It’s been simply over three weeks because the Epic v. Apple proceedings kicked off, and the information has been relentless. So as we anticipate a verdict to roll in, we’re taking a fast flip by all the largest takeaways from the trial. Quite a lot of the juiciest factors didn’t communicate on to the decision — just like the revenue construction of the Xbox or the troubled historical past of Fortnite crossplay — however that’s a part of the enjoyable of an enormous trans-corporate dustup like this. Once you begin digging by CEO Tim Cook’s inbox, all types of attention-grabbing stuff comes out.
1] Apple retains iMessage closed so as to promote extra iPhones
We’ve identified for some time that Apple isn’t going to make iMessage accessible outdoors of iOS units, however this trial confirmed precisely how completely Apple has thought-about increasing iMessage into different working methods — and precisely why the corporate doesn’t need to.
Internal emails present Eddy Cue pushing to increase iMessage right into a WhatsApp-style messaging platform as early as 2013 — and the problem reemerging in an email to Phil Schiller in 2016. The thought was rejected for a similar purpose each occasions: opening up iMessage would simply imply one much less purpose to purchase an iPhone.
2] PlayStation’s Fortnite crossplay deal is even sketchier than we realized
Sony took its time enabling crossplay between completely different console variations of Fortnite, ultimately relenting late in 2018. But a handful of new emails with Epic Games confirmed the deal was even knottier than was publicly identified. Apparently, Sony noticed crossplay as a enterprise legal responsibility for its enterprise and was solely prepared to undertake it after Epic agreed to a sophisticated cross-platform income sharing settlement. It’s a novel association — however since we additionally realized PlayStation is the top revenue driver for Fortnite, Epic appears to have been prepared to make concessions for the platform.
3] Apple pulled out all of the stops to maintain Netflix promoting subscriptions on the iPhone
Apple insists it treats all App Store builders equally, however it’s clear massive gamers like Amazon have gotten special treatment due to their sheer variety of customers. This trial turned up one other occasion, with emails that confirmed Apple employees scrambling behind the scenes to maintain Netflix from eradicating in-app purchases from its iPhone app in 2018.
For Netflix, the logic was arduous to keep away from: Apple’s 30 p.c lower was costing it cash any time somebody signed up by the iOS app as a substitute of by an online browser. But for some time, Apple was prepared to do absolutely anything to maintain Netflix from giving in to the apparent economics.
4] The App Store is wildly worthwhile, however Apple received’t admit it
One of the working jokes of the trial was Apple’s insistence that it had no thought how a lot cash the App Store makes in revenue. Phil Schiller said outright that he had no thought if the App Store had introduced in more cash than it spent since 2009 “because that’s not how I look at the business.” (For context, the App Store introduced in more than $60 billion in 2020, which might be rather a lot to burn by with out realizing.) Tim Cook was slightly bit extra reserved, saying he believed it was profitable however hadn’t calculated by how a lot.
The firmest quantity got here from an professional witness employed by the Epic aspect, who pegged the profit margin as high as 78 percent. That would depart Apple with greater than $45 billion in revenue from the App Store alone — however don’t count on them to confess it out loud.
5] The economics of the Xbox is form of bizarre
Microsoft was a form of unofficial sidekick to Epic for the trial, offering executives to testify in court docket and abruptly lowering its Windows Store fees to place additional stress on Apple. But probably the most thrilling flip got here when Xbox boss Lori Wright took the stand, testifying that Microsoft doesn’t become profitable from Xbox {hardware}.
For attorneys on the Epic aspect, the purpose was to distinguish the Xbox from the iPhone: Microsoft sells Xbox {hardware} at a loss (or a near-loss), so the corporate’s method is completely different from Apple, which makes cash off each iPhone it sells. But any new details about the Xbox enterprise was attention-grabbing far past Epic and Apple, so issues began to spiral virtually instantly. Microsoft’s official PR was quick to walk back the claim, ensuring everybody knew that the general Xbox enterprise is worthwhile despite the {hardware} subsidy.
Apple pressed the problem even additional, making an attempt to power Microsoft to release its profit-and-loss statements for the Xbox business if it needed to maintain Wright’s testimony within the report. It was an opportunity to see severe jousting between a number of the greatest firms on this planet — and a reminder of how knotty these companies are when you look underneath the hood.
6] The economics of the Epic Games Store is even weirder
In the lead-up to the trial, Epic v. Apple case filings confirmed Epic has spent hundreds of millions of dollars on its PC gaming storefront. Much of that went towards expensive offers to draw builders and customers, together with a free video games program that earned Epic millions of new users whereas providing builders a flat charge for participation. Epic additionally tried to get Sony and Microsoft’s first-party games on the Epic Games Store, though it apparently by no means reached a deal over them. Tim Sweeney mentioned in testimony that he expects the shop to show a revenue round 2024 — though Epic has apparently deliberate out several possible scenarios for its future.
7] Apple positive aspects so much by slow-walking progressive net apps on the iPhone
In concept, there’s a approach to get software program onto iPhones that doesn’t embody the App Store. iPhones embody net browsers, in any case, and there’s a complete vary of applied sciences (often bundled underneath the identify Progressive Web Apps or PWAs) which can be meant to make the functionality of an app available through a browser. Google has been pushing this difficult with some help from Microsoft and Twitter — however thus far, cell Safari has been gradual to roll out help.
We didn’t get any new paperwork saying precisely why that’s, however we did get a complete lot of Apple executives saying how vital it was for Apple to have the ability to defend iPhone customers from unhealthy apps. In brief, Apple sees its stranglehold on iOS software program as an vital safety characteristic — and progressive net apps threaten that stranglehold. As lengthy as that stays true, it’s arduous to think about cell Safari catching up in PWA help.
8] Apple remains to be frightened about malware downloads on the Mac
One of Epic’s massive challenges to Apple is why the corporate can’t run the iPhone the identical method it runs the Mac: with a central app retailer however plenty of different methods to get software program outdoors of it. On the stand, Craig Federighi had a easy reply: we don’t really like the way it works on the Mac. Federighi mentioned the extent of malware on the Mac was “unacceptable” and that iOS would get “run over” by malware assaults if it adopted the identical mannequin.
The entire level of the trial is to keep up App Store exclusivity, so it’s no shock that Federighi needed to close the door — however the sheer nervousness he confirmed about Mac malware got here as a little bit of a shock. It’s significantly notable since some people are frightened that macOS is inching towards the iOS mannequin, making it slightly tougher to put in unauthorized software program with every new model. If you have been already anxious in regards to the Mac ecosystem closing off completely, Federighi’s testimony gave you loads extra to fret about.
9] Tim Sweeney has been bugging Tim Cook about this for years
Arguably the funniest a part of the trial has been the sheer dedication of Tim Sweeney to unwind Apple’s app retailer insurance policies. The combat turned public when Fortnite went nuclear final 12 months, however new emails from Sweeney present he’s been making an attempt to appeal, cajole, and annoy Apple into permitting alternate app shops for years now.
That effort peaked with a 2015 email directly to Cook, laying out the case for an open iOS over the course of 4 paragraphs. (Cook responded to Schiller and Cue: “Is this the guy that was at one of our rehearsals?”) Three years later, Sweeney was still trying, urgent the case by the varied developer-relations channels.
Of course, Tim Cook will not be going to vary Apple’s enterprise mannequin simply because some man emailed him saying it could be a good suggestion — however there’s no hurt in making an attempt, proper?