Being on the shelf in Apple's App Store means you operate on the terms of shelf owner and $500B+ of ecosystem activity proves the availability of alternatives

In March 2016 Ben Bajarin and I put on an event called SUBSCRIBE where we asked, among other things, — How will the online services business models evolve?

Asymco 2020-06-21 Horace Dediu

Context & Ripple Effects

This piece lands mid-argument about what the App Store actually is. The inessential counterpoint holds that the store brings users because it is the only choice on iOS, not because it offers exceptional marketing — Asymco reframes the same dynamic: shelf placement means accepting the shelf owner's terms, while the $500B+ of ecosystem activity is cited as proof that alternative channels do exist outside it.

It also extends a thread running since 2019, when Apple's [[a:940344|subscription push was framed around incremental revenue, churn reduction, and curated safety]] — services like News+, which signed 200,000 subscribers in its first two days then stalled — all of which route through Apple's own shelf and commission structure.

First-order effects

Developers listed on the App Store transact on Apple's terms by default — commissions, review, and payment rails are set unilaterally, so any developer selling subscriptions or IAPs on iOS is already inside that bargain.

Second-order effects

Apple's privacy moves compound the leverage: by limiting iOS ad tracking, Apple pushes developers toward paid apps and subscription models where Apple collects commissions, as the Financial Times analysis of ATT and IAP revenue laid out.

Third-order effects

If 'shelf owner' becomes the accepted frame, the dispute shifts to whether one company should set terms for the dominant distribution shelf — and Apple's push into search ads and broader advertising, part of a market shifting beyond the Google-Meta duopoly toward players including Apple (Stratechery's 2022 review), deepens its control of both discovery and monetization on its own shelf.

The trend: Mobile software distribution is consolidating around platform owners who simultaneously set marketplace terms, tax transactions, and sell the discovery ads — making App Store gatekeeping a structural, not incidental, feature.

Discussion

@benedictevans Benedict Evans on x
A hill I would die on: curated app stores have been hugely, unambiguously good for users and software developers, and especially for user security and privacy. 1/
@waltmossberg Walt Mossberg on x
@stevesi puts the App Store debate into the historical context surrounding Windows and shows why curated app stores make sense for users, even if developers don't like them. It's a long thread, but well documented and worth reading. https://twitter.com/...
@reneritchie Rene Ritchie on x
“Apple captures 30% of billings through its App Store. My estimate for these billings were $67.9 billion in 2019 which means App Store billings were 13% of the 2019 ecosystem. Apple's 30% cut of Billings amounts to 3.8% for the whole ecosystem. It's hardly an oppressive number.” …
@reneritchie Rene Ritchie on x
(It's fascinating to see how different the takes are between several of the industry analysts who focus on Apple. And all how different some of those takes are from media that cover Apple. My guess is focusing on 30% is less important than focusing on consistency/transparency.) h…
@benedictevans Benedict Evans on x
We've been arguing about Apple's payment rules since the app store began. From day 1, there has been stuff that should clearly use IAP, stuff that obviously can't, and a huge grey area in the middle where Apple's rules are fuzzy, arbitrary & often look like pure rent-seeking 1/
@benedictevans Benedict Evans on x
The funny thing about this App Store thing is that absolutely nobody has said anything that people didn't say a decade ago. The only thing that's changed is that Apple is now big enough to be firmly in the anti-trust crosshairs
@benedictevans Benedict Evans on x
There is a quite widespread idea that you can retain the safety, privacy and trust benefits of the sandboxed app model while solving the question of Apple's policies if you let people install multiple app stores. I think this is it completely wrong 1/

Chronicles