Eshu Marneedi

The Wall Street Journal Profiles Phil Schiller

Aaron Tilley and Kim Mackrael, in a profile of Phil Schiller, Apple’s former senior vice president of product marketing and now fellow, for The Wall Street Journal:

Apple came around to taking a 30% commission on paid apps or services purchased in the App Store. Initially, Jobs said in 2008 that the company didn’t “intend to make money off the App Store,” according to documents that came out in the Epic case.

After Jobs’s passing in 2011, Schiller kept Jobs’s philosophy alive across everything he did. The two were close, and Schiller often mirrored Jobs’s fierce competitiveness and tendency to praise Apple and disparage competitors. Inside Apple, he came to be referred to as Jobs’s “mini-me” due to the manner in which he often mirrored the company co-founder’s perspective.

“Of the people still at Apple, he is one of the few that still carry the torch of Steve Jobs’s vision,” said Tim Bajarin, a longtime Apple analyst who has known Schiller since his return to the company.

One thing Jobs insisted on in the App Review process is that the company should always have someone reviewing each app that made it into the store. Schiller continued that tradition, eschewing excessive use of artificial intelligence in favor of reviews and careful curation.

If I have this right, Steve Jobs, Apple’s co-founder who insisted on Apple’s tight control over the iOS App Store, only craved control over the apps that were on the App Store. As Tilley and Mackrael quote Jobs saying in 2008, Jobs never wanted to make money from the App Store’s 15–30 percent commission — he just wanted the control that came with that commission. Now that Apple is in hot water over the commission, which in my opinion is what started all of this regulatory scrutiny both in the European Union and the United States, I suggest it lower the percentage it takes to 15 percent for companies that make over $1 million a year on the App Store, and 7 percent for everyone else.

Apple doesn’t need to give up control over the App Store — it just needs to make it seem like the App Store is competitive (which it already is). The 30 percent commission has done irreparable damage to Apple’s public relations over the last several years. Anyone, even people who like Apple and think it deserves a cut of purchases, can agree that the App Store’s rules are a mess. In addition to lowering the fee, I think Apple should also further relax its anti-steering provisions specifically in the vein of payment processing. Apple has (had) to play some bargaining here if it doesn’t (didn’t) want to be caught by the ire of regulators, including the U.S. Justice Department. If it doesn’t give up the anti-steering provisions, it risks losing control over content moderation in the App Store specifically in the United States — the European Union has already busted Apple’s shackles.

Regulators are not even nearly as smart as Apple — everyone knows that. But Apple missed its chance to self-regulate, to give a little and take a little, even when relaxing anti-steering provisions would’ve still fallen within the bounds of Jobs’ App Store ethos set out in 2008.

PS: I still love Schiller.