Monday, June 10, 2013

Where's the Retraction Key on this Computer

Yeah, so, where's the key I push to print a retraction, cause after reading today's article on Apple by L. Gordon Crovitz that I found in the WSJ, I was way off!

The post I wrote last week where-in I alluded to Job's biography and his stipulation that "We'll go to the agency model, where you set the price, and we get our 30%, and yes, the customer pays a little more, but that's what you want anyway," was off by a measure. What I didn't realize until I read today's article is that Apple wasn't setting the price, they were just setting the cut, or the percentage. I have polled a couple of other folks and they had the same misunderstanding.

How can you be mad at Apple when they are treating writing the exact same as every other product or good. All of their apps, all of their games, all of anything gets the same cut 30% to Apple. The article says that price isn't a factor. Until I read more, I'm gonna have to agree with Apple.

Apple just passed 50 billion downloads of the 850,000 apps for its iPhones and iPads. For paid apps, developers get 70% of the sales revenue and Apple keeps 30%. This applies to everything from the best-selling game Angry Birds to the GarageBand app that turns an iPad into a musical instrument.

Revenue sharing is a common business model, and it wasn't controversial until the Justice Department made this 30% the crux of its e-book price-fixing case against Apple, now entering its second week in federal court in New York.

There's nothing unlawful about revenue sharing or most-favored-nation pricing. 

I find that pretty dang compelling, but there's more. When I read this I became a convert:

As this column reported when the case was brought last year, Apple executive Eddy Cue in 2011 turned down my effort to negotiate different terms for apps by news publishers by telling me: "I don't think you understand. We can't treat newspapers or magazines any differently than we treat FarmVille." His point was clear: The 30% revenue-share model is how Apple does business with everyone. It is not, as the government alleges, a scheme Apple concocted to fix prices with book publishers.

I can't find fault with Apple if they're being consistent, can you? Find me where this is wrong and you'll see the first retraction of a retraction on this site.

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