Hubris, Thy Name is Apple (Premium)

Apple has been quietly waging war against its own developers for years in an effort to grab as many revenues as possible from its ecosystem. But thanks to a growing chorus of fed-up app developer complainers, antitrust regulators on both sides of the Atlantic are finally paying attention to this illegal behavior. And that war has gotten a lot louder.

What’s astonishing about Apple, of course, is that its marketing is so effective that so much of the population actually believes its lies. This is a firm that’s been bulldozing its most popular and effective developers for years and then promoting its efforts as being user-centric. Even Apple’s privacy jihad can be viewed in this light. After all, the only way to truly ensure its users’ privacy is to make sure their data is controlled by only a single entity. Apple.

I’ve described Apple’s behavior towards its users as parentalism. This is a firm that thinks it knows better than its users what’s good for them. Its app store is guided by the puritanical worldview of the deceased tech demi-god Steve Jobs, who decided that no adults would be able to see nudity or violence on his devices. This worldview has permeated throughout the Apple ecosystem, and has infected everything from privacy controls---only Apple can be trusted to ensure that its customers’ children are safe from online attack---to its new games, news, and video services.

Apple’s approach to developers is a bit more complicated. Apple hasn’t created the biggest digital ecosystem, but it has created the most lucrative digital ecosystem. The problem is, it did so using strategies that can fairly be compared to any other exclusive and isolationist movement, be it religious, political, or whatever special interest you care to back. Apple thrives because its users want to be part of something that they perceive to be better than what’s offered to the masses. But Apple’s developers walk a razor’s edge in which they hope to benefit from the scraps that Apple lets fall of the table while not drawing the attention of Cupertino.

As Apple’s hardware sales soared and then stalled, the firm has by necessity started looking at those scraps. And increasingly, it likes what it sees. The firm’s services businesses are aimed at collecting the type of ongoing revenues that Apple used to get every year or two when its gullible wanna-be-elite customers purchased new iPhones, iPads, and/or iPods with such regularity. But instead of delivering big bang payments every so often, services provide a steady drip of revenues that could collective, over time, surpass even Apple’s vaunted hardware businesses.

Put another way, Apple is discovering what companies like Microsoft and Google have known for years: Services are lucrative, are easy to amplify or detune as needed, and come with relatively low overhead after you get past the startup-up costs.

The problem, of course, is that Apple isn’t starting services in...