Apple CEO Tim Cook completes a series of statements from high-ranking executives in the ongoing legal battle with Epic Games. Following testimony from Phil Schiller and Craig Federighi, Cook spoke about Apple’s business model and explained why the App Store is the only approved way for end users to install software on iPhones.
Security and privacy
Tim Cook explained Apple’s mission is to “make the best products in the world that truly enrich people’s lives.” To that end, Apple is “investing like crazy in research and development,” Cook added.
“We’ve invested $100 billion since we started developing the iPhone, and that number has just increased,” Cook said. “We have an insane focus on the user and on doing the right thing for the customer.”
He clarified that security and privacy are key components of Apple’s objective. He stressed the importance of the app review process and new features like app tracking transparency as protection against malicious apps or companies that “suck up data.”
The Apple chief took the opportunity to criticize the security of competing platforms such as Android and Windows. Citing third-party data, Cook said the difference between those platforms and iOS is “literally off the charts.”
When asked by Judge Yvonne Gonzalez Rogers to clarify what the data said, Cook said that 1 percent to 2 percent of malware is found on the iPhone. That compares to about 30 percent to 40 percent on Windows and another 30 percent to 40 percent on Android. Although the app review process is not perfect, Cook said, “We’re doing a really good job.”
Apple’s Small Business Program
Asked about Apple’s Small Business Program, which lowers commissions to 15 percent for businesses that earn less than $1 million a year from the App Store, Cook denied that antitrust scrutiny was the main reason for the program.
Cook said antitrust regulation “was in the back of his mind,” but explained that the main reason for the program was the COVID-19 pandemic.
Apple’s market share
Cook also dismissed claims that Apple’s iPhone was a dominant player in the smartphone industry. For example, he recalled that the iPhone has a 15 percent market share worldwide and that Android is dominant.
In addition, the Apple CEO denied that his company is making it difficult to switch from the iPhone to Android. He cites features such as the Data Transfer Project and says Apple is focused on “making efforts to get Android people to switch to iPhone.”
Asked if he believes the App Store is profitable, Cook said it is. However, he noted that Apple does not break down profitability in a detailed way. Cook also said that App Store profit margins do not take into account investments in research and development or other areas, but they are related to the store.
If Epic Games wins, it would be a “disaster”
If Epic Games prevails and Apple is forced to allow side-loading apps and third-party app stores, Cook said the result would be a disaster.
“I think it would be terrible for the user, because if you look at it today, we review 100,000 apps a week and reject 40,000 for various reasons,” Cook said, adding that it wouldn’t take long for the ecosystem to become a “toxic mess.”
Developers would also be affected because they rely on the App Store to be a “safe and trusted place that customers want to come to,” Cook said.
Regarding Epic Games’ call to allow third-party payment processing in the App Store, Cook said that would be problematic for several reasons:
“It would end up with customers then having to fill out their credit cards for all these different apps, so it would be a huge convenience issue, but also the fraud issues could increase. […]
We’d also have to figure out a different way to account for our commissions. We would then have to figure out how to track and bill the transactions and then audit the developers. That would probably be a process that doesn’t have to exist.”