Apple App Store Causing Harm? Not in my Book

Post by
Scott Francis

I love Fred Wilson's blog and generally find agreement in much of what he writes, with maybe only one fairly consistent exception, and that is with regard to all things Apple.

Full disclosure, I'm a fan. I buy a lot of gear for Apple.? We run an operation with more than 100 people and we don't have anyone doing "personal computing" support thanks to Apple.? Apple has both cost us and saved us a lot of money at BP3 over the years (the costs have been far outweighed by the savings).

In a recent post, Fred writes:

The Supreme Court is going to start hearing arguments today in a case where consumers are challenging Apple?s distribution monopoly on iPhone apps. These consumers are represented by the attorney generals of 30 states including?California, Texas, Florida and New York.? [...long post...]

Apple and Google have constrained the distribution system for mobile apps in many parts of the world and the result is higher costs for consumers, less choice, and ultimately less innovation. None of this is good for the economy. It is high time for the courts to weigh in here and open up the opportunity for third party app stores to exist on Apple and Google phones. I encourage the Supreme Court to rule in favor of the consumers in this case in hopes that it will lead to that.

I've added the emphasis on that last line...

Let's review the world before iPhone.? Applications were few and far between for what were considered "smart" phones back then. Think Blackberry.? Nokia.? Etc.? Consumers were expected to pay a fortune for ring tones - $5 in some cases.? And there were extremely few third party apps available, because those apps had to be sold to the telecom provider first, and the telecom provider would decide what they chose to make available (for significant fees) to their customers.


  • There are so many apps you couldn't read the names of all of the apps in the Apple Store if I gave you all day.
  • The median price of Apps is zero.
  • The median price was once greater than zero, but declined to zero over time as more and more free apps were released.
  • The mean price of apps - excluding free apps - has also declined over time.

In addition, we get a few benefits:

  • There's no malware to speak of, on Apple's store.
  • Distribution of Apps is extremely efficient as compared to, say, the shrink wrap era of software (going to a store).? And as compared to how you had to buy apps pre-iPhone.

But maybe iPhone apps are expensive compared to, say, desktop applications.? Nope. iPhone apps are dramatically cheaper - typically 1/10th the price. How about compared to console games for PS4 and the like?? Nope, typical games on the iPhone (that aren't free) are in the range of 1/10th to 1/20th the average price of games on consoles...

So I guess my question is, what is the consumer harm of the Apple Store?? Fred says they have "constrained the distribution system for mobile apps" - but in fact they have *created* the distribution system for mobile apps that previously didn't exist in any shape or form that a consumer could trust.

I think what Fred, and many others, are imagining is that the cost of apps could be even lower - but that does not mean that Apple (and Google) are causing harm through their official stores.? I don't know how much lower than free we can expect the costs to go.? And by the way, Apple will host your free apps, and distribute them... for free.? And for the consumer, we get the benefit of Apple's review process to protect us from apps that will root our phones, brick them, or ship our confidential information to other parties.

I'll stick with the Apple Store, thank you.

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