Epic vs. Apple – A right Battle Royale pt. VII

Tim Cook has a really bad memory.

• There are a number of items that stretch one’s credibility in the testimony given by senior Apple executives which I think has started to tip the balance of the outcome more in Epic’s favour.
• Both Tim Cook and Phil Schiller have given testimony in the court case between Epic Games and Apple which in some parts was unbelievable or was contradicted by evidence presented by Epic.
• Furthermore, the judge in the case has once more returned to the idea of a compromise against which both Apple’s and Epic’s arguments look pretty weak to me.
• The testimony that stretched credibility is:
  • First, Phil Schiller: who stated that he was not aware of congressional antitrust inquiry into the big technology companies.
  • Apple executives certainly have to work hard, but one would have to be living under a rock in Outer Mongolia not to be aware of this investigation.
  • This has been one of the biggest issues in the technology sector for the last 12 months and concerns Apple and the value of Mr. Schiller’s share options directly.
  • Second, Tim Cook: who stated that he has only a feel for the profitability of the app store and could not remember how much Google pays Apple to be the default search provider on iOS.
  • Tim Cook also stated that users did have a choice when it came to App Stores in that they could choose to buy an Android device and avoid the Apple App Store altogether.
  • Apple is a profit-generating machine that sells hundreds of millions of devices per year and in order for this to work efficiently, it needs to be backed by a system that allows laser-focused visibility into any part of the business at any time.
  • This was one of the secrets of Nokia’s huge success in the handset business between 1996 and 2007 and the notion that Apple does not have something similar or better beggars belief.
  • Consequently, I think the court is likely to decide that Tim Cook knows full well how profitable the App Store is which will damage Apple’s case when it comes to deciding the outcome.
• Up until this point, the trial seemed to be going in Apple’s favour, but things have moved meaningfully in Epic’s direction over the last few days.
• Unfortunately, I suspect that this case is going to drag on for years and will end up being decided by the supreme court.
• There is some precedent for this as in 2018 the Supreme Court ruled that American Express could prohibit its merchants from offering alternative cheaper payment methods.
• This fight still has a long way to run and while this is not optimal for the developer industry it remains a great spectator sport.