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This is a case of something being reasonable under initial conditions, but failing to evolve over time. If you remember the first versions of the App Store, mo

This is a case of something being reasonable under initial conditions, but failing to evolve over time. If you remember the first versions of the App Store, most of the apps were hosted and delivered by Apple, and the in app purchases were also hosted, secured and delivered by Apple. You just uploaded the content and had zero cost from that point on - like writing a book and giving it to a publisher. There the 30% cut made sense. If I sleep on the beach all day and receive 70% royalties for my stuff without having to do any other work, great. Sounds reasonable. Not so if I’m running a service or a backend for the app I’m selling. If I’m selling consultations, or running perpetual servers or jobs or bandwidth for each new sale, there’s absolutely no way 30% is a sensible cut, because the value is not being provided by Apple the publisher. Apple has failed to make this distinction, and the more they dig their heels in and refuse to, the bigger the fall is going to be.

Despegar 6y ago
The fixation on what Apple's costs are in operating the App Store is weird. It reminds me of the people that look at the estimates of the bill of materials for an iPhone and who use that to say Apple's charging too much. That's irrelevant. It's not meant to be run at-cost for the benefit of developers. The App Store is a business to Apple just like any of their other products. The cut that "makes sense" is whatever the market will bear.
- corin_ 6y ago
  You could kill off any discussion about any product pricing by saying "the answer is whatever the market will bear", it's not really useful for the discussion though. What the market will bear is made up of lots of people's opinions on whether the price is justified, and the person you're replying to is giving one argument that it isn't.
  - deleted 6y ago
    [deleted]
- oarsinsync 6y ago
  "Whatever the market will bear" requires a healthy market place with a range of options. Like residential internet in the USA, mobile app stores are not a healthy market place. If you use iOS, Apple has a monopoly, and there is no scope for any other market places by design. If you use Android, Google has a monopoly. There is scope for other market places, but Google has a dominant monopoly that is unlikely to go anywhere else. There are no other mobile appstores of consequence. There's little reason for the incumbents to reduce their prices, as there is little-to-no scope for any competition that requires it.
oliwarner 6y ago
Beside security and delivery, there's also marketing, exposure and integration features. I don't disagree with you, but you do have to draw a line somewhere, or every traditionally paid-for app will convert to external registration. Why wouldn't they? It's free money. Still, it's hard to ignore the hypocrisy of allowing Dropbox, Netflix, Kindle, etc without a pathway for sub-billion-dollar companies to follow in their footsteps. How about a model where the developer pays per logged in user? You'd still have to shake out how much Apple "deserved" for its part in the transaction, eg do subscription apps and top ups get warrant more money? Edit: Didn't expect to be downvoted, just trying to find models that work for everybody.
- culturestate 6y ago
  > How about a model where the developer pays per logged in user? As a person who hates being forced to create an account, I'm all for this. As a person who builds stuff, I don't know that you could create a viable revenue model around this. At any rate it'd certainly be interesting and we'd see more people thinking about PG's recent point[1] re: account-less functionality as a competitive advantage. 1. https://twitter.com/paulg/status/1261976515408990208?s=20 https://twitter.com/paulg/status/1261976515408990208?s=20
- sudhirj 6y ago
  The initial model itself started off pretty clear. Where the in app purchase is secured and delivered purely by Apple, it’s acting as a publisher. This is the unlock special functions in the calculator type purchase, or buy a book where the package is hosted in Apple infra itself. Here is the app has no backend, and Apple is a publisher. 30% is fine. In the scenarios where a user is paying for something that is delivered or executed by the app developer’s infrastructure, digital or not, Apple is a payment gateway, not a publisher. They can either match Stripe or go to Paddle’s rate of 5% because they handle taxes and VAT etc. But either way they are and should act as payment gateway and merchant of record, not publisher. This distinction already exists for on digital goods. No one expects to pay 30% when selling food or groceries, for example. But digital services are the same thing.
  - 6y ago
grishka 6y ago
And it's a hostage/racket situation because going through App Store is the only way to presence on iOS. It's a service you can't refuse if you want your product to have any semblance of success.
pankajdoharey 6y ago
Ofcourse it is reasonable Apple has to employ real developers to maintain the App Store and Data centers. Also if your app is doing good Apple promotes and advertises your app highlight them on picks etc. from time to time all of that takes time and money.
ksec 6y ago
I dont have a problem with their rules or cuts. ( May be I do but I could rationally give them a pass ) I still think, to this day you could argue about it from both side. And it will still be a valid agreement to the point where we agree to disagree. What really triggers me was with their Rules being selectively enforced. Fastmail, and a few others being exactly the same as Hey; a mail client, passed the review for years with no IAP. But not Hey. And that is not right in my book. ( Or they could force other email client to have IAP ) The new Tim Cook's Apple has a different sort of arrogance. And very different to Steve Jobs Apple. Qualcomm's case being one. This is another.

Despegar 6y ago

The fixation on what Apple's costs are in operating the App Store is weird. It reminds me of the people that look at the estimates of the bill of materials for an iPhone and who use that to say Apple's charging too much. That's irrelevant. It's not meant to be run at-cost for the benefit of developers. The App Store is a business to Apple just like any of their other products. The cut that "makes sense" is whatever the market will bear.

corin_ 6y ago
You could kill off any discussion about any product pricing by saying "the answer is whatever the market will bear", it's not really useful for the discussion though. What the market will bear is made up of lots of people's opinions on whether the price is justified, and the person you're replying to is giving one argument that it isn't.
- deleted 6y ago
  [deleted]
oarsinsync 6y ago
"Whatever the market will bear" requires a healthy market place with a range of options. Like residential internet in the USA, mobile app stores are not a healthy market place. If you use iOS, Apple has a monopoly, and there is no scope for any other market places by design. If you use Android, Google has a monopoly. There is scope for other market places, but Google has a dominant monopoly that is unlikely to go anywhere else. There are no other mobile appstores of consequence. There's little reason for the incumbents to reduce their prices, as there is little-to-no scope for any competition that requires it.

oliwarner 6y ago

Beside security and delivery, there's also marketing, exposure and integration features. I don't disagree with you, but you do have to draw a line somewhere, or every traditionally paid-for app will convert to external registration. Why wouldn't they? It's free money. Still, it's hard to ignore the hypocrisy of allowing Dropbox, Netflix, Kindle, etc without a pathway for sub-billion-dollar companies to follow in their footsteps. How about a model where the developer pays per logged in user? You'd still have to shake out how much Apple "deserved" for its part in the transaction, eg do subscription apps and top ups get warrant more money? Edit: Didn't expect to be downvoted, just trying to find models that work for everybody.

culturestate 6y ago
> How about a model where the developer pays per logged in user? As a person who hates being forced to create an account, I'm all for this. As a person who builds stuff, I don't know that you could create a viable revenue model around this. At any rate it'd certainly be interesting and we'd see more people thinking about PG's recent point[1] re: account-less functionality as a competitive advantage. 1. https://twitter.com/paulg/status/1261976515408990208?s=20 https://twitter.com/paulg/status/1261976515408990208?s=20
sudhirj 6y ago
The initial model itself started off pretty clear. Where the in app purchase is secured and delivered purely by Apple, it’s acting as a publisher. This is the unlock special functions in the calculator type purchase, or buy a book where the package is hosted in Apple infra itself. Here is the app has no backend, and Apple is a publisher. 30% is fine. In the scenarios where a user is paying for something that is delivered or executed by the app developer’s infrastructure, digital or not, Apple is a payment gateway, not a publisher. They can either match Stripe or go to Paddle’s rate of 5% because they handle taxes and VAT etc. But either way they are and should act as payment gateway and merchant of record, not publisher. This distinction already exists for on digital goods. No one expects to pay 30% when selling food or groceries, for example. But digital services are the same thing.
- 6y ago

grishka 6y ago

And it's a hostage/racket situation because going through App Store is the only way to presence on iOS. It's a service you can't refuse if you want your product to have any semblance of success.

pankajdoharey 6y ago

Ofcourse it is reasonable Apple has to employ real developers to maintain the App Store and Data centers. Also if your app is doing good Apple promotes and advertises your app highlight them on picks etc. from time to time all of that takes time and money.

ksec 6y ago

I dont have a problem with their rules or cuts. ( May be I do but I could rationally give them a pass ) I still think, to this day you could argue about it from both side. And it will still be a valid agreement to the point where we agree to disagree. What really triggers me was with their Rules being selectively enforced. Fastmail, and a few others being exactly the same as Hey; a mail client, passed the review for years with no IAP. But not Hey. And that is not right in my book. ( Or they could force other email client to have IAP ) The new Tim Cook's Apple has a different sort of arrogance. And very different to Steve Jobs Apple. Qualcomm's case being one. This is another.