Spotify Inc has accused Apple Inc of blocking an update to the Swedish company’s music streaming app to push customers towards its own competing service, according to a person familiar with the dispute.
Apple rejected the update after Spotify started encouraging customers to subscribe online rather than through the iOS mobile operating system, the person said, citing a letter that Spotify general counsel Horacio Gutierrez sent to counterpart Bruce Sewell on Sunday last week.
By encouraging users to sign up through the Web site, Spotify is seeking to avoid paying the 30 percent cut on the monthly subscriptions that are billed through iOS.
The Swedish company had managed to avoid diluting its income by charging iOS subscribers US$13 per month rather than the US$10 it charges its other customers. However, that made it a more expensive choice when Apple introduced its own US$10-per-month music streaming service in June last year. Apple has since attracted 15 million paying subscribers, compared with the 30 million that Spotify said it had in March.
Bruce Sewell, Apple’s general counsel, on Friday responded with a letter saying Spotify was seeking “preferential treatment,” according to a copy obtained by Bloomberg.
“This is Apple’s store, the rights of developers are at the mercy of the store owner,” Asymco analyst Horace Dediu said. “This is true for any shop in the world.”
An Apple spokeswoman declined to comment.
Spotify’s response to Apple Music was to offer a three-month subscription for US$0.99 to new customers signing up through its Web site. That prompted Apple to threaten to remove the app from its store, according to the letter. Spotify pulled an advertising campaign pushing the promotion, but also stopped allowing customers to pay via the App Store.
The practice of Apple trumping existing products with its own competing services has become known as “Sherlocking” in the app developer community. The name stems from Sherlock, a search tool on Apple’s desktop computer operating systems that in the early 2000s was updated to incorporate the same tools that an external application had started offering just a few months previously.
Global revenue generated by services and apps on mobile devices could total US$800 billion by 2020, from about US$300 billion today, according to Dediu.
Platform owners such as Apple and Google are only likely to capture about 10 percent of that, with the rest generated by direct sales within other apps or Web sites: Amazon.com Inc sales, Airbnb Inc bookings, Uber Technologies Inc rides and so on.
US Senator Elizabeth Warren criticized Apple’s influence this week, calling for more aggressive enforcement of antitrust laws.
Apple, Amazon and Google have used their market power to “snuff out competition,” the Democratic lawmaker said on Wednesday.
Hon Hai Precision Industry Co (鴻海精密) yesterday said that its research institute has launched its first advanced artificial intelligence (AI) large language model (LLM) using traditional Chinese, with technology assistance from Nvidia Corp. Hon Hai, also known as Foxconn Technology Group (富士康科技集團), said the LLM, FoxBrain, is expected to improve its data analysis capabilities for smart manufacturing, and electric vehicle and smart city development. An LLM is a type of AI trained on vast amounts of text data and uses deep learning techniques, particularly neural networks, to process and generate language. They are essential for building and improving AI-powered servers. Nvidia provided assistance
STILL HOPEFUL: Delayed payment of NT$5.35 billion from an Indian server client sent its earnings plunging last year, but the firm expects a gradual pickup ahead Asustek Computer Inc (華碩), the world’s No. 5 PC vendor, yesterday reported an 87 percent slump in net profit for last year, dragged by a massive overdue payment from an Indian cloud service provider. The Indian customer has delayed payment totaling NT$5.35 billion (US$162.7 million), Asustek chief financial officer Nick Wu (吳長榮) told an online earnings conference. Asustek shipped servers to India between April and June last year. The customer told Asustek that it is launching multiple fundraising projects and expected to repay the debt in the short term, Wu said. The Indian customer accounted for less than 10 percent to Asustek’s
‘DECENT RESULTS’: The company said it is confident thanks to an improving world economy and uptakes in new wireless and AI technologies, despite US uncertainty Pegatron Corp (和碩) yesterday said it plans to build a new server manufacturing factory in the US this year to address US President Donald Trump’s new tariff policy. That would be the second server production base for Pegatron in addition to the existing facilities in Taoyuan, the iPhone assembler said. Servers are one of the new businesses Pegatron has explored in recent years to develop a more balanced product lineup. “We aim to provide our services from a location in the vicinity of our customers,” Pegatron president and chief executive officer Gary Cheng (鄭光治) told an online earnings conference yesterday. “We
LEAK SOURCE? There would be concern over the possibility of tech leaks if TSMC were to form a joint venture to operate Intel’s factories, an analyst said Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday stayed mum after a report said that the chipmaker has pitched chip designers Nvidia Corp, Advanced Micro Devices Inc and Broadcom Inc about taking a stake in a joint venture to operate Intel Corp’s factories. Industry sources told the Central News Agency (CNA) that the possibility of TSMC proposing to operate Intel’s wafer fabs is low, as the Taiwanese chipmaker has always focused on its core business. There is also concern over possible technology leaks if TSMC were to form a joint venture to operate Intel’s factories, Concord Securities Co (康和證券) analyst Kerry Huang (黃志祺)
RSS