How Elon Musk Can Sidestep Apple’s 30% App Store Fee And Still Keep The Platform On App Store – Apple (NASDAQ:AAPL)
It seemed last week that Twitter owner Elon Musk could be preparing for a showdown with Apple, Inc. AAPL but the billionaire confirmed later that all is well between the two.
A Lose-Lose Proposition: If Twitter is removed from Apple’s App Store, both have a lot to lose, Bloomberg columnist Mark Gurman said in his weekly “Power On” newsletter. If it comes to an “all-out war” with Apple, Twitter will likely struggle to survive, he said. The Apple writer noted that the App Store provides Twitter with access to 1.5 billion devices.
While Musk mentioned that he will build his own phone and operating system to sidestep the issue, Gurman said the complexity of that endeavor makes it highly unlikely.
If Apple blocks Twitter, its top executives could end up testifying on Capitol Hill for weeks, he said. Also, the Apple brand could take a hit, thanks to it being seen as politically biased, he added.
App Store Fee – Big Deal For Musk: Although Musk tried to deflect the attention toward Apple’s censorship, his bigger concern could be about the 30% fee the company’s App Store charges, Gurman said.
Apple will likely give an unprecedented amount of leeway and pull the app if Twitter fails to pay the 30% commission, the columnist said. The 30% cut matters, given that Musk paid $44 billion for the Twitter purchase and now aims to fix the company and resell it or take it public within three years, Gurman added.
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Standoff Far From Over: Although Musk and Apple CEO Tim Cook talked out the differences following the former’s outbursts, Gurman said he thinks the standoff may be far from over.
If Musk circumvents App Store fees by utilizing his own payment system, Cook will be left with no option but to boot Twitter out.
But the Apple CEO may not want it to come to this, Gurman said. Apple’s opposition stems not from the money it would lose from Twitter fees but the likelihood that such a development sets off a domino effect of other apps looking to do the same, he added.
This, Gurman said, will send the entire App Store business crashing down.
Crisis Can Be Averted: There’s a solution that will allow both companies to avoid a crisis, while also helping Musk to get his full $8 for Twitter Blue subscriptions, Gurman said.
The Apple writer suggested that Twitter can build a website to take payments online for the Blue service and other subscriptions, and then urge users to sign up for the social network on the web.
“This is legal because of section 3.1.3(b) of the App Store guidelines, known as the Multiplatform Services rule, which says that subscriptions can carry over from other platforms—including the web—so long as they are also available through in-app purchase,” he noted.
Twitter can charge $8 for web users and $10-$11 for using the app on the iPhone, which will likely encourage users to use the web version, Gurman said.
“By carefully leveraging the App Store rules, Musk could essentially circumvent Apple’s 30% cut and keep his app on the App Store, avoiding a dilemma for both himself and Apple,” Gurman said.
“And I think Cook and Apple would consider that a win too.”
See also: Tesla Bull Says Time For Tim Cook To Step Down: Apple In ‘Serious Trouble’ If Elon Musk’s Company Begins Making Phones
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