This is the web version of Data Sheet, Coins2Day’s daily newsletter on the top tech news. To get it delivered daily to your in-box, sign up here.
Good morning. This is Coins2Day writer Aric Jenkins, filling in for Adam.
The eye-popping 30% fee that Apple charges developers to conduct sales through its App Store is fair and inline with other digital marketplaces like the Google Play Store, according to a study commissioned by… guess who?
That’s right. Apple is on the defense ahead of its Monday antitrust hearing in front of the House—which will also feature top executives from Google parent Alphabet, Amazon, and Facebook. Apple says the study, in which economists from Analysis Group to compare the App Store to peers like Google, Microsoft, Airbnb, and Uber, will provide data for CEO Tim Cook to cite in his testimony.
The base 30% rate that Apple charges for paid apps, in-app purchases, and the first 12 months of in-app subscriptions, the study found, matches the Amazon Appstore, Samsung Galaxy Store, Microsoft Store, and even video game marketplaces like Xbox, Playstation, and Nintendo. But there are some discrepancies (see the tables in this piece for a precise breakdown), such as Amazon charging only 20% for video streaming subscriptions, or game platform Steam dropping its percentage once sales exceed $10 million. And Apple and Google themselves lower in-app subscription fees down to 15% after the first year.
Why is Congress (plus the European Union!) so peeved at Apple in particular? Well, roughly 1.5 billion devices actively run Apple’s iOS, and the only way developers can get to them is through the Apple Store. Some with high standing—Netflix, Spotify, Amazon—have decided they aren’t going to pay that fee, and instead make customers sign up outside of the app. But other, much smaller developers are at the complete mercy of Apple. Without that brand recognition, they can’t bank on customers taking additional steps to purchase their products or services.
As if that wasn’t enough, Apple has been accused of promoting its apps over competing third-party ones, as well as over the company’s direct rivals.
“Yeah, yeah,” you might say. “Apple has every right to prioritize its own products on its own store.” And it’s a compelling argument. At the end of the day, Apple completely revolutionized the modern app marketplace. It leads to hundreds of billions of dollars in e-commerce, plus jobs and satisfied customers. Don’t like it? Buy or develop for an Android phone. And even then, you would be subject to the same principles, according to that Analysis Group study.
Just remember that analyst estimates pegged Apple’s take of App Store sales at $15 billion last year—roughly twice as much as its next largest rival, Google. And when Apple is the sole gatekeeper to that much money, it has little incentive to protect developers or everyday customers.
Is that a fair price to pay for access to one of the world’s most prized operating systems, and the devices that run on it? That’s the question Congress will start digging into on Monday.
Aric Jenkins
This edition of Data Sheet was curated by Aaron Pressman.
NEWSWORTHY
The spider and the fly can’t make a deal. Struggling SoftBank Group has been seeking to raise cash to offset losses in investments like WeWork, but the latest rumor sounds a little hard to believe. Graphics chip giant Nvidia may be interested in buying SoftBank's chip unit, ARM, according to Bloomberg. Apple also got the pitch but had no interest. Data Sheet's favorite chip analyst (and spider wrangler extraordinaire), Bernstein's Stacy Rasgon, says the deal doesn't make a whole lot of sense, since Nvidia could just license ARM's chip designs if it wanted and ARM could lose a lot of business if it loses its independence.
Sign on the dotted line. The world of audio content keeps turning up the volume. Spotify announced a new deal with Universal Music Group, the world’s biggest record company, though it didn't say much about the financial terms. And Serial Productions, producer of the famed Serial podcast, was snapped up by the New York Times Co. For about $25 million, Variety reported. And I buried the lead: Taylor Swift is releasing a new album tonight online called Folklore.
Swabbing for justice. More than a million people who privately uploaded their DNA profiles to popular genealogy website GEDmatch didn't get the anonymity they expected. Hackers changed the privacy settings on all of their profiles to make their DNA records available for law enforcement searches. Verogen, which owns the database, says the privacy settings have been restored.
That roars so loud and thunders in the index. On Wall Street, earnings season is heating up. At Tesla, car sales were less important than reporting a fourth consecutive quarter of profits, making the electric carmaker eligible to be added to the S&P 500 (Sorry, Andrew). Tesla shares, which had already nearly quadrupled this year, were about unchanged in morning trading on Thursday. Microsoft saw revenue increase 13% to $38 billion, but that wasn't quite enough. Microsoft shares, previously up 34% this year, dropped 1% on Thursday morning. Twitter's key metric, average daily users, posted a healthy 12% increase to 186 million, even as its revenue declined 19% to $683 million. Shares of Twitter, up 15% in 2020, jumped 6%.
We daren't go a-hunting for fear of little men. Nevermind those large tech companies, what's happening among upstarts? Silver-haired hedge fund manager Bill Ackman on Wednesday launched a $4 billion blank check public company called Pershing Square Tontine Holdings with a goal of acquiring "mature unicorns," aka private tech companies with valuations over $1 billion. And Apple enterprise helper Jamf went public at $26 a share and promptly doubled in its Wednesday debut, though it closed at just over $39, a mere 51% gain.
One more from the Department of Corrections: Tuesday’s Data Sheet newsletter contained an error in its comparison of Toyota and Tesla’s annual sales. Toyota’s global sales were 10.74 million units, not 2.4 million units (U.S. Only). We regret the error.
FOOD FOR THOUGHT
The debate over tech and China is multi-faceted and encompasses many companies. The U.S. Military has banned the use of DJI drones, for example. Three New York Times reporters led by Paul Mozur delve into the DJI controversy following reports from two security firms about issues with DJI's Android app.
An icon of Chinese innovation, as well as a longtime security concern in the United States, DJI has struggled to allay worries about the safety of its drones, which shoot movies, guard power plants, count wildlife and assist military and the police. For years, it has responded repeatedly to reports of vulnerabilities with patches and has worked closely with the U. S. Government to quash other fears.
Still, security researchers with Synacktiv said the pattern of problems in DJI’s code and its quickly implemented fixes, which suggested that the company was already aware of some of the problems but had not fixed them, were also reason for concern. “It is the mix of all of that which has made us suspicious,” said (Synacktiv engineer) Ms. Romand-Latapie. “It makes the application quite dangerous for the user if they are not aware of what the application is capable of doing.”
IN CASE YOU MISSED IT
Facebook’s Messenger will allow users to unlock the app with their fingerprints and faces By Danielle Abril
6 ways TikTok is countering political scrutiny—and a potential ban—in the U.S. By Naomi Xu Elegant
A look at the high-tech camera feature that could raise iPhone prices By Aaron Pressman
How researchers are tracking illegal ghost boats and the decline in flying squid By Katherine Dunn
Microsoft could face EU antitrust showdown as Slack complains about Teams bundling By David Meyer
Subscription boxes and meal kits are seeing a resurgence with shoppers stuck at home By Rachel King
(Some of these stories require a subscription to access. Thank you for supporting our journalism.)
BEFORE YOU GO
In search of distractions from our pandemic times, some folks at Coins2Day spent the morning discussing Lillian Ross's epic 1950 profile of Ernest Hemingway from The New Yorker, which the magazine tweeted about this week. Well, less discussing and more being awed by the famed writer's hard-drinking ways. It's worth a read, if only to transport you to a wholly different era.
Aaron Pressman
