Apple crosses the line again - UPDATE - Feds getting involved!

[Kaido]

His supposition was that a price increase from one player is followed by all. I argued otherwise. But Itunes is different. They are currently unrivaled so a price increase is not easily challenged.

No, I didn't say that - just that the pricing tends to stabilize over time:

No. But I've never heard of that being done anywhere else in business, so it's not really a valid argument - pricing tends to equalize throughout ecosystems. For example, for movies: Amazon Unbox, iTunes Movies & TV Shows, and Vudu. Everybody gets a cut one way or another!

In general, over time, prices tend to stabilize. Otherwise the constant price wars would ruin the economy of the system.

 

[Kaido]

I think people don't understand that Google is in the Advertising business which means they'd probably sell your data for a profit.

But their motto is "do no evil" :awe: :\ :hmm:

 

[Patranus]

How much of that 30% is profit though?

How much markup do you think retailers put on Software?

You look at the MSRP of Windows 7 professional retail, its $299 while Amazon has it for $259. There is a 15% markup right there and Amazon is still making money. So you have to think that Microsoft is selling Windows 7 to retailers at ~30% less than the MSRP.

Its just "evil" because its "cool" to hate on Apple.

 

[Emulex]

microsoft sets the price to whatever they want. they don't give you large margin like apple. all the big money is done at levels amazon can't touch (they are not a LAR)

 

[ChAoTiCpInOy]

How much markup do you think retailers put on Software?

You look at the MSRP of Windows 7 professional retail, its $299 while Amazon has it for $259. There is a 15% markup right there and Amazon is still making money. So you have to think that Microsoft is selling Windows 7 to retailers at ~30% less than the MSRP.

Its just "evil" because its "cool" to hate on Apple.

Exactly. Everyone hates on Apple because of the 30%, but in reality, their profit would probably be <50% of the 30%.

 

[FelixDeCat]

No, I didn't say that - just that the pricing tends to stabilize over time:

In general, over time, prices tend to stabilize. Otherwise the constant price wars would ruin the economy of the system.

Everything happens over time. The sun rises in the east and settles in the west. People are born, live and die. And ..... you'll love this one..... in general, over time, prices go up and down.

Yup that ecosystem equalizing thing - sure is amazing - especially when the dominant player raises prices and there is no real competition on the same scale.

Finally, constant price wars do NOT ruin the economy of the system. Ever hear of WalMart? They thrive on war and driving everyone in the same segment out of business. So to compete, others specialize like Whole Foods catering to upscale, etc. Nothing was ruined. Things just changed.

 

[NaOH]

There's no reason for this thread to exist. They're not being forced, at all. They cannot participate if they don't like it.

In the long run, their content is provided to a bigger market and that in itself could make up for that 30&#37; anyways. It's the same reason people sell on ebay and pay their fees.

 

[Kaido]

Everything happens over time. The sun rises in the east and settles in the west. People are born, live and die. And ..... you'll love this one..... in general, over time, prices go up and down.

Yup that ecosystem equalizing thing - sure is amazing - especially when the dominant player raises prices and there is no real competition on the same scale.

Finally, constant price wars do NOT ruin the economy of the system. Ever hear of WalMart? They thrive on war and driving everyone in the same segment out of business. So to compete, others specialize like Whole Foods catering to upscale, etc. Nothing was ruined. Things just changed.

That's a matter of target market, not price equalization. The target market for McDonalds and Burger King is convenience. I can make a burger for about 10 cents at home, but I'll pay $5 at McDonalds for the same thing. But the price differential between McDonalds and Burger King is about the same.

My point is, no one is going to pay 30% more for the privilege to purchase a digital good from within an Apple app that they could buy via Mobile Safari on the same device, which is fine because that situation is never going to happen

 

[bigsnyder]

I understand that, but the "good" and "evil" mentality was very much a reality back in the 80s and 90s. Even though there has been a "role reversal" of sorts, this thread is evidence that a similar mentality still exists.

Companies are neither good or evil.

 

[jman19]

His supposition was that a price increase from one player is followed by all. I argued otherwise. But Itunes is different. They are currently unrivaled so a price increase is not easily challenged.

No, that wasn't. Reading fail.

 

[FelixDeCat]

I told you guys that Apple was being greedy by forcing publishers to fork over 30&#37; for subscriptions - or else! Now governments are looking into this bad apple again:

NEW YORK/BRUSSELS (Reuters) - U.S. and European regulators are keeping tabs on Apple Inc's plans to take a cut of the revenue generated by the sale of online subscriptions through its App Store following concerns voiced by publishers.

Some app makers are unhappy with Apple's new plan to take a 30 percent cut on all revenue from online subscriptions.

Regulators at the Department of Justice have kicked off an early stage inquiry into Apple's change of policy and are in the process of contacting publishers and also Apple, according to a person familiar with the plans.
In Europe, a European Commission spokeswoman said, "We are monitoring market developments carefully." But an official investigation appears unlikely, however, as commissioners believe rivalry in the field is increasing.

EU Commissioner Andris Piebalgs -- in comments to the European Parliament on the issue -- said it requires, "that Apple holds a dominant position in the relevant market."

"The boundaries of such relevant market(s) are not clear, as the sector is relatively new and evolving."

Apple said on Tuesday that publishers can set the price and duration of a subscription. They can also offer subscriptions through their own existing websites, but would be required to offer the same terms to anyone signing up through Apple.

This would mean customers who want to sign up for a Netflix Inc video account may have just two choices: They could do so through the Netflix website, in which case Netflix would keep the full fee, or they could subscribe through the applications in their iPhone or iPad which would cost Netflix 30 percent of its fees.

Seemingly in response to Apple's plans, Google Inc on Wednesday launched a new subscription service called One Pass for its Android mobile operating system and promised to take just 10 percent of subscription revenue.

U.S. music subscription companies like Rhapsody and Rdio have described the new Apple policy as "economically untenable" for their businesses.
"Digital music is a low margins business. Rights costs typically account for over 70 percent of revenues and payments, technology and marketing taking most of the rest," said Forrester analyst Mark Mulligan. "So Apple's 30 percent levy has the potential to instantly turn premium music subscriptions from low margin to negative margin businesses."

Other media companies likely to be affected include newspaper and magazine publishers who have been looking forward to reinvigorating their flagging print sales by offering their publications through subscriptions on tablets like the iPad.

Apple was not immediately available for comment.

It is not the first time Apple has been investigated by regulators for its role in the music business which it dominates with nearly 70 percent market share of digital music sales. Last May the Justice Department spoke with Internet companies and music labels to determine if Apple was abusing its dominant position.

$26 billion in cash you already have inst enough, Apple? :|


MERGED THREADS - You don't need a second topic on the exact same subject
-Aphex

 

[umrigar]

http://www.google.com/finance?q=NASDAQ&#37;3AMSFT

http://www.google.com/finance?q=NASDAQ:AAPL

hard to argue with success. lots of companies sue each other all the time.
sometimes they win, sometimes they don't.

i think Mercedes should sell me a car that costs like a Kia.
how greedy can they be?

 

[FelixDeCat]

http://www.google.com/finance?q=NASDAQ%3AMSFT

http://www.google.com/finance?q=NASDAQ:AAPL

hard to argue with success. lots of companies sue each other all the time.
sometimes they win, sometimes they don't.

i think Mercedes should sell me a car that costs like a Kia.
how greedy can they be?

Smart Car, owned by Mercedes, is priced like a Kia. ()

 

[alkemyst]

http://www.google.com/finance?q=NASDAQ:MSFT

http://www.google.com/finance?q=NASDAQ:AAPL

hard to argue with success. lots of companies sue each other all the time.
sometimes they win, sometimes they don't.

i think Mercedes should sell me a car that costs like a Kia.
how greedy can they be?

AFAIK publishers can opt out of Apple's delievery method.

Also when people are comparing Apple to M$ they should look at the total number of shares out there. M$ has over 8 times them in the game.

 

[JC86]

While I see where the OP is coming from, its hard to fault Apple for leveraging its massive ecosystem to command a premium to have a publisher's content available to its users. No one is forcing the publishers to to agree to it.

From my perspective, I'd rather have a million Apple users subscribe at a dollar per month and paying 30% of that to Apple, netting me $700,000 than say 100,000 non-Apple users paying me the full $1 per month, netting me only $100,000. Apple know that its iOS ecosystem is huge and wants to take advantage of it. It's a smart business move that anyone in its position would do too.

 

[speg]

Also when people are comparing Apple to M$ they should look at the total number of shares out there. M$ has over 8 times them in the game.

The number of shares of a company doesn't matter much.

I could have a million dollar company with a million shares each worth $1 or 2 shares each worth $500,000, or 500,000 shares each worth $2, or 4 shares each worth $250,000, or 10 shares each worth $100,000, etc...

It would only matter in the rare case that there are so many buyers they want to chop it up into smaller bits. A company can split it's shares whenever it wants, so if Apple wanted to double it's shares it could do so. i.e., Everyone would have twice as many shares and they would trade at half the price. The last time they did this was in 2005 IIRC.

 

[alkemyst]

The number of shares of a company doesn't matter much.

I could have a million dollar company with a million shares each worth $1 or 2 shares each worth $500,000, or 500,000 shares each worth $2, or 4 shares each worth $250,000, or 10 shares each worth $100,000, etc...

It would only matter in the rare case that there are so many buyers they want to chop it up into smaller bits. A company can split it's shares whenever it wants, so if Apple wanted to double it's shares it could do so. i.e., Everyone would have twice as many shares and they would trade at half the price. The last time they did this was in 2005 IIRC.

you don't understand.