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I dunno. Do you really fault Apple for wanting to hold onto their vice grip of the AppStore that gives them license to print money at ridiculous margins? I mean

I dunno. Do you really fault Apple for wanting to hold onto their vice grip of the AppStore that gives them license to print money at ridiculous margins? I mean, their better angels would have them be so confident in the value of their own store that they'd allow other stores to compete on the merits but honestly ... if we were Tim Cook or in charge of Apple I think we'd all fight tooth-and-nail to keep this cash cow.

robocat 3y ago
> license to print money They don't split out their profitability for the App store. Last time I tried to calculate it it was less than you might assume. Anyone have a good article/analysis of what % of Apple's profit comes from the App store tax? Ideally also with foremarket versus aftermarket?
- capitainenemo 3y ago
  https://www.cnbc.com/2021/01/08/apples-app-store-had-gross-sales-around-64-billion-in-2020.html https://www.cnbc.com/2021/01/08/apples-app-store-had-gross-s... "There are some exceptions to Apple's 30% cut of digital sales, and Apple's figures are rough, which means that Apple's App Store total sales is likely even higher. Sensor Tower, an app analytics firm, estimates that the App Store did $72.3 billion in sales 2020." So... 72 billion in 2020.. probably even more now.
  - kennywinker 3y ago
    $72.3B in sales, but given they get less than 30% of that, their cut is less than 21.7B. Put that in perspective of their total revenue of 294B that year the app store represents only ~7% of their total revenue. And I suspect the app store is actually a fairly costly business to run - a lot of effort goes into the decor of the walls around garden. I'm thinking app review, even content serving. Not arguing that it's not a profit center - but in perspective, I suspect apple's reasons for defending it are not primarily the direct financial benefits of it - it's probably mostly about the indirect benefits.
    - gigatexal 3y ago
      hmm yeah that's not a lot... maybe it is more about control than anything else
    - gigatexal 3y ago
      But according to my math it was 10> of their profits for that year. 7% of revenue for 10% of net income is pretty good imo.
    - capitainenemo 3y ago
      True... although hardware probably has far higher costs. I found a site giving apple's net profits for 2020 at $64 billion. If their gross was $294B, that means their profit margin on average was 21% for their sales. If the app store is almost pure rent, and you are overestimating the costs of things like reviewing and it is only a few billion dollars to run, then it could have a far higher profit margin than everything else. Perhaps even 80 or 90%? If so, that $21.7 billion gross is almost pure profit and becomes something like a third of all their profits...
      - capitainenemo 3y ago
        oh... also the article does try to take into account the varying rates apple charges and notes that despite the exceptions the true figure is likely much closer to 30% than the lower rates.
    - AnthonyMouse 3y ago
      > $72.3B in sales, but given they get less than 30% of that, their cut is less than 21.7B. Put that in perspective of their total revenue of 294B that year the app store represents only ~7% of their total revenue. If you have a company with a single line of business and they were to lose 7% of revenue that is going to be a large hit. There are many industries where that exceeds the entire profit margin of the company. But more than that, they don't have a single line of business. Suppose that a conglomerate the size of Apple had totally monopolized the world market for lithium mining. Well, that's a $350M/year industry -- it's barely 0.1% of Apple's revenue! Why should they even bother to monopolize it? The answer is, for the same reason anybody else would. Maybe the CEO of the conglomerate doesn't much care, but the head of the mining division cares about it a lot, and so do all of the customers in that industry. And antitrust violations in service of maintaining the monopoly are just as illegal and just as harmful whether it's a subsidiary of a conglomerate or an independent monopolist. Or to put it another way, 20 billion dollars is 20 billion dollars. It motivates putting in 20 billion dollars worth of effort to hold onto it, regardless of what you're doing on the other side of the building. > And I suspect the app store is actually a fairly costly business to run - a lot of effort goes into the decor of the walls around garden. I'm thinking app review, even content serving. Content serving cost is negligible. Review could be arbitrarily expensive, but the experience of developers seems to imply that they're not spending a lot of resources being diligent about it -- policies applied inconsistently, updates often denied for indiscernible reasons etc. Reviewers seem to be only making a cursory inspection or relying on some kind of inadequate automated scanning tools. Moreover, they have each developer paying $100/year, which should cover that level of review on its own, if the goal was funding the reviews and not extracting rents. Their policies imply the reverse. If the goal was to cover reviews then apps with more downloads should have lower per-download fees, since the fixed cost of reviewing the app can be amortized over more units. And yet "subsidizing" small developers doesn't fit either, because if that was your goal the first thing you'd do is stop charging $100/year to hobbyists and side projects with little or no revenue. What they appear to be doing is providing a "discount" to hardly anyone. They continue extracting $100/year from the long tail of small timers who aren't making any money, continue extracting 30% from anyone who actually succeeds, but get to put "15%" in their PR knowing that the eligible people only represent a tiny proportion of their collections. > I suspect apple's reasons for defending it are not primarily the direct financial benefits of it - it's probably mostly about the indirect benefits. Which are also an issue, e.g. by thwarting competition between browser engines.
- gigatexal 3y ago
  30% on in-game tokens has got to be > 90% margins...
jprd 3y ago
..no? I guess that means I'll never be Tim Cook and might have morals, but it just reeks of craven profiteering.
BenFranklin100 3y ago
The benefit of the app store isn’t money. It’s the security of the ecosystem. 3rd party apps will begin a race to the bottom of fly-by-night iOS developers in it for a fast buck with no qualms about advertising and data trafficking. Before long we end up with what is seen in the Android system.
- malermeister 3y ago
  Despite all the FUD, Android is just fine. I've been using it for more than a decade now and rarely ever had issues. It's all just Apple propaganda.
- deergomoo 3y ago
  I mean...is the situation on Android you describe anything to do with third-party app stores and sideloading? Because my understanding was that, despite there being very few hoops to jump through, the only time the vast majority of users even consider stepping out of the Play Store is to install apps to let them stream pirated movies. Moreover, Apple's App Store is already filled with race-to-the-bottom, shady shit. Apps with bait weekly subscriptions and bald-faced knock-offs are highlighted in tech news and on social media all the time. That's what makes their attitude and arguments all the more galling here: they are doing a really lousy job keeping their own store a safe and reputable place. The only thing they seem to do a good job with is legitimate malware, and I suspect that's mostly because the OS is so locked down and because they scan for use of non-public APIs.
  - BenFranklin100 3y ago
    Developers outside the official store will price undercut those within the store. Legit developers will be forced to leave, fold, and/or adopt the shady data practices of the fly-by-nighters. Eventually the official store will be shadow of its former self. Well heeled consumers will respond by being reluctant to put sensitive personal information on their phones. The entire ecosystem suffers, and phones, instead of becoming trusted personal devices, remain the purview of games, emails, and fart apps. Everyone suffers, especially developers. You guys, above all others, want people to put more personal info on their phones, not less.

robocat 3y ago

> license to print money They don't split out their profitability for the App store. Last time I tried to calculate it it was less than you might assume. Anyone have a good article/analysis of what % of Apple's profit comes from the App store tax? Ideally also with foremarket versus aftermarket?

capitainenemo 3y ago
https://www.cnbc.com/2021/01/08/apples-app-store-had-gross-sales-around-64-billion-in-2020.html https://www.cnbc.com/2021/01/08/apples-app-store-had-gross-s... "There are some exceptions to Apple's 30% cut of digital sales, and Apple's figures are rough, which means that Apple's App Store total sales is likely even higher. Sensor Tower, an app analytics firm, estimates that the App Store did $72.3 billion in sales 2020." So... 72 billion in 2020.. probably even more now.
- kennywinker 3y ago
  $72.3B in sales, but given they get less than 30% of that, their cut is less than 21.7B. Put that in perspective of their total revenue of 294B that year the app store represents only ~7% of their total revenue. And I suspect the app store is actually a fairly costly business to run - a lot of effort goes into the decor of the walls around garden. I'm thinking app review, even content serving. Not arguing that it's not a profit center - but in perspective, I suspect apple's reasons for defending it are not primarily the direct financial benefits of it - it's probably mostly about the indirect benefits.
  - gigatexal 3y ago
    hmm yeah that's not a lot... maybe it is more about control than anything else
  - gigatexal 3y ago
    But according to my math it was 10> of their profits for that year. 7% of revenue for 10% of net income is pretty good imo.
  - capitainenemo 3y ago
    True... although hardware probably has far higher costs. I found a site giving apple's net profits for 2020 at $64 billion. If their gross was $294B, that means their profit margin on average was 21% for their sales. If the app store is almost pure rent, and you are overestimating the costs of things like reviewing and it is only a few billion dollars to run, then it could have a far higher profit margin than everything else. Perhaps even 80 or 90%? If so, that $21.7 billion gross is almost pure profit and becomes something like a third of all their profits...
    - capitainenemo 3y ago
      oh... also the article does try to take into account the varying rates apple charges and notes that despite the exceptions the true figure is likely much closer to 30% than the lower rates.
  - AnthonyMouse 3y ago
    > $72.3B in sales, but given they get less than 30% of that, their cut is less than 21.7B. Put that in perspective of their total revenue of 294B that year the app store represents only ~7% of their total revenue. If you have a company with a single line of business and they were to lose 7% of revenue that is going to be a large hit. There are many industries where that exceeds the entire profit margin of the company. But more than that, they don't have a single line of business. Suppose that a conglomerate the size of Apple had totally monopolized the world market for lithium mining. Well, that's a $350M/year industry -- it's barely 0.1% of Apple's revenue! Why should they even bother to monopolize it? The answer is, for the same reason anybody else would. Maybe the CEO of the conglomerate doesn't much care, but the head of the mining division cares about it a lot, and so do all of the customers in that industry. And antitrust violations in service of maintaining the monopoly are just as illegal and just as harmful whether it's a subsidiary of a conglomerate or an independent monopolist. Or to put it another way, 20 billion dollars is 20 billion dollars. It motivates putting in 20 billion dollars worth of effort to hold onto it, regardless of what you're doing on the other side of the building. > And I suspect the app store is actually a fairly costly business to run - a lot of effort goes into the decor of the walls around garden. I'm thinking app review, even content serving. Content serving cost is negligible. Review could be arbitrarily expensive, but the experience of developers seems to imply that they're not spending a lot of resources being diligent about it -- policies applied inconsistently, updates often denied for indiscernible reasons etc. Reviewers seem to be only making a cursory inspection or relying on some kind of inadequate automated scanning tools. Moreover, they have each developer paying $100/year, which should cover that level of review on its own, if the goal was funding the reviews and not extracting rents. Their policies imply the reverse. If the goal was to cover reviews then apps with more downloads should have lower per-download fees, since the fixed cost of reviewing the app can be amortized over more units. And yet "subsidizing" small developers doesn't fit either, because if that was your goal the first thing you'd do is stop charging $100/year to hobbyists and side projects with little or no revenue. What they appear to be doing is providing a "discount" to hardly anyone. They continue extracting $100/year from the long tail of small timers who aren't making any money, continue extracting 30% from anyone who actually succeeds, but get to put "15%" in their PR knowing that the eligible people only represent a tiny proportion of their collections. > I suspect apple's reasons for defending it are not primarily the direct financial benefits of it - it's probably mostly about the indirect benefits. Which are also an issue, e.g. by thwarting competition between browser engines.
gigatexal 3y ago
30% on in-game tokens has got to be > 90% margins...

jprd 3y ago

..no? I guess that means I'll never be Tim Cook and might have morals, but it just reeks of craven profiteering.

BenFranklin100 3y ago

The benefit of the app store isn’t money. It’s the security of the ecosystem. 3rd party apps will begin a race to the bottom of fly-by-night iOS developers in it for a fast buck with no qualms about advertising and data trafficking. Before long we end up with what is seen in the Android system.

malermeister 3y ago
Despite all the FUD, Android is just fine. I've been using it for more than a decade now and rarely ever had issues. It's all just Apple propaganda.
deergomoo 3y ago
I mean...is the situation on Android you describe anything to do with third-party app stores and sideloading? Because my understanding was that, despite there being very few hoops to jump through, the only time the vast majority of users even consider stepping out of the Play Store is to install apps to let them stream pirated movies. Moreover, Apple's App Store is already filled with race-to-the-bottom, shady shit. Apps with bait weekly subscriptions and bald-faced knock-offs are highlighted in tech news and on social media all the time. That's what makes their attitude and arguments all the more galling here: they are doing a really lousy job keeping their own store a safe and reputable place. The only thing they seem to do a good job with is legitimate malware, and I suspect that's mostly because the OS is so locked down and because they scan for use of non-public APIs.
- BenFranklin100 3y ago
  Developers outside the official store will price undercut those within the store. Legit developers will be forced to leave, fold, and/or adopt the shady data practices of the fly-by-nighters. Eventually the official store will be shadow of its former self. Well heeled consumers will respond by being reluctant to put sensitive personal information on their phones. The entire ecosystem suffers, and phones, instead of becoming trusted personal devices, remain the purview of games, emails, and fart apps. Everyone suffers, especially developers. You guys, above all others, want people to put more personal info on their phones, not less.