10 ms·

The operating cost is the maximum Apple can come up with when their accountants attribute everything they possibly can to digital sales for the sake of legal ar

by nabla9 8mo ago

The operating cost is the maximum Apple can come up with when their accountants attribute everything they possibly can to digital sales for the sake of legal argument. R&D shouldn't really be included, and Apple uses those same tools and APIs themselves. I think the actual profit margin is closer to 90%, and Apple could maintain a 20% margin with just a 3–4% fee.

rob74 8mo ago
I'd say that in the case of Patreon, any fee for Apple is unjustified. Apple can justify their fee on app purchases/subscriptions in the app store, but Patreon is not an app subscription, the money goes mostly from the patrons to the people they support. Ok, Patreon takes a cut to cover their operating costs, and also make a profit (not sure how profitable they are currently), but I really can't see how Apple, who don't have anything to do with this process except for listing the Patreon app on the app store, can justify taking a cut.
- akerl_ 8mo ago
  Why are you ok with Patreon taking a cut but not Apple?
- saimiam 8mo ago
  If a user almost exclusively uses the Patreon ios app to consume the artist’s content and likes to live inside the ios ecosystem for frictionless payments using the card on file/privacy/UX/whatever, then I feel apple should get to set the terms of engagement. If you were a chain store in a high end mall where customers cars were all parked for free by valets, mall staff knew their names, and generally made them feel special, you’d not balk at a higher commission to be paid to mall for access to their customers, right? Airports come to mind for this. I believe apple lets you set whatever price you want on their store, just not tell customers that they could get a lower price elsewhere/on the vendor’s website (I don’t follow App Store policies very closely so my info is probably out of date).
  - rubyfan 8mo ago
    I don’t think anyone suggests Apple should get nothing for their app store services, just that it shouldn’t be 30% of every transaction processed through every iOS app.
    - idiotsecant 8mo ago
      I think that is in fact exactly what GP is suggesting.
      - rubyfan 8mo ago
        I don’t read it that way. I think the point is it doesn’t make sense that apple is taking a cut of a transaction that is not in their payment rails*. Apple can still be compensated for their App store service without using a model that takes 30% of all transactions, e.g. a listing fee, an app review fee, etc. *And anything on their payment rails should have a normal transaction fee, e.g. Stripe’s retail rate is 2.9% + $0.30.
        dwaite 8mo ago
        This is the model they have moved to in the EU - an annual per user-app core technology fee for apps enabled to be listed outside the store, and relaxed in-store rules (and reduced commissions) if you choose to still list in Apple's App Store. Effectively, they are acting as if commissions are paying the core technology fee, and subsidizing it for apps which aren't profitable. The per-user model means that apps which have adopted freemium and advertising-driven models wind up having quite different financials, and could be more expensive.
    - londons_explore 8mo ago
      The EU has the right approach. Don't try to legislate exactly what is a fair/unfair amount of profit to make - change the rules of the game by requiring third party marketplaces and payment platforms so apple has to lower rates or lose every app into a third party store. Apple can easily say "Use our store exclusively and you get our security/privacy guarantees. Go outside our store and you're in the wild west". App developers can then decide how much fee they are willing to pay for access to the user base who refuse to venture into the wild west. Other stores might try to persuade users that they are more secure and more private too via stricter review policies or more locked down permissions etc.
- silvestrov 8mo ago
  You could make the argument that Patreon isn't much more than a banking app. It just focuses on the receiver of the money than the sender. I think Apple is slowly killing apps with this policy. Everybody will slowly move to "web only" as 30% would kill their ability to compete with anybody else. This will likely be much stronger in countries where iPhones do not have the same market share as in the US.
  - wlesieutre 8mo ago
    Honestly I wouldn't be that shocked if Apple tried demanding a 30% royalty on bank deposits and bills paid using iPhone apps. They've decided the future of their company depends on being huge assholes about it.
    - mcintyre1994 8mo ago
      I would be surprised by that because iPhone users would notice that. I think the App Store model relies on their fee being invisible to consumers, and the increased price you’re paying not being linked to them. AFAIK apps aren’t allowed to explain that they charge more if you subscribe on iPhone to users either, or why they do so.
      - dr-detroit 8mo ago
        [dead]
      - wlesieutre 8mo ago
        True, hard for bank deposits where the user sees both ends of the transaction. For bill payments though, they'd just insist on taking 30% of your electric bill payment and if the electric company's margins aren't high enough to absorb that then "Haha that sounds like a you problem" - Tim Cook, probably
      - odo1242 8mo ago
        Apps are allowed to link to web services to offer payment as an alternative to IAPs and offer a discount for doing so, thanks to Apple v Epic.
- MadameMinty 8mo ago
  Next up, 2% cut whenever you use any banking or payment app. Only 1.5% when you use Apple Pay!
  - odo1242 8mo ago
    They currently do charge 0.15% on Apple Pay actually.
- yibg 8mo ago
  No kidding. Imagine if Apple took 30% of your Venmo transfers.
seemaze 8mo ago
Certainly not defending Apple's behavior in this instance, but isn't the success of the larger product ecosystem a direct driver of their App Store profitability? To strictly evaluate the App Store finances in isolation seems to be the sort of accusation you've levied against Apple in the opposite direction.. I like Apple less and less these days for various reasons, but I haven't purchased an app on the App Store in more than a decade. It's strictly a vehicle for local utilities when, for whatever reason, a browser will not suffice. Nearly all purchasing is done on the 'open' web.
parineum 8mo ago
> ...for the sake of legal argument. R&D shouldn't really be included That's an incredibly ridiculous take. R&D is an operating cost and it's an ongoing expense related to the app store existing. > I think the actual profit margin is closer to ... You can replace "think" there with "feel".
jbs789 8mo ago
Or you could argue the App Store wouldn’t exist without the hardware, so the relevant reporting is both combined - lower margins.

by nabla9 8mo ago

rob74 8mo ago

I'd say that in the case of Patreon, any fee for Apple is unjustified. Apple can justify their fee on app purchases/subscriptions in the app store, but Patreon is not an app subscription, the money goes mostly from the patrons to the people they support. Ok, Patreon takes a cut to cover their operating costs, and also make a profit (not sure how profitable they are currently), but I really can't see how Apple, who don't have anything to do with this process except for listing the Patreon app on the app store, can justify taking a cut.

akerl_ 8mo ago
Why are you ok with Patreon taking a cut but not Apple?
saimiam 8mo ago
If a user almost exclusively uses the Patreon ios app to consume the artist’s content and likes to live inside the ios ecosystem for frictionless payments using the card on file/privacy/UX/whatever, then I feel apple should get to set the terms of engagement. If you were a chain store in a high end mall where customers cars were all parked for free by valets, mall staff knew their names, and generally made them feel special, you’d not balk at a higher commission to be paid to mall for access to their customers, right? Airports come to mind for this. I believe apple lets you set whatever price you want on their store, just not tell customers that they could get a lower price elsewhere/on the vendor’s website (I don’t follow App Store policies very closely so my info is probably out of date).
- rubyfan 8mo ago
  I don’t think anyone suggests Apple should get nothing for their app store services, just that it shouldn’t be 30% of every transaction processed through every iOS app.
  - idiotsecant 8mo ago
    I think that is in fact exactly what GP is suggesting.
    - rubyfan 8mo ago
      I don’t read it that way. I think the point is it doesn’t make sense that apple is taking a cut of a transaction that is not in their payment rails*. Apple can still be compensated for their App store service without using a model that takes 30% of all transactions, e.g. a listing fee, an app review fee, etc. *And anything on their payment rails should have a normal transaction fee, e.g. Stripe’s retail rate is 2.9% + $0.30.
      - dwaite 8mo ago
        This is the model they have moved to in the EU - an annual per user-app core technology fee for apps enabled to be listed outside the store, and relaxed in-store rules (and reduced commissions) if you choose to still list in Apple's App Store. Effectively, they are acting as if commissions are paying the core technology fee, and subsidizing it for apps which aren't profitable. The per-user model means that apps which have adopted freemium and advertising-driven models wind up having quite different financials, and could be more expensive.
  - londons_explore 8mo ago
    The EU has the right approach. Don't try to legislate exactly what is a fair/unfair amount of profit to make - change the rules of the game by requiring third party marketplaces and payment platforms so apple has to lower rates or lose every app into a third party store. Apple can easily say "Use our store exclusively and you get our security/privacy guarantees. Go outside our store and you're in the wild west". App developers can then decide how much fee they are willing to pay for access to the user base who refuse to venture into the wild west. Other stores might try to persuade users that they are more secure and more private too via stricter review policies or more locked down permissions etc.
silvestrov 8mo ago
You could make the argument that Patreon isn't much more than a banking app. It just focuses on the receiver of the money than the sender. I think Apple is slowly killing apps with this policy. Everybody will slowly move to "web only" as 30% would kill their ability to compete with anybody else. This will likely be much stronger in countries where iPhones do not have the same market share as in the US.
- wlesieutre 8mo ago
  Honestly I wouldn't be that shocked if Apple tried demanding a 30% royalty on bank deposits and bills paid using iPhone apps. They've decided the future of their company depends on being huge assholes about it.
  - mcintyre1994 8mo ago
    I would be surprised by that because iPhone users would notice that. I think the App Store model relies on their fee being invisible to consumers, and the increased price you’re paying not being linked to them. AFAIK apps aren’t allowed to explain that they charge more if you subscribe on iPhone to users either, or why they do so.
    - dr-detroit 8mo ago
      [dead]
    - wlesieutre 8mo ago
      True, hard for bank deposits where the user sees both ends of the transaction. For bill payments though, they'd just insist on taking 30% of your electric bill payment and if the electric company's margins aren't high enough to absorb that then "Haha that sounds like a you problem" - Tim Cook, probably
    - odo1242 8mo ago
      Apps are allowed to link to web services to offer payment as an alternative to IAPs and offer a discount for doing so, thanks to Apple v Epic.
MadameMinty 8mo ago
Next up, 2% cut whenever you use any banking or payment app. Only 1.5% when you use Apple Pay!
- odo1242 8mo ago
  They currently do charge 0.15% on Apple Pay actually.
yibg 8mo ago
No kidding. Imagine if Apple took 30% of your Venmo transfers.

seemaze 8mo ago

Certainly not defending Apple's behavior in this instance, but isn't the success of the larger product ecosystem a direct driver of their App Store profitability? To strictly evaluate the App Store finances in isolation seems to be the sort of accusation you've levied against Apple in the opposite direction.. I like Apple less and less these days for various reasons, but I haven't purchased an app on the App Store in more than a decade. It's strictly a vehicle for local utilities when, for whatever reason, a browser will not suffice. Nearly all purchasing is done on the 'open' web.

parineum 8mo ago

> ...for the sake of legal argument. R&D shouldn't really be included That's an incredibly ridiculous take. R&D is an operating cost and it's an ongoing expense related to the app store existing. > I think the actual profit margin is closer to ... You can replace "think" there with "feel".

jbs789 8mo ago

Or you could argue the App Store wouldn’t exist without the hardware, so the relevant reporting is both combined - lower margins.