The biggest tech news this week is the antitrust hearing before Congress that involved the CEOs of four of the largest tech companies in the world, Apple, Facebook, Google, and Amazon. I’m generally not someone who thinks these hearings do much to advance the cause of, well, anything beyond scoring political points.
To that end, the format left plenty to be desired, including the fact that more than one of the most powerful tech leaders in the world had technical difficulties with their Cisco WebEx connection. The hearing even stopped at one point to fix a “problem with the connection.”
There were plenty of bad questions, this being Congress after all. That doesn’t mean that everyone’s motivation was wrong, it’s just that for the most part, Congress isn’t that great at understanding or investigating anything related to technology and the internet.
Still, there was one extraordinary statement from Apple’s CEO, Tim Cook that’s worth a deeper look.
The first question for Cook was quite pointed, and remarkably simple: “Apple is the sole decision-maker as to whether an app is made available through the App Store, isn’t that correct?” Rep Hank Johnson from Georgia asked.
“Sir… the App Store is a feature of the iPhone much like the camera is, and much like the chip is,” said Cook before Johnson repeated the same question.
Think about that for a moment. Theater aside, that’s the most insightful answer I’ve heard for how Apple views the App Store. I’m not saying it’s necessarily a good reason, but it certainly sheds light on why Apple exerts the level of control that it does, including its review process.
To Apple, the App Store is a feature. It isn’t a platform for developers, it’s a part of the product Apple sells, just like the camera. According to Apple, that justifies the level of control it exerts. “Because we care so deeply about privacy and security and quality, we do look at every app,” said Cook to another of Johnson’s questions.
Cook made it a point on several occasions to mention that the number of apps has grown from 500 to more than 1.5 million, but ultimately, Apple views access to those 1.5 million apps as a feature of the product it builds, not as individual products that users may want to download onto a device they buy.
In that regard, the people who download apps aren’t developers’ customers, they are Apple’s.
This isn’t a small point. The App Store makes up the largest part of Apple’s incredibly important services business. In fact, you could argue it’s Apple’s most important business, especially as sales of those iPhones have slowed over the past few years.
“We have fierce competition at the developer side and the customer side,” Cook said. “It’s so competitive, I would describe it as a street fight for market share in the smartphone business.”
It isn’t totally unreasonable to say the App Store is a differentiating factor and a part of why people buy iPhones. In that respect, Cook is right.
Except, you can’t have it both ways. You can’t talk about how the App Store has created jobs and provided a livelihood for millions of developers, and also talk about the work they do as simply another feature of your flagship device.
To that end, it’s hard to believe that the App Store is simply a feature of the iPhone when it’s a far faster-growing business for Apple, which explains why Apple is so interested in continuing to collect its commission. Which, I guess, isn’t all that remarkable at all, it’s just not often you hear a CEO like Tim Cook say it out loud.