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The Art of the Possible
- schmudde 6y agoWhat percentage of revenue do App Store apps generate for Apple? It seems like an unusual hill to die on for a high-margin business like Apple. It's definitely making the experience worse for everyone and highlighting all the drawbacks of having a single source of software for your device.
- hrktb 6y agoMobile gaming money is a big deal, and ebook market would have been too if Amazon caved.
- scarface74 6y agoYes it is. It’s not the mobile gaming crowd that’s screaming the loudest. They are making money from in app purchases from whales for loot boxes and tokens. Their margins are basically 0 for in app purchases. It’s the app developers that are reselling licensed content or that have a server component who are complaining the loudest.
- hrktb 6y agoYes. I think that’s Apple has put itself in a weird position where the most vocal devs are making them the least money at this point. But if they make an exception to give these devs what they want, mobile gaming devs will be next banging at the door to get their fees lifted up (well, they are effectively already banging the door pretty loud, like Epic for instance)
- thejohnconway 6y agoI don’t know, but it’s part of the “services” revenue that they need to continue growth now that hardware sales are flat(ish). Apple now has bad incentives to rent-seek, and it’s showing.
- jijji 6y agotheir target price is $99, so if apple wants their 30% cut to be on the app store, just increase the target price to $150 for ios version, no?
- verdverm 6y agoHow does the price increase effect sales?
- perfmode 6y agoDHH has explained that it's not ultimately about the price. There is another factor: divergence of customer billing experience across platforms. Hey has it's own cross-platform billing solution. :shrug:
- scarface74 6y agoIn that case. That’s not a hill he should want to die on. It’s just like selling any physical good through a retailer. I pay for Netflix for instance through T-mobile since I get a discount. I pay for Hulu Live TV for myself and my wife differently than I pay for Hulu+Disney+ for my kids. Not having my information across random app developers and having it centralized with Apple is an argument for the App Store. I would much rather have all of my subscriptions in one place. Of course it isn’t worth a 43% premium.
- perfmode 6y agoI guess the argument is that Netflix and others are given a pass. As a customer, I agree with you. I am happy to have all of my subscriptions through Apple. I'm content to watch from the sidelines as the moneymen argue for their pieces of the pie. For me, the emerging global civil rights movement is of greater import.
- scarface74 6y agoIt’s not just Netflix. It’s the class of apps. Even no name apps like ACloudGuru where you subscribe to get access to training classes do this.
- hrktb 6y agoVery well put, as usual. The most important part for me is how both developers and users are unhappy with the current rules. Hey is the latest flavor of the controversy, but from the start I’m bitter I can’t buy Amazon ebooks directly from the amazon app. And it’s not like these rule give me more security, provide for the stability of the platform, or help me in any indirect ways. The kindle app still makes no revenue for Apple either way. Everyone loses, and that doesn’t help Apple’s image as it’s slowly crawling out of the laptop keyboard fiasco and this string of pretty flaky macos versions.
- jdminhbg 6y ago> And it’s not like these rule give me more security, provide for the stability of the platform, or help me in any indirect ways. In the case of Amazon, probably not. In the case of nearly all other apps, they definitely do. Having every fly-by-night game accepting credit cards to buy more tokens or whatever would be a usability and security nightmare. Even respectable apps I don’t want to give my credit card info to: I let Apple sit in the middle, handle security, and provide me a place to cancel with one tap. I understand why companies, especially big and responsible ones like Amazon or Basecamp, don’t want to use IAP. But a free-for-all would be terrible for iOS users.
- empath75 6y agoAs a user I much prefer in app purchases and Apple Pay, but the fees they charge are clearly extortionate.
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- yawboakye 6y agoMy feelings exactly. I want a no-questions-asked unsubscribe option. IAP is guaranteed to provide that, not the individual apps I download. So even though the 30% share of revenue might look huge, being an independent trusted arbiter probably makes it worth it?
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- scarface74 6y agoI don’t get it. For context I am the first to criticize all of the wanna be lawyers on HN who don’t know what monopoly or anti trust is. But Apple’s stance is just dumb for a lot reasons. It’s not good for Apple, consumers or developers. There is a simple solution that would make everyone happy but the sleazy developers of pay to win games and I have no sympathy for them: All “reader” apps and apps that have subscriptions for services must allow in app purchases. But through Apple Pay. Meaning they get charged standard credit card fees. Apple could even charge a slightly higher rate like 6% to cover the rewards program like other premium cards do. This benefits: Apple: They can bring all of the apps back into the fold like Netflix and Spotify and they can get Microsoft and Adobe in. It’s more money for Apple. On top of that, it gets both the EU and US government off their back. Users: have a much better experience. Developers: Get to keep more of their money. It also excludes pay to win games. Between this and Apple Arcade, I am okay if all of those types of games die. Also offer upgrade pricing capabilities for apps to make it easier for developers to make money without having to rely on subscriptions.
- jiofih 6y agoThat is in fact the solution Apple offers, all apps must offer purchases via Apple Pay. Except the fee is 30% and not 6%, and there lies the problem.
- scarface74 6y agoThat’s not Apple Pay. That’s in app purchasing. That’s a completely different payment flow. In app purchasing: User pays Apple with the card on file with Apple. They take 30% and pay you in 30 days. You get a tax form at the end of the year. Apple Pay: Multiple cards can be stored in your digital wallet on your device. Apple doesn’t store your credit cards on file. When you pay via Apple Pay, you choose the card,Apple takes a much smaller cut, the payment goes through the credit card network, through your merchant bank and you get paid within 2-3 days. Apple doesn’t even have a record of your transaction unless you’re using Apple’s credit card. You are responsible for establishing the merchant account and taking care of card processing and refunds. You are also responsible for making sure that users update their credit card information.
- notduncansmith 6y agoThis whole situation reeks of entitlement. Apple is under no obligation to make someone’s ideal business model feasible. Just like if you want to post content on Facebook, or if you want to sell through Stripe, or you want to deliver groceries on Instacart, or you want to have a business in the USA - you have to follow the rules created by the owners of the platform you stand on, or find/start a new platform. This is a fundamental aspect of social life, not some corporate profit-seeking BS from Apple. No one is making DHH do an email app. No one is forcing him to charge $99. If Apple is so big and bad, then maybe he should be working on a new mobile phone platform instead of another email app. Complaints about injustice without alternatives hold little weight. Finally, if this was something society actually needed, I think I’d feel differently. If this fight was over an app that was critical to survival or civil liberty or something, it would mean something different for Apple to reject it. But it’s not something we need. It’s not important or critical in any way. It’s a new email app. Forgive me for not busting out a bigger violin for someone who has already released multiple profitable software products and is now upset that an even richer entity won’t let them have their exact way.
- esrauch 6y agoI think you know it's completely unrealistic for DHH to make a competing phone platform, so your argument is clearly not in good faith. Microsoft was well positioned to do it and spent many billions and failed to make it work. Im not sure that the situation is actually that egregious yet, but if the barrier to entry becomes so high that it warps the whole economy to the detriment of society we shouldn't just say that's fine because those few companies deserve the freedom to act that way.
- toohotatopic 6y agoMicrosoft wanted to establish a Windows phone platform where phone manufacturers pay license fees. If they had finished Nokia's Maemo with a Windows graphics framework and given away the operating system for free they would have had a much better chance. There is room for another platform as long as it serves what the market wants.
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- lukifer 6y agoThis is one thing I find fascinating about iterative price negotiation: if one party can get a given price to "stick", they can use that normalization as a de facto negotiation tool. And given that there's no collective bargaining on the side of app developers, Apple holds all the leverage, even against giants like Netflix and Google [0]. Once a one-sided pricing norm is established ("industry standard"), whichever party established the norm is highly incentivized to never budge, even to their own detriment on some transactions, lest the norm erode [1]. This phenomenon isn't limited to app stores: I think we see it play out in other economic domains (mortgages/landlords/wages), as well as the political (any policy concessions, even mild or reasonable ones, signals weakness and creates a perceptual opening for your opponents to twist the knife). I suspect there is a formal economics label for this phenomenon which is escaping me at the moment; if anyone more learned on the subject would care to enlighten me I would appreciate it. :) [0] It does seem telling that Amazon seems to be the only giant in the position to carve out a secretly negotiated exception, no doubt because they're so often in the same game themselves: taking hardline stances on negotiating with suppliers, effectively "winning capitalism" within their niche. [1] I harp on the concept a lot, but one way of modeling such norms is as Schelling focal points: https://en.wikipedia.org/wiki/Focal_point_(game_theory) https://en.wikipedia.org/wiki/Focal_point_(game_theory)
- Joeri 6y agoApple doesn't seem to understand they are running out of track. This is not about some disgruntled developers, because to be honest those developers don't have enough leverage over Apple. This is about the EU's investigation. History tells us that these sorts of investigations tend to result in big fines and restrictions being applied, at least if harm to EU businesses can be demonstrated. A big American tech giant harming European businesses like Spotify? Everyone can read those tea leaves. Now, the real question is this, what scenario is more likely? 1. Apple gets out in front of this, and opens up the app store just enough that they don't get fined / restricted. 2. The EU applies fines and restrictions to Apple and only Apple. 3. The EU drafts a digital store directive, and applies it to all digital download stores, including Apple's. The third scenario is probably going to happen at some point anyway, but the current complaint may be the catalyst. I don't know whether to hope for it or fear it, because you never know whether it's going to be a well-written directive.
- Amorymeltzer 6y agoJust a note on the final line: >Apple needs to decide if it wants to be “right,” or if it wants to be happy. I think Siracusa is referencing a line from The Hitchhiker's Guide to the Galaxy, spoken by Slartibartfast as part of an exchange with Arthur Dent: >"I'd far rather be happy than right any day." >"And are you?" >"No, that's where it all falls down, of course." >"Pity," said Arthur with sympathy. "It sounded like quite a good lifestyle otherwise." I love the book, but that particular line has stuck with me for quite a while. I try to use it as a guide whenever I start to lean toward being right over happiness. Works for relationships, code reviews, whatever you like.
- ambicapter 6y agoThat exchange sounds like he tried being happy over right and he didn't end up being happy anyways?
- Amorymeltzer 6y agoYou can try for happiness without actually achieving it. I'd prefer to be happy and right; sometimes I'm neither. Preferring one is no guarantee you'll get either. Also, Slartibartfast is pretty melancholy.
- HighlandSpring 6y agoI guess it's saying it can be difficult to practice what you preach.
- draw_down 6y agoYeah, I’m not sure this the mic-drop moment GP is implying it is.
- _bxg1 6y agoI've always known it as a classic adage in relationship contexts, particularly romantic relationships, where for the sake of the relationship it can make sense to stop trying to win the argument. I don't know if the saying is a reference to the book or if the book is referencing the saying.
- whirlwin 6y agoI still think the fact that end users know that apps in App Store have been valided by someone creates a kind of secure bubble for the end users. And it works well!
- vezycash 6y agoEU should force Apple to allow a third party store for IOS. Any other outcome of their investigation is simply blackmail for money (aka toothless fines, cost of doing business).