At today’s “Big Tech” hearing, Apple CEO Tim Cook vehemently defended Apple and the App Store in his opening remarks before taking questions from lawmakers. Mr. Cook started his remarks remembering the life civil-right icon Rep. John Lewis who died due to natural causes on July 17h.
Before I begin, I want to recognize the life and legacy of John Lewis. I join you in mourning a hero and someone I knew personally. Getting to host Congressman Lewis at Apple was one of the great honors of my life, and his example inspires and guides me. Every American owes him a debt, and I feel fortunate to hail from a state and a country that benefited profoundly from his leadership.
Striking a very similar tone to the opening remarks of Facebook CEO Mark Zuckerberg and others, Mr. Cook touts Apple as being a proud American company calling it “uniquely American”, attributing the companies success to the country. The statement comes as concerns over Apple’s ties to China are increasingly under scrutiny, with US Attorney General Barr saying Apple bows down to the Chinese regime.
Mr. Cook goes on to explain Apple’s mission of creating products that “enrich people’s lives,” saying that it is done by making the best products, not the most. The CEO also doesn’t miss the chance to brag about the success of the iPhone, emphasizing its 99% satisfaction rates amongst customers.
Since 2007, the iPhone has been one such product. The iPhone has redefined the mobile phone through its seamless integration of hardware and software, its effortless user experience, its simplicity of design and a high-quality ecosystem. To our customers, these are essential to why they choose Apple-and why they keep coming back. We focus ceaselessly on our users and their experience, and we see the iPhone’s 99% satisfaction rating in consumer surveys
As much of the hearing is about Apple’s, Amazon’s, Facebook’s, and Google’s dominance in the market, Mr. Cook says that the iPhone faces tough competition from Samsung, LG, Huawei, and Google, calling their smartphone business “very successful,” adding it does not dominate any market.
As much as we believe the iPhone provides the best user experience, we know it is far from the only choice available to consumers. The smartphone market is fiercely competitive, and companies like Samsung, LG, Huawei and Google have built very successful smartphone businesses offering different approaches.
Apple does not have a dominant market share in any market where we do business. That is not just true for iPhone; it is true for any product category.
Addressing the App Store directly Mr. Cook says before its existence the options for software distribution were limited, and that the App Store is meant to be a safe and trusted place for users. Targeting concerns over the App Store and its 15-30% commission policy, Mr, Cook says that developers do not pay for each app they distrubute.
Mr. Cook goes on to explain to lawmakers that Apple provides developers with “cutting-edge” technology to make apps and that the App Store guidelines are high quality and transparent, despite recent events.
App Store developers set prices for their apps and never pay for “shelf space.”
Apple continuously improves, and provides every developer with cutting-edge tools like compilers, programming languages, operating systems, frameworks and more than 150,000 essential software building blocks called APIS . These are not only powerful, but so simple to use that students in elementary schools can and do make apps.
The App Store guidelines ensure a high-quality, reliable and secure user experience. They are transparent and applied equally to developers of all sizes and in all categories. They are not set in stone. Rather, they have changed as the world has changed, and we work with developers to apply them fairly.
In-line with what Apple’s SVP of Worldwide Marketing said this week, and with what an Apple-backed report stated recently, Mr. Cook says that the vast majority on the App Store keep 100% of their revenue and that Apple has never raised or added additional fees/commissions.
For the vast majority of apps on the App Store, developers keep 100% of the money they make. The only apps that are subject to a commission are those where the developer acquires a customer on an Apple device and where the features or services would be experienced and consumed on an Apple device.
Apple’s commissions are comparable to or lower than commissions charged by the majority of our competitors. And they are vastly lower than the 50 to 70 percent that software developers paid to distribute their work before we launched the App Store.
In the more than a decade since the App Store debuted, we have never raised the commission or added a single fee. In fact, we have reduced them for subscriptions and exempted additional categories of apps. The App Store evolves with the times, and every change we have made has been in the direction of providing a better experience for our users and a compelling business opportunity for developers.
Mr. Cook goes on to state that he will make “no concession on the facts” during his testimony, but is approaching the “reasonable and appropriate” scrutiny with “respect and humility.”
At the ending of his remarks, the CEO emphasizes the pure economic benefit that the App Store has in the economy as a $138 billion ecosystem. He says that Apple continues to invest int he App Store, and says that Apple recognizes that “with the pride” that they’ve built the App Store with, comes with “responsibility for what it contains.
Facebook CEO Mark Zuckerberg, Amazon CEO Jeff Bezos, Alphabet CEO Sundar Pichai, are all set to testify as well.
For news, updates, and analysis of this hearing, click here, or visit our Twitter @AppleTerminal.