Tim Cook Says Epic Games Case Risks Turning the App Store into a ‘Flea Market’

Tim Cook in Toronto Jan 2018 Credit: Tim Cook / Twitter
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With its infamous legal battle with Epic Games set to begin next month, Apple’s CEO Tim Cook is undertaking a virtual road tour to try to promote the positive benefits of the App Store ecosystem for developers.

Due to the ongoing global health pandemic, Cook can’t exactly be jet-setting around the world right now, so instead he’s holding virtual roundtables with key developers and interviews with the press, beginning with Canada.

According to the Toronto Star, Apple’s chief executive held a meeting last week with four Canadian developers who have “built thriving businesses on Apple’s platform.” According to Apple, Canadian developers alone have made more than $2.25 billion CAD (~$1.8 billion USD) through the App Store since it launched back in 2008.

In an exclusive interview with the Star, Cook lauded the App Store as being a considerable boon for the Canadian economy, noting that there are almost a quarter of a million developers who have created at least one full-time job as a result of the app economy.

It’s one of the fastest-growing job segments. There are 243,000 developers who are making their living in Canada on the App Store. There’s more than that who are registered, but those are the ones where there’s a full-time job created.

Tim Cook

To put these numbers in context, the population of Canada is only 38 million, so with the App Store having created a minimum of 243,000 jobs — some developers may have more than one full-time employee — these numbers are quite significant.

While Cook met virtually with only four of these developers, all of them were very enthusiastic to have a chance to get advice from Apple’s CEO about their apps, all of which are grassroots projects. The included Abdou Sarr’s FILM3D that allows users to shoot 3D photos, Brie Code’s #SelfCare that teaches meditation and relaxation, Harleen Kaur’s Ground News aggregation app that’s designed to highlight media bias, and Jason Krogh’s Sago Mini that offers a variety of popular educational apps for toddlers.

What’s also significant, Cook notes, is that 90 percent of the revenue earned by Canadian apps on the App Store is coming from outside of Canada, noting that “Apps are very much an export kind of business,” and “There’s lots of opportunity out there.”

One of the developers in the meeting, Harleen Kaur, also shared that Apple’s recent decision to cut its commission in half for smaller developers gave her company a “major boost.” The savings allowed her to hire three additional engineers far sooner than she would have otherwise been able to.

‘A Flea Market’

Naturally, the interview with the Star also turned to the looming court battle with Epic Games, which is set to go to trial early next month.

As he has done numerous times in the past, Cook was adamant that Apple is “not dominant in any market it’s in.” He also added that “there’s fierce competition everywhere,” comparing the struggle for market share in the smartphone world to a “street fight.” While Epic argues in its court filing that Apple has a 40 percent share of the smartphone operating system, it’s basing that on revenue, rather than market share by units sold, which Cook says is “in the teens.”

Cook also revealed that Apple actually reviews 100,000 apps submitted for review on a weekly basis, and rejects about 40,000 of them. This “curation” gives users a “safe and trusted place” to find apps.

These numbers also help put recent complaints of App Store scams in a new light. While scammers have supposedly earned hundreds of millions of dollars in ill-gotten gains over the past few years, these come from only a handful of apps.

One report found 134 “fleeceware” applications on the App Store over the course of two or three years, but the obviously pales in comparison to the 40,000 that Cook claims the App Store rejects on a weekly basis.

So, there’s clearly a much bigger picture here than most folks in the trenches realize. Even if Cook is exaggerating by a factor of ten — which would be tantamount to an outright lie — that’s still a staggering number of apps that the App Store review team has to regularly dig through.

In fact, Cook suggested that if Epic were to prevail, the App Store would be turned into a “flea market,” creating an experience that would not only be worse for end users, but would also make things harder for developers.

At the heart of the Epic complaint is they’d like developers to each put in their own payment information. But that would make the App Store a flea market and you know the confidence level you have at the flea market.

Tim Cook

According to Cook, a series of fragmented app stores and payment systems would result in a lower volume of people going into Apple’s App Store, reducing the audience they have to sell to. Cook suggests that users would also “miss out on the innovation” offered by many developers. “Nobody wins in that environment,” he notes.

While a multiple of other app stores would offer developers an opportunity to sell elsewhere — a point which Cook doesn’t really address — that would still require more legwork on their part to distribute their apps through multiple venues.

However, it’s also difficult to predict what the actual fallout would be if Epic were to win its case against Apple in some form or another. While Epic’s agenda was clearly to set up its own Epic Games Store on iOS, that’s far from the only possible outcome of a court decision that sides with Epic.

I believe if we tell the story, the facts, if we can communicate those clearly, then I’m confident that we should prevail.

Tim Cook

So far, however, the courts have shown a clear disdain for Epic’s legal games, however those have been solely focused on Epic’s attempt to gain premature injunctions, not on the merits of the actual case.

Cook, however, remains confident that Apple will prevail in its battle with Epic Games, simply by sticking to the facts and avoiding much of the hyperbolic mud-slinging that Epic seems to have been falling back on in its ongoing PR campaign against Apple.

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