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FWIW, I used to work in hardware and sold products to Walmart, Target, CVS, Kroger, the Apple Store and had stuff on the shelves of ~20,000 retail locations in

FWIW, I used to work in hardware and sold products to Walmart, Target, CVS, Kroger, the Apple Store and had stuff on the shelves of ~20,000 retail locations in the US. 30% is a bargain. In physical retail we'd pay 50% pretty consistently. We were also at the mercy of the retailer to send things back to us if they didn't sell, without paying. So they would buy 20,000 units, sell 5,000, and a few months later send us back the remainder and call it even. If we wanted promotion in their stores, circulars, or websites we had to pay for the privilege. Considering Apple puts you in the pocket of hundreds of millions of people, puts you a password or fingerprint away from their credit card, and provides the opportunity for massive exposure in their store, it feels like a super fair deal. I'm more troubled by the fact that they essentially have driven the price of discrete software to zero, but fortunately there are more and more ways to monetize via SaaS, IAP, Hardware, etc.

jonknee 11y ago
Your point makes more sense for the iOS App Store, but this was desktop software and the Mac App Store is a different animal. It's nowhere near as successful, even "top" apps are't selling many copies. The sandboxing also means your apps can do less than apps that aren't in the store. You also can't do demos or paid upgrades. Same 30% tax though. There have been many similar rants: http://www.panic.com/blog/coda-2-5-and-the-mac-app-store/ http://www.panic.com/blog/coda-2-5-and-the-mac-app-store/ http://sixcolors.com/post/2014/10/bbedit-at-max-q/ http://sixcolors.com/post/2014/10/bbedit-at-max-q/ http://blog.helftone.com/mac-app-store-the-subtle-exodus/ http://blog.helftone.com/mac-app-store-the-subtle-exodus/ http://www.macstories.net/news/textexpander-4-first-casualty-of-mac-app-store-sandboxing/ http://www.macstories.net/news/textexpander-4-first-casualty... https://www.omnigroup.com/blog/update-no-upgrade-pricing-for-mac-app-store-purchases https://www.omnigroup.com/blog/update-no-upgrade-pricing-for... Etc
mikeash 11y ago
In retail, you pay 50% because that's something like what it actually costs to sell stuff to people in a physical store. The cost of selling software is almost zero. Unlike retail's cut of your selling price, Apple's cut is completely arbitrary and rather unjustified. If you sell software directly to users, the cost can be something like 3%, depending on which payment processor you want to use. What additional service does Apple provide for that additional 27% cut? The buying experience is easier, but this doesn't seem to translate into additional sales. You mention "massive exposure," but there's pretty much universal agreement among developers in the Apple world that the App Store's "marketing" bump is pretty much zero unless you're extremely lucky and get featured. But hey, if it's worth it, then you should be able to let developers choose and they'll still go for it. On iOS, there is no choice. If you want to sell, it's either Apple's 30% or nothing. On the Mac, there is a choice (for now) and the trend now seems to be to choose not to use the App Store there.
- justwannasing 11y ago
  Anyone who thinks the cost of selling software is remotely near zero should be ignored. Ads need to be produced and thought up and salesmen need to be paid and packaging still must be done and and someone has to be in charge of all that, along with all the people beneath him.
  - mikeash 11y ago
    Salesmen? Packaging? We may both be talking about "software" but you're talking about a completely different kind of product than what one finds in the App Store.
    - replicatorblog 11y ago
      One of the reasons why the Apple app store is so popular is that Apple spends billions on TV/BillBoard/Magazine/Web advertising for the store and apps within it. It's a massive marketing/sales/"packaging" cost.
      - mikeash 11y ago
        Which is great if you're one of the top apps and can get Apple's attention, but useless for 99.9% of developers. I would also say that by far the main reason for the App Store's popularity is simply that it is the only channel for third-party apps on a massively popular platform. Apple could do nothing beyond making it available as an icon on the home screen and it would still be enormously popular.
        icebraining 11y ago
        on a massively popular platform And that's part of what you're paying for.
        mikeash 11y ago
        If you want to say that you're paying for access, that Apple can charge what they like, and that 30% is good value for the money for that access, fine. I disagree, but I respect that argument. But the person above was comparing Apple's 30% to retail's 50%, which is a bad comparison because retail's cut is largely based on the actual costs of selling.
gozo 11y ago
Yes, but the digital world in theory enabled greater competition so therefor we expect things to be better. Kickstarter takes 5% + payment fees for instance. Unfortunately, in practice the digital world many times enables companies to employ the same old business practices on a much larger scale.
ISV_Damocles 11y ago
The /value/ of "discrete software" has always been close to zero. Just a few megabytes of disk space. The value of software creation is something else, though, and ages ago the one was tied directly to the other. But even that wasn't truly the case. Shareware gave away part of the software for free, and relied on goodwill from the users for them to pay for the rest rather than sharing the full versions. As you've pointed out, continuous services are another area where money can be made, but then the software isn't the value proposition, just the enabler of those services.
hsuresh 11y ago
Well, retail stores bring people to the store looking to buy things. App stores (not just Apple's) are mostly mandated by Apple/Google/Amazon. They do provide some value (trust, for the apps), but 30% seems quite high for that.

jonknee 11y ago

Your point makes more sense for the iOS App Store, but this was desktop software and the Mac App Store is a different animal. It's nowhere near as successful, even "top" apps are't selling many copies. The sandboxing also means your apps can do less than apps that aren't in the store. You also can't do demos or paid upgrades. Same 30% tax though. There have been many similar rants: http://www.panic.com/blog/coda-2-5-and-the-mac-app-store/ http://www.panic.com/blog/coda-2-5-and-the-mac-app-store/ http://sixcolors.com/post/2014/10/bbedit-at-max-q/ http://sixcolors.com/post/2014/10/bbedit-at-max-q/ http://blog.helftone.com/mac-app-store-the-subtle-exodus/ http://blog.helftone.com/mac-app-store-the-subtle-exodus/ http://www.macstories.net/news/textexpander-4-first-casualty-of-mac-app-store-sandboxing/ http://www.macstories.net/news/textexpander-4-first-casualty... https://www.omnigroup.com/blog/update-no-upgrade-pricing-for-mac-app-store-purchases https://www.omnigroup.com/blog/update-no-upgrade-pricing-for... Etc

mikeash 11y ago

In retail, you pay 50% because that's something like what it actually costs to sell stuff to people in a physical store. The cost of selling software is almost zero. Unlike retail's cut of your selling price, Apple's cut is completely arbitrary and rather unjustified. If you sell software directly to users, the cost can be something like 3%, depending on which payment processor you want to use. What additional service does Apple provide for that additional 27% cut? The buying experience is easier, but this doesn't seem to translate into additional sales. You mention "massive exposure," but there's pretty much universal agreement among developers in the Apple world that the App Store's "marketing" bump is pretty much zero unless you're extremely lucky and get featured. But hey, if it's worth it, then you should be able to let developers choose and they'll still go for it. On iOS, there is no choice. If you want to sell, it's either Apple's 30% or nothing. On the Mac, there is a choice (for now) and the trend now seems to be to choose not to use the App Store there.

justwannasing 11y ago
Anyone who thinks the cost of selling software is remotely near zero should be ignored. Ads need to be produced and thought up and salesmen need to be paid and packaging still must be done and and someone has to be in charge of all that, along with all the people beneath him.
- mikeash 11y ago
  Salesmen? Packaging? We may both be talking about "software" but you're talking about a completely different kind of product than what one finds in the App Store.
  - replicatorblog 11y ago
    One of the reasons why the Apple app store is so popular is that Apple spends billions on TV/BillBoard/Magazine/Web advertising for the store and apps within it. It's a massive marketing/sales/"packaging" cost.
    - mikeash 11y ago
      Which is great if you're one of the top apps and can get Apple's attention, but useless for 99.9% of developers. I would also say that by far the main reason for the App Store's popularity is simply that it is the only channel for third-party apps on a massively popular platform. Apple could do nothing beyond making it available as an icon on the home screen and it would still be enormously popular.
      - icebraining 11y ago
        on a massively popular platform And that's part of what you're paying for.
        mikeash 11y ago
        If you want to say that you're paying for access, that Apple can charge what they like, and that 30% is good value for the money for that access, fine. I disagree, but I respect that argument. But the person above was comparing Apple's 30% to retail's 50%, which is a bad comparison because retail's cut is largely based on the actual costs of selling.

gozo 11y ago

Yes, but the digital world in theory enabled greater competition so therefor we expect things to be better. Kickstarter takes 5% + payment fees for instance. Unfortunately, in practice the digital world many times enables companies to employ the same old business practices on a much larger scale.

ISV_Damocles 11y ago

The /value/ of "discrete software" has always been close to zero. Just a few megabytes of disk space. The value of software creation is something else, though, and ages ago the one was tied directly to the other. But even that wasn't truly the case. Shareware gave away part of the software for free, and relied on goodwill from the users for them to pay for the rest rather than sharing the full versions. As you've pointed out, continuous services are another area where money can be made, but then the software isn't the value proposition, just the enabler of those services.

hsuresh 11y ago

Well, retail stores bring people to the store looking to buy things. App stores (not just Apple's) are mostly mandated by Apple/Google/Amazon. They do provide some value (trust, for the apps), but 30% seems quite high for that.