Actually, most people do care a bit, they're not happy with Apple for taking 30%.
And they shouldn't be, it's highway robbery. Apple does literally nothing, and takes 30%. I know many of you are complete Apple fanbois, but try to get some objective concept of what's going on here. First Apple releases a closed platform that we have to hack to be able to run so we can run software on our own devices without Apple's approval. Then Apple comes out with this app store where they demand a 30% profit for doing nothing but hosting the app - and unless you have jailbroken, there's no other way to get the app. That's bad enough, but then Apple insists on taking a 30% cut of anything bought inside the app - even though there is no need for that to go through Apple at all.
It's extortion. "We've got all these customers locked up, they're ours, we own them. You can't sell to them unless you pay us."
I'm not a big fan of Amazon, but at least they're refusing to pay Apple's extortion. Every developer should.
You do know that the Google Play store also charges a 30% commission? Is that extortion too?
Apple didn't tell Amazon to remove IAP from the Kindle app.
Amazon didn't want to pay Apple to host content on Apple's servers.
It's always the app developer's choice. But Amazon is pleased that you blame Apple for Amazon's choice.
Apple doesn't host Amazon's content except for the app. Any content will be on Amazon's servers and delivered by them.
Who needs facts, when you can just believe whatever helps you win?
According to Apple's last quarterly filing their software and services revenue increased 11% YOY. Did the expenses associated with that really go up 11% or more in the same time period? I would imagine with the introduction of the Mac AppStore this isn't break-even anymore.
No it's not that simple. All that Apple is housing is the app, not the content. Amazon is housing the content, and making delivery. I'm not saying Apple shouldn't get anything, but 30% is way too much.
Google Play is 30% too. I don't know how that figure was arrived at, but I'm assuming there's a reason it's 30 and not 15 or 10. If it's because Aplle is being greedy, then I guess Google is too.
Google Play is 30% too. I don't know how that figure was arrived at, but I'm assuming there's a reason it's 30 and not 15 or 10. If it's because Aplle is being greedy, then I guess Google is too.
One can't do IAPs from Amazon on Android neither. I'm all for a 30% if Apple or Google handle the storage, delivery, and transaction, but if all they're doing is handing the transaction and Amazon handles the storage, and delivery then 30% is indeed greedy and impossible for Amazon to make any money.
Except that $1 billion was made in a quarter not in a year. So 4 quarters in a year would mean $4 billion in revenue versus $1.3 billion in costs for a profit of $2.7 billion. Really easy math.
The Walmart analogy I've used in the past is far more appropriate. Let's say I have a vending machine and I want to install it in a high traffic location to increase sales. I choose Walmart because they are always extremely busy. Do you think Walmart should let me place my machine in their store without getting a cut? I'm taking up a certain amount of square footage in their store, collecting money from customers who came to see Walmart (not my vending machine) and making a profit using the "assets" of a well established store.
IMO, Apple is too lenient. Apple has to host the App for Amazon, pay for all the server costs and bandwidth (including repeat downloads every time there's a patch or update), give Amazon access to their 800 million account holders (which is bigger than Amazons own customer base) and let users of the App buy stuff where Apple gets no money.
Ok, by calling someone else's comment stupid to start with shows how much you are willing to input into a real discussion.
Apple allows free apps into their store, they allow developers to submit apps which redirect to a website for external purchasing for free. The difficulty with comparing to WalMart is WalMart won't allow this. And since Apple allows this what is the issue? Amazon is working within the rules Apple set for them, if Apple doesn't want companies to do this they would stop it.
Amazon wants access to iOS ecosystem for free, if Amazon wants to compete with Apple should make sure they stand on their own two feet in every way financially. Apple has been far too nice to Amazon and Google within the Appstore.
You seem to be slow to grasp this but Apple sets some rules for apps in their app store, and guess what? They allow what amazon are doing, so what is your issue?
One can't do IAPs from Amazon on Android neither. I'm all for a 30% if Apple or Google handle the storage, delivery, and transaction, but if all they're doing is handing the transaction and Amazon handles the storage, and delivery then 30% is indeed greedy and impossible for Amazon to make any money.
It's no different from any other IAP though. When you buy some virtual coins in a game, Apple only has to process the payment, the game is just running some different code that's already in the game. If they said 0% for virtual coins but 30% for an extra map in a map program that they host, that's not really fair on developers. 30% is close to the rate for taxation - it's more likely just a flat rate worked out by weighing up costs against volume of users.
I think it makes sense to make exceptions for apps that are conduits to content like books and movies above a certain volume but the providers won't want to pay anything. In those cases, they can offer a reseller rate like they do when they sell Macs to 3rd party retail stores. That would be closer to 10-15% fee but that's still a large amount for 3rd party content.
The rule can be that if the app developer provides hosting and the content selection is above 1000 options from 3rd party publishers, the fee drops to this 10-15%. Maybe some publishers will go for that but Amazon especially tries to keep as much for itself as possible. Amazon's own fees aren't all that different:
They vary them by category but if you sell jewellery, they want a 40% 'referral fee'. They aren't doing anything except processing the payment; you store the product, ship the product etc. However, for you to profit, Amazon needed to build up their whole infrastructure so it's like a tax on using that infrastructure and they'll be aware that some items have higher margins than others so they vary it by category.
Margins vary by content too - self-published IAPs are 100% margin so 30% makes sense. Reseller IAPs for 3rd party content will come with 30% margins for the reseller at best so it makes more sense to split the profit but like I say, Amazon would probably still push people to the web to protect 10-15% margins as that's a lot of money.
There's no harm in trying it out though. No other IAPs would qualify for the lower rate so they can have the exception for 3rd party movie and book stores and they aren't making money here anyway as they'll be pushing people to buy through the browser.
Until we know what the build and running costs are for Apple's 4 data centers, it's not clear if 30% is too high and I expect they didn't aim to run at break even forever. It's better to run at profit so they can reinvest the profit in more data centers or upgrades as the userbase grows.
Then Amazon would be happy if Apple kicked them out of the Appstore for being the parasite that they are. They want the benefits of the iOS ecosystem (access to users) but they don't want to pay for it. Apple should just pull the plug on Amazon and Google the other parasitic squatter company.
Why should Apple kick out Amazon when they're following the rules that Apple set? Amazon is complying with those rules, just in a different way. If Amazon has their own payment/user management system, then it makes sense for them not to pay Apple. I don't like how Amazon got a free pass from the DOJ in the Apple eBooks trial, but I don't see how it would be fair for Apple to change the rules on them in the middle of the game since they are complying with those rules.
I see this as a simple matter of competition and the struggle for market share. Since I don't buy content from Amazon I couldn't care less how it pans out. Its just interesting. But even if many of the iTunes faithful end up not buying from Amazon it could still make sense to Amazon because they have smaller margins than in their direct store. So I suspect that that may be one of the motivating arguments for the change .. together with the fact that Apple will lose revenue.
I can't really sympathize with the whiners who are pissed about this. Apple is simply greedy with their 30% cut. Its hard to see that any added value of in-app purchasing can come close to justifying the 30%, as others have commented. And I am not one who wants to pump my hard-earned cash to Apple without a solid value-for-money element, which just doesn't exist in this particular context for the users.
It will be very interesting to see if the drop in Comixology sales is more than the 30% they're trying to save.
This is very similar to the manufacturer of a consumer product that used to be available at major retailers deciding to go with direct sales only. They always forget to factor in that the convenience of being in the major retailer was a larger factor in their success than the product itself.
Apple needs to start selling comics through iBooks. Would solve all of this crap.
I was always confused that Newsstand didn’t offer them…
‘Course, I’ve always been confused by Newsstand. Just have three skeuomorphic themes in iBooks: books (shelving), iTunes U (mahogany shelving), newspapers/magazines/comics (metal shelving). All reading material in one place.
Comments
Apple doesn't host Amazon's content except for the app. Any content will be on Amazon's servers and delivered by them.
http://images.apple.com/pr/pdf/q2fy14datasum.pdf
$1 billion in revenue doesn't sound like 'break even'.
http://www.forbes.com/sites/chuckjones/2014/01/07/apples-app-store-could-have-generated-1-billion-in-revenue-in-the-december-quarter/
One can't do IAPs from Amazon on Android neither. I'm all for a 30% if Apple or Google handle the storage, delivery, and transaction, but if all they're doing is handing the transaction and Amazon handles the storage, and delivery then 30% is indeed greedy and impossible for Amazon to make any money.
$1 billion in revenue doesn't sound like 'break even'.
Since you don't have the cost figures for running the app store you can't possibly know.
In 2011, Horace Dediu (the only analyst worth listening to) estimated that the online store costs $1.3billion per year to run
I don't think it's going to get much cheaper, so yes, $1billion sounds a lot like 'break even'.
http://www.asymco.com/2011/06/13/itunes-now-costs-1-3-billionyr-to-run/
Except that $1 billion was made in a quarter not in a year. So 4 quarters in a year would mean $4 billion in revenue versus $1.3 billion in costs for a profit of $2.7 billion. Really easy math.
Yes I do, you just have a single minded view point of everything
Ok, by calling someone else's comment stupid to start with shows how much you are willing to input into a real discussion.
Apple allows free apps into their store, they allow developers to submit apps which redirect to a website for external purchasing for free. The difficulty with comparing to WalMart is WalMart won't allow this. And since Apple allows this what is the issue? Amazon is working within the rules Apple set for them, if Apple doesn't want companies to do this they would stop it.
You seem to be slow to grasp this but Apple sets some rules for apps in their app store, and guess what? They allow what amazon are doing, so what is your issue?
It's no different from any other IAP though. When you buy some virtual coins in a game, Apple only has to process the payment, the game is just running some different code that's already in the game. If they said 0% for virtual coins but 30% for an extra map in a map program that they host, that's not really fair on developers. 30% is close to the rate for taxation - it's more likely just a flat rate worked out by weighing up costs against volume of users.
I think it makes sense to make exceptions for apps that are conduits to content like books and movies above a certain volume but the providers won't want to pay anything. In those cases, they can offer a reseller rate like they do when they sell Macs to 3rd party retail stores. That would be closer to 10-15% fee but that's still a large amount for 3rd party content.
The rule can be that if the app developer provides hosting and the content selection is above 1000 options from 3rd party publishers, the fee drops to this 10-15%. Maybe some publishers will go for that but Amazon especially tries to keep as much for itself as possible. Amazon's own fees aren't all that different:
http://www.amazon.co.uk/gp/help/customer/display.html?nodeId=3149301
They vary them by category but if you sell jewellery, they want a 40% 'referral fee'. They aren't doing anything except processing the payment; you store the product, ship the product etc. However, for you to profit, Amazon needed to build up their whole infrastructure so it's like a tax on using that infrastructure and they'll be aware that some items have higher margins than others so they vary it by category.
Margins vary by content too - self-published IAPs are 100% margin so 30% makes sense. Reseller IAPs for 3rd party content will come with 30% margins for the reseller at best so it makes more sense to split the profit but like I say, Amazon would probably still push people to the web to protect 10-15% margins as that's a lot of money.
There's no harm in trying it out though. No other IAPs would qualify for the lower rate so they can have the exception for 3rd party movie and book stores and they aren't making money here anyway as they'll be pushing people to buy through the browser.
Until we know what the build and running costs are for Apple's 4 data centers, it's not clear if 30% is too high and I expect they didn't aim to run at break even forever. It's better to run at profit so they can reinvest the profit in more data centers or upgrades as the userbase grows.
No, you just don’t comprehend the situation. At all.
Then Amazon would be happy if Apple kicked them out of the Appstore for being the parasite that they are. They want the benefits of the iOS ecosystem (access to users) but they don't want to pay for it. Apple should just pull the plug on Amazon and Google the other parasitic squatter company.
Why should Apple kick out Amazon when they're following the rules that Apple set? Amazon is complying with those rules, just in a different way. If Amazon has their own payment/user management system, then it makes sense for them not to pay Apple. I don't like how Amazon got a free pass from the DOJ in the Apple eBooks trial, but I don't see how it would be fair for Apple to change the rules on them in the middle of the game since they are complying with those rules.I see this as a simple matter of competition and the struggle for market share. Since I don't buy content from Amazon I couldn't care less how it pans out. Its just interesting. But even if many of the iTunes faithful end up not buying from Amazon it could still make sense to Amazon because they have smaller margins than in their direct store. So I suspect that that may be one of the motivating arguments for the change .. together with the fact that Apple will lose revenue.
I can't really sympathize with the whiners who are pissed about this. Apple is simply greedy with their 30% cut. Its hard to see that any added value of in-app purchasing can come close to justifying the 30%, as others have commented. And I am not one who wants to pump my hard-earned cash to Apple without a solid value-for-money element, which just doesn't exist in this particular context for the users.
YMMV.
This is very similar to the manufacturer of a consumer product that used to be available at major retailers deciding to go with direct sales only. They always forget to factor in that the convenience of being in the major retailer was a larger factor in their success than the product itself.
Apple needs to start selling comics through iBooks. Would solve all of this crap.
I was always confused that Newsstand didn’t offer them…
‘Course, I’ve always been confused by Newsstand. Just have three skeuomorphic themes in iBooks: books (shelving), iTunes U (mahogany shelving), newspapers/magazines/comics (metal shelving). All reading material in one place.