Apple opens up NFC transactions to developers. There will be 'associated fees'
techcrunch.com
techcrunch.com
Imagine a tool company demanding a cut of the revenue a building generates because their tools were/are used during the construction/maintenance of that building. Everyone using the tool already paid for the tool!
That is, if I buy a paint sprayer, and combine the sprayer with paint sold at Home Depot that a 3rd party maliciously contaminated with caustic chemicals and that combination of sprayer and caustic chemicals caused a reaction in the paint that melts my walls, no one expects the sprayer manufacturer to give me a free new sprayer or even upgrade my current sprayer to be hardened against 3rd party contamination.
On the other hand if NFC protocols today are discovered in 3 years to have a flaw that 3rd parties are using to steal financial data, it’s Apple whose name will be dragged if they only make a change to NFC in newer model phones.
Apple isn't expected to fix bugs in a third party's app using their APIs, but they're totally expected to fix those APIs, should they be faulty (conceptually or in their implementation).
Obviously that costs money, which they can make either from the sales of the phone alone, or via some subscription model for ongoing updates (remember when OS updates used to be paid? A new OS X version used to cost a hundred bucks!).
To stick with the Home Depot example: Why should the manufacturers of third party paint cartridges pay for Home Depot's product safety obligations?
The problem is what we expect to be fixed for a software product and a hardware product are two different things. If you buy a car, and the next year the car company discovers they can get even more fuel efficiency with a different piston design, or they can improve crash safety with new airbag locations, we don't expect car manufacturers to recall all the current model year cars. We only expect recalls for failure to perform the expected functions that were expected at the time of sale.
On the other hand, when a new version of SSL or TLS is released, when root CA certs expire or change, when new Wi-Fi encryption standards are released, we expect those updates to our old devices, almost always expected gratis and for many years after the initial sale. Look at the substantial amount of complaining every time some software company like Apple or Google announce the end of software support for some old hardware. We treat these devices differently from a tool you buy at the hardware store.
And yes, Apple is expected to issue fixes bugs that 3rd parties bring to the table. Which is exactly what expecting updates for things like stronger encryption cyphers and the like are. They sold you a device that can speak Protocol X, developed by a 3rd party. You use that device to speak Protocol X to another 3rd party device or service. Yet another 3rd party invents some way to exploit Protocol X to do nefarious things. And everyone who bought the Apple device last year absolutely 100% expects apple to release an update when Protocol X++ is released.
And to be clear, I'm not saying this is unreasonable, but it's worth noting as you point out that software updates used to cost money (remember the annual "why is apple charging us for a point release?" song and dance?). And we should remember that developing software for platforms used to cost money too. A lot of money. How much were Visual Studio licenses? Code Warrior? A MS developer network license? Or check out Qualcom's BREW program for the multi thousand dollar up front process to put "bejeweled" on a flip phone. When companies stopped charging for OS updates and developer kits and SDKs, the money needed to make those things didn't stop needing to be made. We talk a lot around here about the lack of funding for open source projects. Well software and software development has a value. How much is it worth, and how many new things are we allowed to demand before the price has to go up somehow?
>To stick with the Home Depot example: Why should the manufacturers of third party paint cartridges pay for Home Depot's product safety obligations?
I suspect that if a paint company wanted to use Home Depot's credit card terminals to do sales for a custom sales process of paint accessories to Home Depot customers that Home Depot would want a cut of that.
In a hypothetical world where I bought a car, and the next year the car company discovers that they can get even more fuel efficiency with a different piston, or they can improve crash safety with new airbag locations, and if these already-developed changes could somehow be implemented for no more cost than a bit of Internet bandwidth, then:
I would be ABSOLUTELY LIVID if the car company extracted a tithing every time I used my car to make a delivery or a visited drive-through (or otherwise used my car for commerce).
They already do take that tithing, in the form of the amortized cost of the car over those transactions. Admittedly the amortized cost of your car doesn't scale with your transaction volume or income (baring extra wear and tear concerns) but – as long as we're torturing analogies to death – you also can't buy your car on a "no up front costs and no costs at all to try it out for yourself and a flat $100 / year as long as you don't make money with your car and 15% on revenue if you do" lease agreement.
SW comes with no liability.
In professional industries like avionics, automation and fabrication, open tooling and security maintenance is the baseline expectation. It's only in captive consumer markets that businesses can convince their customers that they don't want the freedom to use what they paid for.
Those costs are amortized over the hardware sales specifically based on the current revenue model of the iOS platform. If you force a change in the model, or force them to produce new APIs and SDKs they had no intention of making and therefor no need to amortize, then I think yes they can fall back on "we can't support it otherwise".
The real simple question that has been never been answered in this entire discussion over and over again is what is the fair market value of Apple's SDKs, access to their platform and the support that provide for that platform if its not amortized over hardware sales and current revenue split agreements? Forget even trying to answer that for the entire iOS platform. If Apple puts NFC chips in their phones, and then:
1) Has to write an entire public SDK they weren't intending to write
2) That allows access to those chips outside their specific sanctioned and envisions use case
3) That requires providing ongoing support for that SDK and the uses of it outside their specific sanctioned use case
4) Expands their security threat surface for the underlying secure hardware that SDK will interact with and requires more development to secure it
How much money is that worth in cold hard cash up front per developer per update per hardware revision?
It's entirely fair to say to Apple (and companies in similar oligopoly positions) that if you want to compete with third parties on your platform then you need to do so on a level playing field.
It's not then about forcing Apple to build a feature at no cost, but rather declaring that Apple built their NFC feature improperly, by building it in a way that prevented competitor use, illegally privileging their own competing services. They can either remove the feature or build it properly, according to relevant law.
Edit:
I've talked about this in a previous discussion, but we have a sort of arbitrary line we draw on what should or shouldn't be a service / integral part of an OS / Platform and what should be, for lack of a better term, hot swappable by the end users.
On the one hand, you have the sort of "GNU Maximalist / Microkernel" approach, where everything is replaceable. On the other you have the "iOS / Video Game Console" approach, where the system is largely a black box and you get an API and can do things with that API but you can't swap out anything not controllable by the API. There's no objective place to draw that line though, it's all dependent on the experience your platform is designed to provide. Why is "displaying text to the screen" a service we delegate to the OS? Why does Linux consider window management an "application" to be swapped out, but Windows and macOS consider it an integral part of the OS platform? Why do we expect an OS to provide a TCP/IP stack these days, and no one complains that they can't implement their own TCP/IP stack in their mobile app? Clocks are widgets in linux, and an integral part of the OS in windows and macOS. Heck even down to the programming language level we don't have consistency. Is C necessarily better or worse than say Python or Javascript because it doesn't have a native String type and you can pick your String library?
This is an actual issue in the real world that is dealt with using "support contracts." They've only been around for a few centuries or so...
Apple's problems are those of its own making. And if it keeps trying to bait regulators like this, it may soon find itself referred to as "Ma Apple" and its former divisions as "Baby Apples."
Paid iOS updates in the EU? I remind you that the EU argued that a paid ad free version of Facebook's services violates the DMA.
A per-install fee for services developed with Apple's SDKs? That's basically the CTF and that hasn't been met with resounding happiness.
A flat revenue sharing agreement a-la most of the major game engines? That's the core iOS platform model that the DMA is partially a response to.
I suppose we could go back to multi-thousand dollar up front per seat SDK licenses on annual contracts the way folks like Microsoft, Oracle, Qualcomm, Blackberry and Apple used to do, but that really hurts the smaller developers and is part of why the iOS model was such a huge deal when it was first announced.
Look, I'm not arguing that Apple isn't and doesn't make moves that are short sighted and seem purposefully designed to piss off the regulators. But I also don't actually see any option that isn't "free, unlimited, unrestricted access to all of Apple's SDKs and libraries indefinitely" that will ultimately satisfy. No one seems to have an answer for what model Apple can use that
A) Covers their costs
and
B) Allows them to continue to do whatever it is that makes it such that iOS does all these things that Android and Android vendors can't apparently do despite being more open and free
I do, hardware sales should be more than enough. They already cover the device's (and iOS's) R&D costs with more money to spare. This whole brouhaha is due to them simply wanting more, not because they wouldn't survive/profit at all without their current measures.
So like I said, "free, unlimited, unrestricted access to all of Apple's SDKs and libraries indefinitely", just with an implied "with all costs borne by the end consumer purchasers of the hardware" tacked on to the end? Obviously all costs are eventually borne by the consumer, but given that Apple has dropped the "can't charge more on iOS then elsewhere" requirements, couldn't developers just raise their prices for their products on iOS and we could skip all of this extra rigamarole?
Edit:
And to be clear, I really don't have a huge issue with a developer saying "I don't want to pay any of the costs of supporting or developing the platform that I use to sell my goods and services. I want the provider of that platform to extract the costs of providing that platform to me from the end users on that platform that I am selling to". That's a well trod model in the computer space, and it would be hypocritical of me to argue that's somehow wrong when my entire professional career is built on platforms and services that I pay nothing to maintain or support.
I just think that we should recognize what we're doing and be honest with ourselves. Part of why major open source projects have funding issues is in part because we do this a lot in the software world, but a lot of those open source projects don't have end users to charge either because the developers are the end users. We are lucky that Apple has end users to bear our costs for us.
Talk for yourself. Apple is lucky to have a fanbase like this.
The truth of the matter is Apple would almost certainly continue to do offer their iPhone services, updates, app store, etc; even if they were statutorily prohibited from making any money off of any of it, because in the end it makes for a better user experience and helps them differentiate and sell their phones at a premium.
What is happening, is the more financial-minded types within Apple have realized they have substantial lock-in and market power, and they can leverage it to take a % of profits from other market entities.
If you actually care about Apple products, and want them to continue to deliver great products well into the future, then the best thing that could happen would be for them to get the message and accept a loss in this battle. Otherwise you will see increased financialization continue until they are thoroughly hollowed out of great product/engineering culture, and collapse under their own weight, like so many before them.
Every support contract of this nature that I've seen is a fixed, flat fee. And someone, businesses outside of tech, with their far higher costs, are able to make it work.
Apple could easily use this business model, but its profits would be far lower. Apple's grown quite large and comfortable with a business model centered around illegal profits (in this context, referring to the excess profits derived from their anti-competitive behavior) and like other businesses premised on abusive behavior, it's going to fight.