And how would Tim Cook explain this transfer of wealth away from Apple’s shareholders to the X’s shareholders?
This ain’t gonna happen!!!
One thing Apple could do is have an API for resellers. Currently if a business resells content of its users, they get billed on the aggregate of all the sales making some types of business harder to work.
Say an app lets users host artwork similar to ArtStation and allows other users to tip the artists. The app developer is the one who gets the aggregate revenue but they are then paying those tips out to each artist separately.
If 10,000 artists each received $200 in tips, this would cross Apple's threshold for 30% but the app developer and artists would be making much less than the threshold each.
If Apple had an API where a developer could assign a unique in-app purchase identifier to a purchase button (including proxy payments like in-app currency), they'd know how many separate recipients there were and bill based on the amounts that each recipient was making.
The app developer would have to provide accounting details to prove that they were making the payments they said they were.
Then they could have consistent fees that didn't conflict with other app developers who are keeping 100% of their app revenue. If any developer is caught misusing the in-app purchase identifiers, they can be blocked from selling in the store.
This could apply to apps like Spotify where the musicians are the recipients and would each get a unique identifier. They'd assign subscription payments based on streams to each artist and that can get billed separately. To make accounting easier, any unique user below a threshold like $300/month can get 0% fee. Then 15% up to $1m, 30% over $1m.
The way it works now is if an app developer took in $2m in payments = $200 for 10,000 users and the app developer took a 10% profit, Apple would take 30% of the total, the developer would take 10% and the content creators would get 60% (of $200).
If instead a reseller system tagged each user separately, the app developer would take 10% ($200k) and each creator would get 90% of $200 = $180. Apple would then charge 0% of the $180 for each creator and 15% of the $200k of the app developer.
Part of Apple’s justification for the 30% is that it has to create and maintain APIs for developers. Your suggestion completely runs counter to what Apple has been saying.
Apple uses 15% up to $1m, 30% above and 15% for subscriptions. The developer would still be charged this, as would any other recipients who made more than the thresholds, they are just treated separately. Rather than it being 1 developer, aggregate revenue, it's 1 reseller developer + x content creators with split revenue.
Amazon is a reseller. Amazon has an app. People can buy things through the app. Does apple get 30%?
Physical goods are different from digital because of margins. Apple's fees are on revenue, charging 30% on physical goods wouldn't be possible. Apple makes 30-40% margin on their own products so they know that charging 30% for physical goods and services wouldn't be viable.
Even though digital content has costs too, the margins can be much higher and there's way more price flexibility. In-app currency can be any price the developer wants. 15% is a reasonable fee for pretty much every digital content developer as is 30% for millionaires/billionaires.
With reseller apps, there's a clearer cost of goods/services that is part of the developer's revenue. A new API can accommodate this business model.
Amazon also sells digital goods. My understanding (but please correct if wrong) is that Apple only charges a fee for accounts that are set up through the iPhone app and that use Apple's payment systems. If somebody has an Amazon (or Netflix etc) account that was already set up, they can access content through the iPhone app without the 30% going to Apple.
So all Musk has to do is convince people to visit his sketchy-sounding "X.com" website and hand over their credit card information to him so that they can use his super app for all their Xeeting/banking/shopping needs. But if he's relying on Apple's good name and systems to collect payment info, then that's when he has to fork over 30%.
If I understand that correctly, it sounds fair to me. Heck, given the reputational risk of association with Musk, maybe Apple should charge a *higher* fee.
And how would Tim Cook explain this transfer of wealth away from Apple’s shareholders to the X’s shareholders?
This ain’t gonna happen!!!
One thing Apple could do is have an API for resellers. Currently if a business resells content of its users, they get billed on the aggregate of all the sales making some types of business harder to work.
Say an app lets users host artwork similar to ArtStation and allows other users to tip the artists. The app developer is the one who gets the aggregate revenue but they are then paying those tips out to each artist separately.
If 10,000 artists each received $200 in tips, this would cross Apple's threshold for 30% but the app developer and artists would be making much less than the threshold each.
If Apple had an API where a developer could assign a unique in-app purchase identifier to a purchase button (including proxy payments like in-app currency), they'd know how many separate recipients there were and bill based on the amounts that each recipient was making.
The app developer would have to provide accounting details to prove that they were making the payments they said they were.
Then they could have consistent fees that didn't conflict with other app developers who are keeping 100% of their app revenue. If any developer is caught misusing the in-app purchase identifiers, they can be blocked from selling in the store.
This could apply to apps like Spotify where the musicians are the recipients and would each get a unique identifier. They'd assign subscription payments based on streams to each artist and that can get billed separately. To make accounting easier, any unique user below a threshold like $300/month can get 0% fee. Then 15% up to $1m, 30% over $1m.
The way it works now is if an app developer took in $2m in payments = $200 for 10,000 users and the app developer took a 10% profit, Apple would take 30% of the total, the developer would take 10% and the content creators would get 60% (of $200).
If instead a reseller system tagged each user separately, the app developer would take 10% ($200k) and each creator would get 90% of $200 = $180. Apple would then charge 0% of the $180 for each creator and 15% of the $200k of the app developer.
Part of Apple’s justification for the 30% is that it has to create and maintain APIs for developers. Your suggestion completely runs counter to what Apple has been saying.
Apple uses 15% up to $1m, 30% above and 15% for subscriptions. The developer would still be charged this, as would any other recipients who made more than the thresholds, they are just treated separately. Rather than it being 1 developer, aggregate revenue, it's 1 reseller developer + x content creators with split revenue.
Amazon is a reseller. Amazon has an app. People can buy things through the app. Does apple get 30%?
Physical goods are different from digital because of margins. Apple's fees are on revenue, charging 30% on physical goods wouldn't be possible. Apple makes 30-40% margin on their own products so they know that charging 30% for physical goods and services wouldn't be viable.
Even though digital content has costs too, the margins can be much higher and there's way more price flexibility. In-app currency can be any price the developer wants. 15% is a reasonable fee for pretty much every digital content developer as is 30% for millionaires/billionaires.
With reseller apps, there's a clearer cost of goods/services that is part of the developer's revenue. A new API can accommodate this business model.
Amazon also sells digital goods. My understanding (but please correct if wrong) is that Apple only charges a fee for accounts that are set up through the iPhone app and that use Apple's payment systems. If somebody has an Amazon (or Netflix etc) account that was already set up, they can access content through the iPhone app without the 30% going to Apple.
So all Musk has to do is convince people to visit his sketchy-sounding "X.com" website and hand over their credit card information to him so that they can use his super app for all their Xeeting/banking/shopping needs. But if he's relying on Apple's good name and systems to collect payment info, then that's when he has to fork over 30%.
If I understand that correctly, it sounds fair to me. Heck, given the reputational risk of association with Musk, maybe Apple should charge a *higher* fee.
If the payments are external then Apple doesn't apply a fee. Netflix and Amazon Prime are external subscriptions. For individual payments inside the app, that's more of a grey area. Apple doesn't charge banking apps like Venmo, Paypal and that's what Musk's new venture seems to include but an everything app would have some areas where fees would apply like paying content creators using an in-app purchase. They'll probably work out the details of it.
I'd guess Musk's setup would have the ability for people to buy tokens (maybe crypto/dogecoin or Xcoin) and pay content creators with it like cash. They could buy these externally or via a banking system like Revolut that allows crypto purchases without fees. The following says Apple expects a percentage of gas fees (the transfer fee for crypto):
App Store rules are hard to apply fairly and consistently to millions of different apps with overlapping functions but it works pretty well so far considering its scale. Their policies will evolve over time to accommodate new business models that crop up. If Western businesses are to be able to compete with the likes of Tencent and Alibaba, they need platforms to be able to do it.
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So all Musk has to do is convince people to visit his sketchy-sounding "X.com" website and hand over their credit card information to him so that they can use his super app for all their Xeeting/banking/shopping needs. But if he's relying on Apple's good name and systems to collect payment info, then that's when he has to fork over 30%.
If I understand that correctly, it sounds fair to me. Heck, given the reputational risk of association with Musk, maybe Apple should charge a *higher* fee.
I'd guess Musk's setup would have the ability for people to buy tokens (maybe crypto/dogecoin or Xcoin) and pay content creators with it like cash. They could buy these externally or via a banking system like Revolut that allows crypto purchases without fees. The following says Apple expects a percentage of gas fees (the transfer fee for crypto):
https://cryptonews.com/news/apples-app-store-guidelines-under-scrutiny-by-lawmakers-for-blockchain-nft-limitations.htm
App Store rules are hard to apply fairly and consistently to millions of different apps with overlapping functions but it works pretty well so far considering its scale. Their policies will evolve over time to accommodate new business models that crop up. If Western businesses are to be able to compete with the likes of Tencent and Alibaba, they need platforms to be able to do it.