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In 2018 (edit: 2017) they made roughly $11.5 billion[1] with their 30% cut. 1% instead would be $383 million a year. You think that wouldn't be sufficient to r

In 2018 (edit: 2017) they made roughly $11.5 billion[1] with their 30% cut. 1% instead would be $383 million a year. You think that wouldn't be sufficient to run a digital store (including the things mentioned)? Pretty sure you can do it with far less than that. [1]: https://www.forbes.com/sites/chuckjones/2018/01/06/apples-app-store-generated-over-11-billion-in-revenue-for-the-company-last-year/#25298b6b6613 https://www.forbes.com/sites/chuckjones/2018/01/06/apples-ap...

schrodinger 8y ago
2 or 3% goes directly to the credit card processor, no?
- askmike 8y ago
  On that scale I doubt you pay the same as your average Shopify webshop.
fauigerzigerk 8y ago
No, I really don't think it would be sufficient to run a payment service that includes billing, international VAT processing, chargebacks, customer support, fighting fraud, plus providing an entire software development, distribution and vetting platform. Mobile platforms are dysfunctional markets. That's why they can charge 30% and that's why regulators will step in sooner or later. But take a look around and you will find that there is no digital shop that acts as a merchant of record internationally for anywhere close to 1%. It's impossible and completely unrealistic even before accounting for the entire software development and distribution side.
- askmike 8y ago
  Software development is completely unrelated: of course Apple needs to provide software so developers can build apps so consumers have a reason to buy an iPhone in the first place. That has little to do with a marketplace. They can charge 30% because the marketplace (Apple's App Store & Google's playstore) are monopolies and they have complete control over the complete supply chain. If you want your app to be available on the iPhone you have to go through the App Store. There is simply no other way (for a native app), as such you either give in 30% or you don't create an iPhone app.
  - fauigerzigerk 8y ago
    >They can charge 30% because the marketplace (Apple's App Store & Google's playstore) are monopolies and they have complete control over the complete supply chain. I agree with that. 30% is not a plausible rate in a well functioning market. But it's not 1% either, I can guarantee you that. So what is the right revenue share? Paddle charges 5% to act as a merchant of record for you (i.e as a reseller). That's what Apple does as well and I haven't seen that service offered for much less. On top of that, Apple provides all the software distribution and discovery functionality. I'm not sure what the cost of that is, but it's not nothing. So by my estimate, a realistic revenue share for Apple in a well functioning market could be in a range between 8% and 15%. But on the lower end that might mean higher fixed fees for free apps and worse support. What they should do first of all is change the pricing structure to charge a fixed fee plus a percentage. That would allow them to cover their per transaction cost and take a far more realistic revenue cut on top of that.
    - askmike 8y ago
      Fair enough, especially if you account for the discovery (a form of marketing I guess). Within that scope I agree with you.

schrodinger 8y ago

2 or 3% goes directly to the credit card processor, no?

askmike 8y ago
On that scale I doubt you pay the same as your average Shopify webshop.

fauigerzigerk 8y ago

No, I really don't think it would be sufficient to run a payment service that includes billing, international VAT processing, chargebacks, customer support, fighting fraud, plus providing an entire software development, distribution and vetting platform. Mobile platforms are dysfunctional markets. That's why they can charge 30% and that's why regulators will step in sooner or later. But take a look around and you will find that there is no digital shop that acts as a merchant of record internationally for anywhere close to 1%. It's impossible and completely unrealistic even before accounting for the entire software development and distribution side.

askmike 8y ago
Software development is completely unrelated: of course Apple needs to provide software so developers can build apps so consumers have a reason to buy an iPhone in the first place. That has little to do with a marketplace. They can charge 30% because the marketplace (Apple's App Store & Google's playstore) are monopolies and they have complete control over the complete supply chain. If you want your app to be available on the iPhone you have to go through the App Store. There is simply no other way (for a native app), as such you either give in 30% or you don't create an iPhone app.
- fauigerzigerk 8y ago
  >They can charge 30% because the marketplace (Apple's App Store & Google's playstore) are monopolies and they have complete control over the complete supply chain. I agree with that. 30% is not a plausible rate in a well functioning market. But it's not 1% either, I can guarantee you that. So what is the right revenue share? Paddle charges 5% to act as a merchant of record for you (i.e as a reseller). That's what Apple does as well and I haven't seen that service offered for much less. On top of that, Apple provides all the software distribution and discovery functionality. I'm not sure what the cost of that is, but it's not nothing. So by my estimate, a realistic revenue share for Apple in a well functioning market could be in a range between 8% and 15%. But on the lower end that might mean higher fixed fees for free apps and worse support. What they should do first of all is change the pricing structure to charge a fixed fee plus a percentage. That would allow them to cover their per transaction cost and take a far more realistic revenue cut on top of that.
  - askmike 8y ago
    Fair enough, especially if you account for the discovery (a form of marketing I guess). Within that scope I agree with you.