Here’s a simple solution: Apple doesn’t take a commission on any app they compete with directly. Those apps can allow a link to the web to sign up or direct signup and payment inside the app.
So should grocery store bakeries not sell for profit since they also sell third-party baked goods?
Should Target and Walgreens not sell generic cold medicine for profit since they also sell the brand names right next to them on the shelves? Those brand names have to pay “slotting fees” to get shelf position, which Target or Walgreen do not — they charge their competitors the fees but not themselves. Where is the moral outrage?
rogifan_new said: So if this is the case, why then does Apple’s commission only apply to digital goods? Why should Apple get a 30% cut of a Kindle book but not an Uber ride?
Everyone wants to ride the gravy train once all the hard work needed to lay all the track and build the locomotives has been done and paid for by someone else. The fact that the App Store is a proprietary system built and paid for through private investment doesn’t matter to all the lazy ass freeloaders looking to horn in on someone else’s success.
Can I sue Walmart for refusing to carry a product that I built but I cannot sell because I don’t have the visibility and market presence that Walmart has? Plus, I don’t want to pay Walmart what it’s asking to get access to their shelves. So what if it’s their store, they have something that I lack and they owe me. Yeah, it’s America and in America anyone that’s successful owes it to those who aren’t successful, just because, at from my lazy ass entitled standpoint.
So if this is the case, why then does Apple’s commission only apply to digital goods? Why should Apple get a 30% cut of a Kindle book but not an Uber ride?
I think it comes down to what Apple has defined as the boundaries of its proprietary "store" so to speak. Since they are the property owner the get to decide what they will and will not allow to take place on their property. The Kindle app running on iOS or macOS is analogous (imho) to Amazon setting up an Amazon bookstore inside a Barnes & Noble bookstore. I would fully expect that if this were the case Barnes & Noble would demand some sort of commission from Amazon for the use of their store. The terms and conditions for all such arrangements would have been agreed upon by all parties prior to the store-within-a-store being brought online.
In the case of Uber, Apple has not currently put any restrictions on how the goods that Uber offers are transacted within Apple's store. For all we know, Project Titan could turn out to be Apple's proprietary ride sharing service and Uber will get booted from the store. Again, it's Apple's store and they set the terms and conditions and their tenants must agree to in order to take advantage of the many benefits that being in Apple's store provides.
There is nothing in the Apple store/ecosystem that is not available from other store owners. If Walmart doesn't offer me the deal I want for selling my product I can always make a deal with Target or Best Buy. But am I entitled to sue Walmart because it didn't offer a deal that I liked?
OK but I can use Safari to buy a Kindle book and read it on my iOS device. Just like I can use Safari to sign up with Spotify and there Apple gets nothing. Your analogy to Barnes and Noble doesn’t make sense to me. The App Store isn’t a book store. But again it goes back to my point that Apple deciding certain digital goods are deserving of a commission but other things are not is quite arbitrary. And so yeah, what happens when/if Project Titan becomes an Apple ride-sharing service with its own autonomous electric vehicles...do Uber and Lyft all of a sudden get charged a commission or do they get a free ride (no pun intended) because they didn’t exist when Apple created the rules around App Store commissions?
I’m an Apple fan with about 10 active devices. I like the security and elegance of the Apple way, however, I think Apple is walking a tightrope here. Their 30% commission is not chump change. I don’t have numbers to quote but it is hard to imagine that the App Store is not profitable for Apple. I can imagine there are developers who would love to sell their apps on an open market. That’s pretty much how our system works.
I don’t know how this will play out. It could be that Apple would have to offer an option to run your iPhone “in the wild” and enjoy the benefits as well as the pitfalls. It’s not a pretty picture.
If I were a betting person I would not be putting my money on Apple in this case.
Most comments like yours prove complete ignorance of basic commerce. Everybody has to charge a markup or commission for products and services they vend. 30% is hardly outrageous. Yes, your basic grocery store is likely on average making no more than 3%, much higher on many items. The markup for jewelry is at least 200% and often 1000% (they only make money over xmas, and June weddings).
Everybody in the supply chain has to take their cut just to live and stay in business.
Anyone selling their apps in the App Store will price based on how much they need to live and what their costs are and the number of customers. Taking into account Apple's 30% take is the simplest side of this equation, which everyone else has to account for also. No one is disadvantaged.
I like how the AppStore is set up in general. I think opening the AppStore to competition would be worse overall. The fact that iOS is not the Wild West is a big part of what attracts users to the platform. I don't believe it is a monopoly since there are other major platforms. However, I think there is an issue with the AppStore commission structure incentivizing developers to create software with usability issues in some cases.
My major complaint is the "Reader" category mentioned on the page. It is a poor user experience to require leaving an app to add content to the app. This is a category of apps that really shouldn't exist. My personal opinion is that Apple should give up on commission for certain categories of digital content that are cross-platform such as books/audiobooks, movies, music, comic books, or other content that could potentially be consumed in another app or aggregation app. Other types of app-specific digital content typically don't suffer from this issue and allow in-app purchase. Physical goods don't receive a commission and this type of content feels closer to a physical good than an app feature. There could be a requirement to share content with an aggregator app (Books app, TV app, etc.) and/or other third party apps through an SDK similar to how cloud storage apps integrate with Files. Some sort of extension for DRM/viewing would probably also necessary if aggregation were a requirement. It is great that the AppStore has areas with no commission, however that also encourages poor app design to get around paying the commission. Subscriptions have a similar issue, but working with subscriptions is less frequent. It would be nice to see some sort of a change in commissions to encourage more user friendly behavior. I don't know if the economics are sustainable or suitable to encouraging good developer behavior, but maybe just a signup commission for certain types of content along with a requirement that they need to open the content to aggregation apps. Basically, I think content that is suitable for aggregation is the digital content that should be exempted from the normal commission structure. I love Apple as company that puts design and usability first, but this is an area where I think it falters. Commission structure shouldn't encourage poor app design. However, this may be a moot point since "Reader" apps are mostly dominated by large players. If you can't get them to agree on a better system then we are stuck with what we have.
Unrelated to AppStore commissions– I wish Apple would crack down on developers that release apps that take too long to launch. Slow launch times seem to be becoming more common over the last year or so. It would be nice to at least see a slow launch warning on the App Store. Developers that take the time to optimize their apps to launch extremely fast can have a fast launch badge of honor on their store page. I feel like these metrics could be obtained automatically during app submission testing. I think this problem is caused by a combination of requiring a large cloud sync at app start, lack of incremental loads, poor caching behavior, and the rise of poorly written hybrid apps.
OK but I can use Safari to buy a Kindle book and read it on my iOS device. Just like I can use Safari to sign up with Spotify and there Apple gets nothing. Your analogy to Barnes and Noble doesn’t make sense to me. The App Store isn’t a book store. But again it goes back to my point that Apple deciding certain digital goods are deserving of a commission but other things are not is quite arbitrary. And so yeah, what happens when/if Project Titan becomes an Apple ride-sharing service with its own autonomous electric vehicles...do Uber and Lyft all of a sudden get charged a commission or do they get a free ride (no pun intended) because they didn’t exist when Apple created the rules around App Store commissions?
The difference is Safari goes to the open web - a non controlled entity and the App Store is something Apple built and maintains so they are 2 different platforms. Apple had a cost to invent and build the App Store, its backend infrastructure that supports how that store functions. It also has a cost to maintain it, employ people to monitor it and keep it the way it wants it to be (just like a barns & Nobel or any other brick and mortar store). Safari is an application to view the web, while yes they may look similar the two are completely different, Apple just needs developers to build Safari and then it lives on your device. And guess what Apple only takes a 30% cut of the sale on their AppStore if the app itself is an up front sale, they give the developer the option of pricing it for free and getting ad revenue instead of an upfront cost. Not only that they allow 3rd parties to sell subscriptions outside their AppStore but if you sell them within they want a cut because those developers are using their infrastructure and their eco-system and oh yea their customer base. If the AppStore didn't exist would these companies have half as many eyes looking at their wares?
I’m an Apple fan with about 10 active devices. I like the security and elegance of the Apple way, however, I think Apple is walking a tightrope here. Their 30% commission is not chump change. I don’t have numbers to quote but it is hard to imagine that the App Store is not profitable for Apple. I can imagine there are developers who would love to sell their apps on an open market. That’s pretty much how our system works.
I don’t know how this will play out. It could be that Apple would have to offer an option to run your iPhone “in the wild” and enjoy the benefits as well as the pitfalls. It’s not a pretty picture.
If I were a betting person I would not be putting my money on Apple in this case.
Most comments like yours prove complete ignorance of basic commerce. Everybody has to charge a markup or commission for products and services they vend. 30% is hardly outrageous. Yes, your basic grocery store is likely on average making no more than 3%, much higher on many items. The markup for jewelry is at least 200% and often 1000% (they only make money over xmas, and June weddings).
Everybody in the supply chain has to take their cut just to live and stay in business.
Anyone selling their apps in the App Store will price based on how much they need to live and what their costs are and the number of customers. Taking into account Apple's 30% take is the simplest side of this equation, which everyone else has to account for also. No one is disadvantaged.
Except Apple doesn’t take a commission for everything. In fact on their website they highlight apps that are free where they get nothing. Also Apple allows apps that would be subject to commission to just change their app to a reader app and have customers sign up/purchase outside the app. And Apple gets nothing from that.
OK but I can use Safari to buy a Kindle book and read it on my iOS device. Just like I can use Safari to sign up with Spotify and there Apple gets nothing. Your analogy to Barnes and Noble doesn’t make sense to me. The App Store isn’t a book store. But again it goes back to my point that Apple deciding certain digital goods are deserving of a commission but other things are not is quite arbitrary. And so yeah, what happens when/if Project Titan becomes an Apple ride-sharing service with its own autonomous electric vehicles...do Uber and Lyft all of a sudden get charged a commission or do they get a free ride (no pun intended) because they didn’t exist when Apple created the rules around App Store commissions?
The difference is Safari goes to the open web - a non controlled entity and the App Store is something Apple built and maintains so they are 2 different platforms. Apple had a cost to invent and build the App Store, its backend infrastructure that supports how that store functions. It also has a cost to maintain it, employ people to monitor it and keep it the way it wants it to be (just like a barns & Nobel or any other brick and mortar store). Safari is an application to view the web, while yes they may look similar the two are completely different, Apple just needs developers to build Safari and then it lives on your device. And guess what Apple only takes a 30% cut of the sale on their AppStore if the app itself is an up front sale, they give the developer the option of pricing it for free and getting ad revenue instead of an upfront cost. Not only that they allow 3rd parties to sell subscriptions outside their AppStore but if you sell them within they want a cut because those developers are using their infrastructure and their eco-system and oh yea their customer base. If the AppStore didn't exist would these companies have half as many eyes looking at their wares?
OK but in theory every app could be “free” and either use an ad-based model or have you sign up/pay for things via the web to circumvent Apple’s commission/fee. Amazon, Netflix and Spotify are doing it. So if this is all about what it costs to maintain/support the App Store then why does Apple allow any free apps or allow apps that would be charged a commission to be “reader” apps? Of course it’s a rhetorical question. If Apple said to Amazon your Kindle app can’t be in the store unless users can purchase books inside the app and we get 30% of those purchases Amazon would choose not to have an app in the store and customers would be unhappy because they couldn’t read Kindle books on their iOS device. Also I’d love to see how Apple breaks down, say a $1000 iPhone in terms of BOM, R&D, software, etc. I assume when I buy an iOS device part of the cost of the device goes to support software and services. Would that not include the App Store? Sure Apple is providing developers this great platform but iOS and iPhone/iPad would be nothing without great 3rd party apps. I think it’s to Apple’s benefit to make the App Store a place where 3rd parties want to develop and it’s financially worthwhile to do so.
OK but I can use Safari to buy a Kindle book and read it on my iOS device. Just like I can use Safari to sign up with Spotify and there Apple gets nothing. Your analogy to Barnes and Noble doesn’t make sense to me. The App Store isn’t a book store. But again it goes back to my point that Apple deciding certain digital goods are deserving of a commission but other things are not is quite arbitrary. And so yeah, what happens when/if Project Titan becomes an Apple ride-sharing service with its own autonomous electric vehicles...do Uber and Lyft all of a sudden get charged a commission or do they get a free ride (no pun intended) because they didn’t exist when Apple created the rules around App Store commissions?
The difference is Safari goes to the open web - a non controlled entity and the App Store is something Apple built and maintains so they are 2 different platforms. Apple had a cost to invent and build the App Store, its backend infrastructure that supports how that store functions. It also has a cost to maintain it, employ people to monitor it and keep it the way it wants it to be (just like a barns & Nobel or any other brick and mortar store). Safari is an application to view the web, while yes they may look similar the two are completely different, Apple just needs developers to build Safari and then it lives on your device. And guess what Apple only takes a 30% cut of the sale on their AppStore if the app itself is an up front sale, they give the developer the option of pricing it for free and getting ad revenue instead of an upfront cost. Not only that they allow 3rd parties to sell subscriptions outside their AppStore but if you sell them within they want a cut because those developers are using their infrastructure and their eco-system and oh yea their customer base. If the AppStore didn't exist would these companies have half as many eyes looking at their wares?
I agree from a legal perspective. However, I think that encouraging developers to write apps that are less user-friendly because they are taking advantage of a more favorable commission structure isn't a good thing. Certainly Apple should win this court case, but I hope they do look at how the commission structure hurts usability. I elaborate more in my other post.
OK but I can use Safari to buy a Kindle book and read it on my iOS device. Just like I can use Safari to sign up with Spotify and there Apple gets nothing. Your analogy to Barnes and Noble doesn’t make sense to me. The App Store isn’t a book store. But again it goes back to my point that Apple deciding certain digital goods are deserving of a commission but other things are not is quite arbitrary. And so yeah, what happens when/if Project Titan becomes an Apple ride-sharing service with its own autonomous electric vehicles...do Uber and Lyft all of a sudden get charged a commission or do they get a free ride (no pun intended) because they didn’t exist when Apple created the rules around App Store commissions?
The difference is Safari goes to the open web - a non controlled entity and the App Store is something Apple built and maintains so they are 2 different platforms. Apple had a cost to invent and build the App Store, its backend infrastructure that supports how that store functions. It also has a cost to maintain it, employ people to monitor it and keep it the way it wants it to be (just like a barns & Nobel or any other brick and mortar store). Safari is an application to view the web, while yes they may look similar the two are completely different, Apple just needs developers to build Safari and then it lives on your device. And guess what Apple only takes a 30% cut of the sale on their AppStore if the app itself is an up front sale, they give the developer the option of pricing it for free and getting ad revenue instead of an upfront cost. Not only that they allow 3rd parties to sell subscriptions outside their AppStore but if you sell them within they want a cut because those developers are using their infrastructure and their eco-system and oh yea their customer base. If the AppStore didn't exist would these companies have half as many eyes looking at their wares?
OK but in theory every app could be “free” and either use an ad-based model or have you sign up/pay for things via the web to circumvent Apple’s commission/fee. Amazon, Netflix and Spotify are doing it. So if this is all about what it costs to maintain/support the App Store then why does Apple allow any free apps or allow apps that would be charged a commission to be “reader” apps? Of course it’s a rhetorical question. If Apple said to Amazon your Kindle app can’t be in the store unless users can purchase books inside the app and we get 30% of those purchases Amazon would choose not to have an app in the store and customers would be unhappy because they couldn’t read Kindle books on their iOS device. Also I’d love to see how Apple breaks down, say a $1000 iPhone in terms of BOM, R&D, software, etc. I assume when I buy an iOS device part of the cost of the device goes to support software and services. Would that not include the App Store? Sure Apple is providing developers this great platform but iOS and iPhone/iPad would be nothing without great 3rd party apps. I think it’s to Apple’s benefit to make the App Store a place where 3rd parties want to develop and it’s financially worthwhile to do so.
From a business perspective, I think there should be more than just financial worthiness to consider. Anytime there is a commission structure that is uneven, there may be an incentive to cater an app to the commission structure instead of what is necessary to make the best possible app. If you hurt the platform by encouraging apps that are not as good as they could be, you eventually hurt profitability. I feel like Apple may have not found the right balance with reader-apps. I think that ideally reader-only apps tied to a single marketplace shouldn't exist. However, these types of apps are dominated by large players. It could be that they are thinking about this imbalance, but have not been able to get the other players to agree on a better solution. I left my opinion of a better solution is in another comment, but ultimately it may not be doable.
I think it is really sad that if you invent something, own it, than you have to defend why did you set it up like this. Strange no one questioned that after App Store was created...
Because back then Apple completely disrupted the market with a model that was so new. Market share had to be built, a completely new platform and opportunity was available to developers. Times changed - more than 12 years later - and there is now essentially a locked ecosystem and monopoly for each one of the two platforms out there. The playing field is totally different now. These lawsuits are a logical consequence of today’s situation.
But not by consumers who want a secure place to get and purchase apps. We're tired of all the tech people dumping garbage apps with all sorts of backdoors and malware on us. If the tech people don't like how Apple is running their app store then find another platform.
I also prefer to buy my apps from a source that protects my interests, but the existence of an alternative would not prevent me from doing that.
If XYZ Corp opened an iOS App Store the Apple App Store would still exist, and I could continue to buy from it.
If XYZ Corp’s App Store changed a lower commission, that might persuade some developers to use its platform, but again, unless they’re trying to pass off something unsavoury, they would be crazy not to offer their product through the Apple storefront as well.
I’m an Apple fan with about 10 active devices. I like the security and elegance of the Apple way, however, I think Apple is walking a tightrope here. Their 30% commission is not chump change. I don’t have numbers to quote but it is hard to imagine that the App Store is not profitable for Apple. I can imagine there are developers who would love to sell their apps on an open market. That’s pretty much how our system works.
I don’t know how this will play out. It could be that Apple would have to offer an option to run your iPhone “in the wild” and enjoy the benefits as well as the pitfalls. It’s not a pretty picture.
If I were a betting person I would not be putting my money on Apple in this case.
This already exists in 2 forms. There are several pirate App Stores that host Apps signed with Enterprise Developer Program certificates.
Malware is rampant on these, with many of them being pirated App Store Apps with malware added, and re-signed and the enterprise certs are either stolen, or being used outside the programs terms & conditions.
The other one is stores like Cydia that rely on devices being jailbroken. Cydia has arguably been the more ethical of the two options, with much less piracy , and as a consequence is not that financially viable for 5the store owners.
The situation on Android is similar - malware & IP theft & piracy on non Google Play stores is rampant.
Seems to me the Mac App Store framework could be implemented. You could still have your iPhone locked down with the iOS store but have options, however perilous, elsewhere. Perhaps iOS is too locked down at the moment to make this viable, although Apple could probably come up with something.
I would go back to law school to fight this case.... So Ferrari can be sued for pricing their cars too high when there are other cars to buy?? And so how are the litigants being harmed if they chose to buy an Apple Phone and have the option to buy apps elsewhere at their own risk???
The only thing I agree with on The Supreme Court... Litigants have the right to bring stupid cases.
It's more like Ferrari saying every time you use your Ferrari to transport something you bought at Walmart, Walmart has to give Ferrari 30% of the cost of that item.
I do not see any viable way that a non-Apple App Store would maintain the relatively high privacy stand that Apple has.
If Apple is forced to support apps that are not from the App Store, things would devolve to Windows levels pretty quickly and we'd be looking at installing Virus Protection and worry about custom installers for different apps on our iOS devices.
Overall, I think customer's disregard for someone else's work is really appalling. Expecting a good, working application or game for 99 Cents or free is really not understanding what a developer has to do to get that to you.
I may just be in my thirties but it is obvious most individuals speak from a lack of research and go by the Facebook investigative journalism online school approach.
Comments
Should Target and Walgreens not sell generic cold medicine for profit since they also sell the brand names right next to them on the shelves? Those brand names have to pay “slotting fees” to get shelf position, which Target or Walgreen do not — they charge their competitors the fees but not themselves. Where is the moral outrage?
Same exact thing.
Everybody in the supply chain has to take their cut just to live and stay in business.
Anyone selling their apps in the App Store will price based on how much they need to live and what their costs are and the number of customers. Taking into account Apple's 30% take is the simplest side of this equation, which everyone else has to account for also. No one is disadvantaged.
My major complaint is the "Reader" category mentioned on the page. It is a poor user experience to require leaving an app to add content to the app. This is a category of apps that really shouldn't exist. My personal opinion is that Apple should give up on commission for certain categories of digital content that are cross-platform such as books/audiobooks, movies, music, comic books, or other content that could potentially be consumed in another app or aggregation app. Other types of app-specific digital content typically don't suffer from this issue and allow in-app purchase. Physical goods don't receive a commission and this type of content feels closer to a physical good than an app feature. There could be a requirement to share content with an aggregator app (Books app, TV app, etc.) and/or other third party apps through an SDK similar to how cloud storage apps integrate with Files. Some sort of extension for DRM/viewing would probably also necessary if aggregation were a requirement. It is great that the AppStore has areas with no commission, however that also encourages poor app design to get around paying the commission. Subscriptions have a similar issue, but working with subscriptions is less frequent. It would be nice to see some sort of a change in commissions to encourage more user friendly behavior. I don't know if the economics are sustainable or suitable to encouraging good developer behavior, but maybe just a signup commission for certain types of content along with a requirement that they need to open the content to aggregation apps. Basically, I think content that is suitable for aggregation is the digital content that should be exempted from the normal commission structure. I love Apple as company that puts design and usability first, but this is an area where I think it falters. Commission structure shouldn't encourage poor app design. However, this may be a moot point since "Reader" apps are mostly dominated by large players. If you can't get them to agree on a better system then we are stuck with what we have.
Unrelated to AppStore commissions– I wish Apple would crack down on developers that release apps that take too long to launch. Slow launch times seem to be becoming more common over the last year or so. It would be nice to at least see a slow launch warning on the App Store. Developers that take the time to optimize their apps to launch extremely fast can have a fast launch badge of honor on their store page. I feel like these metrics could be obtained automatically during app submission testing. I think this problem is caused by a combination of requiring a large cloud sync at app start, lack of incremental loads, poor caching behavior, and the rise of poorly written hybrid apps.
I agree from a legal perspective. However, I think that encouraging developers to write apps that are less user-friendly because they are taking advantage of a more favorable commission structure isn't a good thing. Certainly Apple should win this court case, but I hope they do look at how the commission structure hurts usability. I elaborate more in my other post.
Times changed - more than 12 years later - and there is now essentially a locked ecosystem and monopoly for each one of the two platforms out there. The playing field is totally different now. These lawsuits are a logical consequence of today’s situation.
If XYZ Corp opened an iOS App Store the Apple App Store would still exist, and I could continue to buy from it.
If XYZ Corp’s App Store changed a lower commission, that might persuade some developers to use its platform, but again, unless they’re trying to pass off something unsavoury, they would be crazy not to offer their product through the Apple storefront as well.
Malware is rampant on these, with many of them being pirated App Store Apps with malware added, and re-signed and the enterprise certs are either stolen, or being used outside the programs terms & conditions.
The other one is stores like Cydia that rely on devices being jailbroken. Cydia has arguably been the more ethical of the two options, with much less piracy , and as a consequence is not that financially viable for 5the store owners.
The situation on Android is similar - malware & IP theft & piracy on non Google Play stores is rampant.
That's because there is no logic in the comment.
I do not see any viable way that a non-Apple App Store would maintain the relatively high privacy stand that Apple has.
If Apple is forced to support apps that are not from the App Store, things would devolve to Windows levels pretty quickly and we'd be looking at installing Virus Protection and worry about custom installers for different apps on our iOS devices.
Overall, I think customer's disregard for someone else's work is really appalling. Expecting a good, working application or game for 99 Cents or free is really not understanding what a developer has to do to get that to you.
Everyone one thinks Apple is the bad guy.
Google gets slapped with $5BN EU fine for Android antitrust abuse.
https://techcrunch.com/2018/07/18/google-gets-slapped-5bn-by-eu-for-android-antitrust-abuse/I may just be in my thirties but it is obvious most individuals speak from a lack of research and go by the Facebook investigative journalism online school approach.