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Three thoughts. There is a certain irony at play here, given both Apple and Google's own fights with tax authorities in many jurisdictions (eg the double Irish

Three thoughts. There is a certain irony at play here, given both Apple and Google's own fights with tax authorities in many jurisdictions (eg the double Irish and the EU, Australian complaints about tax avoidance, agreements about their use of shell companies in the Cayman Islands or other tax havens, etc.). I have always wondered what the real cost is to both Google and Apple in running their App Stores? The 30% figure has been a constant - with a few exceptions like the in-app subscriptions after 1 year on iOS down to 15% - for 10 years now but what are the actual revenue vs cost figures involved in running these [billing] stores? What would be a fairer cut... 10%? 15%? 17.8% in large economies and 22.6% in smaller countries (as semi-random numbers), etc. Currency fluctuations are also important. Apple more so than Google, also seem to make quite some revenue from pegging their prices against the USD and only updating these once or twice a year - and generally only at very favourable forex conversions in Apple's favour. An unintended side effect here is that many non-USA consumers are subsidising USA consumers purchases of both Apple and Google products (because the USD is the benchmark price). Given the reliance on China as the hardware manufacturer, maybe the Yuan would be 'fairer' in many instances? (It won't happen of course due to how Cupertino and Mountain View centric both companies, and by extension, how pro-USA many of their pricing decisions are).

bskap 8y ago
Calculating costs here is tricky. Do you only include the cost for Google running running the Play Store infrastructure itself, or do you also include the costs of developing and running Google Play Services? What about the costs Google has developing Android itself, which is otherwise given away for free?
- adrian_mrd 8y ago
  Good points. Part of the problem with the debate at this point is that there is little to no transparency about any of those costs. Android is obviously a larger ‘strategic’ play so I would argue that should be excluded and Google Play Services are also likely to either be ‘strategic’ plays (ie Apple offers music, so do we; Customers want movies, let’s offer them too, etc) or potentially revenue positive. If Google’s and Apple’s accountants can setup magical tax systems across the world - they could also provide some useful data points about the true costs of running their App stores. As a specific example, I’d be interested to know, what the hosting and bandwidth costs are for the App Stores (likely heavily subsidised given both Apple and Google run cloud platforms including hosting). At the moment, there is next to no transparency except the “30%” cut and some high-level info in their quarterly financial reports.

bskap 8y ago

Calculating costs here is tricky. Do you only include the cost for Google running running the Play Store infrastructure itself, or do you also include the costs of developing and running Google Play Services? What about the costs Google has developing Android itself, which is otherwise given away for free?

adrian_mrd 8y ago
Good points. Part of the problem with the debate at this point is that there is little to no transparency about any of those costs. Android is obviously a larger ‘strategic’ play so I would argue that should be excluded and Google Play Services are also likely to either be ‘strategic’ plays (ie Apple offers music, so do we; Customers want movies, let’s offer them too, etc) or potentially revenue positive. If Google’s and Apple’s accountants can setup magical tax systems across the world - they could also provide some useful data points about the true costs of running their App stores. As a specific example, I’d be interested to know, what the hosting and bandwidth costs are for the App Stores (likely heavily subsidised given both Apple and Google run cloud platforms including hosting). At the moment, there is next to no transparency except the “30%” cut and some high-level info in their quarterly financial reports.