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“ Apple and Google are gatekeepers to all mobile devices (practically), but the value they add as gatekeepers is questionable” If you own an app and remove it

“ Apple and Google are gatekeepers to all mobile devices (practically), but the value they add as gatekeepers is questionable” If you own an app and remove it from all App Stores, you’ll quickly see what value they add. It’s the millions of users who are able to download your product.

amiga_500 6y ago
This kind of gatekeeping / rentier activity is not good for economic activity. There are two big players. Amazing coincidence that both charge 30%, isn't it?
- kmonsen 6y ago
  It's not a coincidence and I have never heard a claim it was. Apple set it at 30% and Google decided not to compete on price. Of course it is legal to set the price of your product based on a competitor.
  - amiga_500 6y ago
    I don't think that is a good situation. It's basically an open duopoly.
    - kmonsen 6y ago
      I actually don't disagree with this, I just said it is not some "coincidence". Apple was first, Google decided to follow. Good for consumers? Probably not.
  - chc 6y ago
    When competitors non-coincidentally decide to set their prices the same arbitrary number, that's called "price fixing" and it is potentially an antitrust issue.
    - amiga_500 6y ago
      Exactly, crazy people are arguing otherwise.
zizee 6y ago
That is only because their app stores hold monopoly positions on their respective devices.
untog 6y ago
That is not value. That is gatekeeping.
- viscanti 6y ago
  Top of the funnel discovery and verifying the app won't do malicious things is value. It's debatable if that's worth 30% of all in-app purchases (but then those also get the value of a trusted payment processor too). But it's silly to imagine that app developers aren't getting value from being in app stores.
wombatmobile 6y ago
What's questionable, AznHisoka, is what value the gatekeepers add for consumers by charging such a high tax. Most of the value is being provided by the app developers. 30 - 50% is an acceptable markup in the retail world, like a bricks and mortar store selling furniture, but the purchase of virtual currency is not the same as a retail transaction. It's closer to the sort of service a money changer provides, or even a credit card merchant. The fee for such as service should be in the range of 3 - 18%, not 30%.
- zepto 6y ago
  This implies there is no serious work involved in developing the App Store or platform other than credit card fees. That’s just clearly not true.
  - wombatmobile 6y ago
    You are right, zepto, that developing, maintaining, and delivering the App Store requires work and resources, and Apple should be compensated fairly for it. App store owners are compensated fairly by the 30% fee they charge as commission on sales. But the Fortnite case is not about sales. It is about the re-supply of virtual currency for use within a game. The customer is already established. There is no new selling or marketing or delivery required of the app store owner. To recognise the differences between product sales vs ongoing consumable resupply, such as virtual currency, app store vendors should do what physical world vendors do and charge different fees that are commensurate with the value add. Retailers charge 30-50% markup to cover the overheads of rent and sales staff. What Apple does with the app store is similar, and so their 30% fee is in step. Forex dealers and banks charge 3% - 18% for financial transactions such as currency exchange and credit card financing. Given that Apple isn't even providing financing for Fortnite's virtual currency, a fee in the order of 5 - 10% would be reasonable in this case. What's at stake here should not be the all or nothing duel that Apple has initiated by banning Fortnite from the App store. Apple should just evolve, and introduce a second tier charge for consumables. Would it make sense for Walmart to charge one price (say $100) for every item it sells in every one of its stores? Of course not. Walmart and every other real world retailer charges different prices for different things, depending on how much value they add. Apple should do the same.

amiga_500 6y ago

This kind of gatekeeping / rentier activity is not good for economic activity. There are two big players. Amazing coincidence that both charge 30%, isn't it?

kmonsen 6y ago
It's not a coincidence and I have never heard a claim it was. Apple set it at 30% and Google decided not to compete on price. Of course it is legal to set the price of your product based on a competitor.
- amiga_500 6y ago
  I don't think that is a good situation. It's basically an open duopoly.
  - kmonsen 6y ago
    I actually don't disagree with this, I just said it is not some "coincidence". Apple was first, Google decided to follow. Good for consumers? Probably not.
- chc 6y ago
  When competitors non-coincidentally decide to set their prices the same arbitrary number, that's called "price fixing" and it is potentially an antitrust issue.
  - amiga_500 6y ago
    Exactly, crazy people are arguing otherwise.

zizee 6y ago

That is only because their app stores hold monopoly positions on their respective devices.

untog 6y ago

That is not value. That is gatekeeping.

viscanti 6y ago
Top of the funnel discovery and verifying the app won't do malicious things is value. It's debatable if that's worth 30% of all in-app purchases (but then those also get the value of a trusted payment processor too). But it's silly to imagine that app developers aren't getting value from being in app stores.

wombatmobile 6y ago

What's questionable, AznHisoka, is what value the gatekeepers add for consumers by charging such a high tax. Most of the value is being provided by the app developers. 30 - 50% is an acceptable markup in the retail world, like a bricks and mortar store selling furniture, but the purchase of virtual currency is not the same as a retail transaction. It's closer to the sort of service a money changer provides, or even a credit card merchant. The fee for such as service should be in the range of 3 - 18%, not 30%.

zepto 6y ago
This implies there is no serious work involved in developing the App Store or platform other than credit card fees. That’s just clearly not true.
- wombatmobile 6y ago
  You are right, zepto, that developing, maintaining, and delivering the App Store requires work and resources, and Apple should be compensated fairly for it. App store owners are compensated fairly by the 30% fee they charge as commission on sales. But the Fortnite case is not about sales. It is about the re-supply of virtual currency for use within a game. The customer is already established. There is no new selling or marketing or delivery required of the app store owner. To recognise the differences between product sales vs ongoing consumable resupply, such as virtual currency, app store vendors should do what physical world vendors do and charge different fees that are commensurate with the value add. Retailers charge 30-50% markup to cover the overheads of rent and sales staff. What Apple does with the app store is similar, and so their 30% fee is in step. Forex dealers and banks charge 3% - 18% for financial transactions such as currency exchange and credit card financing. Given that Apple isn't even providing financing for Fortnite's virtual currency, a fee in the order of 5 - 10% would be reasonable in this case. What's at stake here should not be the all or nothing duel that Apple has initiated by banning Fortnite from the App store. Apple should just evolve, and introduce a second tier charge for consumables. Would it make sense for Walmart to charge one price (say $100) for every item it sells in every one of its stores? Of course not. Walmart and every other real world retailer charges different prices for different things, depending on how much value they add. Apple should do the same.