The press release is exactly five days old. Until this press release, Apple had no objections against apps offering commercial services without IAP.
These app developers spend hundreds of thousands of dollars based on what was standard practice for more than two years, then bam a press release is issued and what was fine for two years is no longer fine.
What you are arguing is that because some developers found a loophole in their contract (or at least in the enforcement of that contract) they should be allowed to exploit that loophole and avoid the revenue sharing that supports the costs of running the App Store, and that Apple ought not be allowed to close that loophole. The App Store is a revenue sharing system, and when developers try to game that system to avoid the revenue sharing they are cheating Apple, and they are cheating other developers who end up supporting the cost of distributing the cheaters apps when in many cases the cheaters are generating more revenue that the honest developers.
Apple is delivering so much for the developers of an App. Happy consumers, a safe marketplace, a wonderful iOS interface... 30% is nothing.
I understand if SJ backs down on this one because of all the bad press. But that's all this is.
This is an ecosystem that I love being a part of-- and I will pay more if that's what the whiners want now that Apple has finally decided to start enforcing their payment rules.
Wanna complain about price-gouging? Look how much your cell-phone company is charging you for SMS.
Apple should be encouraging data coming to their devices not putting up walls that will make content creators and ultimately Apple hardware customers think twice.
I don't agree. Content creators won't be paying any more by going directly through Apple than when they went through Amazon. Customers also won't be paying any more. That's a red herring.
There are apps that allow you to monitor home security and surveillance systems. And naturally these apps require that you log in to see actual information. Should Apple require that you can pay for these security systems (or at least their monthly fees and not the installation cost) via IAP?
I don't realize why so many people have so much trouble comprehending the simple fact that the App Store is not a fee for services system; it's a revenue sharing system. And the revenue sharing goes mostly to supporting the costs of operating the App Store. Developers trying to hide revenue so they don't have to share it according to the terms of the contract they signed with Apple are trying to avoid their share of these costs and stick other developers with them.
I have no problem with Apple requiring in-app purchase functionality. Dictating prices outside of the App Store is what I object to.
I don't realize why so many people have so much trouble comprehending the simple fact that the App Store is not a fee for services system; it's a revenue sharing system. And the revenue sharing goes mostly to supporting the costs of operating the App Store. Developers trying to hide revenue so they don't have to share it according to the terms of the contract they signed with Apple are trying to avoid their share of these costs and stick other developers with them.
Everyone understood it all right. We just wonder what it means: will Apple demand a cut from Direc TV because it offers a viewing app for the iPad?
What you are arguing is that because some developers found a loophole in their contract (or at least in the enforcement of that contract) they should be allowed to exploit that loophole and avoid the revenue sharing that supports the costs of running the App Store, and that Apple ought not be allowed to close that loophole.
Of course, Apple can change its rules whenever it wants. They just should not be surprised if others complain when they destroy their business model (all business which currently operate with a margin of less than 30%).
I don't agree. Content creators won't be paying any more by going directly through Apple than when they went through Amazon. Customers also won't be paying any more. That's a red herring.
How do you figure that? Apple is adding 43% markup to your content, without adding any value to the content itself? They are just another middleman between you and the content creator. That does nothing but add cost to you. Do you really think other delivery methods are making 43% profit? (Yes, profit. Apple does almost nothing here).
The rule 11.2 at its current form leaves too much for interpretition. It could mean that Apple will not approve a "reader" app with ANY kind of out-of-app subscription service.
Impossible. That would be like saying that the iPad won't play music unless you bought it through iTunes, or that you can't watch a movie on the device unless bought the same way.
Banning "reader" apps will not happen -- at least not without the DOJ going apeshit on Apple.
True, it's Apple's product, their rules, and their business to make succeed or fail. It wouldn't be as much of and issue if Apple wasn't running competing services. When someone subscribes to something from Apple, Apple doesn't have to pay anyone else a 30% revenue, but they force their competition to do so (directly to Apple) effectively breaking the business model for others while keepin it intact for Apple. It's anti-competitive. Apple is entitled to no more than a reasonable bounty and operational cost recovery for bringing customers to the subscriber through their product. 30% of total revenue is way beyond reasonable.
They can do why they want, but it's going to repel developers, make their offering less attractive as developers go to other platforms and ultimately lose market share.
I for one will move on to Windows phone or Android if this doesn't change because it means services I want will no longer be available on iPhone (eg:Rhapsody.)
Apple is not treating these devs/services as partners, and that's their problem.
How do you figure Apple is not treating their devs like partners. 30% is perfectly reasonable for a partner who (did not create the product) but is selling the product, distributing the product and creating the audience for the product. If you went into business with someone; you create the product, they manage the sales and distribution and promotion, wouldn't you split profits 50/ 50? So I think Apple is being very fair.
Apple's terms are very similar to all others. Amazon included. If the devs want to explore other options they are free to do so, but I'm sure they will quickly discover the grass is not always greener and if it is it's because your septic tank has a problem.
You guys need to let this play out. We honestly have no idea what the Devs of apps like rhapsody, netflix, skype etc are thinking or how the rules really even affect them.
This is THEIR phone, using THEIR App Store. They should reserve the right for business to be run on their terms. Why shouldn't they get a cut of developer's who make money off of the software they put on their device?
Did you drink the Apple fanboy koolaid so extensively that you forgot the concept of private property? It's not THEIR phone it's MY friggin' phone and as a consumer and owner of iOS devices I don't see how it is in my interest to have Apple imposing an Apple Sales Tax of 43% to every content purchase that I make on MY FRIGGIN' PHONE!
I was going to purchase an iPad 2 in 2011 but with this insane move by Apple I've decided that they can go screw themselves.
Well, Apple certainly seems to be losing the PR war here. They do come off as greedy and more controlling than in the past. They have always had a high profit margin, but fans (like me) said "it is worth it for a great product package." Here, it doesn't seem that Apple is adding all that much with in-app subscriptions...
I don't see how they will win all these battles. Not sure where it will end...
Apple is usually right. In fact, chances are, they've already perceived the long-term outcome.
"Apple's terms also prevented links to external websites to purchase content or subscriptions. In addition, fees cannot be less expensive for customers outside of the App Store."
I do believe they allow external puchases as long as you have internal purchases as well.
Don't like Apple's latest diktat, basically killing your investment made in the platform by pushing overnight an extortion policy? Show them your middle finger, trash them as they completely deserve it, sue them, and yep move your business over less indecent alternatives.
Impossible. That would be like saying that the iPad won't play music unless you bought it through iTunes, or that you can't watch a movie on the device unless bought the same way.
Banning "reader" apps will not happen -- at least not without the DOJ going apeshit on Apple.
And what is the Kindle app but a reader app?
Right now, any reader app that allows you to read DRM-ed books is required that can buy those DRM-protected books via IAP.
Music and movies can be bought from any source without Apple requiring a cut as long as they do not require any DRM. Simply because without DRM, Apple cannot 'prevent' you from playing them in Apple's own apps.
How do you figure that? Apple is adding 43% markup to your content, without adding any value to the content itself? They are just another middleman between you and the content creator. That does nothing but add cost to you. Do you really think other delivery methods are making 43% profit? (Yes, profit. Apple does almost nothing here).
No, they are the ONLY middleman between you and the content creator, if the content creator sells directly through Apple.
You might want to read that a little closer. It's between the seller and the buyer. If you consider Apple to be the buyer (even though they aren't really buying anything here, they are just the transaction processor), then this only applies to the price Apple pays for the content. It does NOT include the mark-up Apple then applies when they resell the product. it's Apple's choice to add 43% to the price.
Amazon, Wal-Mart, and other's may use such contract language with their suppliers to ensure they are getting a good price for their inventory. It has NOTHING to do with the price they in-turn charge their customers. If it did, every time some store had a sale on an item, every other store that sells the same item would then also have to adjust their retail prices! How exactly do you think that would work? It would be chaos!
So, if I were to apply your "favored nation clause", and using my example of something that cost $10 in the app store, that means Apple is paying $7 for it. So therefore, using your clause, $7 would be the minimum price on the content providers web site. Not $10.
Comments
The press release is exactly five days old. Until this press release, Apple had no objections against apps offering commercial services without IAP.
These app developers spend hundreds of thousands of dollars based on what was standard practice for more than two years, then bam a press release is issued and what was fine for two years is no longer fine.
What you are arguing is that because some developers found a loophole in their contract (or at least in the enforcement of that contract) they should be allowed to exploit that loophole and avoid the revenue sharing that supports the costs of running the App Store, and that Apple ought not be allowed to close that loophole. The App Store is a revenue sharing system, and when developers try to game that system to avoid the revenue sharing they are cheating Apple, and they are cheating other developers who end up supporting the cost of distributing the cheaters apps when in many cases the cheaters are generating more revenue that the honest developers.
Apple is delivering so much for the developers of an App. Happy consumers, a safe marketplace, a wonderful iOS interface... 30% is nothing.
I understand if SJ backs down on this one because of all the bad press. But that's all this is.
This is an ecosystem that I love being a part of-- and I will pay more if that's what the whiners want now that Apple has finally decided to start enforcing their payment rules.
Wanna complain about price-gouging? Look how much your cell-phone company is charging you for SMS.
Apple should be encouraging data coming to their devices not putting up walls that will make content creators and ultimately Apple hardware customers think twice.
I don't agree. Content creators won't be paying any more by going directly through Apple than when they went through Amazon. Customers also won't be paying any more. That's a red herring.
I don't realize why so many people have so much trouble comprehending the simple fact that the App Store is not a fee for services system; it's a revenue sharing system. And the revenue sharing goes mostly to supporting the costs of operating the App Store. Developers trying to hide revenue so they don't have to share it according to the terms of the contract they signed with Apple are trying to avoid their share of these costs and stick other developers with them.
I have no problem with Apple requiring in-app purchase functionality. Dictating prices outside of the App Store is what I object to.
I don't realize why so many people have so much trouble comprehending the simple fact that the App Store is not a fee for services system; it's a revenue sharing system. And the revenue sharing goes mostly to supporting the costs of operating the App Store. Developers trying to hide revenue so they don't have to share it according to the terms of the contract they signed with Apple are trying to avoid their share of these costs and stick other developers with them.
Everyone understood it all right. We just wonder what it means: will Apple demand a cut from Direc TV because it offers a viewing app for the iPad?
What you are arguing is that because some developers found a loophole in their contract (or at least in the enforcement of that contract) they should be allowed to exploit that loophole and avoid the revenue sharing that supports the costs of running the App Store, and that Apple ought not be allowed to close that loophole.
Of course, Apple can change its rules whenever it wants. They just should not be surprised if others complain when they destroy their business model (all business which currently operate with a margin of less than 30%).
I have no problem with Apple requiring in-app purchase functionality. Dictating prices outside of the App Store is what I object to.
What makes you think others aren't doing the same thing - including Amazon! It's standard business practice!
http://itlaw.wikia.com/wiki/Most_favored_nation_clause
I don't agree. Content creators won't be paying any more by going directly through Apple than when they went through Amazon. Customers also won't be paying any more. That's a red herring.
How do you figure that? Apple is adding 43% markup to your content, without adding any value to the content itself? They are just another middleman between you and the content creator. That does nothing but add cost to you. Do you really think other delivery methods are making 43% profit? (Yes, profit. Apple does almost nothing here).
The rule 11.2 at its current form leaves too much for interpretition. It could mean that Apple will not approve a "reader" app with ANY kind of out-of-app subscription service.
Impossible. That would be like saying that the iPad won't play music unless you bought it through iTunes, or that you can't watch a movie on the device unless bought the same way.
Banning "reader" apps will not happen -- at least not without the DOJ going apeshit on Apple.
What makes you think others aren't doing the same thing - including Amazon! It's standard business practice!
http://itlaw.wikia.com/wiki/Most_favored_nation_clause
Most favoured nation clauses are mutually agreed, not imposed by one party.
True, it's Apple's product, their rules, and their business to make succeed or fail. It wouldn't be as much of and issue if Apple wasn't running competing services. When someone subscribes to something from Apple, Apple doesn't have to pay anyone else a 30% revenue, but they force their competition to do so (directly to Apple) effectively breaking the business model for others while keepin it intact for Apple. It's anti-competitive. Apple is entitled to no more than a reasonable bounty and operational cost recovery for bringing customers to the subscriber through their product. 30% of total revenue is way beyond reasonable.
They can do why they want, but it's going to repel developers, make their offering less attractive as developers go to other platforms and ultimately lose market share.
I for one will move on to Windows phone or Android if this doesn't change because it means services I want will no longer be available on iPhone (eg:Rhapsody.)
Apple is not treating these devs/services as partners, and that's their problem.
How do you figure Apple is not treating their devs like partners. 30% is perfectly reasonable for a partner who (did not create the product) but is selling the product, distributing the product and creating the audience for the product. If you went into business with someone; you create the product, they manage the sales and distribution and promotion, wouldn't you split profits 50/ 50? So I think Apple is being very fair.
Apple's terms are very similar to all others. Amazon included. If the devs want to explore other options they are free to do so, but I'm sure they will quickly discover the grass is not always greener and if it is it's because your septic tank has a problem.
You guys need to let this play out. We honestly have no idea what the Devs of apps like rhapsody, netflix, skype etc are thinking or how the rules really even affect them.
This is THEIR phone, using THEIR App Store. They should reserve the right for business to be run on their terms. Why shouldn't they get a cut of developer's who make money off of the software they put on their device?
Did you drink the Apple fanboy koolaid so extensively that you forgot the concept of private property? It's not THEIR phone it's MY friggin' phone and as a consumer and owner of iOS devices I don't see how it is in my interest to have Apple imposing an Apple Sales Tax of 43% to every content purchase that I make on MY FRIGGIN' PHONE!
I was going to purchase an iPad 2 in 2011 but with this insane move by Apple I've decided that they can go screw themselves.
Well, Apple certainly seems to be losing the PR war here. They do come off as greedy and more controlling than in the past. They have always had a high profit margin, but fans (like me) said "it is worth it for a great product package." Here, it doesn't seem that Apple is adding all that much with in-app subscriptions...
I don't see how they will win all these battles. Not sure where it will end...
Apple is usually right. In fact, chances are, they've already perceived the long-term outcome.
I'm content to simply let the numbers speak.
"Apple's terms also prevented links to external websites to purchase content or subscriptions. In addition, fees cannot be less expensive for customers outside of the App Store."
I do believe they allow external puchases as long as you have internal purchases as well.
Don't like Apple's choices? Try the competition.
Don't like Apple's latest diktat, basically killing your investment made in the platform by pushing overnight an extortion policy? Show them your middle finger, trash them as they completely deserve it, sue them, and yep move your business over less indecent alternatives.
There, fixed that for you.
Impossible. That would be like saying that the iPad won't play music unless you bought it through iTunes, or that you can't watch a movie on the device unless bought the same way.
Banning "reader" apps will not happen -- at least not without the DOJ going apeshit on Apple.
And what is the Kindle app but a reader app?
Right now, any reader app that allows you to read DRM-ed books is required that can buy those DRM-protected books via IAP.
Music and movies can be bought from any source without Apple requiring a cut as long as they do not require any DRM. Simply because without DRM, Apple cannot 'prevent' you from playing them in Apple's own apps.
How do you figure that? Apple is adding 43% markup to your content, without adding any value to the content itself? They are just another middleman between you and the content creator. That does nothing but add cost to you. Do you really think other delivery methods are making 43% profit? (Yes, profit. Apple does almost nothing here).
No, they are the ONLY middleman between you and the content creator, if the content creator sells directly through Apple.
Most favoured nation clauses are mutually agreed, not imposed by one party.
They can choose to agree or not to agree. If they agree, it's mutual.
What makes you think others aren't doing the same thing - including Amazon! It's standard business practice!
http://itlaw.wikia.com/wiki/Most_favored_nation_clause
You might want to read that a little closer. It's between the seller and the buyer. If you consider Apple to be the buyer (even though they aren't really buying anything here, they are just the transaction processor), then this only applies to the price Apple pays for the content. It does NOT include the mark-up Apple then applies when they resell the product. it's Apple's choice to add 43% to the price.
Amazon, Wal-Mart, and other's may use such contract language with their suppliers to ensure they are getting a good price for their inventory. It has NOTHING to do with the price they in-turn charge their customers. If it did, every time some store had a sale on an item, every other store that sells the same item would then also have to adjust their retail prices! How exactly do you think that would work? It would be chaos!
So, if I were to apply your "favored nation clause", and using my example of something that cost $10 in the app store, that means Apple is paying $7 for it. So therefore, using your clause, $7 would be the minimum price on the content providers web site. Not $10.