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Epic vs. Apple opening arguments suggest a bitter battle over iOS’ future
In leading off the opening arguments in Epic’s long-anticipated bench trial against Apple, the Fortnite studio noted that it was “not suing for damages” or a “special deal.” Instead, Epic’s counsel said, it was “suing for change, not just for itself, but for all developers.”
While “Epic is far from the only unhappy Apple developer and distributor,” Epic’s lawyers said it just happened to be the one company that could “finally [say] enough to Apple’s monopolistic conduct” by “taking on the world’s largest company” in court over the matter.
Apple, meanwhile, used its opening arguments to characterize Epic’s lawsuit as “just an attack on Apple’s 30 percent commission that Epic does not want to pay” and Epic as a company that “has decided it doesn’t want to pay for Apple’s innovations anymore.”
“Rather than investing in innovation, Epic [is] investing in lawyers and PR… to get the benefits that Apple provides for free,” Apple said.
Lock-in and the developer bait-and-switch
Much of Epic’s opening argument focused on the idea that iOS users and developers are effectively locked into Apple’s mobile ecosystem and that Apple knew from early in the iPhone’s history “what it needed to do to lock users in.” Epic produced a number of emails from Apple executives intended to demonstrate this argument, including a 2013 email from Eddy Cue regarding how to get users “hooked to the ecosystem.”
As Cue wrote to Apple’s Tim Cook and Phil Schiller in 2013:
The more people use our stores, the more likely they are to buy additional Apple products and upgrade to the latest versions. Who’s going to but a Samsung phone if they have apps, movies, etc., already purchased? They now need to spend hundreds more to get to where they are today.
Epic said Apple lured in developers with an initial promise that the App Store itself wasn’t going to be a major profit generator for Apple. Steve Jobs said in 2008 that the company didn’t “intend to make money off the App Store,” instead using the existence of an app marketplace to increase the value of profitable iOS hardware itself.
That worked well for everyone at first, in Epic’s telling. But around 2008, Apple realized that some free iOS games were beginning to sell additional levels “for a fee.” Apple VP Greg Joswiak identified that in an email as “a possible leak in the system” and said “we’ll have to make sure our terms don’t allow this.” In 2009, a new requirement was imposed to use Apple’s in-app purchase (IAP) system for such sales, complete with a 30 percent cut to Apple. By 2011, subscriptions made through apps also came with the same requirements.
Epic argued this imposition of in-app purchase fees was capricious, and had nothing to do with security risks, the amount of support offered by Apple, or the costs of processing user payments. And Epic points out that Apple eventually cut its asking fee to 15 percent for the second year of auto-renewing subscriptions, despite there being no change in costs. “There’s a name for businesses that set prices without regards to costs,” Epic’s lawyer said. “Monopolies.”
Despite Jobs’ expectations, Epic says internal Apple documents show the iOS App Store now makes profit margins in excess of 75 percent on hundreds of millions of dollars in annual revenue. Apple says these numbers are misleading and don’t account for iOS SDK and API costs that are filed in other portions of the company, such as the software division.
In any case, Epic characterized this massive profit-taking on app revenue as a bait-and-switch by Apple. “The most appealing flower in the garden was a venus fly trap,” Epic counsel said. Developers “helped add value to iOS, and once they committed to the iOS ecosystem… their businesses depended on Apple.”
Consumers, meanwhile, have invested real, sunk costs into the iOS ecosystem and would incur significant costs from switching, Epic said. Epic cited studies showing “a developer like Epic could not leave the iOS platform even in the face of a price increase without suffering a loss of profit.”
But Apple cited its own data to suggest that anywhere from 12 to 26 percent of iOS users who purchased a new phone in recent quarters switched to a different mobile platform, showing that there are competitive alternatives even for users who have been allegedly “locked in.” And when iOS usage of Fortnite shrank after its iOS App Store removal, play on competing gaming platforms went up concurrently, according to data Apple presented, suggesting further alternatives in that use case.
Security precaution or pretext
Epic argued that Apple could have built the iOS’ software “walled garden” with a door, as it did for MacOS, which shares the same kernel yet allows for the installation of unsigned apps not sold through Apple’s official Mac App Store. Forcing iOS apps through the App Store and its review process was “not a technical decision, but a policy one” Epic argued.
But Apple answered that locking down the iOS App Store was also a security decision and that “putting [unreviewed] native third-party apps on the iPhone could compromise the phone itself.” A mobile device provides a larger and more attractive attack surface than a desktop OS, Apple argued, thanks to the mobile device’s additional capabilities and near-constant powered-on status. This requires additional security layers to protect users, Apple said.
“It is a rare moment when someone leaves a Mac on a bus or a movie theater,” Apple’s lawyers said. “A Mac doesn’t know where you are or you children are.”
Epic said that argument is just a pretext for what amounts to a business decision to exert total control over the iOS app marketplace. Epic counsel quoted Apple executives and materials saying that MacOS is secure, and counsel argued that there is “no [security] failing in MacOS that iOS has cured.”
“Fortnite” creator Epic Games and Apple go to trial: live updates
In 2017, the FTC alleged that Qualcomm, which owns patents essential to the creation of mobile phones, was using its dominant position in the industry to extract unreasonable fees from companies that rely on its tech. Two years later, in May 2019, U.S. District Court judge Lucy Koh agreed. In a 233-page decision, she sided with the FTC, stating that Qualcomm had abused its monopoly power. But in 2020, two days before Epic filed its suit against Apple, a federal appeals court reversed Koh’s decision.
Here’s Everything Coming To And Leaving Game Pass Soon
Members of Xbox Game Pass will soon lose the ability to play Remedy’s beloved Alan Wake at no extra cost. On the other hand, the gnarliest extreme snow sports game since SSX Tricky will become available in a matter of days. Fair trade, if you ask me. Here’s everything coming to Xbox Game Pass in the next few weeks:
May 4
- Dragon Quest Builders 2 (Console, PC)
May 6
- FIFA 21 (Console and PC, via EA Play)
- Steep (Cloud, Console)
May 13
- Final Fantasy X/X-2 HD Remaster (Console, PC)
- Just Cause 4: Reloaded (Cloud, Console, PC)
- Psychonauts (Cloud, Console, PC)
- Red Dead Online (Cloud, Console)
- Remnant: From the Ashes (PC)
When the universe giveth, the universe taketh. The following games will leave the Game Pass library on May 15:
- Alan Wake (Console, PC)
- Battlefleet Gothic: Armada 2 (PC)
- Dungeon of the Endless (Cloud, Console, PC)
- Final Fantasy IX (Console, PC)
- Hotline Miami (PC)
- Plebby Quest: The Crusades (PC)
SpaceX’s upgraded Starship set for test flight despite sore NASA contract losers
Within the last week, while SpaceX has been diligently working to ready an upgraded Starship prototype for its first launch, former competitors Blue Origin and Dynetics – both of which recently lost a historic NASA Moon lander contract to SpaceX – have filed “protests” and forced the space agency to freeze work (and funds).
That means that NASA is now legally unable to use funds or resources related to its Human Lander System (HLS) program or the $2.9 billion contract it awarded SpaceX on April 16th to develop a variant of Starship to return humanity to the Moon. However, just like SpaceX has already spent a great deal of its own time and money on Starship development and – more recently – a rapid-fire series of launches, the company appears to have no intention of letting sore losers hamper its rocket factory or test campaign.
Instead, on the same two days Blue Origin and Dynetics loudly filed official protests with the US Government Accountability Office (GAO), SpaceX performed two back-to-back static fire tests with a Starship prototype and Raptor engines outfitted with “hundreds of improvements.” Technical challenges and unsavory weather conditions forced SpaceX to call off a launch planned sometime last week but the company now appears to be on track to launch Starship prototype SN15 as early as Tuesday, May 4th.
In principle, the ability for companies to protest US government contracting decisions is a necessity and (nominally) a net good but it can easily be misused – and often in damaging ways. In the case of Blue Origin and Dynetics, it’s difficult not to perceive both protests as examples of the latter.
Blue Origin effectively disagrees with every single major point made and conclusion drawn by NASA’s Source Selection Authority (Kathy Lueders) and a separate panel of experts – often to the point that the company is strongly implying that it understands NASA’s contracting process better than the space agency itself. Blue Origin partners Northrop Grumman and Lockheed Martin are both partially or fully responsible for several of their own catastrophic acquisition boondoggles (F-35, Orion, SLS, James Webb Space Telescope, and are part of the military-industrial complex primarily responsible for turning US military and aerospace procurement into the quagmire of political interests, quasi-monopolies, and loopholes it is today.
The primary argument is generally shared by both protestors. In essence, Dynetics [p. 23; PDF] and Blue Origin [PDF] believe that it was unfair or improper for NASA to select just a single provider from the three companies or groups that competed. They argue that downselecting to one provider in lieu of budget shortfalls changed the procurement process and competition so much that NASA should have effectively called it quits and restarted the entire five-month process. Blue Origin and Dynetics also both imply that they were somehow blindsided by NASA’s concerns about a Congressional funding shortfall.
In reality, NASA could scarcely have been clearer that it was exceptionally sensitive about HLS funding and extremely motivated to attempt to return humans to the Moon by 2024 with or without the full support of Congress – albeit in fewer words. As Lueders herself noted in the HLS Option A award selection statement, the solicitation Blue, Dynetics, and SpaceX responded to states – word for word – that “the overall number of awards will be dependent upon funding availability and evaluation results.”
Additionally, implications that NASA somehow blindsided offerors with its lack of funding are woefully ignorant at best and consciously disingenuous at worse. Anyone with even the slightest awareness of the history of large-scale NASA programs would know that the space agency’s budget is all but exclusively determined by Congress each year and liable to change just as frequently if political winds shift. Short of blackmailing members of Congress or wistfully hoping that other avenues of legal political influence and partnership actually lead to desired funding and priorities appearing in appropriations legislation, NASA knows the future of its budget about as well as anyone else with access to the internet and a rudimentary awareness of history and current events.
It became clear that Congress was likely to drastically underfund NASA’s HLS program as early as November 2020 – weeks before HLS Option A proposals were due. The latest appropriations bill was passed on January 3rd, 2021, providing NASA $850 million of the ~$3.4 billion it requested for HLS. Historically, NASA’s experience with the Commercial Crew Program – public knowledge available to anyone – likely made it clear to the agency that it could not trust Congress to fund its priorities in good faith when half a decade of drastic underfunding ultimately delayed the critical program by several years. That damage was done by merely halving NASA Commercial Crew budget request from 2010 to 2013, whereas Congress had already set itself on a path to provide barely a quarter of the HLS funds NASA asked for in the weeks before Moon lander proposals were due.
Ultimately, the protests filed by Blue Origin and Dynetics are packed to the brim with petty axe-grinding, attempts to paint SpaceX in a negative light, and a general lack of indication that either company is operating in good faith. Instead, their protests appear all but guaranteed to fail while simultaneously forcing NASA to freeze HLS work and delay related disbursements for up to 100 days. Given that SpaceX is now technically working to design, build, qualify, and fly an uncrewed Lunar Starship prototype by 2023 and a crewed demonstration landing by 2024, 100 days represents a full 7-10% of the time that’s available to complete that extraordinary task.
Ironically, the protests made by Blue Origin and Dynetics have already helped demonstrate why NASA’s decision – especially in light of unambiguous budgetary restrictions – to sole-source its HLS Moon lander contract to SpaceX was an astute one. Had a victorious Blue Origin or Dynetics been in a similar position to SpaceX, it’s almost impossible to imagine either team continuing work to a significant degree in lieu of NASA funding or direction. SpaceX, on the other hand, hasn’t missed a beat and looks set to continue Starship development, production, and testing around the clock regardless of NASA’s capacity to help.
In other words, with a little luck, the actual schedule impact of a maximum 100-day work and funding freeze should be a tiny fraction of what it could have been if NASA had selected an HLS provider more interested in profit margins and stock buybacks than creating a sustainable path for humanity’s expansion beyond Earth.
Your Gmail and Photos may be deleted! New Google rules start soon
Google is changing things up from June 1 and it could have a major impact on some users of its popular Gmail, Photos and Drive services. The new terms will basically allow the US technology firm to delete personal files stored on its servers without needing any permission to do so.
This dramatic update was first announced back in December 2020 with Google emailing users to explain how the changes will affect them.
“We are writing to let you know that we recently announced new storage policies for Google Accounts using Gmail, Google Drive (including Google Docs, Sheets, Slides, Drawings, Forms, and Jamboard files) and/or Google Photos that bring us in line with industry practices,” Google explained in the email seen by Express.co.uk.
Now, for anyone who has endless private emails or family photos stored with Google, this all sounds pretty terrifying but hopefully, the impact should be minimal.
Google has brought in these changes to enable it to do some serious spring cleaning when users stop using these services and don’t bother to inform the tech giant.
To combat this data problem Google is now giving users two years to log into their accounts. Anyone who stays away for more than 24 months could then see things disappearing with Google having the option to start removing content.
“If you’re inactive for 2 years (24 months) in Gmail, Drive or Photos, we may delete the content in the product(s) in which you’re inactive. If you exceed your storage limit for 2 years, we may delete your content across Gmail, Drive and Photos,” the firm said.
Users will get plenty of notice before their family snaps are sent to the rubbish bin with anyone affected receiving an email to inform them that their content could be removed so they should have plenty of time to get things in order.
It’s also worth noting that, although the changes come into effect from June 1, no content will be removed until at least June 1 2023.
This is because the new rules don’t come into force until June 2021 and users then have two years to comply.
As always, every Google Account will continue to come with 15 GB of free storage across Gmail, Drive and Photos, which Google estimates should last the majority of its users several years.
Although this change might not please everyone there is better Google news coming later this month. Google CEO Sundar Pichai has told investors to expect some “significant product updates and announcements” during the Californian company’s developer conference
Google IO is scheduled to run between May 18-20 and it could be an exciting few days for fans of the US tech brand.
It’s Possible to Drill a Key Ring Hole Into Apple’s AirTags
One of the first things that jumped out to me when I saw Apple’s long-awaited AirTags was their surface, which reminds me of a giant, polished M&M. Like real M&Ms, AirTags don’t have any holes, which means that you have to buy AirTag accessories to hook the device to your keys or hang it on your purse. However, although Apple did not include a key ring hole in the AirTags, you can apparently make one yourself without messing them up too much.
In their teardown of the AirTag published on Saturday, the folks over at iFixit decided to test whether it was possible to drill a key ring hole into the device, a noble service for those who don’t want to shell out the extra cash for accessories and are willing to take the risk of destroying the thing. If this sounds like you, you’ll need a 1/16” drill bit, according to iFixit.
Before wielding your drill, the first thing you have to do is remove the battery. The key lies in locating and successfully drilling through one of the three notches, which you can see clearly over at iFixit, in the AirTag’s circuit board and antenna shield. The notches are made for the clips that hold the AirTag together. (Remember, although AirTag batteries last more than a year without charging, they can be replaced by pulling off the back of the device).
iFixit notes that the location of the notches “roughly” corresponds to that of the clips for the metal battery cover, which means they can serve as a guide. Now, you want to drill through the notch, not through the clip itself. But should you have bad luck, doing this purportedly won’t kill your AirTag.
In the case that you are successful (and we hope that you are, because who wants to throw money away), iFixit states that the AirTag should work “as if nothing happened.” The device’s speaker, which it uses to emit chimes to help you find it if you lose it or inform others that there’s a lost AirTag nearby, was hardly affected.
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There is a price to pay for saving a few bucks, though. iFixit states that if you drill a hole in your AirTag, you shouldn’t expect it to remain waterproof and dust resistant. Meanwhile, MacRumors points out that this will undoubtedly void Apple’s warranty.
In the end, those of you searching for your drill have a decision to make. Is it worth taking a risk when there are accessories available for $12.95 or less? The waterproof thing also worries me, mainly because I’ve had to open my door in the rain. Alas, it is a choice each one of us must make. May luck be on your side.
Apple’s app store goes on trial in threat to ‘walled garden’
SAN RAMON, Calif. (AP) — On Monday, Apple faces one of its most serious legal threats in recent years: A trial that threatens to upend its iron control over its app store, which brings in billions of dollars each year while feeding more than 1.6 billion iPhones, iPads, and other devices.
The federal court case is being brought by Epic Games, maker of the popular video game Fortnite. Epic wants to topple the so-called “walled garden” of the app store, which Apple started building 13 years ago as part of a strategy masterminded by co-founder Steve Jobs.
Epic charges that Apple has transformed a once-tiny digital storefront into an illegal monopoly that squeezes mobile apps for a significant slice of their earnings. Apple takes a commission of 15% to 30% on purchases made within apps, including everything from digital items in games to subscriptions. Apple denies Epic’s charge.
Apple’s highly successful formula has helped turn the iPhone maker into one of the world’s most profitable companies, one with a market value that now tops $2.2 trillion.
Privately held Epic is puny by comparison, with an estimated market value of $30 billion. Its aspirations to get bigger hinge in part on its plan to offer an alternative app store on the iPhone. The North Carolina company also wants to break free of Apple’s commissions. Epic says it forked over hundreds of millions of dollars to Apple before Fortnite was expelled from its app store last August, after Epic added a payment system that bypassed Apple.
Epic then sued Apple, prompting a courtroom drama that could shed new light on Apple’s management of its app store. Both Apple CEO Tim Cook and Epic CEO Tim Sweeney will testify in a Oakland, California federal courtroom that will be set up to allow for social distancing and will require masks at all times.
Neither side wanted a jury trial, leaving the decision to U.S. District Judge Yvonne Gonzalez Rogers, who already seems to know her ruling will probably be appealed, given the stakes in the case.
Much of the evidence will revolve around arcane but crucial arguments about market definitions.
Epic contends the iPhone has become so ingrained in society that the device and its ecosystem have turned into a monopoly Apple can exploit to unfairly enrich itself and thwart competition.
Apple claims it faces significant competition from various alternatives to video games on iPhones. For instance, it points out that about 2 billion other smartphones don’t run iPhone software or work with its app store — primarily those relying on Google’s Android system. Epic has filed a separate case against Google, accusing it of illegally gouging apps through its own app store for Android devices.
Apple will also depict Epic as a desperate company hungry for sources of revenue beyond the aging Fortnite. It claims Epic merely wants to freeload off an iPhone ecosystem in which Apple has invested more than $100 billion over the past 15 years.
Estimates of Apple’s app store revenue range from $15 billion to $18 billion annually. Apple disputes those estimates, although it hasn’t publicly disclosed its own figures. Instead, it has emphasized that it doesn’t collect a cent from 85% of the apps in its store.
The commissions it pockets, Apple says, are a reasonable way for the company to recoup its investment while financing an app review process it calls essential to preserving the security of apps and their users. About 40% of the roughly 100,000 apps submitted for review each week are rejected for some sort of problem, according to Kyle Andeer, Apple’s chief compliance officer.
Epic will try to prove that Apple uses the security issue to disguise its true motivation — maintaining a monopoly that wrings more profits from app makers who can’t afford not to be available on the iPhone.
But the smaller company may face an uphill battle. Last fall, the judge expressed some skepticism in court before denying Epic’s request to reinstate Fortnite on Apple’s app store pending the outcome of the trial. At that time, Gonzalez Rogers asserted that Epic’s claims were “at the frontier edges of antitrust law.”
The trial is expected to last most of May, with a decision to come in the ensuing weeks.
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AirPods 3 could launch alongside new Apple Music HiFi
Rumor has it that Apple has plans for another treat to launch alongside the AirPods 3: a significant upgrade to Apple Music that won’t cost subscribers a cent more.
Hits Daily Double reports that Apple Music will add a new high-fidelity, lossless audio streaming tier taking streams above the current 256kbps AAC format. That means people with high-end speakers or headphones should certainly be able to hear the difference when it’s introduced.
The exact audio quality isn’t specified in the report, but the move should bring Apple Music closer to the likes of Deezer, Tidal, Amazon Music Unlimited and Spotify’s upcoming HiFi tier.
Apple could have an ace up its sleeve. While all of its rivals charge (or are expected to charge) more for their improved audio, Apple Music will apparently offer the upgrade free of charge to its $9.99 per month subscribers.
Too good to be true?
While that may well reflect that Apple isn’t hoping to hit the studio quality offered by Tidal and Amazon, it still almost sounds too good to be true. But that’s the information Hits Daily Double has been given from its “label sources.”
Offering high-fidelity, lossless audio is typically a paid extra for audiophiles, costing between $5 (Amazon Music Unlimited) to $10 (Tidal) per month. While Spotify HiFi doesn’t have a monthly cost attached yet, the company has upped its prices this week, possibly preparing for the new tier when it arrives.
So in that market, could Apple really decide to offer a lossless streaming upgrade without charging more money? Obviously, Apple has the resources to do just that, as it’s essentially been giving away Apple TV Plus for a long time.
That said, Apple Music, despite its growth, still sits some distance behind Spotify in terms of subscriber numbers. If offering an upgrade that others charge for is a way of closing the gap, then it would certainly make sense for Apple to throw some of its ample resources at making that happen.
It’s also worth noting that the move wouldn’t be without precedent for the company. Apple famously offered buyers of HD movies a free upgrade to 4K HDR versions when they became available, which it certainly was under no obligation to do.
Hits Daily Double reports that the new tier will be announced alongside AirPods 3, which should appear in the first half of 2021. If the company keeps subscription prices static while offering improved quality, it will certainly be interesting to see how its rivals react.