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Apple's greed (in maintaining the egregious 30% commission for so long) is going to undermine their entire ecosystem. If Apple moved voluntarily to 10% or 15%

Apple's greed (in maintaining the egregious 30% commission for so long) is going to undermine their entire ecosystem. If Apple moved voluntarily to 10% or 15% for all, there never would have been the industry pressure for this sort of regulation. The EU would have been better to just mandate a maximum % commission for all digital marketplaces above a certain level of revenue. This new solution will get poked full of holes by Apple and lead to an inferior experience for consumers.

chris_st 4y ago
I see this, and it just makes me think that if they had, we'd be seeing posts that say, "Apple's greed (in maintaining the egregious 10% commission for so long) is going to undermine their entire ecosystem. If Apple moved voluntarily to 5% or 3% for all, ...".
- vorpalhex 4y ago
  30% is an insane amount.
  - rootusrootus 4y ago
    How does it compare to a regular bricks & mortar retail store? Shelf fees, etc? Edit: downvoted for asking a question? Thanks HN.
    - vorpalhex 4y ago
      How much warehouse space does it take to sell 3,000,000 copies of fortnite? How much shrink did they have?
      - Nasrudith 4y ago
        The shrinkage is called chargeback and processing fees.
        vorpalhex 4y ago
        Great so that's 3.5% Where is the other 26.5% coming from?
        NovemberWhiskey 4y ago
        How many people do you think Apple employees whose job is solely or primarily-centered around iOS developer relations, tools, support, store infrastructure etc. etc?
        oblio 4y ago
        Random guess? Maybe N employees, paid $5-10bn per year. Maybe $5-10bn in all the other expenses. In 2020 Apple made $60bn from the AppStore. Apple makes outrageous amounts of money from first mover advantage and a humongous moat but I guess we're ok with that.
        sealeck 4y ago
        This isn't the point – the point is that because Apple has a monopolistic position they are not forced to compete and provide better service.
    - oaiey 4y ago
      How does that compare to CDN, stripe Integration, a fancy certificate and a shop web page. That is the question. It is software distribution.
      - ksec 4y ago
        Exactly. I wish people stop using Retail as a counter argument, especially when 99.999999999% of them have no idea how Retail works.
  - laserlight 4y ago
    How much is a fair amount? Who decides that and how?
    - vorpalhex 4y ago
      The market, through competition.
      - laserlight 4y ago
        Thanks for the clarification, because your previous comment seemed to contradict.
        vorpalhex 4y ago
        Oh, is there a competitor to the app store that will let me get apps for my iOS devices?
        laserlight 4y ago
        Your reply reads quite snarky. I don't think further discussion would be productive, so I won't continue.
        deleted 4y ago
        [deleted]
      - Bud 4y ago
        Is "the market" going to magically provide all the substantial benefits of an Apple-run store for apps, too? No. It's not. "The market" is going to say: sorry users, fuck that, y'all can just magically research all this and provide your own security and privacy from here on out. Which is impossible, of course. Result: much poorer user experience for the vast majority of users. Which is why Apple did it their way in the first place. No, it was not because of revenue. Anyone who says that is either lying or is incredibly lazy and hasn't looked up where Apple actually makes its money.
  - Bud 4y ago
    Did you research Apple's costs for running the App Store, screening apps for security, etc., before making this blanket statement? I'd wager not.
    - sealeck 4y ago
      But they're not billing on the basis of how much it technically costs them to provide these services. If we had a competitive ecosystem then we would expect Apple's prices for payment processing to be at least within an order of magnitude of (for example) Stripe's. Of course security screening is expensive, but it's also not that expensive (e.g. a typical software company might have a 10-30% profit margin, so in some cases apple accounts for roughly half the operational expenses of a company – i.e. the company pays as much, or more, money to apple as it does to its entire payroll)
    - kaba0 4y ago
      Do you seriously believe all these things are big expenses? They barely do any screening.
- neop1x 4y ago
  30% is almost 1/3 of the app price! It is higher than income tax in most countries. It is stealing money from developers because their app is not successful due to being released on App Store, it is successful because it is a great product and people would buy it on whatever store it would be available. Developers were just unable to publish it in another store or use a different payment processor with lower fees.
silvestrov 4y ago
> Apple simply chose to pay a $5.5 million fine every week for months in the Netherlands instead of obey orders from the Authority for Consumers and Markets How to piss off the EU political system in one simple step. This ruling is no surprise after such behaviour from Apple. They made their own bed.
- mpweiher 4y ago
  Yep. "So you think our fines are too puny to make you comply?" "There fixed that for you."
  - account42 4y ago
    Fines, at least for corporations, really need to have increase exponentially without limit for repeat offenses so that violating the law can never just be shrugged off as the cost of doing business.
    - mpweiher 4y ago
      10% of global turnover seems pretty substantial. 20% for repeat offenders. I can't imagine any company in the world that will shrug that off.
- arlcode 4y ago
  That felt somewhat desperate, like Apple didn't really know how to deal with this. I wonder what their endgame was? Did they hope that users would rise up and defend apple against their government over dating apps? Did they think the government would blink first? (Why would it?) Was this an attempt to hinder similar laws in other jurisdictions? (If so, how?) Where they simply too stunned and inflexible to react quickly? It made no sense to me and I fear we will never learn?
kinnth 4y ago
If iPhones had different app stores with 15% fees, then consumers would decide. I think the real issue here is consumers are gona get hyper confused and it wont be a better experience for anyone. Every single app creator out there will now want their own "app store" and it's going to be a mess. 30% fee initially to capture that market was what our company factored in and grew exponentially with. A 15% fee is nothing if the market is fragmented.
- warning26 4y ago
  > Every single app creator out there will now want their own "app store" and it's going to be a mess. This is such an oft-repeated argument, yet overlooks that Android already allows sideloading and alternative app stores. If everyone-creating-their-own-app-store hasn't happened on Android, why would iOS be different?
  - Karunamon 4y ago
    Full devils advocate here, but the argument I've always heard is that the play store is a lot less arbitrary and restrictive than the App Store, so there's less reason to want to go outside of it. Apple locks out so many useful kinds of software that there actually may be enough momentum for real alternate app stores to proliferate.
    - reaperducer 4y ago
      Apple locks out so many useful kinds of software For someone who doesn't have a personal Android phone, what useful software is out there that I can get on an iPhone? Related: What mass-market software is out there that isn't available on the iPhone? I don't mean *nix tools and niche game emulators. Things that would make many people actually care about alt stores?
      - GlitchMr 4y ago
        - Web browsers with ad-blocking and plug-ins (Apple currently requires all web browsers to use system Webkit with very limited APIs). - Game cloud streaming services (xCloud, Stadia, GeForce Now). - Unofficial clients for websites such as YouTube that add features that official client doesn't have. - Tools to disable advertisements in applications. - Programs licensed under GPL as Apple App Store bans those.
deepGem 4y ago
This is what beats the heck outta me. A company that is sitting on nearly 150B in cash somehow feels the need to pinch 30% commissions from developers till date. I understand this as an initial business model. I mean a 15% reduction in app revenues is not even a rounding error in Apple's P&L. What the hell are they thinking. The goodwill that they'd earn from devs will go a long long way and if they signal that their share will eventually go to zero over a period of 10+ years, that'll get more devs to embrace iOS. I fail to understand the current leadership at Apple.
- rad_gruchalski 4y ago
  > This is what beats the heck outta me. A company that is sitting on nearly 150B in cash somehow feels the need to pinch 30% commissions from developers till date. The rich don’t become rich by being generous and giving money away.
- bennysomething 4y ago
  They are there to earn money for their share holders (which to be clear isn't just rich people, it's pensions including pensions for fire departments etc). They must act in their share holders interests. Cutting their fees with no justifiable reason is not something they are going to do. There's no conspiracy, companies are there to make money, that's it.
- ksec 4y ago
  So the people that can make the company more successful are sales and marketing people, and they end up running the companies. And the product people get driven out of the decision making forums, and the companies forget what it means to make great products. The product sensibility and the product genius that brought them to that monopolistic position gets rotted out by people running these companies that have no conception of a good product versus a bad product. They have no conception of the craftsmanship that's required to take a good idea and turn it into a good product. And they really have no feeling in their hearts, usually, about wanting to really help the customers. -Steve Jobs
  - nolok 4y ago
caramelcustard 4y ago
Pretty sure 30% commission is not an Apple-exclusive thing. Google Play, consoles and Steam have the same rate.
- ParksNet 4y ago
  Switch has 30% with a 5% rebate to consumers. Steam has a regressive 20%/25%/30% tiered commission structure. There are sweetheart deals we have no knowledge of, like Apple's deal with Amazon to get Prime Video onto their devices.
  - caramelcustard 4y ago
    And AFAIK Apple charges 15% if you earn less than a million in your net revenue, yet noone mentions that. Which, by the way, could be considered a sweetheart deal of its own, just like Steams tiered system. As for the Switch it's still 30% and to the developer it doesn't matter whether there's 5 percent going to the customer or not.
    - zeroonetwothree 4y ago
      The incidence of fees is born by the consumer so it should matter.
    - smoldesu 4y ago
      Apple only made that change after incredible pushback from their community, and it still doesn't address the real problem: Apple could be charging 2% and they would still have a monopoly on app distribution that deserves to be broken up. Steam isn't comparable, since it charges that 30% fee and competes against other distributors. Despite that, developers continue to choose Steam over alternative platforms like Itch.io or EGS. Likewise, Apple is free to charge whatever they want for their app store, they just need to compete with other service providers to ensure they're providing a fair deal.
      - caramelcustard 4y ago
judge2020 4y ago
> If Apple moved voluntarily to 10% or 15% for all, there never would have been the industry pressure for this sort of regulation. They did[0], but the actual companies lobbying for this are the ones that don't benefit because they're making $x millions less due to iOS. 0: https://developer.apple.com/app-store/small-business-program/ https://developer.apple.com/app-store/small-business-program...

chris_st 4y ago

I see this, and it just makes me think that if they had, we'd be seeing posts that say, "Apple's greed (in maintaining the egregious 10% commission for so long) is going to undermine their entire ecosystem. If Apple moved voluntarily to 5% or 3% for all, ...".

vorpalhex 4y ago
30% is an insane amount.
- rootusrootus 4y ago
  How does it compare to a regular bricks & mortar retail store? Shelf fees, etc? Edit: downvoted for asking a question? Thanks HN.
  - vorpalhex 4y ago
    How much warehouse space does it take to sell 3,000,000 copies of fortnite? How much shrink did they have?
    - Nasrudith 4y ago
      The shrinkage is called chargeback and processing fees.
      - vorpalhex 4y ago
        Great so that's 3.5% Where is the other 26.5% coming from?
        NovemberWhiskey 4y ago
        How many people do you think Apple employees whose job is solely or primarily-centered around iOS developer relations, tools, support, store infrastructure etc. etc?
        oblio 4y ago
        Random guess? Maybe N employees, paid $5-10bn per year. Maybe $5-10bn in all the other expenses. In 2020 Apple made $60bn from the AppStore. Apple makes outrageous amounts of money from first mover advantage and a humongous moat but I guess we're ok with that.
        sealeck 4y ago
        This isn't the point – the point is that because Apple has a monopolistic position they are not forced to compete and provide better service.
  - oaiey 4y ago
    How does that compare to CDN, stripe Integration, a fancy certificate and a shop web page. That is the question. It is software distribution.
    - ksec 4y ago
      Exactly. I wish people stop using Retail as a counter argument, especially when 99.999999999% of them have no idea how Retail works.
- laserlight 4y ago
  How much is a fair amount? Who decides that and how?
  - vorpalhex 4y ago
    The market, through competition.
    - laserlight 4y ago
      Thanks for the clarification, because your previous comment seemed to contradict.
      - vorpalhex 4y ago
        Oh, is there a competitor to the app store that will let me get apps for my iOS devices?
        laserlight 4y ago
        Your reply reads quite snarky. I don't think further discussion would be productive, so I won't continue.
        deleted 4y ago
        [deleted]
    - Bud 4y ago
      Is "the market" going to magically provide all the substantial benefits of an Apple-run store for apps, too? No. It's not. "The market" is going to say: sorry users, fuck that, y'all can just magically research all this and provide your own security and privacy from here on out. Which is impossible, of course. Result: much poorer user experience for the vast majority of users. Which is why Apple did it their way in the first place. No, it was not because of revenue. Anyone who says that is either lying or is incredibly lazy and hasn't looked up where Apple actually makes its money.
- Bud 4y ago
  Did you research Apple's costs for running the App Store, screening apps for security, etc., before making this blanket statement? I'd wager not.
  - sealeck 4y ago
    But they're not billing on the basis of how much it technically costs them to provide these services. If we had a competitive ecosystem then we would expect Apple's prices for payment processing to be at least within an order of magnitude of (for example) Stripe's. Of course security screening is expensive, but it's also not that expensive (e.g. a typical software company might have a 10-30% profit margin, so in some cases apple accounts for roughly half the operational expenses of a company – i.e. the company pays as much, or more, money to apple as it does to its entire payroll)
  - kaba0 4y ago
    Do you seriously believe all these things are big expenses? They barely do any screening.
neop1x 4y ago
30% is almost 1/3 of the app price! It is higher than income tax in most countries. It is stealing money from developers because their app is not successful due to being released on App Store, it is successful because it is a great product and people would buy it on whatever store it would be available. Developers were just unable to publish it in another store or use a different payment processor with lower fees.

silvestrov 4y ago

> Apple simply chose to pay a $5.5 million fine every week for months in the Netherlands instead of obey orders from the Authority for Consumers and Markets How to piss off the EU political system in one simple step. This ruling is no surprise after such behaviour from Apple. They made their own bed.

mpweiher 4y ago
Yep. "So you think our fines are too puny to make you comply?" "There fixed that for you."
- account42 4y ago
  Fines, at least for corporations, really need to have increase exponentially without limit for repeat offenses so that violating the law can never just be shrugged off as the cost of doing business.
  - mpweiher 4y ago
    10% of global turnover seems pretty substantial. 20% for repeat offenders. I can't imagine any company in the world that will shrug that off.
arlcode 4y ago
That felt somewhat desperate, like Apple didn't really know how to deal with this. I wonder what their endgame was? Did they hope that users would rise up and defend apple against their government over dating apps? Did they think the government would blink first? (Why would it?) Was this an attempt to hinder similar laws in other jurisdictions? (If so, how?) Where they simply too stunned and inflexible to react quickly? It made no sense to me and I fear we will never learn?

kinnth 4y ago

If iPhones had different app stores with 15% fees, then consumers would decide. I think the real issue here is consumers are gona get hyper confused and it wont be a better experience for anyone. Every single app creator out there will now want their own "app store" and it's going to be a mess. 30% fee initially to capture that market was what our company factored in and grew exponentially with. A 15% fee is nothing if the market is fragmented.

warning26 4y ago
> Every single app creator out there will now want their own "app store" and it's going to be a mess. This is such an oft-repeated argument, yet overlooks that Android already allows sideloading and alternative app stores. If everyone-creating-their-own-app-store hasn't happened on Android, why would iOS be different?
- Karunamon 4y ago
  Full devils advocate here, but the argument I've always heard is that the play store is a lot less arbitrary and restrictive than the App Store, so there's less reason to want to go outside of it. Apple locks out so many useful kinds of software that there actually may be enough momentum for real alternate app stores to proliferate.
  - reaperducer 4y ago
    Apple locks out so many useful kinds of software For someone who doesn't have a personal Android phone, what useful software is out there that I can get on an iPhone? Related: What mass-market software is out there that isn't available on the iPhone? I don't mean *nix tools and niche game emulators. Things that would make many people actually care about alt stores?
    - GlitchMr 4y ago
      - Web browsers with ad-blocking and plug-ins (Apple currently requires all web browsers to use system Webkit with very limited APIs). - Game cloud streaming services (xCloud, Stadia, GeForce Now). - Unofficial clients for websites such as YouTube that add features that official client doesn't have. - Tools to disable advertisements in applications. - Programs licensed under GPL as Apple App Store bans those.

deepGem 4y ago

This is what beats the heck outta me. A company that is sitting on nearly 150B in cash somehow feels the need to pinch 30% commissions from developers till date. I understand this as an initial business model. I mean a 15% reduction in app revenues is not even a rounding error in Apple's P&L. What the hell are they thinking. The goodwill that they'd earn from devs will go a long long way and if they signal that their share will eventually go to zero over a period of 10+ years, that'll get more devs to embrace iOS. I fail to understand the current leadership at Apple.

rad_gruchalski 4y ago
> This is what beats the heck outta me. A company that is sitting on nearly 150B in cash somehow feels the need to pinch 30% commissions from developers till date. The rich don’t become rich by being generous and giving money away.
bennysomething 4y ago
They are there to earn money for their share holders (which to be clear isn't just rich people, it's pensions including pensions for fire departments etc). They must act in their share holders interests. Cutting their fees with no justifiable reason is not something they are going to do. There's no conspiracy, companies are there to make money, that's it.
ksec 4y ago
So the people that can make the company more successful are sales and marketing people, and they end up running the companies. And the product people get driven out of the decision making forums, and the companies forget what it means to make great products. The product sensibility and the product genius that brought them to that monopolistic position gets rotted out by people running these companies that have no conception of a good product versus a bad product. They have no conception of the craftsmanship that's required to take a good idea and turn it into a good product. And they really have no feeling in their hearts, usually, about wanting to really help the customers. -Steve Jobs
- nolok 4y ago

caramelcustard 4y ago

Pretty sure 30% commission is not an Apple-exclusive thing. Google Play, consoles and Steam have the same rate.

ParksNet 4y ago
Switch has 30% with a 5% rebate to consumers. Steam has a regressive 20%/25%/30% tiered commission structure. There are sweetheart deals we have no knowledge of, like Apple's deal with Amazon to get Prime Video onto their devices.
- caramelcustard 4y ago
  And AFAIK Apple charges 15% if you earn less than a million in your net revenue, yet noone mentions that. Which, by the way, could be considered a sweetheart deal of its own, just like Steams tiered system. As for the Switch it's still 30% and to the developer it doesn't matter whether there's 5 percent going to the customer or not.
  - zeroonetwothree 4y ago
    The incidence of fees is born by the consumer so it should matter.
  - smoldesu 4y ago
    Apple only made that change after incredible pushback from their community, and it still doesn't address the real problem: Apple could be charging 2% and they would still have a monopoly on app distribution that deserves to be broken up. Steam isn't comparable, since it charges that 30% fee and competes against other distributors. Despite that, developers continue to choose Steam over alternative platforms like Itch.io or EGS. Likewise, Apple is free to charge whatever they want for their app store, they just need to compete with other service providers to ensure they're providing a fair deal.
    - caramelcustard 4y ago

judge2020 4y ago

> If Apple moved voluntarily to 10% or 15% for all, there never would have been the industry pressure for this sort of regulation. They did[0], but the actual companies lobbying for this are the ones that don't benefit because they're making $x millions less due to iOS. 0: https://developer.apple.com/app-store/small-business-program/ https://developer.apple.com/app-store/small-business-program...