Archive for Apple
Apple’s App Approval Process: Like Dealing with the Federal Government?
Posted by: | CommentsThere have been many complaints about the Apple App approval process and how haphazard the decisions can be (to get a comprehensive understanding of software license agreements for apps, read here). TechCrunch notes:
We’ve seen dozens of apps that are approved the first time, but later rejected for a seemingly small update. And we’ve seen others that are rejected, make almost no change, yet get in the next time they’re submitted. It would seem the the life or death of an app is entirely in the hands of the App Store inspector who checks it out.
Apple’s App approval process reminds me of a similar application system: applying for a trademark registration from the US Patent and Trademark Office. When I used to represent clients in prosecuting their applications, I really had little idea what would happen, as trademarks that should have sailed through according to the law were rejected, and others that were “on the fence” might go right through. For WhichDraft.com, our recent application had been approved, but was then pulled and sat on a supervisor’s desk for 6 months. They couldn’t give me a reasonable explanation why.
Echoing TechCrunch, it would seem that the life or death of a trademark application is entirely in the hands of the U.S. trademark examining attorney who checks it out.
It’s not a good sign when a for-profit corporation’s performance mimics the quality level of the federal government.
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Float That Money! The Politics of Paying Contracts
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During my legal career, I’ve represented both the sales side and the customer side in negotiating deals. While buyers and sellers argued over many issues, one provision always seemed to stay the same: the customer would pay a bill within 30 days. People refer to this kind of contract provision as the “payment terms.”
So color me surprised when I noticed one of my large clients insisting that it would only pay a bill within 45 days. They also pushed back on the seller’s right to terminate the contract for late payments, requiring the seller to give up to 90 days advance notice before it could do so. Floating your money for this extended time period gives you some great advantages when you’re the customer. A customer can use its levitating dollars during the extra time to garner interest or invest the money, money which, in the past, the seller would have had. Presto! Like magic, the extra time means extra dollars for the customer.
What happens to the seller? Think about it: 90 + 45 = 135 days to pay a bill. Most salespeople will tell you that waiting over 4 months for payment will clobber their cash flow and make it very hard for them to pay their own bills. The solution? The seller starts doing the same thing to its vendors. Now, when people negotiate the payment terms in a contract, they’re left in the rather disingenuous position of begging customers to pay within 30 days, then turning around and asking for much more time to pay when it comes to their own creditors.
Besides being a blatant violation of the golden rule (which we all want to follow, right?), the lack of reciprocity makes for an uncomfortable negotiating relationship and hits you with credibility and loyalty costs when it comes to your business partners.
A great example is playing out right now. Apple appears to be taking longer and longer to pay developers who create iPhone applications. Here we have a situation where Apple has tremendous power because it’s the gateway to the iPhone platform. Apple takes all the money users pay for developer’s apps and then relays the developer’s cut to them (minus Apple’s share), per the Apple contract agreed to by every developer. According to the copy of the Apple contract here, Section 3.5 requires Apple to pay the developer within 45 days after the end of the month that Apple received the developer’s payment from a user.
So if you buy my WhichDraft App (doesn’t exist yet, but I can dream, can’t I?) on March 1, Apple doesn’t have to relay your payment to me, the developer, until mid-May! While waiting over 70 days for my money is bad enough, according to this report Apple might be taking even longer. And since Apple controls access to the platform, the developer is left with a difficult choice: keep waiting while her own bills pile up, or threaten to sue Apple, which could provoke Apple into rejecting her apps entirely, effectively shutting the developer out of the entire platform’s market.
The situation makes me imagine Steve Jobs as the Soup Nazi: “No more millions of iPhone users for you!” Sure, there are laws against this kind of behavior, but if you’re a small developer, do you really have the time and money to litigate this kind of dispute? For most people, I think not.
That’s the power of a network access agreement. However, at some point, the pain could be so great that developers just move to a different platform.
Palm Pre, anyone?
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