Both Elon Musk and Apple stand to lose a lot if Apple takes down the Twitter App from the App Store. Mark Gurman, a well-known columnist, says there is a way to resolve the dispute between the two sides while giving Elon Musk what he wants.
The App Store, which reaches more than 1.5 billion devices worldwide, is the best way for users to get Twitter apps. Elon Musk has said that he could build his own phone and operating system, thus bypassing Apple and Google. However, doing so would be too complicated and therefore unlikely.
Apple would also face a disaster. If Apple were to take down Twitter, then Apple executives could face questions from the U.S. Congress, Apple’s brand would be severely damaged, and Apple would be perceived as politically biased. In addition, the Apple ecosystem would no longer include Twitter, and the Twitter App is the reason many users stick with Apple devices.
Elon Musk said his conflict with Apple was “a fight for the future of civilization” and blamed Apple’s app review system. That’s not a coincidence. His bigger gripe with Apple is the fees charged by the App Store. Elon Musk is signaling to legislators and public opinion that Apple is limiting free speech if it takes down Twitter or in any way stifles the app.
The reality is that Apple will give Twitter unprecedented leeway. As long as Twitter doesn’t violate the App Store’s “golden rule,” which requires it to give Apple a 30 percent revenue share, Apple won’t take down the Twitter app.
That revenue share is a serious issue for Elon Musk. He spent $44 billion on his recent acquisition of Twitter, which he admits was too much money. Elon Musk has made it clear that he wants to fix Twitter in three years, and then sell it or take it public. He also promised to drive Twitter to a user-paid subscription business model and to add new features and upgrade existing ones to boost profits.
Moving Twitter to a fully paid subscription model and recouping the investment in three years is nearly impossible, especially considering Apple will take a 30 percent cut of Twitter’s revenue. To make matters worse, Apple has already cut back on its ad spending on Twitter. (Elon Musk, however, said over the weekend that Apple’s ad spending has been restored.)
So it’s not surprising that Elon Musk, a billionaire, has taken aim at Apple this past week. He knows that Apple has become an obstacle to his financial goals, and he will use free speech as a tool to protect himself.
It was the realization of such a situation that led Apple CEO Tim Cook to step in and try to calm the tensions between the two sides. The two men met at Apple headquarters last week. Elon Musk said he was told that Apple had never considered taking down the Twitter app, a claim that Elon Musk first made.
The standoff between the two sides may not be over. If Elon Musk tries to circumvent the App Store’s fees, Cook will have to consider whether to take down Twitter.
On the surface, it’s a tough decision, but in reality Apple has no choice. If Twitter embeds its own payment system into the app, bypassing Apple’s fee mechanism, then Cook will have to follow its own rules and take down Twitter (but it may give Elon Musk a few days to consider whether to change his decision before that happens).
There may be many who believe that it might be better for society if Twitter is taken down from the App Store, considering that Elon Musk prefers not to review content or ban user accounts. But it’s clear that Cook doesn’t want it to come to that either.
It’s not because taking down Twitter would bring losses to Apple, but because such an event has the potential to create a crisis for the entire Apple ecosystem. If Elon Musk publicly flouts Apple’s rules, it could trigger a domino effect that would attract other companies to follow suit. The entire App Store business model would then collapse.
So Cook needs to get Elon Musk to calm down. The question now is how long the peace deal between the two sides is likely to last. Whatever was discussed during their meeting at Apple’s campus headquarters in Cupertino, California, it’s unlikely that Elon Musk will quietly accept Apple’s 30 percent revenue-sharing rule. (Elon Musk has been critical of Apple’s fee model like this for years.)
The good news is that there is also a fully rule-compliant solution that would allow both companies to avoid a crisis and Elon Musk to get the full $8 that users pay to subscribe to the Twitter Blue service.
Twitter could set up a website that accepts online payments for Blue and other paid services, and then ask users to sign up for Twitter through the Web page. The paid service would then be unlocked when the user logs into Twitter via an iPhone or iPad, and the user would not have to process the payment through Apple.
This would save Elon Musk from paying Apple 30 percent of the cost and only require some credit card processing fees. This is in line with App Store rules. Under the “cross-platform services” rules in the App Store guidelines, users can pay for subscriptions from other platforms, including the web, as long as the same services are also available on iOS.
Elon Musk could charge $8 on the web site and then raise the price for iOS by a nominal 30 percent. Either way, he’d get $8, but such pricing would encourage users to pay through the web site. It’s worth noting, however, that Apple’s rules also require that web-site payment plans not to be promoted anywhere within the iOS app, so such an adjustment may need to be paired with an off-end marketing campaign.
Using the App Store rules, Elon Musk could bypass Apple’s 30 percent revenue share while keeping his app in the App Store, thus avoiding a dilemma for both himself and Apple. In all likelihood, Cook and Apple would see this as a win, too.
