Apple’s ‘Walled Garden’ Ensures Profit even if You’re not Paying them

Image made with Canva, powered by OpenAI. Graphic by Reece Nations.

By Ben Alfonsin

More users rely on mobile platforms to get online than ever before, particularly those in vulnerable socioeconomic positions.

To Johanna Dunaway, a Texas A&M University professor who studies the interactions of cultural groups and technology, smart devices are a great asset to those who would otherwise not be able to utilize a traditional computer due to circumstantial reasons such as a lack of access to broadband networks or high-cost barriers to entry.

“There’s a big and growing group of people that only access the internet from their phones,” Dunway said.

This raises concern over the role that corporations hold in these intimate spaces. When mobile computing is the place that many go to experience the digital world, what happens when that experience is controlled by a few entities? What does it look like when a company has more control over it than the user that purchased it? When the focus of the online experience is placed on nickel and diming the customer at every turn, how does it affect both the platform and those that use it?

There’s no need to speculate – the reality is already here. Apple’s mobile operating systems, iOS and iPadOS, exemplify how closed software ecosystems can twist their technology to create a walled garden designed to make money off of its users, developers, and other companies, with and without their knowledge.

Software Ecosystems

Apple is given free rein to control any of their mobile devices thanks to the way that their operating systems are designed. All Apple smart devices are closed software ecosystems.

The “closed” part of the phrase refers to the fact that nothing gets on or off a device without Apple’s say so. The “ecosystem” bit means that all of the programs are designed to work in tandem with each other and are unable to be removed. For example, the contacts app can be used to send phone numbers via an email in the mail app or access a home address in the maps app.

This web of software forms an inseparable network all tied to the essential operating system functions keeping everything afloat. Installing third party applications is possible, but it’s much easier not to when Apple makes it so easy to just use their first party offerings that are already integrated into the experience.

On the other hand, Android offers their users a more free experience in allowing users the ability to customize their devices through their open software ecosystem. Although the parent company Google retains control over Android’s development, an Android user may delete any application that they wish. The apps only “talk” to each other as much as the user gives them consent to do. The user can completely uproot Google from their device and only use independently developed third party software if they wish.

Apple doesn’t offer such a degree of freedom. Any program linked to the way that Apple’s mobile operating systems function is unable to be tweaked or removed. This walled garden approach to operating system management gives Apple complete control over anyone and anything caught within the gates of their closed software ecosystem.

Who is it Bad For? 

This authoritarian approach to computing has been weaponized against anyone who isn’t Apple, as was the case with game developer Epic Games. In August 2020, Epic’s free to play video game Fortnite was updated to allow users choose where they would like to make their in-app purchases. Users could opt to buy their “V-Bucks,” the game’s virtual currency, either from Apple’s App Store or from Epic’s own in-app Fortnite item shop.

The inclusion of this option made no difference to the user’s experience. They received the same number of V-Bucks regardless of where they spent their money. But for Apple, Epic was cutting into their profits.

Any purchase made in the item shop circumvented Apple’s 30% surcharge on all micro-transaction fees, allowing Epic to pocket all their earnings. Within the month, Apple removed Fortnite from the App Store. The game is still absent from Apple’s storefront to this day.

V-Buck icon as seen in Fortnite. Both “Fortnite” and “V-Bucks” are protected copyrights of Epic Games.

Apple’s unrelenting insistence on inserting themselves into every little nook and cranny of their operating system software has not only negatively impacted Epic, but also Apple’s users, developers, and other companies in the name of profit. The technologies integrated into iOS/iPadOS are so tightly controlled that Apple essentially has executive oversight into the devices of millions of users. The integration of these tools is so deeply woven into the computing experience to the point that the boundaries between convenience and capitalization is unclear.

From cloud services to personalization settings, privacy options and even development programming, there’s a little bit of enshittification wrapped up in all of it. When a gatekeeper of technology like Apple dictates what is allowed to occur on a device, even innocuous technologies can be weaponized for profit.

Subscription Models Galore

Software as a service, cloud programs, media streaming services — regardless of what you call them, they’re all over Apple’s mobile OS’s.

These programs offer access to cloud-based applications in exchange for recurring monthly payments. Convenient? Yes, but the companies running these programs reserve the right to cut off access at any point.

Whether it be due to a violation of terms of service or because of the discontinuation of the program, the company running the service has the final say. This service model is commonplace nowadays, powering platforms such as Netflix, Spotify, and Xbox Game Pass. Apple has managed to integrate an entire ecosystem of these applications seamlessly into iOS and iPadOS.

These features are introduced to users subtly enough that they may feel comfortable subscribing either because it’s only click away and a few bucks a month, already integrated into their devices, or packaged with tempting bundles and discounts that encourage further consumption. Worse yet, many of Apple’s offerings appear to be made to directly compete with industry equivalents, attempting to cut out any third-party competition. However, it wasn’t always this way. It wasn’t until 2011 that subscription functionality was integrated into the operating system, four years after the launch of the first iPhone.

Image created in Canva, powered by OpenAI. Graphic by Ben Alfonsin.

Apple has since allowed this payment model to spread across all aspects of their computing experience to the point that soon, the iPhone itself may be allowed to be owned on a subscription basis. 

Here’s a quick rundown of some of Apple’s SaaS services: 

  • Apple Arcade: This $5-a-month subscription gaming service offers exclusive games and ad-free variants of App Store games. An alternative to video game console equivalents like Game Pass or PlayStation Plus. The Arcade storefront can be accessed from within the App Store itself without any further downloads, meaning that the technology is present on all iOS devices but locked behind a paywall.
  • Apple Music: Apple’s answer to music streaming services such as Spotify. Priced at $10 a month, users can download and/or search a library of remotely stored music (not owned by the user). This music service boasts its support for high-quality 24-bit/49khz lossless audio, though not all devices can take advantage of this; not even Apple’s own $549 headphones.
  • iCloud: a digital storage service that allows users to save their data. Akin to Google Drive, Microsoft OneDrive, and Dropbox. In exchange for either $1, $3, or $10 a month users can get either 50 gigabytes, 200 gigabytes, or 2 terabytes in storage respectively. This service came under fire when a security hole allowed hackers to access intimate photos from a handful of celebrities. iCloud can be used to store pictures and videos, game data, and back up settings.
  • Apple One: a bundle package that offers multiple SaaS services at $17 a month, including Apple Music, Apple TV+, Apple Arcade, Apple News+, Apple Fitness+ and iCloud+.
  • External Subscriptions: For any subscriptions that fall outside of Apple’s app ecosystem, explained a 30% fee in the first year which is reduced to 15% in subsequent years. Small creators may apply to the Apple small business program to have their fees cut down to 15% immediately (how generous…).

“iMessage on Android would simply serve to remove [an] obstacle to iPhone families giving their kids Android phones.”

—Craig Federighi, Apple’s senior VP of software engineering

What if users want to leave? Often times, users get so ensnared in software ecosystems that they can’t, no matter now much they’d like to. It’s hard to leave when all of your data is locked up in Apple’s garden walls: your family photos, your personal documents, and your contact info. Walled gardens like Apple’s are effective at keeping unwanted parties out, but also have the secondary effect of locking users in.

Apple CEO Tim Cook has resisted the adoption of RCS messaging (rich communication services), which could bridge communication between Apple and Android devices because of this lock in. Cook views RCS as an “obstacle” to users attempting to migrate to Android, as revealed in emails from the Epic antitrust. The European Union has thankfully forced Apple to adopt RCS beginning in 2024, despite Apple’s resistance. Recently, Android application Beeper found a way to enable iMessage features on non-Apple devices, which Apple swiftly took down, citing security concerns.

“At Apple, we build our products and services with industry-leading privacy and security technologies designed to give users control of their data and keep personal information safe,” said Nadine Haija, Apple’s senior PR manager. “We took steps to protect our users by blocking techniques that exploit fake credentials in order to gain access to iMessage.”

Privacy, But at What Cost? 

Fortunately, many programs now offer their users the option to manage how their information is shared with third parties using privacy management technology.

These tools are widespread largely thanks to the European Union’s General Data Protection Regulation. That’s why websites ask for your consent to be tracked nowadays. It’s also why Apple has been forced to integrate such tools into their software. Users can now control Apple’s tracking within any app and request a copy of their stored data.

Furthermore, users can opt out of personalized advertising, effectively cutting themselves out of Apple’s SKAdNetwork. However, they’ll still be fed generic, non-targeted advertisements. These features are hidden away within settings and are not outright shown to the user, because why would Apple want to cut into their own data-selling profits? While the option to toggle Apple’s tracking is tucked away, Apple has intentionally made the choice to make third party advertisers easier to block.

Alongside the GDPR privacy update, Apple introduced the ability to manage tracking within applications. Whenever any third-party application is opened for the first time, the user is presented with a prompt asking to accept or deny data tracking. For example, users may choose to restrict Snapchat from accessing their location or handling their data while using the app.

Apple isn’t missing out on any valuable data by doing this, as the data collected by third party programs is not controlled by Apple, but by the app’s parent company. Apple refers to this as “App Tracking Transparency,” and it’s cutting into the profit models of companies like Meta and Google. 

The Fight for Ad Space 

Personalized ad profiles are by no means an oddity in today’s age. These algorithms track users’ online behavior, recording their actions as data points using markers like cookies. Companies categorize their users into demographic groups, anonymize their data, and then sell it all for profit.

Programs like Google AdSense take this a step further by letting companies target their ad campaign toward specific user groups. Google and Facebook have their own little duopoly on that industry over on the World Wide Web. However, Apple has also managed to capitalize on their user base’s data and third party company’s desire for ad space all at once within their walled garden.

Despite pitching themselves as a privacy-driven company, Apple still collects user data for advertising purposes. They still cater to paying advertisers all without sharing any anonymized data. Apple’s SKAdNetwork, which has been a mainstay in the Apple ecosystem since 2018, allows developers to include advertisements served up by Apple themselves.

Image created in Canva, powered by OpenAI. Graphic by Ben Alfonsin.

Like other ad networks, developers can integrate ads into their app creations and advertisers can pay Apple to have their campaigns displayed to specific audiences. Apple then provides campaign metrics to the advertiser, all without user consent or awareness of where their actions go. Advertisers can even pay Apple to enhance the visibility of their ads within their search algorithm.

Apple’s Search Ad network functions independently of SKAdNetwork and cannot be disabled by Ad Tracking Transparency. It also happens to have dethroned Facebook as the top advertiser on mobile platforms. A developer can pay to feature their app at the top of relevant searches for users within their target audience.

For example, Lyft may choose to appear first under searches for “driving,” “share ride” or even undercut “Uber” in search queries. This pay-to-win advertising model takes the already very pay-to-win approach of advertising pits companies against each other and stacks the cards in favor of the house of Apple, the sole profiteer of these advertising campaigns. 

The Hidden Costs of Creation 

Sometimes, third party developers may opt to allow additional payments post-initial download.

This might involve design tactics like the locking of specific features behind paywalls or offering pro versions of features via subscription models. These micro-transaction payments are conducted within the application but are still overseen by Apple.

To enable these payments, applications must utilize Apple’s proprietary payment API, StoreKit, allowing payments to be serviced through the App Store without ever leaving the application. Users can access previously stored payment methods linked to their Apple accounts to make purchases. However, any attempt to bypass this integration and take payments elsewhere is deemed a violation of the Apple terms of service, and is subject to removal from the App Store.

Apple claims a 30% share of revenue from each purchase, whether it be within the App Store or StoreKit. This nickel and diming of creators even extends into the creation process. Xcode, the software used for developing applications on iOS and iPadOS with the open-source Swift programming language, is offered as a subscription-based software as a service model.

Unlike the traditional free access to Integrated Development Environments (IDE) in other development settings, Xcode requires payments of $99 annually. This subscription enables coding, user data analysis, and the hosting of applications on the App Store. The high cost of entry incentivizes developers to monetize their programs either through selling them for an upfront cost or by bloating them with SKAdNetwork banner ads to make back their money, both of which allow Apple to take their cut.

Failure to pay for the Xcode subscriptions prevents new programs from being posted and also results in the removal of already hosted applications from the storefront. 

“This Segment is Sponsored by…

Apple holds significant control over user and creator interactions on their platform, but this influence is not present beyond the pearly gates of their ecosystem.

However, the company is still able to entice users into entering their walled garden through strategic partnerships and collaboration, all facilitated with a little Apple technology. The Apple Performance Partner Program allows affiliates, selected by Apple themselves, to guide their followers to content hosted within the Apple ecosystem using personalized affiliate links.

Affiliates receive a portion of the revenue generated, so long as they remain compliant with Apple guidelines. For example, podcast hosts would get kickbacks for leading their users to download new episodes on Apple’s podcast app. Apple Arcade, the subscription gaming service, offers exclusive gaming titles developed specifically for the Arcade platform.

Image created in Canva, powered by OpenAI. Graphic by Ben Alfonsin.

Apple invests in original gaming content, paying developers to host their games exclusively on the Apple platform. Developers must choose whether they want to “abandon” their Android audience completely for the chance of getting a slice of that Apple pie, as famed mobile game developer Zach Gage stated when describing his experience in working with Apple. For example, the upcoming Sonic the Hedgehog video game will remain locked away on the platform for the foreseeable future. This strategy of platform exclusivity is common in console gaming, but is relatively new to the mobile world. 

Apple also integrates technologies from other software platforms into their operating system, allowing native Google searches within Safari and through the voice chat assistant Siri. This link between iOS/iPadOS and the search engine is facilitated through an Application Programming Interface (API), a bridge of sorts that facilitates the transfer of data between Apple and Google systems. While this relationship appears symbiotic on the surface, leaked documents from the Epic antitrust trial suggest otherwise.

Google has been paying 36% of their revenue generated from targeted advertisements to remain the default search engine, a deal that netted them approximately $19 billion in 2023 alone. 

Breaking Free from the Garden 

So what? Should we just give up?

The good news is that Apple’s dominance in the mobile computing industry might not last forever, thanks in part to an antitrust settlement with the European Union. Starting March 2024, Apple will be forced to allow users to sideload third-party software onto their devices. Apple devices would conceivably be able to download apps from the Play Store, not just the App Store.

This move is vehemently opposed by Apple, as evidenced by this document published by the company defending their role as software gatekeepers. There is also a growing movement to empower users to exercise more control over their devices. The right to repair movement advocates for users’ ability to modify their devices, including software modifications.

Image created in Canva, powered by OpenAI. Graphic by Ben Alfonsin.

While there are legal software modifications such as jailbreaking, which allows the loading of third party applications and programs that modify OS functions, companies like Apple actively combat these changes through software patches that remove such features, even when they plan to discontinue a device from their product line. Apple has faced fines for not telling users that their software updates slow down older phones over time, eventually rendering them slow and incapable of loading new apps once Apple ceases official support for the device.

The passing of Right to Repair legislation would force manufacturers to integrate tools allowing users to prolong their devices’ lifespan indefinitely. The right to repair also pertains to hardware fixes. Currently, Apple’s parts-pairing, serialization technology detects replacement parts, and renders a device unusable unless the part matches the serialized data.

This planned obsolescence forces users to dispose of entire devices when a single part breaks, leading to the production of electronic waste, or e-waste, in the name of profit. 

Fighting for a Better Future 

Embracing the Right to Repair movement can lead to changes that would help users prolong their device’s lifespans, reducing waste.

Letting users have responsibility over the device that they have purchased without oversight from a parent company not only enables users to customize their devices to suit their need, but allows Apple’s cycle of monetization to be cut out from the picture entirely. However, addressing what to do with devices when they reach the end of their life cycle still remains a concern.

While tech giants like Apple are making efforts to provide disposal information and promote greener product lifecycles, the authenticity of these efforts is unclear nor is it enough on its own. Promoting sustainable practices in technology from the moment that the materials are mined from the earth to the end of its life ensures that no one is taken advantage of along the way. Holding these companies accountable for the environmental impact they’ve created is the only way to guarantee that they play fair, which is crucial in ensuring a greener future for everyone.

Proposals for regulation of monopolistic practices, especially antitrust measures, aim to curb the control that companies like Apple wield. Regulation seems to be the immediate answer to Apple’s overreach into their user’s lives. However, this all depends on proper legal proceedings ensuring that no one else is allowed to monopolize computing like Apple has. Microsoft’s slap on the wrist in 2013 in many ways led to the rise of Google as an data gobbling giant, as they were allowed to take up the empty throne left behind by Microsoft.

Regardless, the current efforts led by the European Union appear promising. The push for standard communication measures like RCS messaging and application sideloading might be the beginnings of a hopeful future in which we as users are free to interact with our own devices as we please.

About Reece Nations