"a platform that is pretty much the other biggest half of the market and in an explosive growth market in general."

this is the crux of it tho. Apple provides more than just a payment processing system. they provide access to 100+ million users who can pay with a single click, and more importantly have shown their willingness to do so.

This is what they are charging 30% for access to.

Up until now these services have been getting a free ride, and they all know exactly how valuable access to that market is worth. They are absolutely willing to pay to access that segment, now we are just seeing the beginning of the negotiations.

Apple says 30%, all the companies reply with 'we cant afford that .. waaahhh!' . some will even pull their apps. In the end, both Apple and the app developers will find some equilibrium. (ie if enough people pull their apps, or the Last.fms of the world can foment enough bad public opinion then apple will lower the cut. If Last.fm and Rhapsody pull their apps, I pretty much guarantee that someone who can make money from those 100million users will fill their place.)

this is how business works. if you want a prime retail location, then it will cost you premium fees, and you make it up with greater customer traffic.

so a better analogy might be:

each paycheck you get $1000. you can keep that (ie not put your app on the iDevices)

or instead each paycheck will be $700. but you will get three times as many paychecks.

Which one do you choose?

This has nothing at all to do with Apple, it applies to any mobile app. So even if you have android, the developers who want to sell apps in Australia will have to pay to have their apps (well, games) rated.

>>> having hired ..... 250 computer science PhD candidates in Redmond alone..."

this is the problem. i dont know how many of you ahve worked with CS doctorates, but they are some of the most obtuse people i know, and dont generally have any idea what it is the average person wants or needs. (which, imho is what drives this industry)

contrast this with apple, who employ top knotch designers to come up with the ideas, and then hire the big brains to implement it.

a good example might be apple's new 'time machine' feature which allows for incremental backups and easy recovery. technically MS has had somethign like this for a while now (probably designed by some giant-brained CS PhD) but it is not very user friendly (so not user friendly that i had never even heard of it because nobody i know uses it) whereas, apple took that concept and actualyl made it 'useful' to the general populous, and that i think is where technological innovation is.

(i am not an apple fanboi, just using them as a contrast to MS, i think there are tons of innovative companies out there, but i have to honestly say that i dont believe MS is one of them, they might create/invent new technologies, but innovation requires a little something extra that MS seems a bit short on)