Don’t like Apple’s price hike? Too bad.
Good morning! Apple hiked App Store prices by around 20% in some markets outside the U.S. without any explanation and with barely any notice. Critics are unsurprisingly upset, but what choice do they have?
It’s Apple’s party, and it’ll charge if it wants to
The App Store just became a little pricier for many non-U.S. customers. Apple’s planned price hike went into effect today for any market that uses the euro, in addition to Chile, Egypt, Japan, Malaysia, Pakistan, Poland, South Korea, Sweden, and Vietnam.
In most markets, the price increase equates to about 20% higher costs for apps (though it’s even more in some countries, like Japan and South Korea). So a mobile app that was previously 0.99 euros now costs 1.19 euros, while the same is true for an in-app purchase like mobile game currency. Curiously, Apple isn’t saying why exactly, leaving developers to guess whether it’s due to currency fluctuations, the related global economic crisis, or perhaps rising energy costs related to operating the App Store overseas.
The price hike is arriving at a sensitive time. The combination of record inflation and a looming global recession has started to take a serious toll on foreign markets as the strength of the U.S. dollar continues to grow relative to weakening foreign currencies like the euro, the British pound, and the Japanese yen.
- While Apple has yet to raise prices in the U.S., it hiked the price of the new iPhone 14 lineup in Australia, Germany, Japan, and the U.K., in some cases by the equivalent of nearly $150.
- A number of other consumer electronics companies, including PlayStation maker Sony, have enacted similar hardware price hikes in the EU and other markets in recent months.
- Apple can certainly afford to weather any economic storms better than most, if not all, of its competitors. In its last earnings announcement from July, Apple said it had a record Q3 with $19.6 billion in services revenue, a 12% year-over-year increase.
- The company remains the most valuable in the world with a market cap of more than $2.3 trillion.
Apple critics are not pleased. Naturally, a price hike with little explanation and on such short notice is going to rankle Apple's usual detractors in the developer community, including Fortnite maker Epic Games. But the criticisms have grown especially pointed given the current economic climate.
- “These increases were made without the input or consent of app developers, which highlights the extent of Apple’s market power. In no other industry can a business single-handedly increase the prices of another business’s products,” wrote Rick VanMeter, the executive director for the nonprofit Coalition for App Fairness, of which Epic, Match Group, and Spotify are members.
- Epic CEO Tim Sweeney had harsh words, too. “Imagine if a landlord told their small business tenant they had to increase their prices without any say in the matter or anywhere else to go,” he said in a statement yesterday. “That is what Apple is doing to developers for no other reason than to pad Apple’s bottom line.”
- “Developers don't want to raise their app prices in the EU and UK. Consumers don't want app price increases in the EU and UK. Central banks fighting inflation don't want app price inflation,” Sweeney wrote in a follow-up tweet yesterday. “But Apple is raising developers' prices against developers' wishes.”
Apple is no stranger to sudden price increases. For decades, the iPhone maker has exercised near-total control of its software ecosystems, including the digital storefronts it has operated since the days of iTunes.
- You might remember when Apple infamously raised the price of newer, more popular MP3s on the iTunes Store from 99 cents to $1.29. The move, a concession to the music industry, helped labels sell more albums after years of complaints that the era of iTunes pushed consumers toward buying singles over albums. There was plenty of hand-wringing at the time, but nothing really changed. That is, until music streaming took off and individual song sales began to decline.
But there is no comparable distribution change for mobile apps or the App Store on the horizon. Apple sets the rules for commerce on iOS, and everyone must follow — so long as they want to reach iPhone customers.
— Nick Statt
The Twitter drama has only just begun
Elon Musk decided, seemingly out of nowhere, that he actually will buy Twitter. But before you assume the roller coaster ride is over, think again.
Musk sent a letter to Twitter proposing to buy the company at the original, agreed-upon price of $54.20 a share provided the company agrees to forget the whole court battle. Twitter shares jumped on the news before exchanges halted trading.
- The news coincidentally broke at the same time Twitter employees were entering a long meeting about its 2023 strategy. Very funny, we know.
- Twitter said it received Musk’s letter and intends to close the deal at the original price. It hasn’t addressed Musk’s proposal to end its lawsuit.
Musk and Twitter could be entering even muddier waters, where the company will transition to a whole new owner who has expressed rather controversial ideas about the service. What happens next could go like this, as described by Protocol Policy editor Kate Cox:
- Step one: Musk buys Twitter!
- Step two: ???
- Step three: Twitter reaches profitability under Musk.
Musk loves to prove the skeptics wrong, and turning Twitter around could be another way to do it. But those question marks are there for a reason: the details of how he would do it are beyond murky.
- How will Twitter employees — the ones who haven’t fled the company in droves as the acquisition moil unfolded, that is — react?
- How will he handle the spam problem he cited as an excuse to walk away from the deal?
- Musk offered one cryptic hint about his plans in a tweet: “Buying Twitter is an accelerant to creating X, the everything app.” Musk reclaimed the X.com domain from PayPal in 2017, and has teased the idea of building a Twitter competitor on it.
— Sarah Roach
The calm before the storm
Hundreds of companies that cut staff in recent months announced major funding rounds just a few months before. But startups aren’t blowing through their funding weeks after the check is deposited; it’s more complicated than that.
Startups often wait several months to a year after venture capital checks hit their bank account before going public about it.
- “By the time we're hearing about private companies raising capital … it's not actually reflective of when that work was actually done,” Susan Alban, partner at Renegade Partners, told Nat.
- This is because founders often want to announce funding with other big news, like a product release or an executive hire.
The bigger an organization gets, the more secretive it becomes about funding updates. News of a big check is easier to keep from leaking publicly at a company of 100 compared to a company of 2,000, Alban said.
- Companies like Bolt, Getir, and Trade Republic caught flack for this very reason. Many employees said they felt betrayed, as funding announcements gave the illusion that a company is doing better than it is.
- “Bolt employees were blind sided because the CEO was saying just weeks ago how everything is fine,” an anonymous user wrote on the message board Blind.
To help ease the blow of layoffs, being transparent can go a long way. “If people understand what their purpose is in a company, and that you see them for what it is that they're fulfilling, and you're helping this company succeed, that is like a tried-and-true strategy, and it takes time, it takes dedication, and I think it takes a lot of thoughtfulness from a founder,” said Anthony Kline, a partner at VC firm The GP.
— Nat Rubio-Licht
A MESSAGE FROM CAPITAL ONE SOFTWAREMany business leaders aren’t sure where to begin when it comes to migrating to the cloud. To help organizations adapt to this revolution, Capital One launched Capital One Software, a new enterprise B2B software business focused on providing cloud and data management solutions.
People are talking
Uber's Nikki Krishnamurthy said the company is formalizing in-office “anchor days”:
- “Having time to work remotely has benefits for individual productivity as well as balancing work/life demands. At the same time ... when people work in the office regularly they are more engaged, have a stronger sense of belonging."
Intel's Pat Gelsinger said the company should be the "national champion" of the Chips Act:
- "If we are not healthy, then there is no hope that we can turn this around."
Special report: Securing the enterprise
There’s no let-up in the surge of cyberattacks against businesses. But shutting down the hackers will require many enterprises to evolve their strategy.
Our latest Protocol special report examines best practices for securing both enterprises and small- to medium-size businesses, providing a true threat landscape and information you can use to make decisions about the strategy that best supports your business goals. Read the full report here.
IBM added Red Hat’s storage product road maps and its associate teams to the IBM storage business unit.
S. Daniel Leon is stepping down from Celsius as co-founder and strategy chief officer as the company continues to bleed executive leadership. Lior Koren, previously the company’s global tax director, is taking over.
Jon McNeill joined General Motors’ board. McNeill is a former Lyft and Tesla exec.
Steve Pickle is Samsara’s first chief people officer. Pickle was previously an HR exec at Salesforce.
Tifenn Dano Kwan joined Amplitude as CMO. She’s held similar roles at Dropbox, Collibra, and others.
Adam Blitzer joined Calendly’s board. Blitzer is the COO of Datadog.
In other news
Amazon is pausing hiring for corporate retail workers, joining lots of other companies in hiring freezes.
Google settled a consumer privacy suit in Arizona for $85 million. The company's facing similar suits in Indiana, Texas and elsewhere.
Facebook is shuttering Bulletins, its newsletter service meant to rival Substack, by early next year.
Micron’s dropping up to $100 billion on a chip factory in upstate New York over the next two decades thanks to the Chips Act. Construction will begin in 2024, the company said.
Sheryl Sandberg donated $3 million to the American Civil Liberties Union in a push to fight abortion bans.
Coinbase is getting its own documentary. The company worked with director Greg Kohs on the film, which will be released Friday.
Facebook's quiet layoffs may lead to thousands of job cuts. Directors were told they should mark at least 15% of their team members as "needs support" in their internal review process, Business Insider reported.
Can the Internet Archive keep up?
A couple decades ago, the Internet Archive housed about 2TB of data that contained much of the internet. Now, the archive is about 50,000 times bigger and facing way more challenges, which range from documenting web pages with paywalls to scraping data from walled gardens like Facebook. And it might just keep getting harder: Have you ever thought about what it would take to archive the metaverse?
A MESSAGE FROM CAPITAL ONE SOFTWAREThe flexibility of the cloud helps companies like Capital One unlock access to their data with performance that can scale instantly. But this flexibility and scale can also create a unique challenge for organizations and users who are not proficient in cloud optimization.
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