Do you remember when Bill Gates was seen as the Darth Vader of world business, bullying others out of various sectors; operating systems, web browsers and more? And Apple and Steve Jobs were the ‘other guys’, the good guys, the little guys. Indeed, Jobs attracted cultish devotion in the same proportion that Gates attracted opprobrium.
It is, as they say, a funny old world. I never bought into the Apple mania mainly because, running a publisher, all my staff were adherents of St Jobs – and his early machines were better for graphics –so I had to shell out big premiums over the nearly as good Windows alternates.
Now – outside of the batshit crazies who think his 5G death rays are being implanted with every Covid jab – most now see Gates as more deserving of Sainthood than the late Mr Jobs.
Apple, once the self-styled outsider, went on to become the world’s biggest corporation by capitalisation. This status better represents what has always been its absolute core principle, and it has nothing to do with funky design. It is maximum profit; any time, all the time, at any point.
Aside from the premium prices its hardware has always commanded (and chapeau for that), this has also always been seen in the cut it wants to take (gouge?) from any third party it allows into its ecosystem. To be fair, it has always been consistent. In a precursor to iTunes, it tried an online news rack approach to sell newspapers and magazines. It wanted 30 per cent, no negotiation. No one bit and it folded. Today it still wants 30 per cent; 30 per cent of your price tag or 30 per cent of everything you sell through your app.
Now the makers of Fortnite, one of the world’s biggest-hit video games, is saying no and the two companies are involved in a major court case. The legal machinations may see Apple relent (it has already made concessions to small developers, cutting its cut in half), but the company is faced with a real dilemma. Its device dominance in the key consumer market of smart phones has gone. Hence its massive investment in turning the company towards platforms and services; banking, news, games, all announced last March alongside the re-launch of Apple TV+. But none of them has set the world on fire. None of them doesn’t have someone else doing it better, or, at least, for less.
Is Apple too big to take a big hit? Was pay-TV too big too fail? If you try and hang on to big margins just for carrying and aggregating services, then those services will find a way around you and go D2C. Suppliers cut the cord because they can, and then consumers cut the cord because the suppliers have. If your platform’s market share is static, let alone in decline, you can’t go on charging as if you had a monopoly. If you do, then service suppliers will go around you, and then consumers won’t go through you. They’ll cut the Apple core.
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