster version of Win7.
It’s not perfect, but in my opinion Windows is ahead of the curve and headed in the right direction as personal computers continue to decline in sales and more people buy tablets. For someone who travels a lot for business, it’s nice to have a portable tablet with a full OS rather than carry two devices.
You turned my statement that don’t see much of a future for touch notebooks into a belief that I don;t see a future in tablets. You missed my basic point: Tablets are tablets, notebook are notebooks, and it is Microsoft’s attempt to conflate the two that is causing it a lot of trouble.
In the end, it matters not at all whether I like Windows 8 or whether you do. Microsoft’s problem is that the market doesn’t like it. Consumer sales are weak and enterprises overwhelmingly won’t touch it. enterprise laggards forced to move off XP are going to Windows 7, not 8. This is a problem Microsoft has to come to grips with.
I guess we’ll have to agree to disagree. I think tablets and notebooks will basically be interchangeable as technology progresses, and Microsoft is ahead of the curve here even if it’s not popular at the moment. Windows 7 is still a Microsoft product, so if enterprise is moving there from XP, it’s not hurting Microsoft as Windows is still dominating enterprise and will continue to do so for the foreseeable future. I think its Windows 8 approach is geared toward the consumer market and will position the company well as chips get even better and the metro and desktop continue to converge. Having used the Surface Pro 2 for several months now, it’s clear to me that being able to run both apps and full-blown programs makes computing on a tablet incredible versatile, not some kind of insurmountable mental hurdle as you portray. I think more and more people will realize this in the coming months and years.
There is a subset of Apple fanatics (particularly including writers, who unlike 99% of people who use a computer for work, can do their job on almost any device or system) who actually believe (as crazy as it sounds) that mobile devices running smartphone operating systems like Android or (in this case clearly) IOS will completely replace the traditional PC for most people, and even enterprises. It’s a lunatic idea, but it’s out there.
Apple absolutely should be thinking about an “iPad Pro” that runs some variant of OSX. Smarter Apple users who recognize that Apple has been put behind the curve here by Microsoft are already talking about it elsewhere.
The is ad as it currently exists is overpriced, underpowered and underfeatured. If you want something that does what a PC does, you want a Surface Pro or similar Windows tablet. If you want a pure “media consumption tablet”, you want a cheaper Android device. The new Amazon Kindle Fire HDXad that mocks the iPad is devastating, because it’s all true.
I’m a fan of the iPhone. I think its design is nearly perfect for the form factor, although I’m not a fan of IOS 7, and I think a larger screen is overdue. Still, there is not a better phone than the iPhone. The is ad is a completely different story. A tablet needs to be more than a large phone that doesn’t make phone calls. The iPad is far too expensive for what it does, and Apple needs to start thinking differently about it.
Count me as one of those who strongly believes that, for most users, including office workers, the smartphone/iPhone (not even the iPad) will become the primary computing device.
It’s the iPhone that you’ll always have with you. On occasion, you’ll use special purpose devices, like the iPad, the iMac and the Apple TV to augment it with larger screens/touch services and complementary I/O devices.
That’s why having a 64-bit processor that is faster than a desktop matters. That’s your compute engine and link to the iCloud (backbone for the ecosystem). When you’re at home, you’ll have a Bluetooth keyboard and a TV/monitor attached over AirPlay. For lounging, or times when you need a bigger surface, an iPad. When you absolutely must have fixed location computing (e.g. at work), there’s iMac. But most of the time, you’ll just tether your MacBook to your iPhone.
But the iPhone is the key. It’s your ticket to the Apple ecosystem. Any device that can’t connect in will seem broken.
Samsung may copycat putting a 64-bit processor in their phones, but they don’t yet understand what it’s for…
I doubt that’s what Mr. Wildstrom said, and even if he did, I’d still give it careful thought in context. You’re not talking about someone who woke up yesterday and decided he’d give this tech journalism thing a try.
The ability to identify and respect wisdom is key to true knowledge.
Window’s 8.1 is great, it ties all your accounts, like facebook, twitter, etc. etc. into the operating system allowing me to do most of the tasks I use a computer for with an ease not seen before. Got an new update on facebook, get a desktop notification, click it and respond in seconds without even opening your web browser. Tying the things you use a computer for into the os seems like a natural evolution for computers, and I for one like it. It feels more like a 21st century os, I can hardly imagine going back.
If you just boot to desktop, maybe use a program like start menu reviver, you basically boot to the same environment as window 7, with the nicer task manager etc of Win 8, and can use the apps only when you need to. I jump to metro just to get a quick glance at all the information I’m seeking, what’s the weather like, any new updates on facebook or twitter, news headlines, among a million other variations for each individual.
Dont’ get me wrong I thought 7 was great, and if thats what you like, then run with that, but 8 feels more like a 21st century os, allowing me to accomplish many of the tasks I use to run 15 programs, and have 15 tabs open on a browser for. Integrating all that data seems like a natural evolution to me, hope it stays too!
I think there is a huge difference between people who own a Windows 8.1 tablet like the Surface Pro and those who have tried to install it on an existing desktop or laptop without a touch screen.
Anyone who owns a Surface Pro totally “gets” Windows 8 from the start, and I have yet to hear from one who doesn’t love it.
The resistance to it is based on people not wanting to upgrade their hardware, and not wanting to learn something new. As I mentioned before, there are people still on XP. Some people are just set in their ways.
People like the author here then take that and use it as a blanket condemnation because they still can’t get over the inferiority and resentment that the Applecult felt during the 90s when Windows took off. There are legitimate criticisms that could be made, but the author doesn’t even know enough about Windows 8 to make them.
Just bought a lap top with Win 8 and I don’t understand why MS believed it necessary to utterly destroy the “feel” or Windows 7. I may of well have bought a Mac. And it’s a sluggish turd to boot. They **really** needed to find a middle ground because like most Americans I don’t find pleasure in figuring out something that replaces something else that I like fine because I bought a new computer.
Don’t “persevere” for the sake of perseverance. Pitch the turd and get a Mac.
It might not make you feel happy, but my guess is that it will.
Windows 8 is a bet-the-company attempt to solve a problem nobody has: unifying the tablet and the desktop. Incredibly they decided to risk their bread and butter OS to improve their standing in a space they have never had much success in, that of mobile devices. Frankly, MS is just not innovative enough to pull off something like this.
Especially with the track record their recent innovations have displayed.
Windows 8 is an unusable disaster that has finally caused me to make the jump to Apple.
Windows Vista/7 had the perfect meld of desktop and Metro with Gadgets. I’d imagine Win8 solved the security issues with gadgets (whatever they were), and I see no reason you couldn’t have a desktop-centric interface using gadgets (or tiles) whatever you call them.
Windows 7 is much more tweakable. And it dosen’t thrash my hard drive.
No matter what I tried with Windows 8.1 it would constantly write to my HDD. It is unnaceptable.
If you tweak all the W7 services to your liking it boots just as fast as W8.
I dont want that garbage Metro, or the W8 incompatibilities, or all the additional MS bull***t that comes with it.
Interesting how there are so many free and just as good office suites but the average user has no idea and keeps buying office….
Microsoft does need to spilt the desktop interfaces in my mind and keep companies brainwashed that office is the only one of it’s kind, keeping them buying the product….
The problem with microsoft is that it is terrible in everything they do. Example, music players….how could a company so big get beat out by Ipod? Its only a HD that plays audio yet they couldn’t figure that out at all, even in 2014. I am a developer and if I work for the biggest corp. in the world, I would fire everyone who was too stupid to get this to work. In 2014, go on a windows machine and use google to go to MSNBC and play a video. They STILL have not figured out how to actually make a video player that doesn’t crash, loads properly, or even plays on the biggest browser in the world. Its almost 2015 and these buffoons still can’t figure out how to play and buffer video? It shows that not only are the devs horrible but the management must have never ever heard of testing on their own platforms. Micro$oft will be dead soon and I say good riddens to horrible rubbish. There is a part of me that would like to work for them because I could probably go to work high, drunk and asleep and be the employee of the month….but I have pride in my work. No one in Redmond does.
Windows 8 is horrible….why do you have to scroll around looking for simple things like the Start button? How do you even shut down this thing without having to go to that tile screen, click on your username, then on ‘log-out’ (there is nowhere that says ‘shut down’)….how could MS commit the terrible error of making such a drastic change to the UI?? Change is good, learning new things is good…but don’t frustrate your customers by just making changes without considering the difficulties involved in getting used to completely new stuff