The above chart shows the debate at the top of everyone's mind right now in the Apple pundit world. Is the iPhone (and iPad) more of a console or a general computer?
More of a Console Argument
There is an argument that the iPhone is more of a console. The reason being that it has a controlled ecosystem of apps that are dictated by the platform holder. The iPhone only allows apps to be installed from the Apple-controlled App Store, therefore making it a console by definition.
More of a General Computer Argument
The other argument says that iPhones are more like general purpose computers because they allow you to run your life from them, do real work, and are basically essential to modern life. The fact that the third party native software that runs on them is filtered through an app store is console-like, but does not make the iPhone a console.
Hypothetically Going the Other Direction
So there are plenty of people arguing that the iPhone is like a console, and that Apple "deserves" the 30% cut that they ask from all developers. Similarly, they point out the hypocrisy of Epic filing lawsuits against Apple and Google for their restrictions, despite being seemingly fine with similar restrictions on Xbox and PlayStation platforms. If you have the "iPhones are consoles" opinion, then this hypocrisy resonates with you.
But let me try to explain, not why my position is right, but why I think this "it's a console, stupid" argument falls down.
The Microsoft Surface Go ships with restrictions that you may only install apps from the Microsoft Store. Is the Surface Go a console? You can turn this restriction off quite easily, so then does the Go turn into a general computer? New Macs ship with similar restrictions, are Macs consoles until you enable installing third party apps?
Does this mean that a product can be a console and then the user can turn it into a general purpose computer? Maybe that is the argument, but I don't see passionate arguments saying that every Mac that ships today is no different from a PlayStation or Xbox unless the user goes into System Preferences to disable the App Store restriction.
The obvious follow up to this would be: if Macs ship as consoles, just like iPhones, but Macs have a toggle that makes them general purpose computers, then are we just one toggle away from iPhones getting that designation as well?
But of course we're not done yet.
Even if we agree that a Mac is a console until you turn on the ability to run random apps, and we agree that the iPhone would turn into a general purpose computer if Apple added that toggle the iOS, then what about PlayStations or Xboxes or smart refrigerators? Let's say Sony added a toggle to allow miscellaneous apps to run on the PS4, would that become a general purpose computer?
I would argue that it would technically (based on our above terms), but in practice it would not, it would still be a console with some random other games on it. The PlayStation 4 is fundamentally a game playing device, and allowing random software to run on it is not going to change that. There have been plenty of open gaming platforms to hit the market, and despite this open nature and the ability to technically run anything, all of them have just been game playing devices.
Update: As Felipe Cepriano points out, there have been cases of people running Linux on the original Xbox and researches repurposing a bunch of PS3s as a supercomputer, but my response to this is twofold. One, "you can run Linux on the desktop" is not a good argument for saying this is a mainstream use case. Two, if researchers were able to get PS3s to be a supercomputer, would that mean that game consoles are even more general purpose computers than the iPad? This is a fair clarification, but if anything it almost proves the opposite of what I think it's supposed to.
The Most Important Device in Your Life
At the end of the day, the smartphone is likely the most important single piece of hardware in most people's lives. You basically must own a smartphone today, and if you're going to get one in 2020 and you live in the US, then 46% of you will get an iPhone and 54% will get an Android phone. That's it, there are no other players in the market, so we don't have a monopoly, but we sure do have duopoly.
A PlayStation is completely optional. So is an Xbox or a Switch, but a smartphone, that's a requirement. If owning a game console was as essential to modern life as having a smartphone, then I'd also be arguing that game consoles need to allow more customer freedom in how they acquire software for their platforms.
Sony's PlayStation 4 has been a massive success for them, and it's one of the top selling game consoles of all time at 112 million units sold worldwide since 2013. Apple sold that many iPhones in the first 5 months of their fiscal 2018.
I think that once products get so huge and so essential to people's lives (and very few products rise to that level), then it's completely reasonable to talk about these products differently.
Epic is no hero in this fight. Their goal is to make more money, and they want to have their own app store on iOS that lets them sell games, taking a percentage of the revenue just like Apple. I wouldn't even say that I want to go down a road where there are multiple app stores on iOS.
What I would say is that in the past couple months we've had tons of stories about apps being blocked from shipping on iOS because they broke rules, intentionally or not. This "is an iPhone a console" argument is losing the forest for the trees. I'm yet to find someone outside of Tech Twitter who finds this argument remotely compelling, and focusing on this hair splitting about what "console" means is such a small part of what's actually going on. Apple, a company I will remind you that I like more than any other company out there, is getting hammered with bad PR and congressional attention, and something has to give.