I'm shocked those defending the Apple tax aren't considering the fact that businesses are just offloading that tax onto consumers making things artificially more expensive for iOS users. Even worse, when you do this you can't communicate why this is the case or tell people you can use the web for cheaper so users feel like you're just scamming them.
Majority of the people defending Apple would abhor Microsoft doing the same thing for windows. Imagine you had to pay Microsoft 30% on the majority of all commerce on windows.
They certainly could have made a lot more money back in the day!
Just a counter point. Apple can charge what it wants. So can Microsoft. So can Sony. So can Nintendo. So can Valve. So can Epic. They all take a cut for access. In many cases it’s exactly the same as Apple’s, 30%. They also have total control over what apps they allow. There’s no legal reason there should be a carve out for Apple saying they’re the only company that can’t do what everyone else is already doing. And no, Apple does not really have a monopoly any more than Sony does for PS5 or Microsoft for Xbox or Google for Android.
Maybe you could argue they’re ALL wrong / illegal. But that’s a different argument.
Because majority or monopoly is defined by their respective market? People keep spinning Sony does for PS5, when they should have said "console". But then the same people will argue console is small market, it needs to be gaming devices which include handheld or any other devices that could play games such as Smartphone. That was actually what Judge Yvonne Gonzalez Rogers spent 5 pages on her EPIC vs Apple case.
And why does a console, which is a single purpose appliance, used for Gaming. Be compared to a multiple purpose tools required for every day modern life?
A Train company has monopoly on trains? People would argue you have different type of transportation and you dont need train? All these argument are useless and completely misses the point.
Arguing whether it has a monopoly may not be a valid either. Standard Oil never had a monopoly, and neither did Microsoft in 90s going by those argument because Microsoft didn't have market shares in other computer like Server. And you still have linux and Mac on Desktop. You have a choice?
Ultimately it is about Anti-Trust. Too much power held by a single company that is also abusing that power.
And on the subject Apple can charge what it want. Yes. Perfectly valid argument in US America. But no, this wont fly in the rest of the world. Visa and Master can charge whatever it want for its network, until EU decide they have to lower their ridiculous fees and not to price average consumers a cut because they could get rebate from elsewhere. The same happened in AUS. Not a business model most countries are happy with.
And of course Apple supporters on 9to5mac and Macrumors are calling to pull out of small countries like Netherland as retaliation. In which I would use the same argument, if it is Apple's devices and Apple could charge whatever they want, it is also EU's market and they can do whatever they want. So yes, pull out if you dont like it.
My point is only that there is a valid argument to be had here. Not that it is so clearly foregone that only irrational fanboys would defend Apple’s position.
That position is a straw man which is unproductive toward the discussion.
Whether you think the EU way or the USA way is right is irrelevant. Countries / unions of countries have sovereignty and will do what they like. Apple can exit the market if it likes, as many companies have already done in places like China, Russia, North Korea, and Iran. I’m not comparing the EU to those places, but I am pointing out the precedence that companies don’t need to do business if the regulatory climate makes it impossible.
They're the wealthiest company in history. Surly it's not a stretch to suggest some of their ardent defenders aren't, at the very least, influenced by what is likely the worlds highest paid PR company.
This is the very reason why I always check if a subscription can be purchased outside of the app store before even considering buying it there. Its usually more expensive as an in app purchase.
That just shows that Apple doesn't have to have a monopoly to compete. They can offer better features, services, etc that people may be willing to pay more for.
Not everyone pays for the extended warranty when they buy electronics/tools but some do because they find value in it.
I think a more apt analogy would be: I'd pay a premium to shop at a store where there aren't any pushy associates trying to get me to buy an extended warranty in the first place.
^ This! At least here in New Zealand almost all perks of "extended" warranties are useless, as pretty much all things you buy here are already covered under our consumers guarantee act.
Nothing is free. An extended warranty is an insurance policy, the purchase price for it is the premium. It's pretty much the same for the original warranty. It may be included in the purchase, but it's still just an insurance policy that the manufacturer has rolled into the price of the product.
So when you have strong regulation like a consumer guarantee act, it just means everything you buy is priced higher to account for it.
Very true, which is why it's such a scam to sell extended warranties here in NZ, as you get almost no value for it. Yet allot of the big retail chains still do it.
It's a reasonable of life warranty in nz. 2 years is standard for products.
But a fridge would reasonably expect to last for all least 4 years so the manufacturer would be obligated to cover it if say the compressor failed. But if it was something like an electric toothbrush then 2 years would be the warranty.
Consumer goods are more expensive in most of Europe, sure, but that's because of VAT - after adjusting for VAT, the price is usually the same.
This makes sense if you consider that customer protection usually covers (1) returns and (2) defective goods. Returns are not exactly a cost to the retailer - they can still sell the merchandise, and replacing defective goods obviously only applies if you stock them. If you weren't selling bad goods, you wouldn't have that problem.
I'd pay a premium to shop at a store where I could buy something quickly. Vs Apple stores where first I have to flag down someone, then they go tell me to stand at some table and wait, then 5-10 mins later someone comes to help me and ask too many questions, then they say in 5-10 mins someone will bring out the thing I wanted. And finally I can buy >:( Even ordering online for pickup my stuff wasn't at the pickup counter and they had to call into the back room. That might be fine if it was unannounced but they made choose a 15 minute window to pickup. You'd think they'd prep for that window. Instead of waiting until the pickup time I could have just gone to the store without the preorder and waited a similar amount.
If that were true of most customers, Apple could easily allow other storefronts, since nobody would be inclined to use anything but their service. Without competitors though, there's no way to determine if Apple's offerings really are competitive.
Unfortunately, they don't have to actually offer better services. Because they already have the customer base signed up with cc on file, they simply have to not be terrible. Then, no one will even try out individual subscription services because they already have good enough with apple defaults.
They do offer better services, though. Subscription wise, it is significantly more consumer friendly in the way they can be managed and cancelled compared to signing up with people directly.
We can and do compare it to the experience we get from the developers of the apps/subscriptions directly. Many are a much worse experience than clicking a simple button in iOS.
More expensive as a one-time cost, but managing subscriptions through Apple allows you to pay once for a recurring subscription then cancel and use it for the remainder of the purchase period. Even one unintended renewal will wipe out whatever discount you got from a direct purchase.
I’m willing to bet that when developers are able to sell directly without the 30% add on, that it’ll be a short time before they start selling at the same price and taking the 30% for themselves.
Apple has a large number of price tiers. You could always drop from the $4.99 price tier to the $3.99 price tier. Or maybe your month-by-month subscription price tier remains the same, but your yearly price tier could drop.
Why would they, though? Apple lowering their cut doesn't change how much customers are willing to pay for an app. Developers set their prices to what the users are willing to pay, and then Apple cribs 30% of their revenue, not the other way around.
If developers really cared about their customers, then they would charge a lower amount if their costs are reduced. The fact that they don’t do this just gives Apple more fuel for the argument that they don’t need to reduce their prices, either — both should either charge what the market will bear, or they should both reduce their prices when their own costs go down. What’s good for the goose is good for the gander.
Apple has 200 billion dollars in liquid cash sitting in their coffers right now. If you're a developer making less than 1 million dollars annually, there is not a chance that in your lifetime you'd be able to acquire even a fraction of that wealth. There is honestly no comparison between indie developers and the largest corporation in the world; it's like saying that the Mom & Pop diner down the street should be subject to the same tax rate as McDonalds because "they both serve food". It's outright lunacy.
Apple is just one company. There are many developers. And Apple has many products. Apple only charges 30% to those developers making a million bucks a year or more. Which means that well over 95% of all developers only pay 15%. Which is a much better deal than any other major platform gives any developer. If those developers choose not to share that reduction in cost to their customers, then that just shows that the developers in question never had the best interests of the users in mind anyway.
> If those developers choose not to share that reduction in cost to their customers, then that just shows that the developers in question never had the best interests of the users in mind anyway.
That argument is a catch-22. If Apple doesn't pass on the insane profit margin they earn off their App Store to their developers, then it just shows that Apple never had the best interests of the developers in mind anyways.
Apple has paid more back to their developers than any other company in the business. Billions and billions. Many of those developers wouldn’t exist at all if it weren’t for Apple. I think Apple has a right to charge a rate for the App Store that is usual and customary, as you see from Sony, Microsoft, Google, and many others. If you want to argue that all app stores should charge a lower rate, then I won’t argue with you. But the application of that rule has to be fair and equitable across the entire industry and not just aimed at Apple. And by the same token, developers should also be forced to charge an amount that is fair and equitable across the entire industry, and thus they should likewise be forced to forgo the concept of “charge what the market will bear”.
> Apple has paid more back to their developers than any other company in the business. Billions and billions.
Yeah, we're going to need a citation here. The only goodwill that comes to mind is their lousy 60gb IDE and the half-finished Swiftlang. They certainly didn't pay for any of the cool BSD features they took from open source devs, but why should they? They're the multi-billion dollar corporation and they're the ones who decided to use permissive licensing, amirite?
I think they're citing Apple's role as a payment gateway as "paid back more to developers than anyone else", since technically on your $2.99 sale, Apple takes that money, and then pays you your $2.10 share.
Meanwhile Microsoft hasn't paid as much out to developers, because Microsoft did not succeed at effectively middle-man that transaction flow the same way Apple has. Apple doesn't do a particularly good job of it on the Mac either, mind.
Meanwhile, Visa, Mastercard, and banks have likely all paid out more to developers in all of time than Apple has, but that doesn't make as good a narrative as comparing Apple as a platform owner, rather than as a financial intermediary.
Apple has the power over the developers, yes. But the developers have the power over the users. And only Apple is strong enough to force the developers to do things that are in the best interests of the users. As one of those users, I choose to have Apple negotiate on my behalf against the developers.
If a developer was charging $2.99 for their app, after 30% cut, they get $2.09.
To get the same amount after the reduction to 15%, they need to charge $2.47.
Apple offers price points at $1.99 (Tier 1) and $2.99 (Tier 2). It does not allow developers to set arbitrary prices.
How do you suggest a developer manages this? Should the developer cut the price down to $1.99, taking home $1.69, and take a 20% pay cut on their total revenue? Or will you continue to begrudge them for not cutting the price, and increasing their total revenue by 21%?
> Aonly Apple is strong enough to force the developers to do things that are in the best interests of the users ... as one of those users, I choose to have Apple negotiate on my behalf against the developers.
Do you recognise that Apple ($123 billion in quarterly revenues) app store policy is the exact reason why you don't see any of that 15% discount trickling down to you, and not greedy (< $1MM annual revenue) developers who are trying to gouge you out of your money?
> Note that 15% decrease in commission is 21% increase in revenue for the developer. For $4.99 you can drop to $3.99 and keep around the same proceed.
No, you can keep less.
$4.99 after 30% results in $3.49 to the developer.
$3.99 after 15% results in $3.39 to the developer.
Why are developers with less than $1MM in annual turnover being vilified when Apple is turning over $123,900MM quarterly revenues, and is the one squeezing them?
Yep. Apple will be able to present this as evidence in any future court cases that while a reduced commission may be beneficial for developers, it does not necessarily reduce prices for consumers.
EU does care about developers very much even if USA doesn't. Credit card tax is the same, the store pays it and not the user, EU realized that 3% was too high for credit cards so they went after Visa and Mastercard and now it is 0.5%. They can get away with 30% in USA, but I doubt they will in EU.
But isn't this fine? In fact isn't it exactly what we want? If consumers were sufficiently upset at the increased cost of apps on the Apple Store, wouldn't they change platforms?
If they're not changing platforms, then the value they get from using Apple's products must be higher than the cost of dealing with higher app prices, mustn't it?
Furthermore, if there was enough of a demand for a more open platform, wouldn't it be able to attract investors to build it?
> user hostility can't exist because being a user is a choice
User hostility can exist exactly at the level that the market (the users) will bear it. If the prices for things were 10x, then users would clearly notice and leave. If the prices are 1.3x where x is almost always < $10, the users simply don't give enough of a shite to do anything about it, which is why it's not users that are upset here.
Hostility to kids can exist exactly at the level that the kids will bear it. If they get beaten 10 times a day, they would clearly run away from home. If they get beaten 0.3 times a day they simply don't give enough of a shite to do anything about it.
Well it exactly illustrates the point I'm trying to make, that policing the interactions of free adults (Apple, app developers, consumers) is fundamentally akin to treating them like children, and at odds with the ideas of personal liberty. As long as the interactions are peaceful, it's better to let them sort themselves out.
But there isn't (end) user hostility here, there's developer hostility. It's using this as leverage against the developer, and developers aren't willing to call Apple's bluff...presumably because users are more excited by Apple than by the particular app.
It causes developers to raise prices, which hurts the user. The user does not know why the prices went up, or that they can purchase outside of Apple for a significantly cheaper price.
It's also not right to say that this is fine since users still use Apple. Remember when Apple said they would introduce CSAM scanning into iOS? Was their entire userbase going to ditch them and move to Android? Definitely not. But they still retracted the move after constant negative press coverage and outrage from consumers. Some of us still want to use these platforms but are upset at Apple precisely because they can change.
Why not? The app can totally tell them! When I eat at restaurants, I see a receipt with tax + tip + SF mandate itemized out. Nothing stops a developer from itemizing out those costs in communication with users though.
Apple's excuse for this restriction is that Apple considers the disclosure "irrelevant information". Any user who wants to be fully informed about their purchase would disagree.
"Apple blocked Facebook from informing users that Apple would collect 30 percent of in-app purchases made through a planned new feature, Facebook tells Reuters. Apple said the update violated an App Store rule that doesn’t let developers show “irrelevant” information to users."
And as app developer make Apple's cut very clear, "Install our app for just $9.99 + $3.00 Apple Tax". Make the last part a nice red-colored blinking badge. Might also add a "Because you love Apple" emblem.
Only if there's any meaningful alternative... Your only option is Android + Play Store which has policy and pricing very similar to the App Store. And you need to throw away your precious $1500 iPhone and all the investment put into the App Store.
I have zero problems with the mobile phone ecosystem that I want regulation to solve. I don't want the government to force USB-C charging onto iPhones, I prefer Lightning. I don't mind paying higher prices for Apple subscriptions, it's worth it to me because they're dead simple to cancel. Let Apple does what it does, if they end up pissing me off I'll switch to Android. I don't want some idiot fucking politicians deciding what charging port an iPhone has.
I can agree with you, as long as Apple allows app developers to clearly spell out that the cost is higher because of the Apple tax and that they have the choice to sign up online if they choose.
I don’t really see why something like the fees Apple is charging for Apple Pay should not fall under the purview of regulation. It’s a substantial rent imposed upon a huge fraction of commerce which will have an adverse effect on the affordability of goods.
It will result in payment processors passing on Apple’s fees to merchants. Payment processors already do not allow you to charge a higher fee to customers using a credit card normally, so merchants must pass on the cost of these fees to ALL customers regardless of payment method. This makes it of concern to more than Apple’s customers.
This is an important point. We might want USB-C on iPhones, we might want subscriptions to not have an "Apple Tax," but do we really want politicians to micromanage industry to such a level?
Personally, I can't help but think of Standard Oil. Plenty of value was made there, drove oil and kerosene prices way down... and they still got broken up.
USB-C I don't have much a of view on but I absolutely think it's the role of government to address the "Apple tax". After safety the main purposes of regulation should be the elimination of rent seeking behavior and I can think of few better examples then Apple.
Apple has restricted the ability of an app to point this out so it's not as well known as it should be. Subscriptions are the easiest to compare because you can order the exact same thing two ways on iOS (in app or web) and there it's easy to see just look at Netflix or YouTube or Spotify for obvious examples of apps avoiding the cost or costing more if you pay the Apple tax.
It's a bit silly this needs to be defended by example though, where else do people think the 30% cut on stuff subscription is coming from? Certainly not a 30% margin cut or 30% for payment processing, it's ~27% Apple tax apparently.
You are thinking from the point of recouping the costs, while in reality it works on a simpler premise: profitability.
Suppose you have your Android app. You are thinking about porting that to iOS. So, for you the calculation will go like this: will selling that on App Store be worth it after paying Apple's fee and cost of porting? If the answer is yes, then you proceed to expand your app's market share. You may as well price your app differently, if you think that will sell more.
You've oversimplified on the assumption there is only a single transaction rate (30%). In the real world there is not (even on iOS, though Apple does make it difficult and force it to be hidden), hence why the real world examples given above did not follow your theory the 30% is built into the initial optimal price setting. It ended more like 3%, i.e. the average transaction rate, for anyone not using IAP and as close to +30% that could be reached using typical $0.99 or $0.49 price increments for anyone using IAP (or just cancelling IAP).
This is what the above examples are actually doing, not a theory of what I think it makes sense for them to do.
In the Apple utopia where everyone would always use their payment method your simplified answer would be more correct and the Apple tax would be somewhere between >0% and <infinity% (though usually marginally less 30%) as well as a unique value per app. It would never be <0 though it would be possible (and almost expected) for the app price difference between platforms to be greater than the Apple tax alone. This method of course is god awfully impossible to actually compare as it's theoretical values of multiple what-if's, hence why I went the "more complicated" route of just explaining the Apple tax has to eventually hit the consumer on some level from a recoup perspective.
I noticed that in games here in Brazil, in Hearthstone, a card game from Activision Blizzard a 40 cards pack cost 279,90 BRL ($52) in the iOS app, if you buy in the PC app it'll cost 99 BRL ($18), almost 200% increase, crazy.
Is it really a tax if people can avoid paying it? Or, if we are to accuse Apple of anything, would it be fraud (keeping less informed users from realizing they can buy things with their web browser) instead of anti-competitive behavior (preventing them from doing so)?
Look at Android and there are alternative stores like F-droid and rampant piracy. I don't even see any ads because of a combination of Blokada and Vanced.
> making things artificially more expensive for iOS users.
It's not artificially more expensive, I'm happy to pay for the service and reliability offered by the App Store.
>users feel like you're just scamming them.
Users feel that way because so many subscription services ARE trying to scam them. As a commenter said below, subscribing through the App Store provides a simple, reliable way to manage your subscriptions and guarantee a cancel if you want without having to deal with whatever dark pattern bullshit apps normally throw up at you.
Choose to pay less and enjoy a world of endless unreliable, shitty apps and shady practices if you want, I'm happy to pay not to.
iOS users are legitimately willing to pay more for things, Apple has worked very hard to make this be the case. Why should small businesses in the Netherlands be rewarded for Apple's hard work?
That’s not really true. Consumers have a fixed willingness to pay and professional app publishers are good at discovering that number, so there really isn’t much passing costs onto the consumer.
Um, no, cost of doing business affects the equilibrium market price. There's no Apple tax outside of Apple's walled garden, so everyone competing outside of it has lower costs and can thus offer lower prices (outside of the walled garden). If you don't, your competitors will, and you'll lose customers.
So yes, in the broadest possible abstract, sure. But we're talking about the sale of digital goods here. What market for game coins, app features, digital content w/e is so intensely price sensitive, apparently fungible enough that switching apps doesn't matter, but then also not at all actually price sensitive since the mostly arbitrary distinction to the consumer "what brand is your phone" means you can charge 30% more?
Like I totally believe you, I'm actually just interested.
> then also not at all actually price sensitive since the mostly arbitrary distinction to the consumer "what brand is your phone" means you can charge 30% more
This distinction isn't arbitrary at all. They're effectively different markets. iPhone owners make more money and spend more money than Android users.
There have been a number of surveys that have shown this, here's one:
If you live in a jurisdiction where you need to pay sales tax, you will pay that sales tax, it will be on top of anything that the seller would normally charge you. You can't escape this tax by going to a different seller in your same jurisdiction. You can choose to move to a different jurisdiction if you don't like paying that tax, but a seller who sells in both will charge you the same subtotal (+ different tax).
Same with Apple's 30% fee - it's unavoidable on their platform so it acts as a private sales tax on their platform. Some developers might choose to essentially subsidize their apple users by charging them the same price on Apple and on tax-free platforms like the web. That may be out of fear for Apple or out of cultural inertia or whatever, but it doesn't make sense, they're the ones leaving money on the table, not the ones who charge people taking into account the cost of doing business with those people on their preferred platform. They could get more profit selling their app for cheaper when not subject to the 30% platform tax, if they think that their pricing with that tax is optimal.
This implies the business is setting the price, which if so, sure I guess. But "creator economy" applications as one example also fall under "digital goods", which means a user is setting the price on a platform to provide a service for $X, the platform takes $Y cut, and then pays the user $X - $Y, but then Apple wants 30% of $X. It's absolutely insane because most platforms out there don't even charge a fee that high so in order to cover the Apple tax they either have to make $0 per transaction and also pay creators less, or just charge consumers $X + 30% up front.
> Consumers have a fixed willingness to pay and professional app publishers are good at discovering that number, so there really isn’t much passing costs onto the consumer.
Prices are set by supply and demand. If you take a 30% cut out of the supplier's revenue, you get fewer suppliers and the price each one can charge goes up because the customer can't switch to a competitor who was driven out of business by the high fees.
My wife was a high level government official in the finance and tax area; she helped me do some calculations showing that the government taxes (direct and indirect on the entire chain) make all the product prices approximately double, some more than triple. Nobody is complaining about this, even if people have no alternatives when paying for utilities or food, while a smartphone is by far optional: you can always buy a cheap phone for communication and you can easily live without apps on the phone (like we did until 10 years ago).
The point? I don't care about rip-off on optional products if I cannot avoid the rip-off on the most basic human needs. I vote with my wallet not to pay Apple anything, problem solved.
Apple allows “free apps” that are entirely ad-supported, never giving Apple a dime (aside from $99/year), yet they are consuming infrastructure: hosting pages, downloads, reviewer time, etc. Why isn’t Apple concerned about any of those costs? Simple: they make overwhelmingly most of their App Store money from the handful of developers that offer purchases. This also leads to perverse outcomes like Apple dragging its feet on scams that make them heaps of money.
Developers are literally subsidizing other developers, and it’s not necessarily the richest ones helping the poorest ones. Someone trying to make money on a $0.99 app is sacrificing more to Apple than Facebook does with their free app.
That’s why I find all these percentage and payment discussions weird: income is so insanely distributed that a lot of this literally does not apply to more than 80% of the stuff on the store. There are fundamental issues that need to be resolved too.
Ok, that's fine. If I can _choose_ to use Apple's services, in exchange for their cut, then that's a trade that I can evaluate as a business. Instead if I want to develop for iOS I am _forced_ to use these services, and pay the cost. That's the Problem.
the app for my phone network just opens a webview where i pay for stuff. then i close the webview and the funds just show up in the app. do they also pay 30% to apple?
If they are following apple's rules, yes, that is what they want. If they catch you trying to skirt it, your app gets pulled from the store until you "fix" it.
This is only allowed for "non-digital" goods - otherwise if you distribute in the App Store. Hell, you can't even link to or mention that it would be possible to pay anywhere else.
well, the thing is iOS itself isn't exactly a separate "thing" from these services. Also it wholly belongs to apple. You don't (and shouldn't) have a "right" to develop for it on anything but Apple's terms.
> You don't (and shouldn't) have a "right" to develop for it on anything but Apple's terms.
Sometimes I wonder what today’s computers would be like if Microsoft had exerted that level of control over DOS and Windows. Forget downloading some random exe you found online, only approved programs can be installed. Would there have been a booming software industry? Would there be so much malware? Would Microsoft have allowed things like the first web browsers?
No comment on the merits of operating systems as walled gardens. I just find it fascinating (and difficult) to imagine how things might have been.
I think a good comparison is to look at gaming. Most consoles have been walled gardens, ever since Nintendo revitalized the market. You end up with centralized power in the hand of a few big companies.
While in pc gaming, small indie studios can create entire new genres, like Factorio did, some which go on to grow and become giants themselves, like Minecraft.
Actually for a while Nintendo's control was circumvented by 3rd party publishers. Modern consoles have the DMCA to thank for maintaining an iron grip on who and what can run on the machines they sell.
I just think we should allow both options to compete and flourish. As you point out, each has their merits. If users end up preferring walled gardens and appliance-style devices, then shouldn't that be what they get?
The choice needs to be independent of the rest of the stack. If Apple wants to make an option where you can lock your iPhone to only installing apps from Apple's store and taking it out of that mode requires a factory reset, that's fine, because the customer has a choice.
Tying that choice to the choice of hardware and operating system is anti-competitive.
> Tying that choice to the choice of hardware and operating system is anti-competitive.
Except you've just invented that arbitrary distinction.
You can't seriously suggest that a Microwave, Treadmill, Car, Calculator, Thermometer etc would all need to invest the ridiculous amounts of time/money in supporting users wishing to install alternate operating systems.
One is not like the others. Modern mobile phones are pocket computers. And for some people the only device through which they can access more and more tools of modern life. Even the browser choice is severely limited.
Why is tying software to hardware anti-competitive? It's commonplace in literally everywhere, from washing machines to televisions to game consoles to CNC machines to cars to tractors. An overwhelming majority of hardware is sold with software included, and is designed to work with that software alone. Why are we trying to force iPhones into a special, narrow category they are actively avoiding? Why do we need to make the distinction at all?
Having the choice is great. It’s nice to use walled gardens sometimes (I’m writing this on an iPad) and to have options like Linux for more control and some tinkering.
It just blows my mind a little when I imagine the walled garden approach being applied more broadly and earlier. E.g. if the creators of web browsers and search engines had all decided they want a cut of sales from websites. (I mean a cut of sales from organic search, not just ads. And all sales made using the browser.)
Those “what might have been” scenarios tend to make me less comfortable with my iPad and my Android phone. But I still have them because I like them.
Interesting point. Comments elsewhere in the thread mention console gaming. That seems like another good argument for closed ecosystems being able to support a big software industry.
> You don't (and shouldn't) have a "right" to develop for it on anything but Apple's terms.
That's one perspective. However I would argue that Apple is big enough, and the number of alternative platforms is small enough, that it is in the Public Interest that Apple be required by the government (aka, Us, collectively), to play by a different set of rules, rules that are decided by you know, Democracy, rather than by fiat.
Yep, apple and google are basically a duopoly, and if you want a "normal smartphone" (basically a device, where you can get apps for your online banking, mainstream games and other content, etc.), there are basically no real alternatives.
If you think that there's enough demand for such a device to justify the expense in developing it, you should have no problems attracting investment to build it, don't you think?
Unfortunately iOS and Android have incredible lock in in addition to more than a decade head start. Just like Oracle is able to continue making $40 billion a year even though their product is ass.
That can be rephrased as "Oracle is continuing to see a return on its investment and innovation in RDBMS from the 80's into the 2000s". Why is this a bad thing?
No, I'm sayin that even though it's not a monopoly, but a duopoly, they should be regulated as a monopoly, because there are no real alternatives, and the barrier to entry is really high.
That depends on how you define the term. If you're suggesting things are less than optimal, I'm perfectly glad to agree with you. If you're suggesting we should use the force of regulation to attempt to optimize them, you've lost me.
Who is being hurt here? Users are clearly flocking to this platform because it does what they want. Who cares that app developers are unhappy? There are lots and lots of smartphone manufacturers. It's a thriving market. Most non-technical folks don't perceive the device and the OS as separate things.
If any company wants to disrupt the market, much like Apple itself did with the iPhone, there is literally nothing stopping them.
Edit:
> rules that are decided by you know, Democracy
At what point does democracy overreach? Is there one? Isn't it "democracy in defense of liberty"?
If we are sure people like so much apple services and integration, should be no problem at all to have alternatives not even directly managed by apple (so that it won't cost anything to apple to support it, except for opening some "store api"), still most users would keep using only the integrated apple services...
The point here is that Apple itself should be able to choose when and how and to whom it open the Apple Store. It should not be compelled to do so by anyone but its own directors and shareholders. If someone wants to sell phones that don't have this limitation, they are free to seek investment and build them.
It's not reasonable to expect other app stores to build their own mobile operating systems, which is why there is momentum among lawmakers in the U.S. to pass a bill that protects the right of users to use alternative app stores and sideload apps.[1] It is unjust for Apple to use its market power in the U.S. smartphone industry (57% market share in Q4 2021)[2] to force users and developers to endure the effects of a 15-30% fee (offset by a 17.6-42.9% price increase) on the majority of revenue generated by app developers, a fee that would not survive a market where multiple app stores were able to compete for iOS users.
Apple's market share is different in the Netherlands, but strong regulations in one major market are all it takes to punch a hole in Apple's monopoly/duopoly position.
I don't think it's reasonable for U.S. lawmakers to have an opinion on what Apple's competition should or should not be expected to do in order to compete with Apple. As I've said previously, if Apple was able to build it's own phone and OS in order to compete with RIM, and Google built its own phone and OS to compete with Apple, there's no reason why sufficient market pressure wouldn't attract the investment required to do it again. Regulation is simply forcing the situation when this pressure doesn't seem to exist. If users cared that much, they would buy Android. They don't. And since they don't, it's completely unjust for their representatives to apply force.
U.S. lawmakers are elected by U.S. citizens to represent their interests, which are not necessarily aligned with Apple's interests. In the case of Apple abusing its monopoly/duopoly power to extract higher fees from developers that are ultimately paid by users, these interests are not aligned. Lawmakers in any country have an obligation to introduce measures that prevent private companies from denying people the option of taking actions (such as sideloading) that would serve their interests, even if they would be counter to Apple's interests.
Monopolies and uncompetitive markets (such as the mobile app store duopoly in many regions) result in deadweight loss,* which hinders the growth of the economy at large. Lawmakers in any country would do well to increase their country's economic efficiency by limiting the ability of companies with high market power to distort the market. Uncompetitive markets are not free markets.
Is there any action taken by U.S. lawmakers that you wouldn't consider an overreach? Apple is also a U.S. company composed of U.S. citizens who should be at liberty to make and sell whatever devices they see fit. U.S. lawmakers should act primarily in defence of that liberty.
> If we will not endure a king as a political power we should not endure a king over the production, transportation, and sale of any of the necessaries of life. -John Sherman
I hardly see how Apple, by taking 30% of revenue from substantially games, is king over the production or sale of any of the necessaries of life.
Apple is just one company among many in the U.S., and there is no legitimate reason for lawmakers anywhere to prioritize Apple's ability to restrict other people's liberties to the detriment of everyone else's liberties, especially liberties that concern everyone else's own property (such as sideloading). Apple will still be able to make and sell whatever devices they see fit, that ability is not in question.
The Commerce Clause* of the U.S. constitution empowers lawmakers to regulate interstate commerce. This clause has enabled the passage of antitrust laws in the U.S., including the Sherman Antitrust Act and hopefully the upcoming Open App Markets Act.
First is the Apple Store, and you are correct you have no right to have your application on it.
Second is the hardware device I paid money for and exists in my pocket. There is no reasonable right that Apple says "Only we can put a program on it, and you will have no ability to run your own programs on it"
We live in a world where hardware makers of all kinds think we own them a permanent rent. It is a poor and expensive path to let them continue.
You can indeed do whatever you want with your iPhone. You can throw it in a blender if it pleases you. That doesn't mean Apple is obligated to make it easy for you. Apple has sold you a device with a given hardware/software configuration, just like Samsung when they sell you a washing machine. If you don't like it, you don't have to buy it.
Users have no choice, the market is a duopoly, and Android app store has all the same problems (because it's a duopoly). You can't feasibly escape platform tax on mobile.
They make it sufficiently arduous to do otherwise that the bar is higher than what ordinary people can reach. The proof that this is not the case will be when a single store has less than half of the Android app market.
With Android, you can at least enable "Install [insecure] apps from 3. parties" or the like. You can then install whatever you like. Just like on most computers. Remember to disable the option after install .
why not exactly? As long as consumers are getting good devices and good competition (which they are), then what's the problem? It's not like the door is closed to innovation here, if any company can disrupt the smartphone market then the takings are all theirs. This is literally what Apple did with the original iPhone. Have you heard of Blackberry recently? I don't see that the incumbents are preventing this in any meaningful way, in the same way that RIM wasn't. Furthermore there are way more than two players in the smartphone game.
There's no competition, which competition exactly? The only tariff change Apple ever done in 10 years was due ... to a threat of an anti-trust lawsuit, you can't make this up. Even Apple basically admits indirectly the lack of competition. You only have two companies, with very similar rules and behaviour, there's no market anymore.
Don't get my comment wrong, I'd say the exact same thing about Google. It's a duopoly without any competition whatsoever.
> if any company can disrupt the smartphone market then the takings are all theirs
I don't think that's possible, even Microsoft failed at it with their massive funding.
https://www.gsmarena.com/makers.php3 loads of mobile phone companies, lots of healthy competition. Non-technical consumers don't perceive the device and the OS as separate things.
Right, but Apple is a mobile phone company, not a mobile app company. iOS app companies exist entirely at the pleasure of Apple, just like companies who depend on the Twitter API.
I disagree with that, Apple is a mobile app company and there's only two in the world.
Twitter as big as it is, is just a website across millions of others. In the mobile app market there is exactly two companies, Apple and Google, that's it.
Does Oppo or Samsung has any power when publishing an app? No? Then they are not part of this market.
Of course, these are not the bread and butter products.
I find it a bit pointless to separate their hardware and software. I know few people who run Windows or Linux on their Apple hardware. For me, Apple is primarily a products company that excels in fusing hardware and software together. They are increasingly expanding into services, too.
Isn't that the whole point? They can only make that money because they build the phones to begin with. They also invested in building the entire platform, literally from scratch. Isn't this just a return on their investment? Aren't they perfectly entitled to it? Why can't phones be loss leaders into mobile app ecosystems, just like razors are loss leaders into razor blades?
Up to a point, no. Common Carrier laws have been around for a long time and had demonstrable benefits. Net neutrality means phone companies can't use their infrastructure however they like. AT&T wanted to just sit on their patent for the transistor but was pushed by the government into to licensing it to Motorola, TI, etc. There's no reason why similar regulations couldn't be applied to mobile app platforms.
Common Carrier laws exist to ensure that infrastructure that occupies one physical location is shared. If AT&T had sat on the transistor patent, then Telefunken would have invented the transistron a whole two years later, and that's what we'd be calling the switches in our computers. Even failing that, delaying the information age by the expiry time of a patent doesn't seem like a big deal when you look at the big picture.
App developers shouldn't be beholden to using Apple's payment processing if they don't want to use it. Along that same line of logic, forcing developers to go through Apple for first-party distribution gives them a defacto monopoly over the iPhone. Apple could charge 85% overhead and there would be nothing developers could do about it.
The only fair resolution here is to force Apple to compete with other storefronts to prove that the value they provide is competitive. Apple could resolve this issue in a number of ways, but they've only chose to make the problem worse; that's why 34 states have come forward voicing their concern[0], and why EU regulators have been stepping in to block Apple's service expansions. They're the largest company in the world, and they deserve the most regulatory scrutiny for it; anything else is a failure of democracy and capitalism.
> monopoly over the iPhone
> Apple could charge 85% overhead and there would be nothing developers could do about it.
That's exactly right! Then fewer and poorer apps would be built on iOS, and users would notice, and they would migrate to other platforms. This has happened plenty of times before. Yes, Apple has a monopoly over the iPhone - it's an Apple product. Just like Sony have a monopoly over the PS5, and Samsung has a monopoly over the WF45R6300AV Front Load Washing Machine.
The only fair resolution would be to allow Apple to do whatever it wants with Apple devices. If everyone at Apple collectively lost their minds tomorrow, they would have every right to pull all apps from the App Store completely. They could shut down the platform. It's literally theirs in every sense of the word. They built it. They own it. They operate it. Just because people are concerned doesn't make socializing iPhones or the App Store in any way reasonable.
> That's exactly right! Then fewer and poorer apps would be built on iOS, and users would notice, and they would migrate to other platforms.
You're admitting yourself that there's not much value provided by the appstore to developers and they only use it because they have not choice (and I do agree with that being a developer myself)
It's called market abuse. Other companies have been broken before for abuse, that won't be the first one.
Apple could decided third party apps aren't allowed and then developers make 0%. It's their platform to decided what to do with. If they think 15/30% works well, then so be it.
There's quite a few ways to slice data, but profit would likely be better than revenue.
Apple does not make 30% profit off of total iPhone revenue, as they do still have to pay for development, infrastructure, and supporting staff.
They have a historical 38% margin on hardware, and just reported a 70% margin on first-party services.
The stores (iTunes Store, App Store, Books) may very well be their lowest margin divisions. Which would make sense, since they are selling other people's products.
Apple is 100% a mobile app company. They guard all the doors, they hold all the keys to the hardware device. Thereby they dictate what you can run on your hardware that you paid for after the sale.
> they dictate what you can run on your hardware that you paid for after the sale.
You bought the hardware from Apple knowing exactly what restrictions they place on the hardware. You were knowledgeable about it and still decided to purchase the hardware.
You can develop apps all you want, but Apple can break them anytime with updates. iOS and macOS are marketed and positioned by Apple differently. One is an open platform, one isn't. This is and should continue to be at Apple's sole discretion. If they choose to update macOS to be a closed platform, they certainly have the right to do so, don't they?
Actually, starting out closed and going more open is legal, whereas starting open and going completely closed would get slapped for anticompetitive. (No, requiring "notarization" does not cross the line for becoming closed and anticompetitive.)
Uhm, the $99/year thing is actually substantial. It is not competitive at all.
I'm pretty sure if Apple let people just download IPA files (like they do with APKs on Android), lots of developers would choose that over the walled garden.
$99/year is literally nothing for most companies. Furthermore, Android has competing app stores, yet by far the biggest one is still the Play Store. Lots of developers (and users) did not and would not chose other distribution methods.
"A potential audience of millions of users" means less than it implies. If I just put my work online, have I got the audience of billions of Internet users? Probably yes, but it doesn't mean much - I still need to tell people about my work somehow so they would be interested in it.
If we think about how App Store can actually actively help us in promoting an app, without specifically buying ad in the App Store - which doesn't cost $99/year, it costs much more - it's not exactly appealing. Epic's CEO showed how bad the App Store search is in finding apps that users specifically search for: https://twitter.com/timsweeneyepic/status/101985252700794470...
And why wouldn't it be bad? Iphone users don't have any better.
> Perhaps the most ingenious move on Sony’s part was its decision to use the PC as a development platform, enabling it to call on the skills of huge number of developers. Licensees now receive a pair of full-length ISA cards that plug into a normal PC. These two cards contain the entire PlayStation chipset, as well as extra RAM and some logic to enable them to talk to the PC. ‘lt’s great having the system inside the PC,’ reckons Peter Molyneux. ‘With most bulky console development systems it sometimes feels like you’re surrounded by NASA control.’
> Such technology doesn’t come cheap, though. PlayStation developers need to cough up £ 12,000 for the full system (which Sony is adamant it doesn’t make money on), although all subsequent software tools and hardware upgrades are free.
> Registering for the portal and downloading the tools is completely free.
Also, if you plan to release a digital only title, you can use the IARC system to retrieve the age rating for no fee, which will allow you to publish in all the participating countries.
All that is left is the cost of acquiring development hardware: you will find more information on this inside the portal.
> On 3/25/2021, the only Nintendo platform for which new development is possible will be Nintendo Switch.
> Development for Nintendo 3DS and Wii U will only be possible for those who have already purchased development hardware.
Those who do not have development hardware will not be able to develop.
> Individual accounts cost approximately $19 USD, and company accounts cost approximately $99 USD (the exact amounts may vary depending on your country or region). This is a one-time registration fee and no renewal is required.
(having some difficulty finding the specifics of the Xbox series X and series S dev kits)
--- --- ---
The point of this is that as a game device, the iPhone is in line with other developer programs and in some cases (Sony, looking at you) quite a bit less expensive.
> Apple allows “free apps” that are entirely ad-supported, never giving Apple a dime (aside from $99/year), yet they are consuming infrastructure
Because Apple doesn't give them a choice! Android developers can host their own apps, set up their own CDNs and downloading/updating infrastracture, pay journalists to review their apps etc.
This is like tying someone up in your basement and telling them to be grateful that they don't have to pay rent.
I suspect as Apple ramps up their second attempt to make profits from Ads, you will eventually be required to include Apple's in-app ad solution if you include any third party (FB/G/etc). See what happened with "Sign In with Apple".
It's the logical move for them as they move into being a more service-oriented business and leverage all the devices they have in the world.
> I suspect as Apple ramps up their second attempt to make profits from Ads, you will eventually be required to include Apple's in-app ad solution if you include any third party (FB/G/etc). See what happened with "Sign In with Apple".
Google Chrome has been restricted from removing support for third party cookies (long gone in competing browsers) because they are also an advertising provider, and such a move has been deemed anticompetitive.[1]
Going more heavily into advertising would give more ammunition to defang anti-tracking protections being built into the platform with technical measures, as well as remove the ability to delist apps which work around those measures (ignoring user preference.)
They could pull off a mandate for SIWA because their competitors couldn't muster strong arguments it was costing them revenue. Such a mandate would be way harder too use some new in-app ad solution for impressions instead of third party solutions.
In-app ads, especially in games, are really scammy these days. Apple's solution wasn't to try to create a competing ad network, but to create a subscription game service that mandated all games be without DLC, IAP, or ads.
Do you really think the hardware costs THAT much too?
Users are already paying a premium for the privilege of buying an iOS device. And Apple knows that usually it will add some pressure on friends and family to have devices in the same family. Everything related to the app store is already paid for, the bandwidth is cheap, maintaining the service is cheap enough and covered by the device premium AND the developer subscription.
Whether the apps are free or paid for (with a big cut for Apple), the company is already making money. The tax on top of everything is just a way to make a lot of money and favor Apple services when compared to competitors in the same segment.
> never giving Apple a dime (aside from $99/year), yet they are consuming infrastructure: hosting pages, downloads, reviewer time, etc
Pretty sure $99/year is more than a dime. It should be more than enough to pay for hosting the app. As for reviews, app developers don’t need those, so if Apple wants to review apps, they should also be the ones paying for it.
It’s the only income they receive in that case, and it is fixed, whereas their costs are variable (e.g. whether some app is downloaded thousands of times or dozens; whether apps decide to post video previews or not; they receive the same money but incur different costs on infrastructure).
App Review alone takes hours per update and is done many times a year for apps. Even if a single Apple employee is involved, and even if they are paid something pathetic like $5 an hour, that $99 will be eaten up quickly from reviews alone.
My point is that it doesn’t add up; Apple likes to claim all these “costs” for “running” the App Store but there are gaping holes in their accounting unless you consider that not all developers are really equal here.
That's a good point. They are taxing paid apps and not taxing ad-supported apps. Which incentivizes the ad-model and therefore reduces the number of paid apps.
This has been the case since the beginning with mobile app stores so who knows how the distribution of paid vs ad-supported apps would be if this wasn't the case.
On the flip side, Apple is incentivized to encourage paid apps and subscription based apps in order to collect revenue. Purely advertising-driven apps just cost them hosting and support.
Historically they have not offered enough options here, such forbidding time-limited trials and not providing specific guidance for companies who wish to sell paid upgrades to new major versions. Apple's (arguably workable) solution here was entirely based on subscriptions.
That said, the ease of use of subscriptions and the high variability of billing amounts/periods has caused them to be the preferred mechanism for App Store scams.
They're nuts. All they are doing is setting themselves up for another set of lawsuits.
Seriously: Apple should focus on selling hardware and be happy to facilitate those payments that people - and application developers - voluntarily process through their system.
All this stupid taxation of other peoples' businesses should stop, it is anti-competitive behavior that they themselves would never tolerate.
Imagine if in the past Apple would have had to pay 30% of their gross to Microsoft in order to be allowed to run their software on Windows.
I think Apple's stubbornness at keeping their commission ~30% underscores how critical that percentage is to their bottom line profitability - both present and future. "Services" is foundational to Tim Cook's vision to continue to grow the company and increase its revenue streams.
Based on latest Q4 earnings, Services is one of the highest growth segment of Apple at 25% YoY (others being Mac at 25%, Other Products at 13%). As the clamor for M1-based Macs subsides, monetizing its existing 500M+ users is the only major revenue-growth area. But what happens if their commission rate is cut in half to 15%? Apple doesn't break out the specific App Store revenue amount or percentage but it must be quite significant.
Hence they're willing to risk these continued lawsuits and regulatory backlash. The day that Services division no longer reports 20%+ YoY growth could well be one when Apple stock faces the reckoning like FB/Meta.
So Apple has around one billion customers. When you look at global income distributions there are not that many more people that actually have enough income to afford their products. Practically speaking while they may grow their customer base a bit further, they cannot double it without making far cheaper products or the world’s population becoming a lot more equally distributed income-wise.
The consequence of this is that they have to lean into inequality: get their existing high income customers to pay them more money. This is why services are such a good strategy and they are so unwilling to give up on that revenue, and it is also why they are planning to launch very expensive (and therefore high profit) new product categories like vr goggles and cars targeted at their existing customer base.
Apple is so ridiculously big that it is fun to map them back onto the world economy. Their yearly revenue is 0.4% of the world economy. Their market cap is 0.6% of global wealth. But that does present a real challenge to Tim Cook to keep growing. If apple doubles again they will be 1% of the world economy. Does that make sense for what amounts to a luxury brand?
And the problem for them is as they shed the luxury brand and become mass market general computing... the antitrust regulations will just keep accumulating, increasing the pressure. A vicious cycle.
Yes, ironically, a piece of software that becomes used by everybody, or at least everyone it ever might be used by, becomes worthless in the eyes of investors, because merely tracking with population growth would be seen as a sign of a dying business. This leads to self destructive behaviors as the product tries to monetize itself in unpleasant ways and expand into non-core competencies. Dropbox is an often sited example.
What if you planned a complete software product lifecycle and create a pool of talented teams / organizational modes that can adopt stewardship of the software at various life stages with the goal to smoothly transition between stages without harming users or workers?
Lets say it looks like this for the sake of argument: stage - organizational mode - goals
Idea / Proof of Concept - individual or team - prove the idea out
Growth Software Product - startup - carve a space for the product, grow its useful user base to a target number, transition to Utility
Utility Software Product - utility - maintain the project and optimize costs and delivered value, transition back up to Growth or down to Archived
Archived Software Product - library / anthropology - tell the story of the project, minimize costs, make it available to a wide audience, organize its community, transition back up to Utility
The idea is to have a pool of teams and organization templates where you aim to "pass the baton" between modes depending on the lifecycle stage of the software, and individual teams and orgs are rewarded based on how they meet their objectives including delivering a seamless transition to the next stage.
That's very well thought out. Sadly feels overly aspirational when just "keeping the lights on" is often underrated and neglected in many companies. Maybe eventually a good business will have the foresight to think of their organization in terms of different lifecycle stages.
Thanks. I agree that today's profit-oriented organizations are generally unsuited to act out this kind of product-centric methodology. Maybe future nonprofits or DAOs or something could pull it off.
How can you ignore this past week when this past week is _directly related_ to their account growth falling off a cliff because of the exact over-saturation of the market we're discussing here?
Yes, they're not valued on making $10 billion per year. That P/E means it would take 24 years to make your money back. They're valued so highly because they're growing and it's expected that in ten years, it'll $30 billion per year, cutting your return time. If growth ends, then this overvaluation corrects itself.
24 years to earn your money back works out to a 2.9% annual rate of return, which is a little bit above both the 20 and 30 year treasury yields (~2.23%), reflecting a small but positive risk premium for a big blue-chip company that is generally seen as a low-risk investment.
This looks like another example of how low interest rates cause stock valuations to run up until their long-term yields end up only slightly higher than bond yields. Investors expecting that rapid growth to continue might be disappointed.
When companies aren't growing explosively they're worth (looks at INTC) 10 P/E. If AAPL hit their ceiling they'd be overpriced by 2.8X. (Hand-waving away dividend and buyback differences)
Ironically, this 30% and the pivot to "Service" is why iOS devices get updates after 3 years while Android phones just become paperweights.
Android OEM are incentivized to sell as many phones as they can. They only make money on new hardware. Apple on the other hand still makes money on older hardware as long as the user still buy from the ecosystem. So it makes sense for them to keep the products working longer.
>Ironically, this 30% and the pivot to "Service" is why iOS devices get updates after 3 years while Android phones just become paperweights.
Apple's support window advantage long predates their services initiative.
Every flagship iPhone since the iPhone 4s in 2011 has gotten at least five years of OS and security updates.
If you count years where you only get a security update, but not an OS update the way the Android ecosystem does, they have devices that have gotten eight years of support.
If it's just a question of revenue, Google can certainly afford to update it's Pixel devices for more than three years. Heck, they can afford to offer customer service and technical support hotlines the way Apple does as well.
However, the claim made was that Apple only started offering a longer update period after they started calling out service growth. This simply isn't true.
They can except... They don't control the SoC! Qualcomm decides if a SoC gets to boot a newer Android or not. And it’s in Qualcomm’s interest to sell more chips, since they get no revenues post sales; only maintenance costs.
That claim doesn't hold water. If people doing unpaid community support can produce custom ROMs for older devices that are no longer supported, Google can support older devices too.
Not to mention the ability of any company to make demands of their suppliers. If Google can demand device makers not use a fork of Android, they can demand suppliers offer support for their products.
Google simply doesn't care, because the customers they care about are the advertisers, not device purchasers.
Great point. Apple is lauded for their 5-6 year of iOS updates but it's not an altruistic move - the updates enable users to keep using their apps/services.
Also there's an upper-bound on price for an iPhone Apple is able to charge and if I can speculate, the "Pro" lineup does not outsell the "base" iPhone significantly. For one, there isn't enough product differentiation for an average consumer to pay the $300/40% price premium.
So in the world of 3-4 year iPhone cycles, keeping up the walled garden and monetizing those within is the surest path to revenue growth.
Apple's approach is even simpler from a technical point of view. The oldest supported iPhone is the second generation of 64 bit processor. There were almost certainly problems with the first generation (of anything). The oldest supported Watch was the first with (a now mature) 64 bit processor. They made it mandatory for apps in the store to be 64 bit.
Android meanwhile supports 32 and 64 bit, multiple instruction sets, multiple (incompatible) SOCs etc. That is a lot more challenging.
>The oldest supported iPhone is the second generation of 64 bit processor. There were almost certainly problems with the first generation (of anything)
The iPhone with the oldest version of a 64 bit processor (the A7 used in the 2013 iPhone 5s) fell out of support after six years because it no longer had enough RAM for the new version of the OS.
Google figured out the game better than that. After a few years there's no ongoing costs for those devices, but they still take their vig if users continue to use them.
Please don't attack services in general. There's nothing wrong with selling your OWN services.
Apple TV+ and Apple Arcade are examples of good services where Apple are commissioning and paying content producers. The services are good value, good quality and have competition on a level playing field (e.g. Netflix directly compete against both and don't have to pay a commission to Apple despite both their games and video services appearing on the App Store).
Other services from Apple like cloud storage, Apple News and Apple Music are more debatable value but they have competition so if you don't like them, use something else.
The App Store is different because you don't have an alternative. It is a parasitic system where where 70% of revenue (not a guess, that's the real number according to emails in the Epic lawsuit) comes from loot box grifting in games and there's literally no alternative to Apple's 30% tax. It is a poison chalice from top to bottom.
I honestly prefer to use Apple payments and Apple "Hide My Email" as I'm sure a non-trivial number of users do. If they could just refocus on making developers prioritize that flow for users over outside payment systems (e.g. create a flow requiring users to agree to disclose their private information to the app maker and third parties in order to use an outside payment system) then they'd keep most of their customers in the Apple ecosystem and keep the payment processing.
The fact they are trying to keep a stranglehold on this revenue seems penny wise and dollar foolish. Clearly regulators are gunning for them and it's not long before they lose this and don't get to set the standard.
> I honestly prefer to use Apple payments and Apple "Hide My Email" as I'm sure a non-trivial number of users do. If they could just refocus on making developers prioritize that flow for users over outside payment systems (e.g. create a flow requiring users to agree to disclose their private information to the app maker and third parties in order to use an outside payment system) then they'd keep most of their customers in the Apple ecosystem and keep the payment processing.
It's pretty good stuff.
But they seem to be admitting that the payment processing is only worth a 3% cut. And you wouldn't charge apps for the email hiding.
They’re charging the apps for distribution, which is a lot of infrastructure and a lot of human-driven process that doesn’t come for free. There are good platform reasons for not allowing alternate distribution methods.
There are no wholesale prices for digital goods so they get tacked on as fees. All Apple is really doing is asking developers to give their customers an all-in price that they’ll display. You as a developer are free to raise your prices 30% on iOS, and many in fact do.
Every segment of every market does not need to be relentlessly competitive. Apple’s App Store rules are obvious, and if you don’t like them, you’re free not to develop for their platform (which itself is the product they sell to their consumers; not your app and of which the iPhone is only one component).
You are not entitled to be profitable any way you want; you have to find a niche in the market that’s profitable and if you can’t make money on iOS, the market solution is to just do something else. Countries — especially relatively small ones — that try to legislate around this are just as likely to be seen as more trouble for Apple than they’re worth to have an official presence in.
> They’re charging the apps for distribution, which is a lot of infrastructure and a lot of human-driven process that doesn’t come for free.
Yes but they're overcharging.
> Every segment of every market does not need to be relentlessly competitive.
It's significantly better for consumers if a 27% distribution fee faces competition.
Alternate app stores are a poor way to achieve this, but that doesn't mean the status quo is good.
> You are not entitled to be profitable any way you want
Same to apple. They want to control things they shouldn't have this much control over.
> Countries — especially relatively small ones — that try to legislate around this are just as likely to be seen as more trouble for Apple than they’re worth to have an official presence in.
If they get that aggressive, then thank goodness for the EU.
> Same to apple. They want to control things they shouldn't have this much control over.
I think that’s their right as a platform owner. They have no responsibility to sellers setting up shop in their walled garden. If the App Store was the busiest shopping mall in the world, they’re not obligated to make rent cheap; if your business model doesn’t work, apples rules are not new and you knew them before rolling the dice on an iOS app.
Under US law there is no guarantee it’s possible to craft a law that would stand up in court anyway.
> If the App Store was the busiest shopping mall in the world, they’re not obligated
If there were only 2 major places in the entire world to buy things from, and Apple had 57% of that shopping revenue, then yes, absolutely they would be obligated to do a lot of things.
Is it really nuts though? This should be a completely unsurprising move, given this is exactly what Play Store did in South Korea [0]. That's three months old, has anyone heard of a followup suggesting their solution is being treated non-compliant by the regulators? This solution also seems to be in line with what the US courts found in the Epic vs. Apple case.
> Imagine if in the past Apple would have had to pay 30% of their gross to Microsoft in order to be allowed to run their software on Windows.
Anyone making software for the Xbox has to pay Microsoft. Why is this different?
Edit: Good grief, people. I am not pro-App Store. But jacquesm is literally claiming that Apple is nuts and that their solution will never fly. But everything we've seen so far in analogous cases suggests it will.
> That's three months old, has anyone heard of a followup suggesting their solution is being treated non-compliant by the regulators?
Yes, reported on yesterday by Reuters [1]:
> As for Google's plan, the official said the KCC was aware of concern over Google's planned policy of only reducing its service charge to developers by 4 percentage points when users choose an alternative billing system, and the regulator is waiting for additional information from Google.
> "As a result of any policy, if app developers find it realistically difficult to use an alternative payment system and resort to using the dominant app store operator's payment system, it would not fit the law's purpose," the official said, adding that this stance would likely be reflected in the final ordinance.
Consoles are a super interesting comparison. In principle, I agree that they should have to be open too.
On the other hand, consoles' hardware is nearly always subsidized by expected future software royalties, while Apple makes a lot of profit just by selling the hardware alone.
But these are internal details that shouldn't matter at all when deciding if a business practice is valid or not. If I want to sell a toaster (regardless of whether it's sold at loss or gain) that only toasts bread that I bake, I should be perfectly entitled to do so. And if users flock to my toaster due to its simplicity, predictability, and ease of use, then the fact that other bakers are upset about this shouldn't matter in the least bit.
Whether a toaster or console or smartphone is sold at a loss or gain is an internal detail that isn't even public. It's totally irrelevant.
Well, sure, and you can try to and some even succeed in jailbreaking their iOS devices. That doesn't mean that Apple should be anything but hostile to such attempts.
We've reached the first point in recent history where we're really seeing products with actively anti-user features at scale. Coffe machines that only take proprietary coffe pods, printers that have DRM on ink cartriges, and more. These are all on a much smaller scale than a computing device that we use for a significant portion of our lives, both for management and entertainment.
Another comparison would be a car that can only drive to restaurants that agreed to give the car company 30% per customer that arrives in one of their cars, and there have to be fences around it to make sure you're not walking to the restaurant next door by foot.
I'm not sure I agree with "I should be able to sell anything with any anti-features I want" anymore to a certain extent, since it does affect such a large part of our lives, as general computing machines.
Arrangements that subsidize a large purchase (printer, paper towel dispenser, coffee maker, razor, smartphone, tractor, etc.) by locking the purchaser into an exclusivity agreement for consumables from the same company (ink, paper towels, coffee pods, razor blades, smartphone apps, tractor maintenance, etc.) are as old as these have been feasible. This innovation tremendously benefits both parties. I'm not sure why you'd dispense with it really.
A simple line of reasoning, like the Earth being flat. Big companies love it because it's the perfect way of avoiding competition, leveraging existing monopolies to build new ones, locking customers, using assimetry of information to hide true costs from them, etc... It has plenty of regulation against it, although it is not truly enforced thanks to deep pockets.
It's a line of reasoning that follows the original intended definition of liberty. Anything I should be free to do in my basement and sell to my neighbours I should be free to do at massive scale. There's no avoiding competition. If someone out there innovates the next generation of personal computing, they will eat Apple's lunch, just like Apple ate RIM's.
It's ideological because this whole idea of forcing terms onto Apple to open it's store is basically socializing parts of Apple infrastructure and parts of its workforce. To me this is totally unacceptable. Apple's innovation has advanced the state of the art a great deal. This company literally invented the concepts that we're now seeking to rob it of. Why can't we just be grateful that the free market was able to produce such a marvel, be glad for the nice devices we all carry around, and leave the org and its investors well enough alone?
Also which economic theory am I ignoring? Didn't Apple itself enter the smartphone market by massively disrupting the existing players and forcing the entire industry to play catchup for over a decade? Didn't they do this without any regulatory intervention to weaken the market incumbents at the time? Why can't we expect that the next smartphone-level innovation to personal computing will come without similar intervention on our parts?
Lol sure let's invalidate all patents for starters, if you want a free market. Copyright next. See how much will be left of Apple's hegemony. Or just admit that regulations are a thing we use to get socially optimal outcomes and not get trapped in market failures like monopolies, duopolies, and negative externalities. Your fetish for unregulated capitalism is not as popular as you think even in the US.
>Apple makes a lot of profit just by selling the hardware alone.
Do you suppose that means Nintendo, which has sometimes turned a profit on their consoles, should have an open system? Interesting take, and I wonder what, in your mind, the threshold is for "makes a lot of profit." I.e., if Apple cut the price of their devices to make as much profit as Nintendo, would they get a pass?
To be honest, I haven't thought about that much, and don't have the mental capacity right now to really think about the answer. It's a good point.
On the spot though I'd say that that would make Nintendo the ones that should open up their system in my mind though, provided they are making a sizeable (10% including stuff like R&D over the span of a few years) profit.
It would be interesting to see the reaction if consoles had to be open to other store (my opinion is that they shouldn't since their are not general purpose devices per se). When the Epic Game Store appeared, the pc gaming community was up in arms against it because it was a Steam rival (sort of a tribal reaction) but were complaining against the NVIDEA GPU monopoly
Why? Because how much you have to pay is determined by how much the platform owner can get away with. There is no fundamental logic to it other than market power. Why don't you compare to better, open platforms instead - desktop apps, the web. Why does everything has to be as shitty as something else.
I'm not comparing to those other cases because the question being asked was "what if Microsoft had been charging a fee", so it seems rather relevant that Microsoft has been charging exactly that kind of a fee for a couple of decades.
I hope we can agree that laws need to apply to everyone equally. For a long time, it's been fine for platform owners to charge e.g. licensing fees, for store owners to charge a fee, etc. Why is Apple different, such that they cannot charge such a fee while others can? If they're not substantially different, do we expect that going forward nobody can charge a fee?
> Why is Apple different, such that they cannot charge such a fee while others can?
The difference is market power.
Yes, literally if a company is big enough, then they should be legally prevented from doing certain things that anti-competitively take advantage of it's market power.
For video game consoles, I am less concerned about the platform taking a fee, because there are 3 major consoles, as well as an absolutely huge PC gaming market, and the PC gaming market is very open
Where as for smartphones I am concerned, because it is a 2 company duopoly, and there is no major open competitor, with significant market share.
> I'm not comparing to those other cases because the question being asked was
The question being asked was specifically about windows, and wasn't about Microsoft being "good", but rather about how Apple benefited from platforms being open.
> If they're not substantially different, do we expect that going forward nobody can charge a fee?
Doesn’t Google allow alternative app stores to be loaded onto Androids though? If that’s the case I’m not sure the comparison makes sense because consumers aren’t forced to use the Play Store to install software. Give Google 30% of sales or have no sales at all the way it is for iPhone developers.
Yes, but side-loading, either directly or through third-party stores, prompts the user with dire warnings, making it almost impossible for developers to realistically use that method.
The exceptions are hardware manufacturers that ship custom versions of Android that have their own stores.
If it weren't for that detail, or that Google warned all installs about the same thing (even from their own store), I wouldn't have a problem with it.
> Anyone making software for the Xbox has to pay Microsoft. Why is this different?
Historically, writing software for the Xbox meant getting dev kits not sold to the public as well as access to private documentation. And there was a level of support from Microsoft game studios could expect. The deals between studios and Microsoft could also include co-marketing or exclusivity. Plus to get an Xbox tittle out you needed a distributor (remember brick and mortar stores) so it really was B2B. Today I wouldn’t be surprised to see Microsoft just going with the Store model and taking a very small cut from indies. But distribution is nowhere as hard and expensive as it was back in 2001.
I really don’t think it’s the same as Apple that advertise it’s developer program to individuals. Apple’s developer program almost seems like a consumer product (term and conditions are pretty much the same for every individual dev out there, it’s a flat fee).
I think that the Xbox should be an open platform. Microsoft has built in enough sandboxing and security that I’d hope they could handle arbitrary downloads while offering their store + online services for games that use their store (provide actual value for their cut).
It’s not like they make money off of the hardware, and their new push is in Gamepass subscriptions which people will still want.
There will of course be people who pirate, just like they do on the switch, but piracy is likely to be so small that it won’t affect Microsoft’s profits.
Right because you have data to show that piracy takes away more than 30% of small devs' desktop games' revenue? Given that most pirates wouldn't actually buy it if they had to pay?
Smaller developers publish PC games just fine, you know, choosing whichever store they like most, or choosing to entirely self publish. This is how it should be everywhere.
I'm not sure that Google Korea blog post supports your assertion. It says:
"97% of developers don’t sell digital content and are not subject to any service fee for having their apps displayed in the Play Store or for any of the services listed"
> Anyone making software for the Xbox has to pay Microsoft. Why is this different?
It's different because Apple sells and markets their hardware as general-purpose computing devices. An Xbox is a gaming console and that's what it's sold and marketed as.
There is literally no legal distinction whatsoever between general-purpose devices and non-general-purpose devices. I don't know where this legal myth on HN came from, but there's no law anywhere saying Apple has to be one or the other, or that marketing has anything to do with what a device should be allowed or not allowed to do, nor does the law define these terms anywhere.
Nobody's saying that this has anything to do with legality under current laws. Neither does whataboutism that this is usually in response to, for the record.
The part of the “general purpose computer” that Apple does not display in its iPhone marketing is the “computer” part including the original “there’s an app for that” commercial. Arguably also the “general purpose” part in that a general purpose computer will run any calculable task, and App Store + OS policies prevent this or at least make it difficult and the messaging around this also comes out of their crack marketing team. Feet to the fire, Apple would probably call iPhones pachinko machines before they ever called them general purpose computers in any part of their marketing.
What do I know, but I see Xbox as more than a gaming machine with its steaming and web browsing features, and iOS as less than general-purpose since I can’t execute code outside of a very narrow and curated api. OSX is general purpose, no doubt, but I’m not sure it’s relevant since I can basically run whatever I can compile.
I cited one campaign that very clearly answers the question posed. It was not incumbent on me to go through all of their campaigns and conferences and earnings calls and whatever else. Although, this campaign was hardly the first time Apple suggested their mobile devices could replace a computer.
> plus a computer is not by definition a general purpose device.
What are we even talking about then? It's not like this campaign was suggesting the iPad would be a fantastic purpose-specific replacement of my TI-89 or my web cam. What, based on the context of this discussion, are we supposed to understand "general purpose device" to mean if not the colloquial definition of a computer?
I looked at that ad you posted earlier and refrained from commenting at the time, but if you take the ad at face value, Apple is claiming that iPads are not computers, or at least not the general purpose ones that culturally we refer to as computers (desktops, notebooks) and do this in both the slogan (“your next computer is not a computer”) and by demonstration, inviting the user to think of iPads as something else. It’s not an ad for tablet computers, it’s an ad for iPads.
Technically, iPhones and iPads are absolutely computers. General purpose computers. In fact arguably they are even more general purpose because you can easily and non-trivially manipulate them in 3D space in ways you probably wouldn’t even manipulate a notebook computer, which makes the inclusion of various sensors in the body of the device more useful to a broader array of applications. I will absolutely use my phone as a wallet in the way I never would a MacBook Pro. Apple has absolutely never marketed them as general purpose computers though even though I think you and I can agree that’s exactly what they are. Duplicitous? I think so, but it’s also the exact same strategy that game consoles benefit from today and in either case I think both Apple and game console makers are at the moment on solid legal footing.
We'll have to agree to disagree. This ad to me looked just like the "Mac VS PC" ads, where Apple wanted to convey to you that their personal computers weren't "PCs", but something else, something better. But, they very clearly were advertising the product as a replacement computer.
They want people shopping for iPads, not tablet computers. I'll grant you that, but that's just a marketing gimmick as far as I can tell. This ad to me says "don't bother with another laptop because the iPad can do the same stuff, but better (and you might look really cool using it)." It's a marketing campaign, so it's going to resonate with people differently.
I still don't know anyone that went out and purchased an Xbox to replace their laptops, but I know plenty of people that have done so with iPads. And they're checking email, commenting on Facebook, taking pictures, editing video, surfing the web, managing todos, making video calls, watching video streams, playing games, and doing many other activities that they used to on a laptop or desktop, while Xbox users play video games, maybe consume media, and possibly deal with being called racist names on a voice chat.
We probably will have to agree to disagree, but I’m trying to see the message I think Apple intended to sell and I think trying to sell a replacement for or an alternative to computers is a lot more in line with how they’ve always marketed iPads. The reason to look at their intended message specially is because this is the marketing gimmick that colors their PR and lobbying campaigns.
I don’t think it is severable from the manner console manufacturers operate either. They sell locked down computers with operating systems and license the software that can operate on it. In terms of functions and capabilities, they’re as Turing complete as any other machine, you just have to jump through extra hoops to run unlicensed software and they take explicit action to prevent this or make it more difficult.
The intended use is basically irrelevant. A device that’s there to operate Facebook or Spotify or a device that’s there to operate Halo or HBO is functionally still just an entertainment device. Where they significantly differ is that Apple licenses a broader array of software and Sony, Microsoft and Nintendo license mostly entertainment software (games, video apps, music apps and comic book readers). If you actually bought an Xbox to do the functions you could on a Windows PC, you would be disappointed but not because there’s some inherent Xbox property preventing this, but because Microsoft does not license Xbox software in the manner Apple does iPhone and iPad software nor allow unlicensed software to run the way it does on Windows. That’s a corporate choice, and because that corporate choice was made, it would be a bad choice to buy an Xbox for those functions or else some people might actually choose to use an Xbox to check their email or do whatever else they do on their PCs. If you think about it, $500 is not bad for a decent gaming computer that lets you get rid of your PC.
I think it was pretty evident that computers were going to continue to get smaller, handheld, wearable, what have you. Apple didn't invent the space, they just made the product that got people to adopt the new form factor en masse. That's no small thing. But, I don't think they deserve near full control and a 30% tax on all revenue transacted on that form factor as a result. We wouldn't have tolerated it if Microsoft had done it on the desktop environment. We wouldn't have tolerated if Microsoft forced all purchases through their platform.
We've backed ourselves into a weird spot. It's essentially impossible for a new platform to develop in the computing space. Google did everything it could to kill off Windows mobile. Mozilla took a crack at it and failed. There's an illusion of choice, but it's quite difficult to get by without an Android or iPhone. That became very evident to me with the pandemic. Virtual doctor visits, check-ins, mobile passports, and so required a device running one of Android or iOS/iPadOS. My wife isn't fond of smart phones, but we had to get her an iPhone to participate in society. Companies don't want to support web sites for mobile and Apple's support for PWAs is pretty bad, forcing you back into their app ecosystem. Moreover, switching platforms is quite expensive and often impractical, in no small part because your purchases are bound to a particular platform (desktop licenses, on the other hand, often work across operating systems or charge a nominal fee to have licenses for macOS and Windows).
That's a very long-winded way of saying, sure let's start with opening up the App Store for iPads. I think we should do it for phones, too, but I'll take what I can get. For many people, their phone is their "computer" these days as well and as I said, I think that result was inevitable. We can argue about whether smart phones are general computing devices, but I'd argue the only reason they're not as "general" as desktops is because Apple won't allow them to be. Microsoft and Samsung both had interesting technologies (Continuum and Dex, respectively) that could turn your phone into a portable desktop that showed promise for what the space could be. But, people make do with the restrictions placed on them, if for no other reason than switching is expensive and hard.
Regardless, smart phones a completely different class of device than video game consoles. People run many of the same tasks on phones & tablets that they would on a laptop. Despite that, video game consoles are more open. I can buy video games from a dozen different stores, get them on a secondary market, and I can lend them out to people. But, let's open up the consoles too if that's what's holding us back with Apple and Google.
Well, first to set the context. Most money on the App Store isn’t being spent on the little Indy developer. It came out in the Epic trial that the large majority is being spent on games, in-app purchases and loot boxes on pay to win games.
Now, let’s talk about the challenges on the App Store for the Indy developer. 15% vs 30% is the least of it.
1. You have to be discovered among the millions of other apps. The App Store is horrible for discoverability. Even if you do get a one day pop from it being spotlighted, that’s fleeting.
2. The value of an application has been devalued. Back in the day, people didn’t mind spending real money on applications. People think spending $10 on a mobile app is overpriced.
3. No one wants to pay for upgrades even if the App Store made that easy. I once bought an app - Tempo Magic in 2010. I hadn’t thought about it for years. But 10 years later I looked for it. Downloaded it and it still worked. The developer has kept the app working for a decade and through the 32 bit to 64 bit transition. I haven’t paid a penny more for it. How is a developer suppose to sustain themselves?
The only business model where high quality productivity apps are sustainable are via subscriptions. That’s why you have MS Office available.
Apple's insistence on setting the terms of the sale is also problematic and all the more reason to support another store. I absolutely loathe IAP. The last thing I want to do is download an app and guess what parts are going to get unlocked when I pay for something. I'm in favor of having a paid upgrade path. And I'd love to see a trial option that wasn't tied to a subscription. And I think app prices are too low. It's another case of having made a few bad initial moves and then pushing the whole industry that way. The top selling app on the Google Play Store is a slot machine. This is not good for society.
Let’s stick to the crux of the matter - people don’t want to pay for stuff. If an alternative App Store set a minimum price and sn upgrade path, not many people would buy the apps.
The only successful model so far has been subscriptions for productivity apps. For arcade quality games, the streaming services have a chance and Apple is subsidizing non slimy games via Apple Arcade.
Just out of curiousness, does the Xbox have a shell like my iPhone? Can I ssh from my Xbox? I can from my iPhone, for all intents it seems like a personal computer (PC) and can do anything my computer can do. My phone wasn’t marketed as a gaming console either. I’m not sure comparing an Xbox and a phone is anywhere near the same thing. I could be wrong though.
The Xbox certainly has sufficient hardware and software capabilities to run a shell or a ssh client; it is basically PC hardware and a PC operating system, just locked down. If it doesn't have a ssh client, it's only because Microsoft didn't let the app onto the Xbox store. If that's the line you draw, then the obvious thing for Apple to do is to remove ssh clients from the store.
It has Edge on it so if you can do a browser version you can do whatever. If you plug in a keyboard and mouse you can gamedev on our platform for example.
Imagine how well the xbox would sell if there was a PC "homework" mode, where you could just boot into windows. I doubt Microsoft would do that to their PC making brethren though.
Heh, that’d actually be entertaining. After that it would be image editing, then text editors, then, actually just delete the utilities section from the App Store…
The latest models of Xbox and PlayStation are basically just Ryzen 3700X + Radeon 5700XT PCs, with the former running a Windows variant and the latter running a FreeBSD variant. They’re pretty similar in stymied potential to iOS devices.
You just made Apple's point though. The Microsoft ecosystem of flexibility introduced so much variation that lots of people moved to Apple BECAUSE of it's enforced uniformity. Microsoft's ecosystem of flexibility allowed their system to be abused and exploited by bad actors more easily resulting in people MOVING to Apple to get away from this. If you want flexibility, develop for Android or Windows. You don't have a right to have access to people who moved to Apple for the express purpose of living in a managed ecosystem that just worked and simplified their lives. Everyone is talking about the developer's rights but no one is talking about end users, many of whom choose Apple for the very reason this is trying to negate, even if they couldn't articulate it as such.
> many of whom choose Apple for the very reason this is trying to negate
I already use apps in iOs that bypass the store to transfer money, pay for train tickets, parking, etc. Many people in Sweden likes Swish and probably will be ok with being able to choose it for all their transactions.
I could be wrong, but I don't think that there is data to support the opposite either.
There is absolutely nothing is preventing Apple from creating an easy to use 'checkout' process that pretty much every single e-commerce websites have. Developers can choose to integrate with Apple payments, pay pal, square or whoever. Its no different than Amazon. Users can check a payment processor as a default and never be bothered. In my opinion, this is simply Apple being a bully, for commercial reasons, not technical, or UX ones.
The industry could build platforms which are both safe and flexible. They just do not want it. Some for keeping their revenue other for sticking to backward compatibility
You’re not wrong, it what does this have to do with App Store commissions? I (an end user) would be quite happy to see iOS remain a restricted environment for developers, while also lowering App Store commissions, such that more business models will be competitive on iOS.
When they eventually lose a major lawsuit, any 'record setting' settlement or judgement is likely to be a tiny fraction of the profits they were able to reap in over a decade of bad behavior. Name a single multinational company in the last 20 years where the consequences were more than a fraction of the profit they made from their bad behavior.
It's pretty straightforward, assuming that you have the standard charge amount correct. (I don't know)
Between the two approaches, the costs break even when 30c = .27*cost.
Apple's 27% exceeds the 30c whenver the purchase costs less than $1.11. 27% of .99 is 26.73c.
So, this is a strong case Apple has calculated the other processor's charges for all app sales of .99 or less. It seems they are trying to charge more than normal processors for all micro-transactions.
> By the same logic BestBuy, Verizon, and other hardware retailers should get a cut of Apple’s revenue.
Best Buy, Verizon, and other hardware retailers buy Apple products at a discount and sell them for retail price. So, in a way they do get a cut of the revenue that Apple would make when Apple sells products at Apple's retail stores.
When Develop X sells IAP for their app, Apple demands a cut. Apple didn't ship that IAP or have anything to do with it.
When Apple collects their cut from an app, they don't pass any portion of that on to Best Buy, who sold that device.
Apple insists that Developer X wouldn't have made that profit without Apple's support, and they're due that cut. By that same logic, Best Buy is due a portion of that because they enabled Apple to make that money in the first place.
It's bonkers, which is why everyone's mind rejects that Best Buy would be entitled to anything of the sort. But Apple has managed to sell that line somehow.
> When Develop X sells IAP for their app, Apple demands a cut. Apple didn't ship that IAP or have anything to do with it.
Apple provides hosting for IAP content, if developers wish to use it
> When Apple collects their cut from an app, they don't pass any portion of that on to Best Buy, who sold that device.
So far I don't believe Best Buy has asked for such a thing. They do ask for fees on things like customer acquisition for cellular plans AFAIK. In the past they have gotten customer acquisition fees for other subscription services, such as ISPs.
Apple's various stores are based directly on this same model (portion of revenue on directly sold products, money for customer acquisition on subscriptions).
> Apple insists that Developer X wouldn't have made that profit without Apple's support, and they're due that cut. By that same logic, Best Buy is due a portion of that because they enabled Apple to make that money in the first place.
Apple has looser restrictions for so-called reader apps (for consuming digital alternatives of physical goods), but generally their restriction is that a consumer-directed app be usable without requiring out-of-app purchasing, and that apps do not direct users to out-of-app purchasing options (either marketing their availability or linking to them).
This is again analogous to what you would expect in a brick-and-mortar store. For example, subscription revenue games are way harder to negotiate for sale at a Best Buy than episodic content. There is no way you'd see such a storefront stock a game that sold for $.99 but required a $19.99/month subscription to play without the retailer getting a major acquisition payback.
A better comparison would be to compare a wild fictitious example against another retailer, Whole Foods.
It would be wild to imagine Amazon selling a high quality refrigerator that only allowed you to place perishable items from Whole Foods inside of it. Independent of whether Whole Foods was selling things at a reasonable rate and of reasonable quality, the expectation is that you would not need to purchase a different brand of refrigerator in order to get food from other markets. No matter what sort of concessions they made, such as offering to sell food at lower margin for local farmers and smaller suppliers, the mere existence of such a closed system would offend some people.
But ironically, those people are just as likely to buy into in other closed systems without blinking an eye. Perhaps they have an EV which is only repairable by its manufacturer. Perhaps they have a game system which requires games to be sold in its store or be pressed onto its CDs, and requires hundreds or thousands of dollars for game developers to sign up to participate. Perhaps they have a smart thermostat or smoke detector which refuse to interoperate with any other vendor.
The reality is that people are offended by the grocery example because they _understand_ the grocery example. Enough to feel that some company is pushing them through bizarre restrictions because of the revenue model they chose to pursue. And those restrictions impact them.
They're not. Apple is essentially acting like a government, and they're certainly way more powerful than the Dutch government:
- They have an income tax -- 30% (wait until they come up with a capital gains tax, and a property and inheritance tax as well)
- Use monopoly of "force" by removing us if we "evade taxes"
- Have their legislation branch to come up with their own set of "laws" - they call it "terms", but can't be "terms" if we have to swallow it without coming to terms with it
- Their judiciary branch judge our actions with no recourse
- Have their executive branch to put into practice what their judicial branch decides (usually in an automated fashion)
Netherlands has a strong voice in the EU; I'm betting that Apple doesn't want to cease all business in the EU. Heck, they bent to China.... they'll bend to EU, make no mistake.
This is an mind-blowingly-risky move on Apple's part. They show malice here - if they are acting like a government, they invite governments to fight them. I.e. they're nuts.
And it's not even just the EU. The U.S., South Korea, Australia, India, Russia- a lot of countries and markets are taking notice. This is a global phenomenon. The sharks are circling.
I think 30% is only unreasonable if apps in their ecosystem start to leave. Honestly, when the marketplace votes by staying on the platform at 30%, then it doesn't matter how ridiculous it seems to some of us, they're going to keep doing it.
No idea. We released a new Windows version around the same time which introduced DXVA support and sales overall went up. So if Apple users left, they were overcompensated by additional Windows users.
They are doing everything they think they can get away with. I agree that ethics and morale should factor into corporate decision making, but at this level I'd argue that corporate decision making is purely an optimization game between profits over various horizons.
If they think this maximizes their payoff, they'll do it. I'm 100% certain that they realize that this may/will invite further lawsuits and have factored this into their calculations.
Or not. Short term bonuses are key, achieving quarter goals is extremely important, that the company crashes and burns in 10 years may be someone else problem.
Big corporations are giants with clay feet. From inside one can see the real humans behind the curtains.
So, you could be right and its a long term strategy, but it's also possible that they are just thinking about their next bonus.
That's pretty much what I wrote. You are disagreeing with a strawman.
> corporate decision making is purely an optimization game between profits over various horizons. If they think this maximizes their payoff, they'll do it.
Keyword being "various horizons". Sometimes it's a long term strategy, often it will be just maximizing the next bonus..
I think Apple would actually have more of a case if they charged different rates for different types of apps based on technical reasons (i.e. Basics - web/touch/image/audio, video media, gaming/ARKit):
1.) web view/touch/audio streaming app - 10%
2.) accelerated web view/SDvideo app - 15%
3.) HDvideo H.264 app - 20%
4.) 3D Graphics/ARKit SDK app - 30%
3D and ARKit which are pushing the boundaries of the silicon probably do have associated R&D costs as well as silicon COGS costs that perhaps do need to be recouped in a manner similar to gaming console SW licensing agreements (i.e. Xbox, PS, Nintendo royalty payments).
In the court of public opinion it would also minimize the effectiveness of "think of the solo iOS dev" type scenarios that the big guys such as Epic, etc. like to hide behind.
I wonder if that would run into net neutrality-type issues, but setting different rates is definitely a novel way of looking at things. Charging higher rates for publishers of larger app binaries would also make sense. Certainly tech giants such as Facebook and Uber who have bloated app sizes could pay the extra expense for the hosting and so forth.
> I wonder if that would run into net neutrality-type issues
It absolutely would. Who is Apple or anyone on HN to tell one developer that their app is more important/costly/uses higher priority SDKs than another?
Well, maybe app binary sizes are an objective metric. Apple could even raise the existing cap and give Uber a bit more room to breathe, while charging them for the inevitable expansion of their app.
I think the analogy would be more equivalent to AWS. There are different costs associated with using the various SDKs (i.e. Lightsail, EC2, S3, SageMaker).
I'd also say the more it can be defined in terms of technical reasons the better.
There are R&D costs to maintaining a cutting edge, industry leading 3D Graphics SDK for iOS that the primary users beneficiaries of said library (i.e. Epic, Xbox) should contribute to.
This would require a bit of mindshift and context.
>Imagine if in the past Apple would have had to pay 30% of their gross to Microsoft in order to be allowed to run their software on Windows.
Sure, instead Best Buy would record a 22% gross margin for selling the software on a CD [0] (I know it's not a perfect example since Best Buy sells a lot of things, but Software was 22% of sales in the linked period)
So you're argument is that an online digital store justifies a higher fee (30% vs 22%) even though it's significantly less expensive for Apple to run a digital store than it is for Best Buy to operate physical retail stores?
If anything, that's just evidence that Apple is grossing abusing its market position.
If Best Buy doesn't sell the software, they lose money, because A. They already paid the developer for it. B. It takes up space that could be used to sell something else. If Best Buy wants to sell it at a discount, it doesn't affect the developer, they were already paid by Best Buy.
With Apple, its the opposite. If Apple sells something at a discount, the developer suffers (or Apple has to pay the difference in some countries). If it doesn't sell, no one gets any cash. Apple has no incentive to market something and/or move inventory. Apple has only the incentive to market things that you spend money on vs. Best Buy that has to take a risk on something by spending money to buy it from the publisher first.
We receive vendor allowances for various programs,
primarily volume incentives and reimbursements for specific
costs such as markdowns, margin protection, advertising
and sales incentives. Vendor allowances provided as a
reimbursement of specific, incremental and identifiable
costs incurred to promote a vendor’s products are included
as an expense reduction when the cost is incurred. All other
vendor allowances, including vendor allowances received in
excess of our cost to promote a vendor’s product, are
initially deferred and recorded as a reduction of
merchandise inventories.
As much as Best Buy did, since they required vendors to reimburse them for markdowns and unsold investory.
We receive vendor allowances for various programs,
primarily volume incentives and reimbursements for specific
costs such as markdowns, margin protection, advertising
and sales incentives. Vendor allowances provided as a
reimbursement of specific, incremental and identifiable
costs incurred to promote a vendor’s products are included
as an expense reduction when the cost is incurred. All other
vendor allowances, including vendor allowances received in
excess of our cost to promote a vendor’s product, are
initially deferred and recorded as a reduction of
merchandise inventories.
Right, but there are at least many competitors to Best Buy all competing for your business, driving down margins. Running physical stores is costly. If Apple allowed competing digital stores, I would expect margins would be less than 30%, and even less than 22%, and the value would end up in consumer and developer's pockets.
They have armies of economists, lawyers, and accountants. Do you really think that they are naive and you simply understand the situation better than them or do you think it's possible that they've run the numbers?
Nonsense. Most of those businesses only exist because of the App Store. Apple can ask whatever they want as users can buy whatever they want. There is no need for whining.
> Apple should focus on selling hardware and be happy to facilitate those payments that people - and application developers - voluntarily process through their system.
Why don’t you apply that to the Xbox, PlayStation, etc.?
> All this stupid taxation of other peoples' businesses
Exactly. Stop trying to overthrow Apple from the ecosystem they built.
The problem is that people can easily be induced to install software that negates the benefit of Apple’s hardware. Apple can’t deliver their hardware benefits without also controlling the operating system.
> Apple can’t deliver their hardware benefits without also controlling the operating system.
Nobody is talking about loading something besides iOS on Apple mobile devices. The argument that "The OS is everything" failed over 20 years ago in US v Microsoft.
So you mean how WeChat and Alibaba do it, and are allowed to do so by the App Store. Then why hasn't Meta done that? Perhaps they don't care to? Not that the Facebook app isn't already hugely overstuffed.
Because Apple bent down for WeChat and Alibaba, but Apple won't do it for Facebook?
I'm 100% sure that if Facebook could have an iOS app store, they would start one. It's worth all the work for the improved tracking alone, as app download ads are a big part of Facebook's mobile revenue.
The GP is talking about Meta embedding its own app store within the Facebook app, not about Facebook creating its own iOS app store. An "internal" app store would still be subject to the same restrictions and security that the actual Apple App Store already has. I don't believe the mini-apps within WeChat or Alibaba's apps can flout those regulations, but it's China and those are big apps so who knows.
From a technical perspective, I'm not sure how hosting littler apps within your own app, which is already on the Apple App Store and subject to its review process and rules, would allow you access to improved tracking.
On the subject of a Meta third-party app store independent of Apple's control- yes, there is motivation there to do that, but I am dubious of how much of a threat that is to the end user because:
1. Apple still maintains control of iOS and can restrict invasive tracking from the OS level.
2. I'm not actually convinced that Meta, Google, Amazon, et al are really capable of executing successful alternative app stores. They would need to make it a sufficiently seamless and friction-free experience, and offer enough incentives for users to overcome having to sign up for yet another service just to use the apps they already have access to.
> The problem is that people can easily be induced to install software that negates the benefit of Apple’s hardware. Apple can’t deliver their hardware benefits without also controlling the operating system.
Apple is less concerned about this than profits.
They could make their hardware ecosystem more open, that's easy, but that wouldn't make them a significant amount of extra money, so why would they?
Again, even if that was true, and I believe you are conflating profits and revenue here, it has nothing to do with my comment, which was about Apple refusing to make the ecosystem more open because it wouldn’t bring any significant financial profit.
It is true. It’s not hard to check it. If you want to proceed with this line of discussion, you should do some googling rather than persisting with false claims.
"Apple CFO Luca Maestri said that Apple's install base of devices hit a new all-time high as well, which helps drive services growth."
"Cloud services, Apple Music , advertising, video, and payments saw all-time revenue records, while the App Store saw a new June quarter revenue record."
"Services brought in $17.5 billion during the quarter"
> Imagine if in the past Apple would have had to pay 30% of their gross to Microsoft in order to be allowed to run their software on Windows.
iPod wouldn't have happened and Apple wouldn't exist today. Apple relied on the fact that most of its customers used Windows and that they got to transact for free on the platform. Heck, they didn't even need Microsoft's approval to offer iTunes downloads.
Think about all of the small businesses and startups that are getting snuffed out today by Apple's aggressive over-harvesting.
Some non-trivial percentage of Apple's $3T market cap owes itself to a system of feudalism and mafia-style tactics rather than innovation and product sales. Imagine of those dollars were instead represented just about anywhere else.
Gatekeepers like Apple will have specific obligation according to Article 5:
(b) allow business users to offer the same products or services to end users through third party online intermediation services at prices or conditions that are different from those offered through the online intermediation services of the gatekeeper;
(c) allow business users to promote offers to end users acquired via the core platform service, and to conclude contracts with these end users regardless of whether for that purpose they use the core platform services of the gatekeeper or not, and allow end users to access and use, through the core platform services of the gatekeeper, content, subscriptions, features or other items by using the software application of a business user, where these items have been acquired by the end users from the relevant business user without using the core platform services of the gatekeeper;
And Article 6:
(c) allow the installation and effective use of third party software applications or software application stores using, or interoperating with, operating systems of that gatekeeper and allow these software applications or software application stores to be accessed by means other than the core platform services of that gatekeeper. The gatekeeper shall not be prevented from taking proportionate measures to ensure that third party software applications or software application stores do not endanger the integrity of the hardware or operating system provided by the gatekeeper;
(k) apply fair and non-discriminatory general conditions of access for business users to its software application store designated pursuant to Article 3 of this Regulation.
Following articles, like:
- article 7: Compliance with obligations for gatekeepers
- article 10: Updating obligations for gatekeepers and
- article 11: Anti-circumvention
Give the EU Commission quite a lot of maneuvering power to ensure effective implementation.
Uuuh, things are gonna get interesting!
Putting on my tinfoil hat here, if this goes through I forsee that we'll see a lot of fearmongering about malware in the near future, and even some well publicized cases of malware infecting people who go outside of the established app stores.
This should be changed so the end user gets to decide what payment service to use. I don't want to download and app and have to insert my credit card ever and I want to cancel subscriptions in one place the way I can now.
It should not be up to the developer to choose how I pay them, only the amount.
Good point! If people are happy to pay 13€ instead of 10€ for the convenience of using the platform owner's payment system, that should always be an option.
the app maker should have the complete freedom what payment options he offers. if i want you to pay me in stones that is my freedom, the same you are free to not use my app and find another app that offers methods that you like.
Great point. Also true: I already have some level of trust with Apple(I bought their device), not you. So Apple should return more relevant results for me on AppStore or even allow me to filter out those apps, that doesn’t support preferred option of payment. Will you agree with such setting?
I don't mind it being a filter, but I think them sorting them like that by default could be an issue. Would you equivalate it to developers paying for higher search ranking? Apple favoring their own services over others definitely could be an anti-trust issue.
Sure. A reasonable compromise would be that the app developer puts Apple's payment system in the app, for you to use, but all transparently tells you that you have to pay the 30% Apple fee yourself.
So, you'd be shown 2 options. Option 1 would be their payment processor, and option 2 would be Apple's. And you could choose to pay an extra 30% to use Apple's.
Problem solved right? Everyone gets what they want, and pays the appropriate fee.
Card details can be stored in the phone and the OS can offer a payments API through which any payment provider can integrate. Similarly to how the File Provider API works.
Paragraph 1, a provider of core platform services shall be designated as gatekeeper if:
(a) it has a significant impact on the internal market;
(b) it operates a core platform service which serves as an important gateway for business users to reach end users; and
(c) it enjoys an entrenched and durable position in its operations or it is foreseeable that it will enjoy such a position in the near future.
Paragraph 2, a provider of core platform services shall be presumed to satisfy:
(a) the requirement in paragraph 1 point (a) where the undertaking to which it belongs achieves an annual EEA turnover equal to or above EUR 6.5 billion in the last three financial years, or where the average market capitalisation or the equivalent fair market value of the undertaking to which it belongs amounted to at least EUR 65 billion in the last financial year, and it provides a core platform service in at least three Member States;
(b) the requirement in paragraph 1 point (b) where it provides a core platform service that has more than 45 million monthly active end users established or located in the Union and more than 10 000 yearly active business users established in the Union in the last financial year;
for the purpose of the first subparagraph, monthly active end users shall refer to the average number of monthly active end users throughout the largest part of the last financial year;
(c) the requirement in paragraph 1 point (c) where the thresholds in point (b) were met in each of the last three financial years.
What people want is to stop being forced to pay Apple’s 15-30%.
Alternative payment processors were never going to accomplish that, as this case shows. You can make Apple accept alternative payment processors, but that doesn’t really change the price they set for using their store.
Unless you want to abandon a free market economy, a government can’t force a company to provide a certain service at a certain price. Squeeze one spot with regulation and a company will extract more revenue from another. Squeeze everywhere and a company will leave the market.
What they should do is force Apple to allow competing stores.
Apple can keep it’s 15-30%… if it can compete at that level. If not, it will have to adjust, by either offering something more compelling to developers or charging them less. And if Apple can’t do well enough, and pulls back from its app store, then, well, iPhone users will still have the stores of all those stronger competitors to choose from.
We don’t have to wonder what a platform with a competing sources for software looks like. We have a bunch of them, and they seem to work well.
> What people want is to stop being forced to pay Apple’s 15-30%.
Just to be clear developers care about this, not “people”. Vast majority of iPhone users couldn’t care less. Wanna know why? Because the developers have to compete on price and Apple is cutting into their margins. This is Apple vs app developers through and through. If Apple stopped taking a cut there would be no price changes. Developers would just make better margin.
Since Apple provides me with a great experience and developers tend to mostly be bad or mediocre, I’ll stick with Apple thank you.
> What they should do is force Apple to allow competing stores.
No thanks. I like that my grandma who uses Facebook has Apple making sure (within bounds) that they aren’t doing shady stuff, and that they have to state what they use data for and confirm permissions routinely.
> We don’t have to wonder what a platform with a competing sources for software looks like. We have a bunch of them, and they seem to work well.
If it’s the best model you don’t need government intervention because it’ll just win out. If Apple’s “monopoly” on the App Store is that bad people will buy other phones. But the truth is it’s a great model and users love it, which is why Apple crushes sales quarter after quarter.
This reminds me of someone recently defending Google doing something on behalf of users. Developers thinking they know what their users want “opt them in to this great feature they previously opted out of” so they can discover it. Same stuff different tune. It’s all business and just rich corporations attacking other rich corporations with no benefit, except that I lose benefits when Apple isn’t in charge.
> I like that my grandma who uses Facebook has Apple making sure (within bounds) that they aren’t doing shady stuff
The problem is that it has been proven that Apple used its store in a monopolistic way, lying to developers, stealing ideas for its own native apps, ruining developers' life.
This is much more than just an economic problem, you can't trade dark patterns for presumed governance and security.
Based on my experience I say give them even more control. I don’t care if they have a monopoly nor do I think they “have a monopoly” anymore than any other store or marketplace.
You and anyone else can continue to purchase or install apps exclusively through the App Store, even if Apple's App Store is not the only way to get apps on iOS. People who prefer to purchase or install iOS apps through other means are the ones harmed by Apple's anti-competitive restrictions, and that is why countries around the world are gradually introducing new regulations that curb Apple's ability to limit consumer choice.
If Apple cedes control over the App Store I lose all of the benefits. Who will implement anonymous Sign In with Apple when you can just, create an alternative App Store and bypass this? No more Apple Pay. No more privacy fact sheets and enforcements. You name it. Apple collectively bargains on behalf of users against predatory developers.
I honestly cannot comprehend why people can’t just buy an Android phone if they want the Amazon Prime App Store or the Meta App Store of whatever. Leave us alone. We like the iPhone this way. I’d rather developers stop writing new software than to give up these controls. If apple is this big bad monopoly or whatever seriously just don’t buy their products. When you go to buy your next phone say “I want multiple app stores. Therefore iPhone is not the device for me” and then just buy the Android phone that supports the features you want. Only having one App Store is the feature I want, which is why I buy the iPhone. If this feature is a big deal to customers than they will start buying other products and then apple may have to change how it does things.
But we both know that won’t happen because Apple’s way is the superior model. There’s just a minority of developers who complain loudly and then other mega corps who want to increase their margins. Again. There’s absolutely 0, and I mean 0 benefit to me as a customer to change this, and instead I lose lots of benefits that I enjoy.
Apple's restrictions are anti-competitive for all iOS users, and have a negative effect on iOS users who have different preferences than you. You don't speak for all iOS users, and it is not your place to demand iOS users who want to obtain iOS apps from alternative app stores to go out of their way and switch ecosystems to satisfy your preferences, if a more convenient option is available for them to obtain what they want.
Allowing alternative app stores does not prevent Apple from setting arbitrary fees and restrictions (like Apple Pay and Apple sign-in) on apps published through Apple's App Store. You are still free to exclusively use Apple's App Store, regardless of where other iOS users choose to get their apps from if Apple's anti-competitive restrictions on iOS app installation were removed.
> Apple's restrictions are anti-competitive for all iOS users, and have a negative effect on iOS users who have different preferences than you. You don't speak for all iOS users, and it is not your place to demand iOS users who want to obtain iOS apps from alternative app stores to go out of their way and switch ecosystems to satisfy your preferences, if a more convenient option is available for them to obtain what they want.
Ok. Now just reverse everything here. You don’t speak for iOS users. It’s not your place to demand changes that satisfy your preferences. Etc. And honestly you can just buy an Android phone with the features you want. Why is this so difficult for people?
> Allowing alternative app stores does not prevent Apple from setting arbitrary fees and restrictions (like Apple Pay and Apple sign-in) on apps published through Apple's App Store. You are still free to exclusively use Apple's App Store, regardless of where other iOS users choose to get their apps from if Apple's anti-competitive restrictions on iOS app installation were removed.
What your suggesting degrades the ecosystem (privacy, payments, etc.) and does not provide value to users. If anybody at all gave a damn it would be affecting sales. Literally nobody cares. Walk down the street in idk, Indianapolis and ask people if they care that they have one App Store on Apple. It’ll be crickets. It’s literally just figuring out whether Facebook or Netflix have better margins or if Apple does. That’s it. There’s no cost savings to customers. 90%+ of apps are junk, and these changes mean that Apple is no longer able to collectively bargain against developers on behalf of users. When you add another App Store what will happen is the big companies will create new app stores. These stores won’t have things like privacy protection. You might say “apple should compete on privacy protection” sure just like people who advocate for bike lanes should compete with car owners. The overall product of, say, Facebook being on another marketplace will cause users to switch. And now Facebook (again just picking on them here) gets to collect invasive data, skirt ethical privacy policies, and just do whatever they want. With Apple you get the best of both worlds. Facebook has to provide their product and they have to do it in a way that protects privacy.
Also it would be great if you and others would consider not using “anti-competitive” here because what Apple is doing isn’t anti-competitive. If you want to suggest that it is, then the term loses meaning. Kroger can’t sell Kroger brand products at Wal-Mart. I can’t sell custom game skins on the Epic store. Apple competes fiercely with an all-in experience against numerous competitors. That they’re crushing the competition is proving what the market actually wants.
Anyone can call for changes in the regulatory environment to make a market more equitable for them. The difference is that you are demanding other people to make personal changes (going out of their way to buy a different phone, re-purchase all of their apps, and switch ecosystems) to satisfy your preferences and not theirs. Others aren't obligated to follow your demands, which is why it's not your place to demand them to act against their own wishes. On the other hand, nobody is demanding you to do anything. If the regulatory environment changes to prevent Apple from suppressing consumer choice on iOS, you can continue doing what you are doing now (purchasing and installing exclusively from Apple's App Store) as if it never happened.
Sideloading might not benefit you if you are committed to never using the feature, but it benefits other iOS users. There are iOS users who want to remain on iOS, while accessing apps that Apple has blocked from its App Store for various reasons. iOS users who want to use secure messengers like Signal, certain VPN apps, and other apps banned in China benefit from sideloading. Fortnite players who want the latest version of the app on iOS regardless of the ongoing legal case benefit from sideloading. There are also iOS users who are mostly content with Apple's App Store, but would gladly sideload other apps that are not available in the App Store, such as alternative clients for services like NewPipe, SMS/MMS apps with features that Apple doesn't provide, and FOSS apps that developers don't want to pay $99/year for the rest of their life to keep in the App Store. Sideloading provides benefits to all of these iOS users, without affecting people like you who wouldn't use the feature. You don't get to gatekeep who can be an iOS user, because nobody else is obligated to listen to you.
Most iOS users will continue to get apps from Apple's App Store even if sideloading were allowed. Google allows sideloading on Android with restrictions, and almost all users get apps from the Play Store in regions where it is available. There is little reason to believe that the situation would be different on iOS. If a developer does pull an app out of the App Store, that is their right to choose not to serve users in the App Store. You cannot compel others to make a business arrangement with Apple, because that is their decision to make. You are also not entitled to force any developer to make their apps available to you. Having said that, I have yet to see any high-profile Android app pull out from the Play Store without returning soon after (excepting those that discontinued Android support completely), and the situation on iOS and the App Store will likely be the same. Apple would still be able to impose the fees and restrictions that they want on apps published through their App Store.
I will continue to note that Apple's iOS restrictions are anti-competitive, because they prevent other app stores from competing with Apple's App Store on iOS. Walmart is not selling homes that require the homeowner to buy all of their groceries and appliances from Walmart. Also, Walmart and Kroger don't have a duopoly in any country, while Apple and Google do in many countries. Duopolies and other uncompetitive markets are not free markets, and they don't accurately reflect consumer preferences.
> The difference is that you are demanding other people to make personal changes
And now you are demanding that other people make personal changes by losing the benefits of the iOS ecosystem (Apple Pay, privacy enforcement, app standards, etc.).
> Others aren't obligated to follow your demands, which is why it's not your place to demand them to act against their own wishes.
Stop demanding that I act against my wishes then? My wishes are one App Store owned and controlled by Apple. Stop bothering me. This works both ways.
> You don't get to gatekeep who can be an iOS user, because nobody else is obligated to listen to you.
This is pathetic. I’m gatekeeping? Ok nobody is obligated to listen to me. I’m not obligated to listen to them. So I guess we keep things as they are then. Or am I now obligated to listen to you?
> Most iOS users will continue to get apps from Apple's App Store even if sideloading were allowed. Google allows sideloading on Android with restrictions, and almost all users get apps from the Play Store in regions where it is available. There is little reason to believe that the situation would be different on iOS.
Ok then no reason to change a great service for the majority of users to satisfy a tiny minority of use… I mean developers who want better margins.
> Having said that, I have yet to see any high-profile Android app pull out from the Play Store without returning soon after
Because Google is a fox in the hen house. They have the same privacy-invading business model. Of course they don’t care.
> I will continue to note that Apple's iOS restrictions are anti-competitive, because they prevent other app stores from competing with Apple's App Store on iOS. Walmart is not selling homes that require the homeowner to buy all of their groceries and appliances from Walmart. Also, Walmart and Kroger don't have a duopoly in any country, while Apple and Google do in many countries. Duopolies and other uncompetitive markets are not free markets, and they don't accurately reflect consumer preferences.
Duopolies naturally occur in free markets. In fact, monopolies do too. It’s not a big deal and a duopoly frothing into existence does not de facto necessitate anti-competitive behavior. (Just as multiple companies can have anti-competitive behaviors. Remember Tech salary collusion amongst the major players?) This is even more true in the case of Apple where consumers benefit because of Apple’s ability to collectively bargain against developers on behalf of users. Should ASML be forced to dissolve or create a competitor since they’re the only ones who can make the machines they do? That’s a monopoly.
Your “re-analogy” of the situation with Wal-Mart and Kroger falls flat because if Wal-Mart did sell a house and as part of the sale required or just outfitted the house with all Wal-Mart products nobody would consider that anti-competitive behavior. The grocery example just doesn’t make sense at all unless you wanted to maybe talk about calling Kroger for groceries and then demanding they go pick up from Wal-Mart. Instead a better analogy is looking at Kroger and the products they sell at Kroger as the market. Kroger enforces some standards like POS systems, one or two types of carts, employees who stock shelves or whatever and then Kroger takes margin on the products they sell. To continue, the analogy would be a company saying Kroger should allow them to set up their own shop inside Kroger, and then sell products in that shop and not give Kroger a cut. You’d walk in and there would be multiple POS systems, you’d have different employees some who could help you and some who can only help you in the sub-store. You’d have different carts, and some of the sub-stores would install security cameras and tracking devices. Kroger customer service couldn’t help you. It’s just a nightmare.
But hey now I can download Signal as a Chinese person except that if there are any legit other app stores they’ll just comply with CCP demands anyway and we’re back to just sideloading apps.
But hey Netflix got a better commission instead of Apple and now my life is worse. Sounds great!
Nobody is demanding that you make a personal change. If you are currently using Apple's App Store for all of your purchases, you can continue to do that regardless of whether sideloading is available. Your existing choice would still available to you even if sideloading were an option, so you would not be making a change, because you are not being asked to take any action. On the other hand, you are demanding others to make a change by switching ecosystems, an action that others are not inclined to take due to the costs of switching. Your demand is gatekeeping because you are arguing that people should be iOS users only if they are against sideloading, which is not an opinion that all iOS users agree with.
Lawmakers are elected to pass laws that represent the interests of their country's citizens, such as the Open App Markets Act[1] in the U.S., which would prevent Apple from enforcing its anti-competitive restriction against sideloading on iOS. Duopolies and uncompetitive markets like Apple's and Google's duopoly on mobile app stores result in deadweight loss,[2] which limits economic growth. This and the fact that restrictions against sideloading limit consumer choice are why there is momentum for passing new antitrust laws that curb Apple's and Google's anti-competitive behavior, including Apple's prohibition against competing app stores on iOS. You are free to wish otherwise and to petition lawmakers to support Apple's monopoly/duopoly, but the momentum of legislation is going against your wishes.
Your store analogy is flawed because when someone owns an iPhone, that phone is the user's property, not Apple's property. On the other hand, Walmart stores, Kroger stores, and Apple's App Store belong to Walmart, Kroger, and Apple, not their customers. Apple imposing anti-competitive restrictions on phones that do not belong to them is completely different from Apple imposing restrictions on their own App Store. Sideloading does not involve Apple or Apple's App Store at all, it only involves the user and the source that the user chooses to obtain the app from. You can choose to shop exclusively at Apple, Walmart, or Kroger, and the existence of other separate stores would not prevent you from continuing to do so.
App stores available to users in China do not have to be hosted in China. Sideloading combined with a VPN would allow iOS users in China to download, install, and use any iOS app published in any country.
> Nobody is demanding that you make a personal change.
Then in that case I am not demanding that anyone else make a personal change. So you can stop suggesting that I am. Thanks.
> Your existing choice would still available to you even if sideloading were an option, so you would not be making a change, because you are not being asked to take any action. On the other hand, you are demanding others to make a change by switching ecosystems, an action that others are not inclined to take due to the costs of switching. Your demand is gatekeeping because you are arguing that people should be iOS users only if they are against sideloading, which is not an opinion that all iOS users agree with.
One at a time:
> Your existing choice would still available to you even if sideloading were an option, so you would not be making a change, because you are not being asked to take any action
Your premise is that the app store is just a single isolated app that has no effect on the ecosystem. This is a faulty premise. If additional app stores are introduced it unequivocally changes the ecosystem. I've already explained the reasons I believe this is negative.
> On the other hand, you are demanding others to make a change by switching ecosystems
They don't have to change ecosystems. Just keep the same one as it is.
> an action that others are not inclined to take due to the costs of switching.
They could have not bought an iPhone from the start. All features have costs and trade-offs. If I buy a BMW I can't go off roading in it like I can in a Jeep. I can't then demand that all BMWs come with off-road tires and a lift kit and then claim that others are causing me to incur switching costs. Your suggestion here is a non-sequitur.
> Your demand is gatekeeping because you are arguing that people should be iOS users only if they are against sideloading, which is not an opinion that all iOS users agree with.
Ok, then equivalently you are gatekeeping by limiting my access to the Apple ecosystem as is. If you want to use the term like that, then fine.
> you are arguing that people should be iOS users only if they are against sideloading, which is not an opinion that all iOS users agree with.
Ok then not all iOS users agree with gatekeeping around the ecosystem as is. Stop gatekeeping.
> Lawmakers are elected to pass laws that represent the interests of their country's citizens, such as the Open App Markets Act[1] in the U.S., which would prevent Apple from enforcing its anti-competitive restriction against sideloading on iOS.
Yes, lawmakers can pass any law they want, whether or not its in the interest of their country's citizens. For example, requiring that Apple let 3rd-party App Stores on the iPhone would be against the interest of citizens.
Apple's model is not anti-competitive.
> Duopolies and uncompetitive markets like Apple's and Google's duopoly on mobile app stores result in deadweight loss,[2] which limits economic growth.
Your implication is that economic growth for the sake of economic growth should be pursued. Environmental regulations can create deadweight loss and limit economic growth as well yet we still pursue those.
Restricting Apple's ability to bargain on behalf of users creates negative externalities (previously highlighted) whose costs outweigh any deadweight loss. And again, markets aren't completely efficient, duopolies naturally exist in markets, and they can have minimal deadweight loss such that the presence of the duopoly is more beneficial than introducing competitors.
Also, where you claim Duopoly remember that Apple competes with many companies, such as Huawei, Samsung, Google (both Android and Pixel), and others.
> This and the fact that restrictions against sideloading limit consumer choice are why there is momentum for passing new antitrust laws that curb Apple's and Google's anti-competitive behavior, including Apple's prohibition against competing app stores on iOS.
Limiting consumer choice is perfectly fine. Happens all the time and should continue to happen where it makes sense to do so, such as here.
> You are free to wish otherwise and to petition lawmakers to support Apple's monopoly/duopoly, but the momentum of legislation is going against your wishes.
Ah the ole' love it or leave it sentiment.
> Your store analogy is flawed because when someone owns an iPhone, that phone is the user's property, not Apple's property. On the other hand, Walmart stores, Kroger stores, and Apple's App Store belong to Walmart, Kroger, and Apple, not their customers. Apple imposing restrictions on phones that do not belong to them is completely different from Apple imposing restrictions on their own App Store.
It's not flawed because the question of ownership isn't what's at stake here. Introducing that would change the scenario. Instead what was being discussed was Apple's distribution model for iOS applications. You can think of each shopper as an individual iPhone/iPhone user.
> Sideloading does not involve Apple or Apple's App Store at all, it only involves the user and the source that the user chooses to obtain the app from.
And just for the sake of clarity since you're now using the term sideloading I'm interpreting that to mean 3rd-party app store. Idk why we've switched but w/e.
Of course you can do anything you want to your iPhone. It's your property. You can install any app, you can throw it off a bridge. Anything really. You can even install 3rd-party App Stores. Just figure out how to do it.
> You can choose to shop exclusively at Apple, Walmart, or Kroger, and the existence of other separate stores would not prevent you from continuing to do so.
Yes, but this isn't about switching stores, that would change what's happening and so we'd have to build a meta store on top of these stores just to get back to what the model looks like. Instead what you're discussing here would be switching between Android and iOS. (Wal-Mart and Kroger or w/e). Once inside we're back to the correct analogy.
> App stores available to users in China do not have to be hosted in China.
They'll just pass a law to make them hosted in China then or whatever they'd need to have the exact same leverage here that they would on Apple, Google, or any other provider. All the same stuff.
> Sideloading combined with a VPN would allow iOS users in China to download, install, and use any iOS app published in any country.
Great. Then just sideload apps (as opposed to 3rd-party app stores) as you normally do and we'll just keep the single App Store that Apple maintains.
When you demand iOS users with a different opinion than you to "just buy the Android phone that supports the features you want"[1] and "just buy an Android phone with the features you want",[2] you are demanding others to make a personal change regardless of whether you want people to call you out for it. That is gatekeeping ("To limit another party's participation in a collective identity or activity, usually due to undue resentment or overprotectiveness")[3] because you are saying that people who support sideloading (an opinion that you disagree with) should not be iOS users. I have never told you to refrain from being an iOS or Android user for any reason, so I have not done likewise for you.
An iOS user who prefers to be able to sideload but also wants to, for example, stick with iPhone hardware is perfectly within their right to stay on iOS and take advantage of the benefits provided by changes to the regulatory environment. The momentum of legislation suggests that these iOS users will eventually get what they want without needing to switch ecosystems. Allowing iOS users to sideload by removing Apple's anti-competitive restrictions increases consumer choice, and benefits everyone except a minority of people in any country (Apple employees, those who have a significant ownership stake in Apple, and those who strongly identify with Apple's profitability as a company). Lawmakers are correct to prioritize the economic growth of their country and the consumer choice of the population at large over the interests of a small minority of individuals vested in Apple.
There are no significant negative externalities to allowing sideloading for iOS users, because only the people who want the feature will go out of their way to enable it, as user behavior on Android shows. There are significant positive externalities to enabling sideloading for iOS users, because removing Apple's anti-competitive restrictions would spur the development of free and open source apps that improve the experience for all iOS users who choose to use them, which increases the value of iOS as a platform and the value of iPhones and iPads as products. Developers have always had the right to "change the ecosystem" by pulling out from Apple's App Store whenever they wanted. It is their choice whether they want to have a business arrangement with Apple, not your choice or mine. Apple retains the right to impose restrictions on apps in their App Store, which they can continue to make the default app store on iOS. There has been no "collective bargaining" regarding Apple's App Store since Apple is a single company with monopoly/duopoly power, and we have not yet seen multiple developers (together) negotiate with Apple. Apple and Google do have duopolies in the mobile operating system market (iOS and Android) and the mobile app store market (App Store and Play Store), because their combined market shares make up most of both markets.
Many iOS users in China who want to use iOS apps that are not in Apple's App Store selection for China would definitely sideload these iOS apps once Apple's anti-competitive sideloading restrictions are removed from iOS.
> Just to be clear developers care about this, not “people”.
People want software for their underutilized M1-powered Apple hardware investment.
Software requires — developers with a sustainable business.
When people invest years of data entry and muscle memory in software for their Apple device, their investment can be lost if the developer goes out of business due to excessive fees imposed by Apple.
I always laugh when people talk about how the Apple way is the only safe way when Android has been doing this for years while also supporting alternate stores/sideloading. Your grandma is going to use the App Store regardless of whether alternate app stores exist, there's no concern here for that.
Then why can’t people just buy an Android phone and be done with it? Why does the iPhone have to be like Android? Clearly there are alternatives to Apple’s tech stack here so just… use them?
It's not about having to be like Android, we're talking about Apple abusing its high market share. With a 50% market share in the U.S., most app developers have no choice but to do whatever Apple demands or lose half their business, and antitrust laws start to come into play when this happens. Apple is abusing its market share to force people to use only the Apple store, which if you remember is very similar to what Microsoft did with Windows and their browser.
Antitrust law does not come into play simply because of market share.
> Apple is abusing its market share to force people to use only the Apple store
This is not an abuse for customers though. Having a single App Store allows Apple to collectively bargain on behalf of users against developers. It allows Apple to introduce things like privacy scorecards, sign-on-with-Apple as a privacy friendly alternative, and the use of Apple Pay integrated across apps.
> is very similar to what Microsoft did with Windows and their browser
Don't think it's similar enough to draw a comparison.
And yet, people’s grandmas somehow do fine on their non-iOS platforms.
I don’t know why it’s OK for Apple to protect us from ourselves, but not for regulations to protect us from Apple.
BTW, I think Apple’s model is good and people (users and dev) are widely satisfied with it — you said “great” and “love”… I wouldn’t go that far, but we’re on the same page. So if there were a choice of stores, a great many would be unaffected, probably including your grandma.
New antitrust regulations like the Open App Markets Act in the U.S. would prevent this kind of fee from affecting app stores that are sideloaded onto the device. The Netherlands and other countries can easily replicate this bill.
It is astounding to see so many people here argue for the 30% apple tax.
It is like the mafia demanding you pay for the privilege of doing business on your street.
30% is just too much.
My client is selling a service where they are selling a physical product together with something you do with it in the app. Currently the customers buy the service and device in a separate shop and the app is just for the convenience of the user, they could also use a laptop conputer or whatever else. The client wanted to include a link to the shop in the app, but apple wouldn't allow it without their 30% tax. With this 30% cut providing the service for apple users wouldn't make business sense, they would lose money on each sale. Should they have higher prices for iphone users to make up for that?
People are arguing for that tax because they genuinely believe that Apple will somehow respond to this in a way that will cause their own income stream to be affected negatively (for instance: if Apple decides to raise the 30% to make up for the shortfall of companies that go outside of their platform).
It's Stockholm Syndrome.
Apple got away lucky that they weren't ordered to be split up and to run their payment service provider as an independent entity. It could still happen, the EU is pretty aggressive when it comes to monopolies overreaching their legal limits or abusing their position.
The various phone operators here have been smacked down pretty hard time and again on things like roaming, service fees and so on. Apple is no different.
I’m arguing for the tax because it provides a strong incentive for app developers to stick to Apples payment systems, that’s good for me as an end user.
I’m also arguing for the tax because I believe that Apple has the absolute right to collect such a tax, why wouldn’t they? They’re far from being a monopolist.
Stockholm syndrome? Mobile app development sounds like the last thing I’d want to have anything to do with.
> I’m arguing for the tax because it provides a strong incentive for app developers to stick to Apples payment systems, that’s good for me as an end user.
You as an end user are not party to the agreement that Apple has with the developers. You are of course free to choose not to do business with parties that do not support Apples payment system, but the same goes for Stripe, PayPal, Adyen and all the other PSPs.
> I’m also arguing for the tax because I believe that Apple has the absolute right to collect such a tax, why wouldn’t they?
Because they are abusing their position to do so.
> They’re far from being a monopolist.
Your understanding of what constitutes a de-facto monopoly is broken.
> Stockholm syndrome?
> Mobile app development sounds like the last thing I’d want to have anything to do with.
That is your choice and your right, but plenty of high performance and/or low level applications have no choice but to go native.
> You as an end user are not party to the agreement that Apple has with the developers. You are of course free to choose not to do business with...
Under the same logic, you, as the developer is also free to not do business with Apple and build on iOS.
Or you could see it with the angle that Apple is in effect hired by us, the end-users, to negotiate on our behalf to ensure the ecosystem cannot dictate unilateral terms unfavorable to us.
>Or you could see it with the angle that Apple is in effect hired by us, the end-users, to negotiate on our behalf to ensure the ecosystem cannot dictate unilateral terms unfavorable to us.
Then continue to only use Apple App Store and Apple Payments. Free market says if all the end-users truly believe that, all the others will fail from no users. So why is Apple so afraid of a little fair competition?
I don't think your description of "free market" with some arbitrary constraint on singular party, i.e. Apple, is quite self-consistent, but I digress; the argument is not hinged on holding "freeness of the market" as self-evidently good.
> if all the end-users truly believe that, all the others will fail from no users
Not necessarily. There is a possibility that each individual user may not be valuable enough to the developer to negotiate the Terms of Service imposed on them by the developer. Nor does logistics allow for such negotiation. By voting with our wallets, Apple acts on behalf of all of us securing some of our interests, meanwhile pocketing some money for their mediation service, just like a lawyer, non-profit, union, lobby group, co-op, or agent would do.
I mean free market as opposed to a monopoly market.
>By voting with our wallets, Apple acts on behalf of all of us securing some of our interests, meanwhile pocketing some money for their mediation service, just like a lawyer, non-profit, union, lobby group, co-op, or agent would do.
If you vote against the other options, they'll fail is my point. But by preventing me from being able to vote for other options, Apple is being anti-competitive.
Sure you have a choice--most obvious is Android and in fact that is what most people use. I really don't understand how you can call Apple a monopoly unless you call all vertical integration such. You don't have a choice of your own seat manufacturer when you buy a vehicle either. That's not particularly "anticompetitive".
In any case, this is beside my original point. My original comment was addressing a specific argument that suggested users are not a stakeholder in this matter because the agreement is between developers and Apple, which I find to be a ridiculous characterization. I am not holistically evaluating Apple's market positioning here. As one other comment points out, this is ultimately a broad political choice for the society at large, not necessarily one that could be concluded one way or the other by abstract analysis.
[My personal opinion on this matter is pretty much orthogonal to the "payment methods" debate which I find to ultimately be a negotiation between corporate entities on who earns how much. What I do want for the society to regulate is the ability for the end user to run their own software stack should they choose to, on a device they pay for. I am comfortable with the fact that should you choose to run iOS, you get the entire iOS experience.]
>Sure you have a choice--most obvious is Android and in fact that is what most people use. I really don't understand how you can call Apple a monopoly unless you call all vertical integration such
And what's wrong with more choice?
Because it's about defining the market. To me the market is iOS apps. Not Android apps. I can't get Android apps on iOS nor vice versa. The EU has ruled similarly when using anti-trust against Google: "Google's app store dominance is not constrained by Apple's App Store, which is only available on iOS devices." [0] It's about barrier of entry. "Android device users face switching costs when switching to Apple devices, such as losing their apps, data and contacts, and having to learn how to use a new operating system". A monopoly in California wouldn't be considered okay because you can always move to Florida.
And if you wanna bring up that car analogy, no car manufacturer has monopoly power. Using the term the way the FTC uses it: "a firm with significant and durable market power" [1], not an actual monopoly. You can't really say that Apple, the most valuable company in the world, isn't.
US anti-trust has ruled against vertical integration before when it has harmed competition in the "Hollywood Antitrust Case of 1948". Even if you say Apple isn't a monopoly, movie studios were an oligopoly like we have now with Google and Apple.
> You are of course free to choose not to do business with parties that do not support Apples payment system
Take a look at the videogames landscape on PC. There is an ever-growing amount of game launchers because each company refuses to pay that 30% to someone (e.g. Steam).
Having the option to create a store means almost everyone that can WILL create one. Not having that option forces everyone to play by the rules of the existing store.
As a consumer, I like Steam's policies about refunds, I like being able to buy any game with the same in-store credit or the same credit card, I like their client's features like download throttling or scheduling.
I certainly do not like that each half-assed client comes up with a bare bones implementation of the same thing and calls it a day. If Rockstar shits the bed and launches a terrible game, I can refund it on Steam but not on the Rockstar launcher.
Same case for Apple, the minute they allow external stores, half the apps will be pulled from the App Store into their own proprietary store and all the consumer protection would go out the window
>Not having that option forces everyone to play by the rules of the existing store.
So what you want is a convenient monopoly, when there is no such thing (unless it's under heavy government regulation). As a consumer, I like Epic's free games. GoG's policy of DRM-free. Which is why competition is good.
> You as an end user are not party to the agreement that Apple has with the developers
In the end this will be a political decision. I vote.
> Your understanding of what constitutes a de-facto monopoly is broken.
The monopoly argument may work in the US, but not in the EU. Apple may be up to nasty stuff that legislators should act against, but they’re certainly not a monopolist.
Apple can charge 99% if they’d like, but that’ll probably cost them developers and make me an unhappy customer.
So as far as I’m concerned it probably should be left up to Apple to decide how much they charge, if they screw that up I can always switch to Android.
If it were only abusive for the developers, why is EU intervening on behalf of all users, including developers? It’s harmful to competition, and the harm to developers is the cherry on top.
No, people are arguing this because they think the 15% represents good value compared to what you would have to do as an indie developer to support multiple stores and payment methods.
It's a mindset I'll never fully comprehend myself.
Supposedly I did work to earn a profit, but clearly not so much work that I shouldn't thank whatever system I'm subject to for the privilege of... making a transaction that barely involved said system, if at all.
5% or even 10% would be more acceptable. But 30%? lol For what? There's no way the vast majority of that cut is necessary for Apple's financial operations or for them to make a reasonable profit. How some people can't see this as greed is mind blowing. Where do they draw the line?
I'll tell you honestly why. It's because if they charged 5% or 10% it wouldn't be worth Apples time.
If they can't make 30% on the app store they'll go do something else which will make them 30%+ and leave it to rot. Because 5% or 10% is a commodity business and they can do better than that.
If there was something else that they could be making that kind of money for that little work, they'd already be doing it. Apple got lucky with a lock-in ecosystem and they obviously design great hardware, but I don't see them just up and deciding to dominate another market to make similar profits just because they're Apple.
Above something that is probably quite marginal this is basically free money for Apple. What are you comparing 30% to? Profit vs gross income? That's not what the 30% are here. That's 30% of an amount which depends on:
* a market that is so large that in a bunch of area it is basically not limiting - Apple has an influence on that but capturing so much value on 3rd party apps should not be warranted IMO, otherwise it would be warranted for them to also capture a big part on most of software for MacOs sales (esp. since the configuration by default is now quite secure so the argument that the App Store for iPhone is so valuable because it is curated is getting weaker) and for MS to capture a big part on most of software sales for Windows (and maybe give some crumbs to PC hardware manufacturers)
* the success of 3rd party apps, most of which has not much to do with Apple
Well, the Mac software landscape flourished before Apple had an app store. I wouldn't mind if they just gave up and let people distribute software how God intended.
It would be nice if they only charged for customers that discovered the app on the App Store. I would assume that the fraction of users who install apps after discovering them on the app store is miniscule compared to how many people learn of new apps through other channels.
Yours is a mindset that I'll never understand. You appear to believe that the price of a thing should be related to the marginal cost of the seller. Whereas, in reality, it's only a question of what a buyer will pay and what a seller will accept.
When you look at an airline that's about to fly a plane with twenty empty seats, do you say "sheesh, it's totally unreasonable that seat is selling for anything more than zero, it costs the airline nothing to have someone sit in it, the greed is mind-blowing"?
> Whereas, in reality, it's only a question of what a buyer will pay and what a seller will accept.
Which is why you don't have to let a monopoly/oligopoly set the price at will, they need to be regulated. Smartphones are becoming essential tools in many people's lives, and there are only 2 main providers; they need to be regulated. You can argue at the exact regulation but this Apple move has proved beyond doubt that we (as a society) need to impose tough regulations on them; because by themselves, they're not going to be reasonable, they're looking to extract maximum feasible rent.
>Which is why you don't have to let a monopoly/oligopoly set the price at will
Even monopolies are generally allowed to set their own prices; it's only the point at which there's abuse that there's a regulatory concern. The argument that Apple is looking to "extract maximum feasible" rent is undermined a bit by some facts I discuss in one of my comments elsewhere in this thread.
This. And before some libertarian starts rambling about how not to regulate stuff: I'm an libertarian myself and the current tech monopolies are only possible because of the state's intervention in the free market. Without ridiculous copyright and patent laws we wouldn't have those monopolies we see right now.
So yeah, as long as there's state intervention in the free market let the state regulate bad actors. I would be glad if it all went away but reality is that we have to live with this system.
That equivalence is awful. What is the profit margin of airlines vs the app store? There is a real cost to an airline seat, and there is a real cost to publishing an app on an app store (and all that it entails). The difference here is that airlines have tons of competition driving down margins, while no one is allowed to compete with Apple for iOS customers.
The existence of large profit margins is not prima facie indication of a lack of competition. Apple makes a huge profit margin on iPhones but I don't think there's anyone who suggests that the smartphone market is uncompetitive. To that extent, the first part of your point doesn't really hold up.
On your second part: one of the defining qualities of a retail store experience is, in my experience, that no-one is allowed to compete with the owner of the store. No-one would say it is uncompetitive that the owner of a supermarket doesn't allow you to put your own goods on their shelves.
Presumably your point is really that Apple's App Store is such a large fraction of the total smartphone app market that it has, and uses, monopoly pricing power in abusive way. That's a more interesting point.
The fact that's interesting to me is that, as far as I know, since Apple created the App Store, it has always charged 30% (modulo the recent small business program); from the very beginning when the market was practically non-existent, with no guarantee of success, up until today. So despite the fact the market has grown from nothing, Apple hasn't sought to increase their fees.
Also, look at comparison points. If you look at PC video games, those can often be bought in physical form, downloaded direct from their publishers, etc. etc. I mean to say there is no restriction on alternative sales channels. Nonetheless, a huge number of game developers choose to sell on Steam; where, coincidentally, the store cut is also 30%. They complain about it, but they do it.
> Whereas, in reality, it's only a question of what a buyer will pay and what a seller will accept.
I didn't say that's not what determines a price.
> When you look at an airline that's about to fly a plane with twenty empty seats, do you say "sheesh, it's totally unreasonable that seat is selling for anything more than zero, it costs the airline nothing to have someone sit in it, the greed is mind-blowing"?
No. Plane tickets are quite cheap regardless when you consider the amount of force involved in lifting that much weight into the air across the planet. Even when it's more expensive, I'm saving a ton of time compared to if I drove my car across country and back, making even pricier tickets worth it. In fact, the way I look at it, a plane with a bunch of empty seats is a good thing because that allows people to make last-minute travel plans. If one had to reserve a plane ticket months in advance, that'd be pretty lousy.
So perhaps that was just a bad example.
Here's the flaw in your oversimplifying of the argument. The price being as simple as what the buyer is willing to pay for is only adequate when you ignore the seller's level of monopolism and the market incentives that drive the buyer to taking it in the rear. Apple not only dominates a massive percentage of the mobile phone market, but they along with Google have created systems where your digital service is unlikely to be successful unless you play their game... because they are oh so concerned about the safety of the end user. And app that's not found in the App Store is never going to reach widespread use because even Android users don't really want to use apps their friends who have iPhones can't interact with them on. Even if you host binaries on your own site, good luck having iOS users figure out how to side-load the app or even have the courage to do so.
Would you be fine if your bank just ripped off 1/3 of your income? After all, what are you gonna do? Use cash for everything and be closed off from the modern economy? Sure, you can do that. But does that mean that this hypothetical banking system isn't ripping you off regardless of if you choose to pay it? It's a large amount of value that the buyer earned that the seller arguably didn't earn. In the case of Apple, they effectively get a 30% share in every company that hosts an app in the App Store because at any moment Apple can just say "nah" and delete the app.
But sure... let's have a society where everything's a free-for-all and we don't regulate scams and ripoffs because the buyer was willing to pay for it.
EDIT: I now realized what I said was on the snarky side... I changed it but left some of it and hope you're not personally offended or anything.
The profit margins scream lack of competition. In a competitive market you'd have dozens of companies scrambling in the hope of shaving off even 1% of the App store's revenue.
Right, but that doesn’t necessarily equal a good time for consumers. It’s a common gripe among PC gamers that every major vendor wants their own launcher, some of which are borderline spyware.
The choices I have on PC are wonderful. Many games are on multiple launchers or no launcher is necessary- download straight from the web. Lots of overlap between GOG, Steam, and Windows/Xbox Store. I can download and control games I buy DRM free from GOG. It's awesome.
> It is like the mafia demanding you pay for the privilege of doing business on your street
If Apple were to add this tax or raise it long after launch I could perhaps see this argument.
However, this tax is nothing new. AFAIK it has been like this for _years_. App developers must have known (before starting development) that there is a fee if you were to use the platform.
If you knew a certain street has mafia activity (or other similar taxes), would you make the concious choise of moving your store there? Well, if the business opportunuties are good enough, then it might be worth it. If the mafia suddenly showed up, then the equation could be different. This is just like any other business investment analysis.
If 30% is too much all in all, then it is unsustainable to keep the app store as an option.
App developers don't get to choose which platforms their users are on. There's a reason why things like react-native mainly target ios and android - that's where the users are. That is why people compare it to the mafia, you have to do business there, which means you have to pay them. Where are you finding users that aren't on android/ios?
If the mafia built the street, provided you with a shop to sell out of (with all sorts of nice features, got customers to come to your shop, and acted as a first line of customer support for all billing issues, would it be more reasonable that they got 30%?
How much revenue would developers make if Apple hadn't built the iPhone and the App Store and successfully marketed the thing to millions of customers?
What would be a fair price?
The linking stuff is simply because developers have tried time and time again to game the system by linking to outside shops. Hence the blanket ban.
It would be FAIR if you could charge iPhone customers more than Android customers but Apple is not stupid. The small print in your contract forbids just that.
People fall in love with Apple the same way they do a sports team or actor. They begin to cheer for it and want their favorite to win all the games, the best roles, the awards. Unfortunately these fields are all zero-sum, and small companies get pulverized by the hits to their cash flow.
This is great, because it serves as a basis for what Apple can be forced to reduce their commission to. What Apple has said here is "The cost of the payment processing is 3% and the rest is our commission", which obviously opens the door to legislators then saying "Well, you said the costs of payment processing is 3%, that's what we'll cap your commission at".
The big question here is why should Apple be entitled to any fee whatsoever if a user wants to buy something from a vendor without using Apple's payment infrastructure? Users should be free to transact directly with vendors without involving Apple if they don't want to involve Apple (which the court case approved) and if they aren't involving Apple, as in this case, a demand for a "commission" on non-Apple transactions is anticompetitive and should be prohibited by law.
The fight over alternative payment methods is fraught with misunderstandings. Apple has always stated their intention to collect the 30% regardless of what payment method you use, because as far as they're concerned it's not a payment processing fee. They view it as a platform fee that you pay for access to iOS, the App Store, and other services, and so far regulators and governments have agreed with them on that.
What's changed here is that Apple has now set a number to the "payment processing" portion of their fee. This gives them a way to cave on alternative payments while still retaining the bulk of their profits.
No, they are providing exclusive service because they own the platform. If competition was allowed their insane margins would go away. Microsoft got fined for IE and this is milking it way worse.
Not bothering would be the equivalent of the app store closing in this case, which would mean that iPhones would have to be open. So that would be the ideal outcome (except for Apple).
It's not 30%, but a very large portion of VISA's profits comes from the fees they charge; VISA's fees are not capped to their "costs" of operating. VISA exists as a literal precedent that you can profit off a commission for a financial transaction.
The issue in question isn't whether Apple should be allowed to profit, it's whether they should be allowed to abuse their effective monopoly position to set their commission a literal order of magnitude higher than any other processor.
In EU credit card fees are capped by law, and the duopoly is surviving just fine, just with less obscene profits. Should do the same with mobile app stores.
Apple has always argued that the 30% is not a payment processing fee. It's the App Store fee, which until today has bundled their payment processing fee with fees to cover their other expenses (and make them a tidy profit).
The argument over alternative payment methods has always struck me as odd for precisely this reason--throughout the Epic case Apple has made it clear that if they allowed alternative payment methods they would still charge the 30% fee for the other services.
Is 30% (or 27%) too steep for what the App Store provides? Probably. But fighting over the 30% as a payment processing fee is a huge misstep, because regulators will always take Apple's side on that question.
It’s rather tiresome for people to alternate between general and specific in order to be argumentative as opposed to staying on topic and contributing to the issue at hand.
No, the poster isn’t implying that all businesses should be capping their fees. That’s absurd. However, Apple is not all businesses and regulation is structured in a way that has a number of conditions. I for one am glad that the department of insurance makes my car insurance affordable and that when I purchase water it’s not from a private equity firm.
apple never said 30% is just payment processing. they claim the infra, the testers, the approval etc etc costs a lot. so now we know it’s 27%. which is absolutely normal.
should any app use their proprietary apis, without their explicit approval? of course not. the phone might be yours, but the code running on it a hard no.
but at the end of the day it’s all politics so i normally assume the worst: a worse overall end-user experience because some companies spent more on lobbying than others.
Clearly the incremental platform fees of Apple, Nintendo, Sony, etc.) amortize both capital and operational expenses, and also enable those companies to make tons of money.
The assumption that Apple only has to pay for infrastructure when people are downloading things is incorrect. Data centers still incur ongoing operations and maintenance costs even if they're fully paid for and nobody's downloading anything.
Yes, it shows that payment processing is 3%, and the remaining 27% has nothing do to with payment processing
Why do people insist on acting like the platform commission is a payment processing fee? No one says that about the platform commissions by Xbox, Playstation, Twitch, Patreon, ...
It’s interesting to me that the OS market in two separate generations of tech has naturally shaken out to become a duopoly.
Desktop computing for decades has been just Windows or MacOS (For 98.5% of people, yes I know Linux exists, but quit being cute).
Mobile computing took only a few years to shake down to iOS and Android.
Are OS markets inevitably always going to mature into duopoly? To me this is the core issue here.
Since computing is now the basis of the modern economy, the 3 companies that are in the OS business across desktop and mobile (Microsoft, Apple, Google) are basically the wealthiest companies on earth due to their ability to extract rents from all of computing.
I get that these companies built the market (although you could argue the tech was inevitable, so many teams were working on it in the early days) but once you become one of the winners and most valuable company on earth, extracting 30% rents starts to feel like a drag on future innovation.
It’s also interesting to me that Jobs originally courted John Scully from Pepsi to run Apple way back in the 80s—-what a bizarre choice. Did he know the market would inevitably always be a duopoly like the Cola market, already back then?
If you paid attention to Epic v.s. Apple, that was also the conclusion of the US court.[0]
When you use Apple tools to to make and publish software, Apple is entitled to a cut. The limitations Apple imposes on the payment processors are simply to make it easy to collect their cut and streamline the user experience.
I think the only scenario where Apple is not entitled to a cut is when you use non-Apple toolchain to develop your apps and spread it through non-Apple distribution channels, i.e. Cydia. Currently that requires a jailbroken device but maybe if Apple is forced to allow side loading, the cut for distribution can be collected by other companies instead of Apple.
“Apple has the legal right to do business with anyone they want,” said Paul Gallant, managing director at Cowen & Co. “So Apple could change the terms of the App Store and say to developers, regardless of where you collect your revenue, you owe us 30%, and if developers refuse to pay it, Apple would be free to de-platform them.”
There's an excellent overview of the US Federal court's 180 page decision on Youtube, but it's rather long. The diction is good, so it's still understandable when set to run at a faster speed.
The first 15 minutes is a summary and the balance of the video is a more detailed look.
Doesn't that still leave the problem with "using apple tools"? Currently, the only way I know of to compile apps that run on iPhones are xcode, on a macintosh.
Even when using frameworks like flutter I'm pretty sure you still need to use an apple compiler to make the final build, right?
I don't think that you have to use Apple toolchain, it's just way way easier to do so. I think there was some linux toolchain that you can use to build binaries for iOS.
On a non-jailbroken devices you will need to sign your binary with Apple's help but on a jailbroken device you can install whatever you want. It's also perfectly legal.
Besides, some hacking companies manage to install their malware on non-jailbroken devices.
There is no 3rd-party toolchain that you can use for a complete iOS (or even MacOS) build. Even if you cross-compile the majority of your code, you will need to transfer the binaries to a Mac for code signing. Everywhere I've worked that has produced Mac builds has had at least a small cluster of Mac machines to perform code signing. (But usually at this point, you just give up and perform the entire build on the Mac cluster.)
Technically you don't need it. There's no mechanism preventing another toolchain from producing an iOS build. It's just nobody is interested in creating an alternative toolchain.
If only they would allow sideloading. How cool would a F-Droid equivalent for iOS be? I can only hope that Apple or regulators will open up that walled garden a bit.
I know that Apple's Terms say that you can't explain to your users, that they have to pay some 30% "Apple Tax" for in-app purchases. But could you just say something like "30% mobile phone app fee", to go around it, while making it clear to the user why they're paying this amount? I feel like it would be illegal for Apple (or Google Play) to prohibit developers from breaking down costs like that? Like I don't get it.
They do prohibit developers from breaking down the costs like that. This is the guideline they would cite you for:
> 3.1.3 The following apps may use purchase methods other than in-app purchase. Apps in this section cannot, within the app, encourage users to use a purchasing method other than in-app purchase.
Yes, it should be illegal for them to prevent you from breaking the cost down, but they have historically interpreted this statement that way.
No but i think it would be useful to apply the law generally to situations where there are multiple payment options. E.g. credit cards vs cash in store. Right now stores are forbidden by CC companies to post a different price for CC vs cash, or to otherwise breakdown the cost of using a credit cards.
I suppose you could read it like that. I think consumers should have a right to know what they're paying for. One should be able to say that you pay x for hosting, y for software development/maintenance, and z for the platform offering the app for you. I don't see how anything against this could prevent someone from breaking it down like that. But here we are.
I have an app in the App Store and pay 15% commissions, since we are below 1 mn USD in sales. In exchange, I can roll-out my app in 175 countries and have not deal with local authorities re taxes etc.
For me, that's a pretty good deal. I could never do this on my own. Any other provider would probably take the same cut for that kind of service.
That's an easy one. Let's look at the other big ecosystem Android. There we have a couple of alternate stores like Amazon's. They take 30% as well? I am not sure why it should be different with Apple.
Maybe, just maybe, running a well-curated app store is just something that is expensive.
Comparing apples to pomegranate seeds, surely. But perhaps that's the point. If third party app stores were allowed, they needn't all be shoddy wannabe Apple App Stores run by rival tech giants trying to publish as many apps willy-nilly to cut into Apple's market. Instead, perhaps there could be many boutique curated app stores, some non-profit even, that aim to cater to specific user experiences.
The benefit is that it could be a solution for the app discovery issues that currently come from having a single App Store with a single search interface. Users with specialized interests or needs can subscribe to smaller third party app stores as they see fit. There would be competition in app discovery. More customization in user experiences. Variety in editorial control.
It's a bit akin to reversing the current state of the web where giant closed sites such as Facebook or Google are single-entry points, and going back to the past where there were web communities and webrings. A Neocities for apps would be neat.
I think Steam and GOG are examples of well curated (specialized) app stores. I searched a bit and it seems there have only ever been a small handful of reports of Steam accidentally allowing malware to be distributed with a game ("Abstractism" is the only one I found, that had apparently had a crypto miner embedded).
To be fair, Steam also was collecting 30% fees (I believe they have reduced recently, mostly because of pressure from Epic), so from this point of view it's not better than Apple.
Android has plenty of free stores and with v12, those stores can also update apps automatically. It's going in the great direction.
I use 3 different stores on my phone for example.
Of course, an average person doesn't need that many. I use fdroid for sensitive apps (I can verify an app build there compared to playstore) and some developers provide apps without google services framework on froid as an alternative to their playstore version.
A price that has nothing to do with costs is a monopoly rent; in a competitive market marginal prices are driven down to marginal economic costs by competition.
On the contrary. In case of a monopoly price is guaranteed to cover the costs. In a competitive market the price can be well below the costs. Case in point: Epic games store. They are burning money to carve out a market share. That's an example of price decoupled from the cost.
For me, that's a pretty good deal. I could never do this on my own.
No one is saying Apple shouldn't offer the service, or that it's not a good service, or even that Apple shouldn't charge 15%. If you think Apple do a good job and offer value for money then you should use their service and pay what they charge.
The only thing people want is the opportunity to use a competing service. That's it.
The practices aren’t anti-competitive. That’s just it. This is all about a few other multi-billion dollar companies trying to take money for something they didn’t build.
It’s laughably naive to think this is about individual citizens voting for completion law.
Actually, a judge already found that at least some of Apple's practices were anti-competitive, and order them to stop.
So yes, in at least one trial, some of Apple's actions were declared anti-competitive.
> voting for completion law
This thread is actually literally about a law that was created. And more laws are being created right now, in south korea, the EU, and the USA, and those laws would require Apple to change more of it's behavior.
But also, as I mentioned before, a judge literally already found some of Apple's behavior to be illegally anti competitive.
Did you read the part where I said "So yes, in at least one trial, some of Apple's actions were declared anti-competitive."?
I didn't say "any" practices. I said some.
So yes, some of Apple's practices were anti-competitive.
Apple has to win on every single count, otherwise it is a loss compared to the status quo, because that is 1 less thing they are allowed to do.
So yes, Apple is at the stage where already "some" of it's practices have been declared anti-competitive. And more lawsuits and laws are happening or being drafted.
In fact, the Open Apps Market app just went through the senate committee yesterday, in a rare bipartisan 20 to 2 decision, which would force sideloading of alternate App stores, I believe.
If that law passes, it is game over for Apple on this subject.
If that passes, there is basically nothing Apple can do to prevent everyone from completely bypassing the 30% fee.
> So yes, Apple is at the stage where already "some" of it's practices have been declared anti-competitive
Yes, but that’s irrelevant. It doesn’t mean their practices have been declared as such in some general way. If you want to discuss the specifics of that case, by all means do so, otherwise it’s just dishonest to pretend they are relevant.
As for what passed the committee - it’s possible that may indeed allow people to bypass the 15% fee (please don’t lie about it being 30% - that is only for a small number of developers).
It will also have all kinds of damaging impacts that make life harder for smaller developers, so it’s not a win for anyone except some larger scammy operators.
In any case, a committee vote is a long way from legislation. It’s unlikely to pass judicial review even if it passes both houses of Congress, which is also unlikely.
Huh. It's almost like pressuring apple with legal action forced them to lower their fees. That's pretty nice. Sounds like we need to more of that.
> pretend they are relevant.
It is relevant because it supports my general point that every loss for apple, is one less thing that they can do, and that there are a bunch of ways that they are being attacked, on many fronts.
Apple has to win on everything, or it is a loss, compared to nothing happening.
> It’s unlikely to pass judicial review
People are not making any significant arguments that the law is illegal or unconstitutional. Laws aren't unconstitutional just because you don't like them.
These types of laws are attempting to be passed in lots of countries. So no, all of these laws everywhere, that lots of countries are trying to pass, are not all illegal.
> that make life harder for smaller developers
Nobody is making the Apple App store illegal. Those developers can continue to use that, if they prefer it. It is just other companies can choose something else if they want.
> People are not making any significant arguments that the law is illegal or unconstitutional. Laws aren't unconstitutional just because you don't like them.
Don’t be silly. The bill only passed committee last week. Arguments over constitutionality will come in due course.
> These types of laws are attempting to be passed in lots of countries. So no, all of these laws everywhere,
No they aren’t.
> that lots of countries are trying to pass, are not all illegal.
That remains to be seen.
> that make life harder for smaller developers
Nobody is making the Apple App store illegal. Those developers can continue to use that, if they prefer it. It is just other companies can choose something else if they want.
This simply isn’t true.
If a developer has to negotiate with a multitude of different stores, each with different rules, their life will be harder.
Given that the alternative is to lose access to customers, it’s the small developers who will be harmed most by this.
These bills are supported by giant corporations who want to run their own stores. It’s just about them taking a cut, and has nothing to do with consumers or small developers.
> Arguments over constitutionality will come in due course
Which means that you have absolutely no justification for the law being illegal. You just don't like it, and are reaching for whatever things that you can, without any justification.
> That remains to be seen.
This is code for "I have absolutely no good arguments, or any legal justification, for why it is illegal, I just want to assert that it is illegal because I don't like it!".
Because if you had good arguments you would have said them.
So I have no idea why you are making these strong claims that it is very unlikely that it will pass constitutional review, when your only justification is "that remains to be seen".
> No they aren’t.
Yes they are. Go look up the EU tech laws that they are attempting to pass. They include a similar provision, that would force other app stores on the platform.
You are pretty misinformed if you didn't know that there was a big EU tech law, that they are attempting to write and pass right now.
The points you were responding to are just rebuttals of your own claims of legal knowledge.
> This is code for "I have absolutely no good arguments, or any legal justification, for why it is illegal, I just want to assert that it is illegal because I don't like it!".
Saying my argument is something I didn’t write is just a dishonest and lazy move. What I wrote isn’t code for anything. You seem to be unable to handle my points as they were written.
You also didn’t respond to my rebuttal of your actual position. Let’s try again:
> that make life harder for smaller developers Nobody is making the Apple App store illegal. Those developers can continue to use that, if they prefer it. It is just other companies can choose something else if they want.
This simply isn’t true.
If a developer has to negotiate with a multitude of different stores, each with different rules, their life will be harder.
Given that the alternative is to lose access to customers, it’s the small developers who will be harmed most by this.
These bills are supported by giant corporations who want to run their own stores. It’s just about them taking a cut, and has nothing to do with consumers or small developers.
Since you are not quick on the uptake to figure out what I was saying, I will spell it out explicitly.
When I said it was a "code", I didn't literally mean that you were speaking in code, like some sort of cryptographic secret language. Instead I was making fun of you, for asserting that the laws were illegal, without any actual justification.
You originally stated "It’s unlikely to pass judicial review". And you just asserted it. With no justification.
And then later, when I pressed you on it, your only justification, for why you think these laws are illegal is "That remains to be seen.". Which isn't an argument for why the laws might be illegal.
I was assuming that when you said "It’s unlikely to pass judicial review", that you might actually have a reason for why you think the law is illegal, other than "That remains to be seen.". But I guess I was wrong on thinking that you had a reason.
You had no actual reason or justification, for why these laws could be illegal, even though there are multiple laws, attempting to be passed in all sorts of countries, such as the EU, which you were wrong about.
You just said it was illegal, and said we'll have to wait to find out, lol. Thats not a reason, because you don't have any.
I do expect that it won’t pass judicial review. However that is a discussion for another time. Remember the proposal hasn’t come before either house yet. Imagining the law is an instantaneous process seems misguided.
So you’ve now wasted comment after comment merely ‘making fun of’ that opinion without adding any substance. I assume that’s because you aren’t really sure of your position.
Perhaps this is just bluster to distract us from the fact that you didn’t respond to my rebuttal of your actual position. Let’s try again:
> that make life harder for smaller developers Nobody is making the Apple App store illegal. Those developers can continue to use that, if they prefer it. It is just other companies can choose something else if they want.
This simply isn’t true.
If a developer has to negotiate with a multitude of different stores, each with different rules, their life will be harder.
Given that the alternative is to lose access to customers, it’s the small developers who will be harmed most by this.
These bills are supported by giant corporations who want to run their own stores. It’s just about them taking a cut, and has nothing to do with consumers or small developers.
> I do expect that it won’t pass judicial review. However that is a discussion for another time.
So then you have asserted this, without any reason at all, which was my entire point. You have no reason or justification for thinking that the law is illegal. You just said "Its illegal, and I have no reason why I think that!".
And before you say it, when I said that Quote, I am not literally saying that you said those words, instead I am saying how you didn't give a reason, and just asserted that it was illegal, with no justification.
> So you’ve now wasted comment
When you make a completely unsubstantiated comment, with no justification, it is important to keep it on point, so that you don't just shrug your shoulders and ignore it. Because you have made multiple false statements, and then when I point out the false statements, you just ignore that.
You similarly disagreed with me, that there were other countries trying to pass similar laws, by just saying "no they aren't", when actually they are, and you can easily google these EU laws that people are writing.
When you keep on making completely false statements like that, it is important to point out, so that you are aware of how little you know about this topic.
>> I do expect that it won’t pass judicial review. However that is a discussion for another time.
> So then you have asserted this, without any reason at all, which was my entire point. You have no reason or justification for thinking that the law is illegal. You just said "Its illegal, and I have no reason why I think that!".
No I didn’t say it’s illegal. Where did I say that?
I said I expect that it won’t pass judicial review. That is what I expect.
> Because you have made multiple false statements, and then when I point out the false statements, you just ignore that.
You haven’t pointed out a single false statement. It seems like you’re just descending into outright lies now.
If you can quote a false statement I made rather that making one up, then I’ll reconsider that opinion.
It seems like you are are just lying to distract from the fact that you didn’t respond to my rebuttal of your actual position.
Let’s try again:
> that make life harder for smaller developers Nobody is making the Apple App store illegal. Those developers can continue to use that, if they prefer it. It is just other companies can choose something else if they want.
This simply isn’t true.
If a developer has to negotiate with a multitude of different stores, each with different rules, their life will be harder.
Given that the alternative is to lose access to customers, it’s the small developers who will be harmed most by this.
These bills are supported by giant corporations who want to run their own stores. It’s just about them taking a cut, and has nothing to do with consumers or small developers.
Ok, so expect that it will be declared illegal. As in, "it won’t pass judicial review". That is what I meant by that statement.
I am saying that you are claiming that " it won’t pass judicial review", but you didn't give a reason or justification for why that would be case.
> You haven’t pointed out a single false statement
The most obvious false statement, would be the one that I just quoted of you, in that post. Which would be when you said "no they aren't", in response to me, when I said that other countries were trying to pass similar laws.
A similar law, would be the EU laws that are being written right now. So that is the false statement. It would be how you were not aware of those similar EU laws.
> If you can quote a false statement
The quote is "No they aren't", in response to my statements about these EU laws. I literally quoted that in my previous post.
I’m not ‘claiming’ it won’t pass judicial review. I am stating an opinion. Do you understand that?
I don’t think the EU laws are similar. That is another opinion.
Neither of these statements are false. You may disagree with my opinions but it’s delusional to confuse opinion with fact.
You are lying when you say I’m making false statements. to distract from the fact that you didn’t respond to my rebuttal of your actual position.
Let’s try again:
> that make life harder for smaller developers Nobody is making the Apple App store illegal. Those developers can continue to use that, if they prefer it. It is just other companies can choose something else if they want.
This simply isn’t true.
If a developer has to negotiate with a multitude of different stores, each with different rules, their life will be harder.
Given that the alternative is to lose access to customers, it’s the small developers who will be harmed most by this.
These bills are supported by giant corporations who want to run their own stores. It’s just about them taking a cut, and has nothing to do with consumers or small developers.
People as in consumers? 99% of Apple consumers don’t care about this drama. They just want to click and install an app that’s safe, vetted, and no one will steal their credit card.
Same as I don’t care when digitally buying PlayStation games. I don’t care how much Sony charges developers to be on their marketplace, and I don’t want to use alternative stores with additional places where I have to put in my credit card or ask for refunds.
99% of Apple consumers don’t care about this drama.
At the moment there's no point in caring. You don't have a choice, so why worry about it?
You have to remember that you, as someone who doesn't care about alternative stores and wouldn't switch, aren't the market for an alternative store. This is about other people and their freedom to choose. Arguing that the Apple iOS store works for you and therefore it should work for everyone else is not how free markets work.
If Apple iOS store doesn't work for you, there's Google Play store. Free market has nothing to do with how software is loaded on a hardware.
There were more options in the past.
There was Windows Mobile, Windows Phone, BlackBerry, Nokia, Symbian, etc.
But when Apple came to market, they made such an excellent device, along with great developer and consumer experience, that developers agreed for 30% cut and most decided to ditch developing for other platforms, and consumers decided to ditch other now "shitty" phones where they couldn't download their favourite apps for.
Microsoft released great phones, but still had issues with software. They tried solving that with throwing money at developers, but developers still didn't want to develop for Windows Phone.
Developers played crucial part in the last 10 years to form the market where we are today.
And suddenly in 2022, after playing on the same terms for the last 10 years, an access to a marketplace with 1+ billion active users needs to be a free, basic human right that everyone cries for.
Would I be free to choose to pay for your App through Apple? Or would the developer have the choice, and I end up having to call them to end the subscription the way so many news papers require you to?
Because Apple given the third party access to you via a marketplace.
And you are a participant of this marketplace, because Apple spent billions on R&D and ended up being so good, that developers and consumers abandoned other platforms in droves.
Apple also smoked previous multibillion competitors (BlackBerry and Nokia) into shame, and they’re now part of history and MBA lectures on how a young and innovative player can kill your slow and boring business in a short time.
That’s why Apple is a market leader, with the best vertically integrated hardware and software devices, as well as a marketplace with billion people that both devs and consumers eagerly want to be part of.
The same marketplace developers agreed to join by paying up 30% of revenue 10+ years ago, while abandoning Windows Phone and others, and playing part in the shaping the market where it is today.
And suddenly developers cry wolf that it’s a basic human right to have access to a marketplace with 1 billion people for free, which they played active part in building.
Apple forces me to use their marketplace to do business with any third party selling software for my phone.
It is not "giving access" to third parties, it is restricting them from accessing my phone unless they use Apple's preferred software distribution method.
The fact that they were in the right place at the right time with the right fashion and right look and feel to capture this market does not entitle them to perpetually profit from it. And I do say "happened to", because the iPhone had nothing other than chance going for it, and it was simply an idea whose time had come. Several others were developing smartphones at the same time, such as Nokia, LG, and Google's Android. Apple had better and faster execution, much better marketing, and luck.
These are fair points, I am curious how you perceive the existing wireless industry in the United States.
It seems to me that Verizon and others are in a state of perpetually profiting their consolidation of companies that were in the "right place at the right time."
Would you agree with this? If so, do you think these companies are making outsized profits given lack of entitlement?
How would you craft policy that would cover not just the Apple but other companies like wireless carriers?
Separately, you mention Mentor Graphics above. Did you mean to refer to chip-level design tool software?
I'm not sure how the US wireless market works, as I don't live there. Still, centralization and consolidation of service providers is always a bad thing, and ideally anti-trust legislation should reflect this. This problem exists in my own country as well.
Still, this seems like a separate problem to me - one is consolidation of different service providers into fewer ones; the other is extending your market position in one space (smartphones as hardware) into another (smartphone software). I doubt the exact same legislation could cover both, as acquiring/merging with competitors is different from creating your own market monopoly.
I don't know enough about how these things can exactly be regulated to propose actual legislation. I can only say that the current situation is bad and getting worse, and that allowing huge mergers, and allowing companies to control all activity on the hardware they sell, are both negatives that need to be legislated somehow.
> Separately, you mention Mentor Graphics above. Did you mean to refer to chip-level design tool software?
Yes, it was the first thing that came to my mind as Unix-based commercial software. Honestly, I have no idea if it actually runs on a Mac, but the exact software was immaterial to my point, so I didn't do too much research.
Ok, but then I get the same thing on Android, more or less - which is why I was talking about an oligopoly.
And while I could use F-droid on an Android, I would lose access to important software that clings to the Play Store, such as MS Office support and many banking apps - though, admittedly, that is a different issue to tackle and less Google's fault. And I'm not referring to the fact that they may simply be unlisted there, but the fact that they will refuse to run unless the phone is locked down using Play services.
Edit: Not to mention, the point is to improve the iPhone (and Android phones), not just to seek for alternatives. We can look at as system and decide as a society that we want to do better, we don't have to wait until someone provides that better thing and then "vote with our wallets".
That is a facetious argument. Just because the majority doesn't care doesn't mean the issue isn't important. We don't decide importance of things just based on a vote - we can use also use reason, logic, empathy, etc.
As someone who has had to deal with subscriptions on apps on my wife’s phone, “20% cheaper” but outside of the Apple payment ecosystem sounds way more expensive.
There's merchants of record like Paddle.com that do the exact same thing (handle taxes on software sales for you) and they charge 5%. And that includes payment processing fees they have to pay to Paypal etc.
So with Apple's scale, they could easily offer this service at below 5% commission.
You're paying for access to iPhone users, not the transaction fee.
An analogy would be, creating a product and getting on store shelves. You pay the store owner a percentage of each sale, in order to be sold in the store
At your level that makes sense. But if you were more successful there would come a point at which you would be better off to process your payments yourself and you should be free to do so. Because then you would be doing all the work rather than Apple.
Apple is not a government, they should not be able or allowed to levy taxes.
That is not the kind of argument that works in an anti-competitive setting.
The fact that I went to your school does not give you a right to a chunk of my lifelong income, the fact that you once sold me a tool doesn't either and so on.
If there is no performance there is no right to invoice. The only entities that can do that legally are called governments, which - incidentally - Apple is doing their damnest to not pay taxes.
Of course it does, when you get big by visiting my school and knowing this before.
It is just absolutely ludicrous to get big on the back of a giant and then to start complaining. Just get big without it that is what you wish.
Re tax evasion: EVERY mid-sized company in Europe that I have worked for has elaborate tax evasions schemes in place, mainly by having other entities in countries like Luxembourg.
It's the fact that the EU tolerates places like Luxembourg an Ireland that this happens. No one talks about it because it's just better for headline to go for the big Californian names.
Well, I hope you pay your mom 30% of your income then because you got big on the back of her work.
Seriously though, how you get started is immaterial, you should be free to change service providers, especially service providers that are price gouging you when you feel that you can no longer justify their cut.
As for the tax avoidance (not evasion, that's an important distinction here), yes all the big guys do it, but that does not make it right and if Apple were to actually pay their taxes I would see that as them at least understanding the pain of having to pay a good chunk of your income every year.
I pay my taxes and contribute to my community through them, Apple siphons off a very large chunk of the worlds wealth into the pockets of a very small number of shareholders and now wants to argue that they have an unassailable claim to 30% of the income of other companies. And I strongly disagree with that.
If they charged between 1 and 5% for their service that would be fine by me, but it would still not give them an automatic right to this fee, they would have to compete with everybody else.
Anti competitive behavior has one clear and common thread running through it the world over: an element of abuse and that is clearly present here.
Unfortunately, my mom died a couple of years ago, so no I don't pay anything :)
I believe we have a fundamentally different world view, so I am not sure if it makes sense to continue debating.
I believe in meritocracy. Apple put hard, hard work into building an ecosystem of 1.8 bn active devices. I believe they are entitled to reap the benefits and not let any upstart compete with them as they wish.
If you believe in a meritocracy then you should see the irony in that you are defending a de-facto monopolist and their rent-seeking behavior, which is an abuse of power.
The rent seekers are the inheritors of a machine that they themselves did not build (the shareholders of Apple), and who are taking away a good chunk of income of those whose products people wish to use, a sure sign of merit.
> Apple put hard, hard work into building an ecosystem of 1.8 bn active devices. I believe they are entitled to reap the benefits and not let any upstart compete with them as they wish.
So you don't believe in meritocracy, you believe in perpetually inherited wealth.
Meritocracy would mean that, at any point in time, whoever is the best at doing something should rise to the top. Maintaining someone else's advantage because they were the best at some previous point in time actively works against a meritocracy.
This is like saying that nobility is a form of meritocracy, as Queen Elizabeth II's great great great grandmother put hard, hard work into building an empire, so she should now entitled to reap the benefits, not let some upstart president of a colony compete with her as they wish.
This is a valid argument. But it's not like devs are completely on their own outside of the App Store. There are at least two other companies that provide payment and licensing services to software vendors like Fastspring or Paddle. I only know these companies as a buyer software licenses. Never had any problems with them. But I can't say how it is to deal with them as a software vendor.
I use Paddle as a seller and it's an amazing experience. No VAT hassle (both paying it and displaying prices correctly on my website) and super easy integration on my website (comparable to Stripe). Plus you get a bunch of payment methods at once (Apple Pay, Paypal, credit card, bank transfer,...).
A great experience all around for a fair price (5%).
What Paddle and Fastspring offer is what Apple values at 3% of the 30% fee.
This is about access to marketplace with 1+ billion people for a vertically integrated device that cost billions of R&D money.
Same as if you want your SaaS to be on Shopify or Salesforce store. You'll pay a cut to be there. Because Shopify and Salesforce offer you access to their customers to install your app in 1 click.
This whole fight is a bunch of billionaires slinging mud at each other and trying to win over the court of public opinion, which is largely not affected.
The drop to 15% took too long. But it’s here now. If the Epics of the world want to enlist/manipulate the suffering of the “little guy,” they really can’t anymore.
Maybe so. But it wasn’t due to developers leaving or putting market pressure on Apple. If developers feel so cheated and abused by Apple why not go to the US majority platform of Android? They don’t because Apple presents them tremendous value. They just want more of the pie. Nothing wrong with that. But let’s call it what it is.
There's also a big power disbalance - a developer complaining about Apple's policies and rent seeking is completely at their mercy and mind find their account and apps blocked for "violating their ToS" or some other reason. Yes, the Apple platform is vastly more profitable for developers because most Apple customers are accustomed to spending money ( as opposed to the Android market which includes everything from $/€ 100 headsets from obscure brands like Wiko to $/€ 2k premium Samsung or whatever devices - the latter might be okay on dropping $/€ 10 on app, the former certainly wouldn't).
Exactly. It literally enables level playing field for smaller developers who can't simply incorporate in 175 countries and navigate through the rules, regulations of taxes.
The value that Apple provides for the smaller developers is immense, you don't actually see small developers complaining about Apple(with exception to those who were sherlocked maybe) but you see multi billion corporations pretending to be advocating for the little guy.
I'm very annoyed by all this, I'm afraid that they will win and solo developers will lose any chance to make it big without getting screwed by large publishers.
Can you please stop saving the small developers from Apple? Thank you.
> you see multi billion corporations pretending to be advocating for the little guy.
And they are.
The little guys won't stand up to 30% of their gross taken but the big guys can and do. As a result after all the lawsuits have run their course Apple will be charging a much lower fee in the hopes of regaining their payment processing marketshare.
Do you think that a 99% tax/commission would be fine? If not, how do you decide that 99% breaks the business, but 30% is fine?
The answer of course is that different businesses have different margins. For some, even paying 99% commission to Apple would not break the business, as they have such great margins that even getting 1% of each sale would still leave them profitable. For others, even a 1% commission is too much, as they have such low margins even losing 1% of sales price makes them unprofitable.
For any set price, some business models are excluded from the App Store, for better or for worse.
Suggesting that what Apple does is equivalent to a payment processor is ridiculous. I suggest looking at Epic v Apple and how that argument went down in court. It was embarrassing to witness.
Yes, agreed they are more like a mob running amok in a neighborhood but for the moment I'll give them the benefit of the doubt and looking at it purely as a transaction processor.
I wonder how all of those defending Apple in this thread would respond if they jacked up the prices to say 75%. And why stop there?
How do you pay your taxes in UK, Turkey, Poland, USA, Japan, China, Australia and the rest of the 175 countries? How do you handle the regulatory requirements in each country and how do you navigate through the trade agreements?
I'm asking you to enlighten me. Currently I don't have to deal with any of these, Apple handles all that for me, I like that and that's why I'm active in this thread. I'm defending a service that I see value in but maybe you can shine a light and demonstrate that all these can be handled for cheaper and easier than using Apple's service that charges %15 to %30.
I'm asking legitimate question, I'm puzzled by your dismissive tone. How do you sell software and services in 175 countries for less work and commission than Apple's service?
Good for you that you are running international business for a couple a decade know, would you share some of that knowledge?
That it works for you is fine. You obviously have no incentive to look further than what works for you and you are fine with paying 30% for a service that is not competitive but that is convenient.
If you were a bit larger that equation would change. Your first step would then be to use a commercial payment services provider such as Stripe, Adyen or any of the others to process the transactions for you (rates: 1 to 5%), possibly falling back to Apple in case their coverage doesn't perfectly overlap. Then at an even higher level of transactions you could choose to do the payment processing yourself.
It's pretty simple, really. And as for taxes: that too is something that you can arrange in different ways, depending on where your main place of business is registered.
My dismissive tone is because it appears that you want me to do a bunch of homework for you while at the same time arguing that there is nothing to be concerned about in 10's of comments in this thread. You have already made up your mind and seem to use questions as a way to argue rather than that you are really interested in the answers. I predict that as a result of this response you are going to come up with another set of questions for me to answer or a new set of arguments that move the goalposts away from your previous claims.
But the essence of my response is: anti-competitive behavior can not be argued for by utility to some subset of the customers. The phone company provides a lot of value. But if they behave in an anti-competive way, for instance by price gouging customers on something that costs them peanuts such as roaming then they deserve to be smacked down, even if some people will argue that you could of course buy a different phone for every country as an alternative, and so those roaming charges are acceptable because they are cheaper. That misses the point entirely.
> If you were a bit larger that equation would change
Right.
Can you please stop saving smaller developers from Apple? Thanks!
PS: You maybe need some homework too. Essentially, Stripe etc. doesn't handle anything else that processing your payments(Maybe that changed or will change in the future). They have list of countries that they support and links to the governing bodies, you are on your own to figure out how to sell in these countries. There are some companies that handle stuff like that but you don't simply pay 99$/year and start using them, there are also publishers that will do it for you but they are much much more predatory and restrictive that Apple. So please, if you have something that you know say it, instead of passive aggressively attacking my character. If you are business genius you say you are, it would be much nicer of you to share some of that with those who know less instead of throwing generalised assumption and saying things like "go do your homework".
Nobody said that you can't do business with Apple in any way that you want.
Your arguments in this thread are based on some kind of extrapolation that is not warranted.
As for what Stripe and other PSPs do: I'm intimately familiar with that stuff. You are free to do your own marketing/sales/payment processing/whatever but you should not be forced to deal with any particular party, including Apple at some price that they set.
Note that if Apple would charge regular PSP fees we probably would not be having this discussion and you would be making more money.
I'm glad that you are intimately knowledgable but your original claim was that %30 is a bad deal and large corporations are in a mission to help small developers agains Apple.
Then when I press you to show some calculation, you admit that you actually need to be "a bit bigger than a small". Essentially, what you say that all you need is a dream and a few million dollars in the bank. Thanks, great advice.
You keep repeating that you know a lot and I am sure you do but your arguments fall short of actual information. You keep saying things that "you need to learn" which I tolerate and try to be respectful despite I really don't enjoy being patronised.
Besides, I want to note that the real issue for me is not the %30 or %15 or whatever cut Apple takes. The real issue is that Apple/Google/Amazon or any other company can cut you off if they want. At this point, I think these services must be regulated like utility, i.e. businesses that depend on these must be guaranteed to be treated equally and fairly. Apple is has done fine for the most part but IMHO what we need is rights, not all that BS about making Apple change their software to accommodate something.
30% is a bad deal because it was a one-sided affair.
Let's see your reaction when they crank it up to 50%, 70% or even more. Your arguments are going to be exactly the same, right?
> At this point, I think these services must be regulated like utility, i.e. businesses that depend on these must be guaranteed to be treated equally and fairly.
This is exactly the crux of this court case. Apple is abusing its position, it has turned itself into a utility and there is no way to opt out and switch to another utility.
There isn't going to be any reaction because they can't crank it up to 50 or 70 percent because developers would leave. Which means it's not a monopoly.
Developers wouldn't leave, the apple app store generates so much revenue that it would be much more profitable than android even if they lost half of it. What would happen is that governments all over the world would quickly rush to regulate Apples power away, that is what Apple is worried about and why they lowered it for small developers to 15% already, they aren't worried about competition here.
> Developers wouldn't leave, the apple app store generates so much revenue that it would be much more profitable than android even if they lost half of it.
You're countering your own point. The fact that there is so much money to be made on the app store, is why they have a right to charge 30%. They created the platform, and made it a great place to buy apps for users, and a lucrative place to sell apps for developers.
iPhone users are wealthier than Android users, that is the main reason the platform is more lucrative. Apple did a great job creating phones that users wants and charges a premium for them, which is great. What is not so great is that Apple then uses their dominance in the premium phone market to become the gatekeeper of a majority of phone app revenue, resulting in Apple taking a 30% cut of most app sales in the world. They don't have the most phones, no, but they have most of the phone app market.
And as phones are taking over phone apps are becoming an ever more important part of our lives. Apple can't just sit there and charge 30% of phone apps forever, that starves an upcoming market and holds back progress.
And yet somehow indie devs have managed to sell software for macOS for decades before the invention of the Apple App Store. Only the larger software shops are atually running their own payment and licensing backends. Most use payment providers like Paddle or Fastspring. There are also other distribution channels like SetApp for expample.
One thing that Apple has made very easy for devs are In-App Payments. But I think you can argue if that is such a good thing for Apple's customers.
macOS app ecosystem isn't really thriving and the regulatory complexities arrived after the Internet matured.
Something being possible isn't the same as being good. Selling 1000 copies at %30 commission(it tends to be around %50 once you ad stuff like VAT) is much better than selling 10 copies at %1 commission.
I also think that from the users perspective it's much better to have one place where you manage all your payments/subscriptions/downloads etc. That can be solved through some kind of unified purchasing interface though.
I'm not saying that App Store distribution is useless. But I think vendors should have a choice. If Apple's system is so superior, they have little to worry about.
> ... you have access to the exact same processes as the Epic or Microsoft.
No you don't. Netflix and Amazon got special deals (before the whole Epic saga) [1] [2]. From partial waivers of the Apple Tax, to Apple-run editorial promotions, to bundling!
"The emails could serve as evidence that for lucrative and powerful partners, Apple seems to be willing to make concessions."
You make no sense. No one is arguing Apple should stop offering this service to developers.
However, Apple shouldn't be allowed to monopolize the market for mobile apps (or "oligopolize" it together with Google, if you want to be extremely pedantic). There should be other options for these types of services.
If Apple offers the best case for your business: Great! Keep using Apple. If someone else's business doesn't need availability in 175 countries (say, they are a taxi app operating in one city), perhaps they should be able to choose some other payment processor who won't demand 30% of every in-app purchase for offering them the exact same service as Stripe.
The problem is that they aren't offering the same service. The payment processor is not maintaining the ecosystem or doing anything outside of the relatively narrow scope of accepting payments and maybe dealing with taxes.
Even if you think Apple's (and Google's, and Microsoft's, and so on) cut is too high, the idea that the entirety or even the bulk of the value that they offer is strictly in facilitating transactions is incorrect.
> The payment processor is not maintaining the ecosystem
There is good historical precedent to believe that this "service" is approximately 0 in value: the Windows desktop market (in its heyday). People were making money selling software to consumers on Windows without Microsoft doing anything to "maintain the ecosystem" other then developing their OS.
So, the approximate value of the service Apple offers to businesses except payment processing, taxes, etc, is 0, which is approximately how much Apple should be paid if someone is using Stripe instead of Apple for payment processing.
I don't think they are scared, it's just easier for them to collect their cut when the payments flow through their systems. It also enables them to do really good customer service and this helps them sell more iDevices. Purchasing, refunds, cancellations are all handled by Apple and are accessible from a single place and that makes for a superb customer experience.
Let's not forget that companies are not charities. When they are charities, they register as such.
This 15% happened after all the outrage. Yes, all these mega corps don't care about the little guy but apple allowing third party options doesn't take away from their ability to continue to provide the services to developers who see value in apple's payment services.
Are you a developer? Can I see your apps? I'm curios about your business model where selling coins or unlocking premium features at %30 commission instead of %15 breaks your business to the point that incorporating in 175 countries is more desirable.
I develop. No, 30% doesn't break my business majorly because my business model is not around app sales but I agree with your point that for most 15 and 30 won't break the business. But you are presenting a false dichotomy. Why are we assuming if apple doesn't offer these services, a third party won't as well? And I am not proposing that apple stop offering its payment and other distribution services but rather that third parties be allowed to do the same.
There's nothing desirable in dealing with multiple 3rd parties to reach your customers instead of one that is essentially providing equal service at equal price to (almost)everyone.
The mafia also provides services. You don't just pay them and get nothing in return. Of course, there, as here, you really have no choice but to pay; and to pay ridiculously inflated rates.
> ... at equal price
Not true. Apple's price is zero. Sucks if you're competing with them, then. Maybe we should all be thankful Apple at-least let's you compete, even if with a handicap. Unlike the mafia.
15% is really low, considering you can pay using discounted iTunes cards. Typically in the Netherlands you can buy them with 15% extra credit, which is about 13% off.
So you can almost take money from Apple by buying these cards and spending them on your app. The only problem is taxes.
They help you collect taxes but they don't manage the tax payment processes. You will still need to create a company in France or register for VAT in France, understand the French accounting and laws, them pay the French taxes if you sell to people in France, for example.
It's also only 35 countries. No match for what Apple does.
Stripe doesn't do taxes. Only recently they added ability to calculate how much tax you legally need to charge in some jurisdictions. Filing the right taxes in those countries is still your responsibility.
There is a massive difference between 15% and 30%. The latter could never be justified, I think the former probably could be with the services that Apple offer as a vendor (particularly for small businesses). But it still feels too high.
The 27% in the article is just mad, I think they could justify 10% when not using their payments, maybe. But it would be better to have an opt out where there is a set rate for app approval (this could easily be hundreds of dollars) and a download cost for app/data delivery and storage.
Quite right, however I do think Apple offer slightly more than just payment processing. If we say transaction costs are 3%, do I think apple can justify an additional 26%? No. Do I think they can justify 12% for the validating of apps, providing marketing tools in the App Store, data storage and distribution? Maybe yes, it still feels a little high.
It's why I would like to see it broken down as line items and for them to make it optional to just pay the costs of each service directly rather than them charging a % cut.
12% is the number Epic Games arrived at for their game store, which they heavily used to pressure steam. How realistic it really is for all of the services SteamWorks offers and how much of that 12% would change in the future once tencent loss-leader funding runs out remains to be seen, but based on the current (games) market it seems like a reasonable number, especially at the scale apple operates at.
The path that computing is on is "You will buy a screen, pay monthly for internet access, and then pay monthly to access a cloud service where you access all your SaaS applications.
I am a huge fan of Apple but… also a fan of reality so I'll share this story here.
This fun anecdote is about what I think is Apple's treatment of other companies' pricing rules — The Apple Company Store at 1 Infinite Loop in Cupertino used to sell a variety of clothing, accessories, and various items including, seasonally, Lego Mindstorms kits.
My impression from having observed Lego over the years is that they have very strict retail pricing rules. I have no other evidence for this than what I've seen in the market.
Each year at the Apple Company Store, when Christmas season rolled around, the store would get Lego Mindstorms in stock. One year, we decided to buy a set.
The store is frequented by Apple employees, who get a steep discount on Apple merchandise. But Lego… they have (I think) strict rules about discounts, so what was Apple to do here?
Now I am making some guesses here, to be fair. But I found it very interesting that there at the store they had a large pile of Mindstorms sets that all had mysteriously carefully damaged boxes, which looked like the corner of the box had been gently stepped on, all in the same way, and that were all marked down significantly, something like 30 or 40% for "damage." Inside, the sets were fine.
It could have been just a coincidence, but my spidey senses were telling me it was something else… I suspect it was Apple, not able to mark the items down for employees due to strict Lego corporate rules about when sets can be marked down and when they cannot (sound familiar? Apple is pretty strict about pricing as well, in my understanding). And they found a loophole in that damaged items could be marked down.
So, somehow, the items ended up "damaged", as a nice holiday special gift item for employees (or for anyone who came into the shop, lucky for me).
These days, the Apple Company Store after a revamp does not carry as much third party merchandise, so I don't know if this is still a thing.
This tactic is in no way specific to Apple or Lego, in many businesses with high markup they want to (in specific cases) sell at a lower price without breaking their contracts, insulting their costumers and inviting scalpers. So they sell items that can’t be resold, aren’t wanted by the costumers that buy at the original price and are not covered by their contracts.
Problem for Apple is that if it charges less then it shows that it can run the store for less than 30% in total - and what is true in NL is true everywhere else - which is not helpful for them in antitrust actions.
Burning goodwill and brand value while they do it though.
We know they can run it for way less because they disclose numbers in their earnings, and the Epic litigation turned up emails from Phil talking about this issue and going down to like 10%.
The issue is what’s the recourse and remedy? Go to Google/Android, which charges a comparable fee and tends to be less valuable?
Folks are getting their money’s worth on Apple’s ecosystem. But they somehow feel like they should just be getting more, just because. But apple doesn’t have a monopoly. They just have a good product.
> Absolutely vile. This says everything about @tim_cook’s Apple and what it thinks of developers. I hope the company gets exactly what it deserves. Everybody on their executive team should be ashamed, and some of them should not be here when it’s all over. We all see you.
> We’ve been told that if Apple ever asked its employees to betray their principles, they’d leave. In a similar vein, everybody, top to bottom, involved in planning, editing, implementation of everything in this document should leave Apple. You betrayed us.
Someone on 9to5 Mac suggested Steve to put his money where his mouth is, i.e. pull his own software from App Store, before demanding from Apple employees that they leave the company. I think that's a good advice.
If the only chance for him to make a change is by completely boycotting the system, is there not a possibility that the system isn't that good in the first place? Are you insinuating that the Blizzard employees who were routinely abused should have just left the company and forfeit their source of income instead of trying to inspire internal change?
No, I'm not insinuating. I think I was clear enough: if you want others to bear financial responsibility for you cause, lead by example. Otherwise you do what any other hypocrite does: shaming people for something you yourself is guilty of.
Do a Neil Young thing, Steve. Pull your catalogue.
Their second tweet doesn't make sense. How does his feeling of betrayal mean that the employees betrayed their principles and should therefore leave?
That's a projection of his own belief in the way it should work onto the beliefs of thousands of employees who may not share his thoughts on the matter.
What I don’t understand is - if you don’t like the fees, why don’t you just not use it? If you make money after the fees then isn’t it worth it compared to the alternative?
If people actually just stood firm against the fees then viable alternatives would manifest.
Yeah, if you don't like the fee, just make your own phone hardware, your own processor, your own screens, your own OS..
The same way when automakers tried a similar game and then.. the government stepped in, slapped the tar out of them with regulation, and told them to play nicely with third parties or lose the ability to do business.
Or when utilities had natural monopolies were preventing competition and.. then the government put strict regulations on them, set pricing rules and allowed significant control of them.
The answer is that if the two dominant parties have managed to keep out competitors and basically engage in collusion, the government should correct the situation.
> Yeah, if you don't like the fee, just make your own phone hardware, your own processor, your own screens, your own OS..
So should companies not be rewarded for making an awesome system so they can charge these commissions? I mean Amazon and Microsoft can't blame Apple for their failure to produce phones people want to use...they certainly had the resources, and still do.
So you're arguing that because apple makes a profit from the initial sale of the phone...they shouldn't also make a profit from the services they provide for that phone (such as maintaining an app store and the infrastructure for that app store)?
That's a bold position to take. What makes you feel entitled to that? Did apple ever sell iPhones as a one-and-done purchase? I'm pretty confused about how you're justifying this argument. It seems to me that you think all developers have some kind of entitlement to make a profit off of Apple's ecosystem without Apple making a profit from an ecosystem they risked a lot to build, because Apple is already making a profit off the iPhone. Am I following that correctly?
> Did apple ever sell iPhones as a one-and-done purchase?
Yes, the original iPhone 2G. It didn’t even have App Store on launch version of iOS. In fact, Cydia, the original jailbreak app store, existed on iOS before the official App Store. Saurik can speak to any fees for paid apps featured on Cydia. I remember an SMS app that allowed reply from notifications that I bought through Cydia, but I forget the name, maybe biteSMS? Most apps were entirely free, and Cydia supports adding arbitrary repositories.
So, arguably, the original app purchasing experience on iOS was free and open source. Apple and their App Store couldn’t compete, and thus the war against right to compute and jailbreaks.
So you basically agree all phones since the original iPhone are not sold as one-and-done purchases?
I just don't understand where developers are coming from. Let's say I build a wildly successful theme park. It's the best theme park in the world and only a couple other theme parks exist that is as fun as my theme park.
Because I'm so good at building theme parks, do you have some kind of entitlement to put your ride in my theme park and charge people money to ride it?
I don’t agree, because, as I said, the original iPhone didn’t even allow installing apps unless you jailbroke and sideloaded. Android has always let you sideload. Sideloading by the community is the natural state of affairs, imo. Insisting that users and developers only use an App Store that the vendors themselves run is untenable, and ahistorical.
I don’t get your theme park example. Here’s my spin on your analogy:
Apple built the theme park, and now they want to dictate that the independently-operated hotdog vendor may only purchase buns from Apple, and they further dictate that if they use the buns (totally optional), then Apple is entitled to 27% of the total hotdog purchase price.
> Apple built the theme park, and now they want to dictate that the independently-operated hotdog vendor may only purchase buns from Apple, and they further dictate that if they use the buns (totally optional), then Apple is entitled to 27% of the total hotdog purchase price.
You basically just described McDonald's business model. And yes, that's fair. Because if you as a hotdog vendor want to sell in Apple's theme park, then you play by Apple theme park rules. You can sell your hotdogs on the street if you don't like Apple's terms. What's so hard to understand about that?
It's hard for me to understand how it's anticompetitive to charge a fee for a platform that you built, when there are many other platforms which a developer could use to sell their wares.
It seems to me like the only folk legislating against it are European nations, who have historically very uncompetitive tech companies so this is their only way of getting a piece of the pie. Seems like everybody is motivated by money to me. Epic and co. can act like they are for the people, but in the end, they just want more money.
I don’t see why the determinations of government officials and the public that they represent aren’t reason enough to justify the regulatory actions that they are taking. It may not seem fair to you or to Apple if those regulations were to pass, but the status quo already is, and has been for some time now, similarly unfair to everyone in the world living under the Apple/Google smartphone duopoly.
35 states and the Department of Justice are asking for reform in the US. Netherlands, Korea and others have passed rules.
You can have a private theme park. You can't call 50% of consumers theme park attendees. You can't operate globally and lock down a device and charge punitive rates - and if you do, we will use the legislative to fix that.
You can make a web app which can be run on the same phones with no fees. The vast majority of apps can be implemented as web apps.
Comparing utilities, based on physical constraints, with digital goods doesn’t make any sense. It doesn’t require any effort to make a web app relative to the status quo.
Furthermore your example doesn’t make any sense because you make money with Apple and pay a fee - you’re not paying for nothing. Natural gas, for example, has constraints around distribution and collection. These don’t exist for apps.
Ironically, if more developers just made web apps instead of going to app stores it would not only make their apps more accessible as they are inherently cross platform, but would likely lead to the creation of a web App Store to resolve the distribution problem.
This. Especially with the advent of technologies like WebAssembly, WebGPU, and WebXR, developers can now distribute real-time 3D applications like games universally via the open web, without having to sacrifice 30% to a walled garden.
Good luck running a business where (in the US) you lose 50% of potential customers instantly, and those 50% will tell everyone else to use x because it's available on both platforms.
It's really the 50% shouting on social media that hurts the most. Instead of maybe recommending your app, they will recommend one of your competitors that support both.
How many options do you have for gas, water, or power where you live? If I don't like the $18 a month fee for my gas bill, before I use a single ccf of natural gas can I just not use it?
If I don't like the app store fees can I just not use it? You see what I'm getting at?
Silly comparison - natural gas prices are regulated, but furthermore you don’t make money from your natural gas payment inherently.
You only pay Apple store fees if you make money. Your comparison is dumb. Charge more to your users and be done with it a all of your Apple competitors are bound by the same rule.
If I make an app that Apple doesn't like, I can't put it on my iPhone. I literally cannot put my own apps on my phone. Or install apps from developers outside of the app store. I can do so on my computer, why not my phone. "well just switch to android" isn't a good excuse.
This is exactly what I'd expect from Apple, and Google, and any platform provider.
It makes the point that their fee isn't about credit card processing.
I suspect, baring specific language in the law baring the practice, Apple, Google, etc. will force their commissions no matter what other allowances they're asked to make.
Don't want to play devil's advocate here but if they didn't, many big players would be using their platforms to build their apps, reaching Apple's customers on Apple devices, giving the app for free and processing everything off-Apple land, basically using the whole platform for making millions without giving Apple literally anything ($99 dev fee is nothing compared to all the money being made).
If I were a company who literally created a whole industry and many other companies were making millions off the platform I created, I'd of course take my cut, and a well-deserved big one.
It's a for-profit company who enabled those apps/purchases* to be made in the first place, not a charity or a non-profit.
(*: not talking about non-app related payments like real world items, obviously)
Following your logic than all PC makers should be paying a fee to IBM for creating the PC? It doesn't make sense, it was never done this way in the past and it only goes on because sadly most politicians are borderline computer illiterate and are easily bamboozled by the complexity of the matter. Just look at when Sundar Pichai testified at the US Senate, most lawmakers have zero ideas on how the Internet works, and they don't really have the means to understand the similarities that exist between what Apple is doing and the "brick and mortar" world they are accustomed to.
If you create an industry, a platform, you already have instruments to monetize on it. the Apple software platform is already tied to its own devices, from whose sales Apple has earned a vast amount of wealth over the years and profited thanks to their massive margins. What makes Apple different from Google in this regard is that the Play store has won due to consumer choice, while Apple has basically prohibited side loading and alternate stores in any possible way and shape.
The Amazon Appstore has failed to gain marketshare because people simply didn't like it, and Google play was just superior, end of it, and if you want to use Google services in order to give your customers what they want you have to pay Google's fee, fair and square. On an Apple device there are no ways to sell people anything without paying Apple because Apple does not allow it.
If Apple starts providing a shitty service with its Appstore, there is no way to circumvent it, you must choose either to quit the iOS market entirely or play along whatever rules they decide to adopt. This is basically extorting protection money, with a few extra steps on top of it.
> Following your logic than all PC makers should be paying a fee to IBM for creating the PC.
This is called patents, so yes, actually. But this is more akin to Microsoft charging 30% for sales in Windows and Xbox, which would be totally allowed.
> politicians are borderline computer illiterate
And developers are ignorant of business and law which is what this case is really about. Absolutely nothing about Apple's sales commission is about tech. Wanting something to be different just because it's digital doesn't make it so. Uber is still a taxi company.
> you already have instruments to monetize on it
And that instrument is charging for access to the platform -- some might say 30%.
> there are no ways to sell people anything without paying Apple
Right. This is the point. This is literally the thing Apple charges for. The one thing. The thing that people, very rationally, want for free. I also want to get all the benefits of a company's work without paying too.
> you must choose either to quit the iOS market entirely
This is the core issue, Apple, and the law in most countries, say you have absolutely no inherent right to access the market they created. You don't get to demand the ability to set up a stall in someone's mall because they charge 30% to the stores.
Not even mobile computing. There was a Windows Mobile long before the iPhone existed. They may have really brought it mainstream, but if they hadn't, someone else would have.
So poor Apple would only be left with the 1000$ for each iPhone sold?
I wonder if such arguments existed decrying Microsoft's immense charity in allowing others to make money off of its platform back when Windows was the dominant way of computing and connecting to the Internet with 0 fees for installing software on Windows...
It reminds me of ISPs' arguments that Netflix and like should pay more for fast connection to their customers because "otherwise who is gonna pay for the bandwidth?" We the customers do. We pay a high monthly fee for our connection and ISPs want to slow down our traffic to double-dip by charging content providers the access to us. If I pay 1500$ for a phone, I expect Apple to treat me as their customer, not as a resource to be sold to App developers.
It will be smacked down hard is my prediction, because clearly Apple is trying to argue that they have an innate right to other parties' business income. It's the Mafia model: you have a partner in the business who wants a sizeable chunk of your gross without doing anything for it.
Of course they don't, those businesses are free to develop their own phones and not pay Apple at all.
Now maybe 15 percent is a more reasonable price, but Apple developed the phone, apple developed the SDK, apple made it available to everybody, heck Apple even developed the computer language used.
This is all available for anybody for a fixed percentage, which means that it scales pretty well with how much you make and it cost you nothing more than 100 dollars a year if you don't charge people.
This comment section is rich coming from a group that does thing like massively charge more for "enterprise plans" that are are basically nothing except SSO. You charge based on how much the person on the other side wants your stuff, not how much it costs to provide it. And businesses moving a lot of product on iOS definitely want it more.
But when you use the store, you need to pay for using and maintaining the store, which is the other 27%. Why would you expect to upload apps in the store and let them be downloaded for free?
Because that is the model that Apple has chosen for. If the downloads can be priced or can be free that is Apple's choice. Then they should raise the minimum price for distribution.
Distribution is a one-time expense, and it does not entitle you to a 30% cut of services that use Apps as endpoints. It's a mob move, taxation because you are powerful enough to harm another business, not because you have contributed to the business.
No, it's not. Distribution requires ongoing storage and bandwidth costs.
> It's a mob move, taxation because you are powerful enough to harm another business, not because you have contributed to the business.
This is just flaming. Apple absolutely have contributed to the business. They provide hosting, storage, versioning, a marketplace, storefront reviews, developer tools, various high-availability services (auth being one of them). We can argue all day how much that is worth, but it is definitely worth some number greater than 0, otherwise people would just ignore the platforms.
Explain please how distribution is tied in to the unknown price point at which the other company proceeds to do business?
Or are you arguing that the 30% cut is used to subsidize the remainder of the free apps?
You really should bone up on anti-competitive behavior before accusing people of flaming.
People are forced into this model, the alternatives have been degraded to the point that they no longer function for all intents and purposes you have to distribute your app through Apple.
This is a much more reasonable comment than your original coment.
> Explain please how distribution is tied in to the unknown price point at which the other company proceeds to do business?
This is not what you said, you said it was a one time expense. Those two statements are not the same.
> Or are you arguing that the 30% cut is used to subsidize the remainder of the free apps?
You're putting words in my mouth here. I'm not arguing the 30% cut is used to subsidise the remainder of the apps, I'm arguing that free apps still have distribution costs.
> You really should bone up on anti-competitive behavior before accusing people of flaming.
I stand by my accusation of flaming - just becasue you have a point doesn't mean it couldn't be made in a better way.
> People are forced into this model, the alternatives have been degraded to the point that they no longer function for all intents and purposes you have to distribute your app through Apple.
That I don't disagree with one bit, and if your initial comment had said that rather than " It's a mob move, taxation because you are powerful enough to harm another business, not because you have contributed to the business." I wouldn't have commented on it.
You expect there should be no profit, and the whole commission therefore must cover some costs? That was the line of argument of Epic in court; it didn't go well.
I still don't understand why this is so hard to understand:
Developers can absolutely develop an app with whichever payment system they want and keep all the income to themselves. Develop a web app and do whatever you want. You integrate with whichever third party systems you want and provide the experience you think is best for your users and yourself. Anyone will be able to use your web app from an iPhone as much as they will be able to use it from a Desktop device.
However, if you actively choose to develop a native iOS app in order to integrate with Apple's native APIs in order to provide an experience which can be superior to a web app then it's not a far stretch to expect you to therefore integrate with Apple's native APIs across the board, including payments. I mean that is literally why you choose to develop a native app, because you want to provide EXTRA value to your users by making use of APIs which Apple invested in.
> Each month, developers will have to send a report to Apple that lists their sales. Apple will then send out invoices for its commission, that must be paid within 45 days.
LOL!
Apple has no way of knowing how many sales actually occurred in the app, so they have to trust the developers to report the correct number. How the tables have turned :-)
As a user, a huge part of their value proposition is that they act as a private regulator, to good effect.
It's the libertarian dream of paying companies to be your private regulatory enforcement agency (see Friedman and others).
Then they tax companies for access to their little haven of sanity.
I'd prefer the government just regulate out all the plainly-bad behavior that goes on in the software industry, but lacking that... I prefer to retain this option.
I wish their cut were lower but that they levy a "tax" makes a certain amount of sense, given the circumstances.
Do you think that your approach to life would have made a better world than it is now? If we said like "Don't worry about companies throwing shit into the rivers, just buy bottled water", or "Don't worry about workers rights just find a better job", "Don't worry about purchases, just buy from a different company", like we need to make sure that the system can thrive, that small businesses can develop without being blood sucked, we are all at stake of making sure that the system as a whole can grow and not only the fruit company and its stakeholder, so no we don't have a choice of ignoring fruity shit, we need to make sure that what they can do is regulated to let every one work and fairly earn, I am fairly annoyed by this libertarian brain damage trying to make everyone reading more stupid, you want to let apple get away, then do that use apple and set up a direct debit so that they can keep exploiting you, for the rest of us with opposable thumb, we're going to try to make sure that regulators regulate
And if I'm uncomfortable with Android, what should I use ? I have the choice between being abused by Apple, Google or having no apps because no one bothers developping apps for Linux phones.
They though about that too, they will provide an API, that the developer has to call before redirecting the user to the external payment provider. So they can approximate the amount of sales the app generates. It’s in the article.
I mean maybe I am being cynical here, but it was implied that developers could just under-report their sales without negative effects, in order to fight that possibility I might suppose that Apple would increase positioning of apps in the Netherlands that reported high sales, under theory that they were 'better'.
I got an iPhone in August. Their I've never seen such a crappy and expensive AppStore before and I'm a longtime Android user.
And this won't improve it, apps are very expensive for they do, phone is pretty much a closed up black box which apparently is easily hackable if you manage to find the security holes.
I’ve been an Apple fan for a very long time, but I bought my first windows laptop ever this past year because of the direction Apple has been going with things like this. I really wish the alternatives to iPhones, Apple watches, and tvOS weren’t so much worse.
I get the frustration and even outrage, condemnation, in the comments here.
I don’t want to take away from this.
I also feel grateful Apple created and maintains an ecosystem where I (for a small fee) develop and distribute applications which build upon libraries and infrastructure that took untold developer hours to make, and untold developer hours to maintain.
And I can give this away for free and it’s available to soooooo many people who can carry it around in their hand.
Every developer like me is subsidized by every complex scheme Apple uses to extort money from the successful ones.
It's a bit late in the discussion but basically they are saying at most 3% is cost , and emphasis on "at most". The rest is just profit or legal requirements (and thus not counted to loss).
I can see a reasonable processing fee, and even a reasonable establish-the-purchase fee. Perhaps in the order of - or a bit more than - a credit card. So maybe somewhere between 5 and 15%. (Depends on how much more likely users find an apps through the app-store as opposed to a web search.)
Anything above is abusing Apple's market dominating position. Especially because there are no (official) ways to install 3rd party apps on iPhones et al.
If they do it, it's because they know they can get away with it. They studied the risk and cost associated with a lawsuit, and estimated it was more profitable to keep the commission high.
Which is one more hint that our legal system is not working as it should. It is completely ineffective at enforcing laws above a certain threshold of power.
Personally I don't think 15% is that unfair for businesses that make $1 million or less per year which is what Apple charges[0]. If I had a business making $500,000 / year and most of that revenue was through organic sales through the app store's search I would be wildly happy about that and also send yearly gifts of appreciation to Steve Jobs' family. Note to readers: I don't own any Apple products or do mobile app development but I used to be involved with selling courses on certain platforms that take a 50% cut.
But, if you were really unhappy about it then the solution is kind of easy on paper. If every developer pulled their apps from the app store in unison and suffered a short term loss then Apple's sales commission would drop to $0 and they would announce a cut in rates probably within 48 hours -- no regulation or competition needed. This strategy works for any marketplace.
I like how they're literally explaining that the actual cost for app payment processing caps out at 3%, and everything they charge on top is just pure profit margin.
This is the biggest confusion. You're not paying 30% for Apple to process your payments -- you're paying 3% for that, apparently. Not really a surprise since that's what every other CC processor charges but now we know. The rest is a sales commission, always has been. If you read any of the documents for the Apple/Epic lawsuit you can see exactly that. You want to reach iOS users and sell to them on Apple's land, that's the price.
You wanna sell stuff to players in your Xbox game, 30%. You wanna sell stuff to players in your Playstation game, 30%. The service they're selling is stalls in their market that gets a lot of foot traffic.
Is it just a warning? Mine explicitly teels me that if anything happens to the bank account they won't be liable because I used the app on a rooted phone.
See also them exempting themselves from the cross-app tracking thing.
Personally, I predict that they'll need to either give up on service revenue growth, or roll back on these changes.
This will occur as the next big f2p games will find it much, much harder to monetise profitably without being able to measure/optimise at a user level.
>Personally, I predict that they'll need to either give up on service revenue growth, or roll back on these changes.
There is no need to give up on service revenue. Before 2016, my expectation of future Apple Services was growth from AppleCare and iCloud. Today, Apple put $10 per devices to services revenue for OS, Map and other Software. Apple could hike the price and move those to services. For example iPhone price hike but with 2 years AppleCare by default.
Nearly 80% of App Store revenue are from Gaming. There is no reason why Apple cant separate Game into a different Store and continue to charge 30% off it. That would have protected 80% of App Store revenue alone. EPIC wouldn't be happy, but I am sure most people couldn't care less. Gaming are not the fabric of our modern society ( I am sure there will be people who disagree ).
Then it is the Apps and Services. Which is not only just a revenue problem but a power play problem. Why does Apple get to dictate which business it is allowed on their platform when it holds 60%+ of usage in US / UK market. I have an app for my restaurant, but Apple refuse to host it. While QSR next door get to use Apps and customer are flying in. Under which law does Apple gets to discriminate small business? May be that is fine by US standards, I can assure you this wont fly in EUR. And where are business and developers going to complain? And how is Apple responding? If you watch every speech, interview or answer Tim Cook gave, it is obvious he ( representing Apple ) doesn't think they have a problem at all. And the biggest problem in the world is not understanding there is a problem.
It is sad those who were on Steve Jobs side are all gone. Phil Schiller, Katie Cotton, Jony Ive, Scott Forstall, Bob Mansfield, Ron Johnson. And only Tim Cook and Eddy Cue left. There may be not of people with high intellect at Apple, but very little with intuition.
“Intuition is a very powerful thing, more powerful than intellect, in my opinion,” - Steve Jobs
> Nearly 80% of App Store revenue are from Gaming. There is no reason why Apple cant separate Game into a different Store and continue to charge 30% off it. That would have protected 80% of App Store revenue alone. EPIC wouldn't be happy, but I am sure most people couldn't care less. Gaming are not the fabric of our modern society ( I am sure there will be people who disagree ).
Yes, exactly. And how do those games monetise?
They target a small number of people who spend absurd amounts of money on in-game purchases. FB (and Google, but that's not relevant on iOS) have tools that allow a marketer to optimise towards this event. If you can't measure which people actually purchased, it gets much more expensive to spend loads of money acquiring users on iOS (relative to Android).
Therefore, while Apple are fine now, I suspect that they'll see far less growth from in-app purchases from games in the future, which will hold back their services revenue.
Hence my comment, they'll either roll this back or give up on service revenue growth.
It doesn't really matter to me (no longer in the industry) but it'll be interesting to see what they choose.
Yes, I know Mobile Gaming is the reason why Internet ad revenue are up, it is pretty much a whole cycle where IAP gets money and these company use percentage of them for advertising, the cycle repeat until a point it dies and they will make another game using other IP.
But do less effective ads necessary means less spending on Games? I am going to assume there will be other form of discovery. The whales will just go somewhere else and spend it. Or am I missing a link here somewhere?
I do see you point of how service revenue and the game and ads are tied together. Probably need sometime to sit down and think deeply about it.
I am not. He replaced Bertrand Serlet in 2011. But if you look at Steve's close circle, He simply wasn't there. Arguably speaking he is Tim Cook's man. Not Steve Jobs.
But every shareholder of any corporation wants exactly that. Moreover, Tesla proves this can be achieved largely on promises (look at the capitalization/revenue).
Apple Apple argue buying iPhone was only the hardware while 30% cut was for their IP. And yet accuse Qualcomm charging them 5% for IP and selling them hardware modem ( with rebate ) as double dipping.
There was "immense value" in every monopolist that was rightfully broken up or restricted. There's "immense value" in every monopoly / duopoly market. So what. The richest company in the world is swimming in money, pays little taxes, and gouges every developer who made its products successful. They are nothing without the developers, they're simply in a good position to abuse them, a position that they carefully crafted for themselves.
On top of that, we really don't want to be in a situation where every large software producer has to create their own phone to maximize their income. It would be a terrible waste of resources. What Apple wants to own can't be owned.
It's not the number of Apple users that matter. There are many more Android users world wide. It's the fact that Apple users spend more, and more often than users on other platforms.
Phone market share has different distributions in different markets. In the US it looks like the iPhone hovers around 50% marketshare. That's pretty significant to ignore.
Then there are the network effects. Many apps have a social component, and if your app isn't on iPhone you'll only get the customers who both use Android and who never want to collaborate with iPhone-owning friends/family/coworkers.
This is of course true for iPhone-only apps, too, which is why folks argue Apple and Google are a duopoly: it's infeasible to succeed in the mobile market without bending to the gatekeepers, and they don't give anyone the market power to force them to change.
Until there isn't and then they should be free to take their payment services elsewhere because a 30% cut to your payment provider makes no sense.
The value is there but then again, Stripe and other PSPs provide much of that same value at a much better price point, and that's because there is competition in the realm of payment processing.
There is definitely some value to the App Store and Apple's management of it and the payment service, listing, etc. But I would not say it is "immense" value, and 30% is a lot.
Instead of forcing Apple to allow alternative payment methods, Apple should have been forced to implement PWAs to full specs in Safari/WebKit. That would help take care of the AppStore monopoly.
This is an appropriate way to handle the incentives. Not keeping par with PWA (as in what is available in modern browsers) is the unfair competitive practice.
I don't see why Apple would back down from making their intellectual property to be used for free. But it is quite unsurprising and expected that they will find a way to collect the fees even if IAP was optional. [0] [1].
So using Apple's SDKs, App Store, devices and services etc isn't their intellectual property and it is all public domain and free to use?
In case if you haven't read the comment:
From [0] of page 112 (b)
> The Court agrees with the general proposition that Apple is entitled to be paid for its intellectual property. The inquiry though does not end with the bald conclusion. Apple provides evidence that it invests enormous sums into developing new tools and features for iOS.
I don't think anyone would agree to develop all of that for free at a loss, especially when it is used by billions of users and devices. They will still collect the fees either way and as predicted.
>>> ... Apple's SDKs, App Store, devices and services
>> ... $99/yr already?
> No.
Ooh! Please show me how I can publish to Apple's App Store, using Apple's SDKs and devices to build the app, without paying $99/yr for an Apple Developer Account. I'd quite like users of iOS devices to be able to use my apps and services.
Hm, does that mean they implicit accepted that 3% is a maximum price for a payment system to not count as profiteering?
And hence 27% is the price for the service of forcing you to use their app-store, sorry I mean non well working scam scanning, sorry I mean sup-par mac only build tools, ah wait I mean download cost, ... or maybe their sometimes abusive and often non-well working moderation, ah no that can't be it either. Maybe it's subvention the hardware cost as a iPhone only costs... wait... Why does it seem like profiteering no matter how I try to look at it??
Jokes aside, in app payments are basically only monetary processing. Now you can claim that in app-payments are subvention reduced up-front payments. But that only holds up up to some degree of average per-active-user payment. But at least the more revenue rich phone games to quite a bit above that.
Seems fair to me, 27% commission implies 3% for card handling fees, to level out to the same 30% developers would have to pay doing things the intended way.
All this talk of using "alternative payment systems" just seems like a way to skirt around paying Apple commission.
I think the big sticking point is whether smartphones are a generic, standardised thing that requires some level of guarantees for the end consumer on accessing software of if each smartphone is one of many products in a broad category that all have different restrictions and limitations. Essentially the "you have a choice, just use Android" defence. I'm not saying which one is correct here, just that this seems to be the specific fork in the road between differing opinions.
I thought that the justification for the 30% commission was the tightly integrated payment system, and not just the fact that you can install the app in the first place.
That's definitely one aspect of it, but I've always thought most of that fee is simply for the "privilege" of being a part of the Apple ecosystem, being mostly profit for Apple with a portion going towards the hosting, distribution of the App, search/discoverability aspect.
I can definitely see why this fee and it's associated lock-in upsets many consumers and developers. It's clearly a divisive issue right now, and I am unsure we'll see any resolution to the overall narrative until the EU/US forces Apples hand.
They're signalling that other methods or payment are fine, but they're entitled to that commission of 30% (- processing fees i guess)
If people thought the lawsuits were about the commission they're wrong, they were about forcing Apple's method of payment, but even after you get through that they still feel they are entitled to the commission.
You might have your opinions about whether thats right or wrong, but Apple's approach was to look as both as 2 different things whereas everyone seemed to see them as the same. And thats what they took advantage of.
They are as much entitled to that commission as the Mafia is entitled to theirs.
It's a ridiculous demand. It is a pretty American way of thinking that the courts order is about the payment system rather than because of the commission when clearly, if the commission weren't there companies would not be looking for alternative payment systems to begin with. It's ignoring the spirit of the ruling. Prediction: this won't end well for Apple and it will cost them plenty of goodwill in NL.
They kinda are entitled - you are build for their OS, using their APIs and SDKs, targeting their customers.
All that needs to be funded somehow plus as I always say - nobody has forced engineers to build iOS apps.
An example: what if US engineers dislike the privacy laws of the EU and start asking to get them removed because you know their app wants to track and stalk ppl without their knowledge.
Maybe not the best example but I hope you get the point
> you are build for their OS, using their APIs and SDKs
Already paid by the user. You are building for the user. Do you pay the house builder for the poster you nail in your wall?
I only get that argument for the actual store, since there is a curation service being provided. But the OS? No way. If anything, apps in an OS ecosystem give more value to the OS; the OS owner should be paying for that ecosystem, not demanding payment.
Right! So as soon as I’ve bought one game built with Unreal Engine, I’ve paid for the engine and should get a discount on all other games which use it.
I’m the customer. I can decide when the company is fairly compensated.
Well, you probably would pay the house builder for the poster you nail in your wall if the house builder stored and delivered the poster that was built with tools the house builder provided. Your analogy does not apply.
For your second point, apps vary in value and I'm sure that there are times when Apple pays somebody to put an app on their store.
Gatekeepers like Apple will have specific obligation according to Article 5:
(b) allow business users to offer the same products or services to end users through third party online intermediation services at prices or conditions that are different from those offered through the online intermediation services of the gatekeeper;
(c) allow business users to promote offers to end users acquired via the core platform service, and to conclude contracts with these end users regardless of whether for that purpose they use the core platform services of the gatekeeper or not, and allow end users to access and use, through the core platform services of the gatekeeper, content, subscriptions, features or other items by using the software application of a business user, where these items have been acquired by the end users from the relevant business user without using the core platform services of the gatekeeper;
And Article 6:
(c) allow the installation and effective use of third party software applications or software application stores using, or interoperating with, operating systems of that gatekeeper and allow these software applications or software application stores to be accessed by means other than the core platform services of that gatekeeper. The gatekeeper shall not be prevented from taking proportionate measures to ensure that third party software applications or software application stores do not endanger the integrity of the hardware or operating system provided by the gatekeeper;
(k) apply fair and non-discriminatory general conditions of access for business users to its software application store designated pursuant to Article 3 of this Regulation.
None of these stop the % commission they merely say it has to be applied fairy and equally. The fees aren't a gatekeep since everyone has the same treatment and no one is being 'gatekept'
The law will require to allow third-party app stores. If Apple decides to impose 27% tax on everything sold in the third-party app store then I'm sure other EU competition laws will kick in. As Apple will be explicitly using their power to make direct competition non-viable.
Also, EU does not need to spell everything explicitly. The law will give the EU Commission a lot of executive power to respond to this type of shenanigans from gatekeepers.
Article 7, compliance with obligations for gatekeepers, paragraph 2:
Where the Commission finds that the measures that the gatekeeper intends to implement pursuant to paragraph 1, or has implemented, do not ensure effective compliance with the relevant obligations laid down in Article 6, it may by decision specify the measures that the gatekeeper concerned shall implement. (...)
Article 10, updating obligations for gatekeepers, paragraph 1:
The Commission is empowered to adopt delegated acts in accordance with Article 34 to update the obligations laid down in Articles 5 and 6 where, based on a market investigation pursuant to Article 17, it has identified the need for new obligations addressing practices that limit the contestability of core platform services or are unfair in the same way as the practices addressed by the obligations laid down in Articles 5 and 6.
None of that gets around the fact that the 27% can be defined as the licence fee for intellectual property. There’s no principle of capitalism that allows someone else to compete with you on the sale of your own goods.
EU already forced visa and mastercard to lower their fees, this is exactly the same kind of scenario. EU doesn't tolerate giant companies making themselves into a bottleneck so they can extract more money from the economy.
A good start for interpreting EU law is to let go of the US literal view of the law and to start looking at the intent of the law. That's a much better predictor for how EU courts will rule.
Ah, the appeal to authority. To me your just another anonymous commenter on HN. Really, I couldn't care less, every lawsuit has lawyers on both sides and half of them will lose their case, but will maintain that their customer was right all along and that they will now appeal and then when they run out of appeals they quietly slink off into the dark with their money.
EU anti-competitive law has been tested in court time and again by the big telcos and as a rule they have lost every time they tried to get smart with words.
Whilst my appeal may be to authority yours is based on what you feel is right and wrong and that isn't the same as how the law works. In fact it's built to work against what a consumer feels to what that is fair. You might not like it but fair is tilted towards the large company not the consumer in the EU, especially when it comes to a company making profit.
The big telcos btw always win, but always makes the consumer happy. Have looked at Orange do this countless times.
Why don't you tell me about how happy you feel the EU is green, and then i'll tell you how happy European companies are 'green' now includes natural gas. Both sides win I suppose.
I was waiting for this, you have basically gone for an ad hominem, which is how basically you fail to win an argument.
I am assuming from the 'where you sit is where you stand' principle that you are from the Netherlands. I can understand how it can be seen as a bit of a defeat this ruling by Apple and their reaction; the expectations were more of a win. Maybe a 3% discount off 30% is a minor improvement.
Focus on the facts and not the person. Again this is why you are letting your opinion of Apple be dictated by your feelings, and this is why you can't win against them with this mindset.
Btw for someone in my profession to get this is a great thing so I will take the compliment. It is seen as the other person breaking not to have a good argument ;-)
> They kinda are entitled - you are build for their OS, using their APIs and SDKs, targeting their customers.
So do you also think that Microsoft is entitled to 30% of every developer's income if they want to release an app for the Windows platform? After all they're building for their OS, using their APIs and SDKs and targeting their customers.
> you are build for their OS, using their APIs and SDKs, targeting their customers.
Which takes us right back to "Imagine if in the past Apple would have had to pay 30% of their gross to Microsoft in order to be allowed to run their software on Windows."
I'm apple's customer, and I'm these apps' customer. None of them own me. Apple's not doing any meaningful referring, it should be possible to opt out of any referring they do, and building for an OS should not cost these fees.
You choose to do business with Apple, knowing the terms of the deal. At a certain point that’s determinative. Apple doesn’t have a majority user base in the US. Google is ready and waiting for defectors.
This is excellent news. You see, I work in networks. I (helped) write the driver that is used on the carrier side of 4G networks, and it's open source, so, like Apple, I retain the copyright. A driver that you have undoubtedly used to order pizza. My code is the "platform" you used to pay that pizza! I am entitled to compensation, and apparently 30% ... wow. Great news!
I'll have 30% of everything you ever paid over your phone now.
Remember, you CHOSE to pay using "my" infrastructure, so it's only fair that I be compensated for that.
Or is your point that these rules only apply to massive US corporations?
Oh I got the point alright: a large US entity (who by hte way is an expert at dodging taxes themselves) believes that they can ignore a court ruling by playing word games and are entitled to a 30% tax on all of the income peripherally generated if their eco-system was touched at some point in time. It's ridiculous.
As for that privacy law: that pertains to EU data subjects. So it isn't 'not the best example' it is a terrible example, especially given that the ruling here is very similar in nature.
>They kinda are entitled - you are build for their OS, using their APIs and SDKs, targeting their customers.
The fix is super obvious, Apple selling shit in my country uses my country population and wealth, so 30% tax on each sell, NOT on profits, We could use the Apple Tax against Apple, if they don't like it they are not forced to sell the products in my country.
Just using the tax system against big tech would be a start. It’s ludicrous how little tax gets paid once the stupid dodges have been played. Fix those holes and have them pay what the small players pay. That alone would satisfy me.
