Spotify vs Apple, a look at Apple's capex, more bad news from China
|Mar 17||Public post|
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Spotify vs Apple vs Reality
Spotify open letter is here, signed by Mr. Ek himself, while Apple's response twodays later can be found here. I'll be digesting what both companies claim, point by point, but be aware that both companies talk about very different issues:
(1) "Choice" vs "security"
Spotify: In recent years, Apple has introduced rules to the App Store that purposely limit choice and stifle innovation at the expense of the user experience (...) acting as both a player and referee to deliberately disadvantage other app developers.
Apple: At its core, the App Store is a safe, secure platform where users can have faith in the apps they discover and the transactions they make.
Reality: both companies aren't even talking about the same thing. Or at least focusing in the same thing. Spotify would like more openness, while Apple argues that would bring unsafer choices for their users. This is a decade long discussion that won't be solved here by not addressing each others' points.
Spotify: (1) Apple operates a platform that, for over a billion people around the world, is the gateway to the internet. Apple is both the owner of the iOS platform and the App Store (2) they continue to give themselves an unfair advantage at every turn. (3) We should all be subject to the same fair set of rules and restrictions—including Apple Music
Apple: Spotify is free to build apps for — and compete on — our products and platforms, and we hope they do..
Reality: Spotify wants to have all the features of Apple's own music streaming service. Apple doesn't do that because their own apps doesn't go through the same vetting process. Apple apps can use custom APIs and obviously, don't pay the 30% cut to themselves.
(3) Physical vs digital
Spotify: We simply want the same treatment as numerous other apps on the App Store, like Uber or Deliveroo.
Apple: Apps that sell physical goods — including ride-hailing and food delivery services, to name a few — aren’t charged by Apple.
Reality: would be great if Apple extended this to a broader category of digital services, and not only physical goods. But this could be chaotic to distinguish what's what.
This won't solve anything
Spotify, and many others', point that Apple can not fairly operate the App Store while also using it, has technical merit, but legally this is on murky grounds. After a decade, the U.S. Supreme Court is looking at it at the moment, and now, the EU Commission.
Apple's declining capex
Neil Cybart is intrigued by the company's reasons behind the 13% drop in capital expenditures for 2019. For the first time in 16 years, Apple expects its capex to decline during the current fiscal year. He offered a follow-up in his paid articles.
By the time 2019 closes the actual figure could be different, but Cybart offers the most probable four points if Apple ends up spending "only" $14 billion: (1) fewer new Apple Stores, (2) less tooling and machinery spending, (3) Apple overspent in the past, and (4) they're wrong.
More bad news from China
The number of searches for the iPhone on Chinese search engine Baidu cratered by 48% in February after dropping 50% in January, according to Longbow Research. "searches also have an 82 percent correlation to iPhone shipments into China".
China's mobile phone market plunged nearly 20% year-on-year in February. Neil Shah from Counterpoint says "Apple and Xiaomi continue to be the biggest losers whereas Huawei, Vivo and OPPO continue to grab more share away".
According to IDC, iPad shipments in China still lead, but “were about 8.37 million units, down 6.4% year-on-year, accounting for 37.8% market share". underperforming a market that shrunk just by 0.8%.
Tim Cook to get a biography
Unauthorized, of course, but "The Genius Who Took Apple to the Next Level" will focus on Cook's time as the CEO of Apple, what makes him different from Steve Jobs and his stance on privacy. It comes out on April 16.
Apple bought Laserlike
More from the orchard
Apple to host annual WWDC June 3-7 in San Jose, California.
Roku Has Nearly Finalized AirPlay 2 Support. In time for March 25 event.
In defense of Apple’s $14 billion R&D budget, in which there's a claim that the company gets a bigger "bang for its buck" in R&D. Interesting despite the important differences between the companies in the comparison.
Apple and Stanford’s Apple Watch study identified irregular heartbeats in over 2,000 patients, or about 0.5% of participants.
Google released the first beta of Android Q, with a desktop mode, small UI and privacy improvements, and lots of minor tweaks and features.
Eero CEO Nick Weaver said the company won't change their privacy stance after Amazon acquired them.
Nielsen will begin sharing Amazon and Hulu viewing numbers later this year. Putting pressure on Netflix as well as the upcoming Apple Video service.
Huawei says it has developed their own alternative OS for both smartphones and computers, in case the U.S. goes "ZTE" on them.
Samsung new Galaxy Watch Active costs half of what the Apple Watch does, but reviews find Bixby lacking and that it has connecting issues to non-Samsung devices, and with overall good UI.
Thank you for reading Apple Weekly. Please consider forwarding this email to your contacts. — Alex