While there is a desire to further purify and make fairer - one must reflect on how the store itself has flattened the playing field, significantly mores o than what other retail systems allows. I.E. Also a 30% cut is nothing in comparison to retail channels where markup is anywhere from 50% to 300% on the price paid to suppliers. (Also keep in mind that the app can be free, with external payment - as utilised by numerous vendors.)
They single out Apple,and the so called Apple Tax, which by the way Google and Amazon also get the same 30%, but Retail stores also markup 30% or much higher. This is really just dumb, by yet another really clueless person that has no idea how the real world works and just latches onto dumb target key words like Apple Tax! All the while leaving out security of not having out of control Virus infected software. Not having to run Anti-Virus software n our iPhones. Having Quality App's following Apple's guide lines. I can go on, but this is really no different then what Game Console company's have been doing for YEARS.
If you don't like it, write your own OS and give it away and see if anyone uses it. See how well that works out for you.
As the owner of an app developing company, I have a somewhat different view then most AI readers. The current app revenue model is broken: 95% of the app developers who publish their own apps on the app store for a few $, are losing money. A typical app take 6 months to develop and costs about 50K, meaning you need 70K of revenue to be break even. If you look at the Japanese figures of 2015, the average revenue is less than 20K per developer (every organisation counts is a single developer for Apple). A few large well known organisations make all the profits, so it is even worse for the individual developer, which won't make a living.
The major issues with the current model are:
Apple (and Google) given too little in return for the 30% they are asking. With more than 1M apps in both stores, the chances that your newly developed app gets any visibility or attention reaches 0%. Because Apple is also making paid apps (e.g. Apple Music), and Apple does not have to pay 30%, this is smelling like anti-competitive
Due to the lack of visibility, you have to de your own marketing,
which can be costly and time consuming. Making a great website, make
brochures, being present in social media, ... When I developed my first
app in 2012, this was less of an issue, the presence in the app store
was sufficient to get started and to get your first revenue. Now it
is a different ball game.
The search function is the App Store app is an absolute shame. Apple prefers to list apps from well known developers like Facebook, Google, Apple, ... that are only vaguely related to the search text, while not displaying apps from lesser known developers that are very well related, even if the latter have very good ratings. Luckily Google is doing a better job here, but not every iPhone user uses Google to search for an iOS app.
Apple severely restricts your possibilities in marketing and selling tactics. You are not allowed to give a temporary discount as part of a marketing campaign, your are not allowed to do cross selling (giving a buyer of one of your apps a discount on another app), you cannot make links in your app to your website for any goodies. (Google gives you here more freedom). These restrictions are for me anti-competitive
Apple enforces a US based pricing scheme with predefined currency rates, which creates sometimes difficulties in other countries, especially when the currency rate changes. (Google gives you again more freedom)
The app developer is facing big uncertainties, that can be quite costly. You never know when your app will be approved, so it is difficult to plan your marketing. Apple can reject your app for a reason that you do not understand, and it is extremely difficult to get in contact with an Apple representative to discuss this. Apple can throw your app out after approval, because Apple is developing a similar function. This is for me also anti-competitive.
Making apps for large companies has become my major source of
income. My own apps are barely making profits, they are just a showcase
for my technical skills, attracting new business customers.
The app that I am currently developing is moving to a different model, used by companies like Evernote, Trello, Spotify. A basic version of the app is free, the user can enable additional features by making a purchase on the website, that I have to build anyway. So I am avoiding the 30% tax by Apple and Google, I only have to pay between 2 and 3% for the credit card handling. If I talk to other app developers, they (with the exception of game developers) are also moving in that direction
Not dismissing all of your points or saying that Apple couldn't make improvements now that app development is a more mature market, but part of your argument is really that there's too much competition, not too little. You specifically say that it was easier to make money earlier in the App Store's history because fewer apps = better visibility. How does that support the idea of the App Store being anti-competitive? Also, I don't think the argument regarding "I have to do my own marketing" is all that effective since it's a common practice in markets outside of digital app stores.
The anti-competitive nature is twofold.
First of all Apple and Google are developing apps themselves and they give their own apps a serious advantage over apps developed by 3rd parties as I explained above.
Secondly Apple gives no transparency about app approval, which apps are promoted in the app store, how the search algorithm in the app store app works. If I talk with colleague app developers we all get the feeling that Apple is not neutral during app approval and in the app store app search results. I can give examples of apps that were rejected for features that posed no approval issues in apps developed by large US companies.
I think the problem is that all these up an' coming second world countries realize that at this point Apple is as dependent on or going to be depended on revenues from them as it is on the US, so they are flexing some muscles if Cook just kept his mouth shut about how well the iPhone is doing in non US territories some of this might have been mitigated maybe not indefinitely but enough for a strategy to be formulated, threats of pulling out now aren't likely to work knowing that Apple can't afford the hit on revenue, India is pulling the same kind of crap all Offcause started by China, Tim is in a bit of a pickle to say the least
Kinda like the way Sony controls the way PlayStation games?
Heck Sony ruled the entire electronics world for a hell of a long time, not that I minded they made great stuff back in the day. Never heard any complaints from Tokyo about that either.
As the owner of an app developing company, I have a somewhat different view then most AI readers. The current app revenue model is broken: 95% of the app developers who publish their own apps on the app store for a few $, are losing money. A typical app take 6 months to develop and costs about 50K, meaning you need 70K of revenue to be break even. If you look at the Japanese figures of 2015, the average revenue is less than 20K per developer (every organisation counts is a single developer for Apple). A few large well known organisations make all the profits, so it is even worse for the individual developer, which won't make a living.
The major issues with the current model are:
Apple (and Google) given too little in return for the 30% they are asking. With more than 1M apps in both stores, the chances that your newly developed app gets any visibility or attention reaches 0%. Because Apple is also making paid apps (e.g. Apple Music), and Apple does not have to pay 30%, this is smelling like anti-competitive
Due to the lack of visibility, you have to de your own marketing,
which can be costly and time consuming. Making a great website, make
brochures, being present in social media, ... When I developed my first
app in 2012, this was less of an issue, the presence in the app store
was sufficient to get started and to get your first revenue. Now it
is a different ball game.
The search function is the App Store app is an absolute shame. Apple prefers to list apps from well known developers like Facebook, Google, Apple, ... that are only vaguely related to the search text, while not displaying apps from lesser known developers that are very well related, even if the latter have very good ratings. Luckily Google is doing a better job here, but not every iPhone user uses Google to search for an iOS app.
Apple severely restricts your possibilities in marketing and selling tactics. You are not allowed to give a temporary discount as part of a marketing campaign, your are not allowed to do cross selling (giving a buyer of one of your apps a discount on another app), you cannot make links in your app to your website for any goodies. (Google gives you here more freedom). These restrictions are for me anti-competitive
Apple enforces a US based pricing scheme with predefined currency rates, which creates sometimes difficulties in other countries, especially when the currency rate changes. (Google gives you again more freedom)
The app developer is facing big uncertainties, that can be quite costly. You never know when your app will be approved, so it is difficult to plan your marketing. Apple can reject your app for a reason that you do not understand, and it is extremely difficult to get in contact with an Apple representative to discuss this. Apple can throw your app out after approval, because Apple is developing a similar function. This is for me also anti-competitive.
Making apps for large companies has become my major source of
income. My own apps are barely making profits, they are just a showcase
for my technical skills, attracting new business customers.
The app that I am currently developing is moving to a different model, used by companies like Evernote, Trello, Spotify. A basic version of the app is free, the user can enable additional features by making a purchase on the website, that I have to build anyway. So I am avoiding the 30% tax by Apple and Google, I only have to pay between 2 and 3% for the credit card handling. If I talk to other app developers, they (with the exception of game developers) are also moving in that direction
Not dismissing all of your points or saying that Apple couldn't make improvements now that app development is a more mature market, but part of your argument is really that there's too much competition, not too little. You specifically say that it was easier to make money earlier in the App Store's history because fewer apps = better visibility. How does that support the idea of the App Store being anti-competitive? Also, I don't think the argument regarding "I have to do my own marketing" is all that effective since it's a common practice in markets outside of digital app stores.
The anti-competitive nature is twofold.
First of all Apple and Google are developing apps themselves and they give their own apps a serious advantage over apps developed by 3rd parties as I explained above.
Secondly Apple gives no transparency about app approval, which apps are promoted in the app store, how the search algorithm in the app store app works. If I talk with colleague app developers we all get the feeling that Apple is not neutral during app approval and in the app store app search results. I can give examples of apps that were rejected for features that posed no approval issues in apps developed by large US companies.
And those examples are? Would be interested in the features and apps you are talking about...
About the only thing that sounds reasonable in their complaints is the issue regarding refunds and the developer being on the hook for the 30% that went to Apple.
I agree. What Apple has done with the App Store is generally very good, the "monopoly" aspect comes from the walled garden but that's an overwhelmingly good thing because of the assurance (of good behaviour by apps) that it provides. Apple does need to be pulled up if it abuses the promotional aspects to favour certain developers - like itself - of course.
However, I had not realised that a developer had to fund Apple's portion of the refund should an app refund be made. It's true that Apple will have done its bit (host, advertise, deliver, take original payment) before the need for a refund but it puts a developer at significant financial risk. Suppose a lone developer's app becomes a minor cult hit, sells a few thousand copies before there is a movement on social media to reject it for some reason, real or imagined. That developer could then be liable for 30% of the price times the number of refunds in addition to the cash that they were originally paid for the rejected copies.
Eek! In a global marketplace like the app store, an additional refund of £1 could easily apply to a thousand or more copies in the "vendetta" scenario. That's a lot of money for an individual and it's an unlimited risk. I see the justice in returning the entire payment received but this verges on punitive: it's the kind of thing that you'd hope Apple would take on for the good of the entire iOS community.
Comments
I see what you did there.
First of all Apple and Google are developing apps themselves and they give their own apps a serious advantage over apps developed by 3rd parties as I explained above.
Secondly Apple gives no transparency about app approval, which apps are promoted in the app store, how the search algorithm in the app store app works. If I talk with colleague app developers we all get the feeling that Apple is not neutral during app approval and in the app store app search results. I can give examples of apps that were rejected for features that posed no approval issues in apps developed by large US companies.
However, I had not realised that a developer had to fund Apple's portion of the refund should an app refund be made. It's true that Apple will have done its bit (host, advertise, deliver, take original payment) before the need for a refund but it puts a developer at significant financial risk. Suppose a lone developer's app becomes a minor cult hit, sells a few thousand copies before there is a movement on social media to reject it for some reason, real or imagined. That developer could then be liable for 30% of the price times the number of refunds in addition to the cash that they were originally paid for the rejected copies.
Eek! In a global marketplace like the app store, an additional refund of £1 could easily apply to a thousand or more copies in the "vendetta" scenario. That's a lot of money for an individual and it's an unlimited risk. I see the justice in returning the entire payment received but this verges on punitive: it's the kind of thing that you'd hope Apple would take on for the good of the entire iOS community.