As for the alert where Apple directs the customer to alternate payment methods via the DEV's website, that's old news.
It was an issue and I think one of devs was Netflix at the time, where they wanted to put a message with a hyperlink in the description of the app in the App Store and Apple clearly said "NO".
Oh, that doesn't sound good if Apple doesn't alert us, it sounds like they're trying to keep us in the dark about alternative payment methods and then exploit our ignorance. I don't like companies that play those sort of tricks on their own customers.
Take a look at Reply #10 from "yours truly" as to why Apple may take a cut of 15% or 30% from in app purchases or subscriptions.
Could that "overhead" be lower? A separate debate I guess.
Thanks, sorry, yes you've answered already! So it's a processing fee. Well then, 15% or 30% sounds way to high for that - it sounds like Apple are exploiting us. Maybe it would be a good idea if Apple were forced to show an alert that it may be cheaper for us to go directly to the developer's website.
Apple argues it is a finder's fee or a facilitator's fee. The platform enables commerce of digital items, where without the platform, the digital good and commerce can't exist.
So, the mental line Apple draws for what digital good or service the fee will apply to is something like "does a digital good or service require the platform to consume"? That's not "... require the platform to work". "Work" and "consume" are different, and there's definitely a back and forth across this line that Apple goes through on what that applies to, and a back and forth on policy.
The fee doesn't apply to commerce of physical goods since the beginning. They view this Tesla webcam subscription service as something that an iPhone doesn't enable. Tesla has multi-thousand dollar software unlocks in its app. A fee isn't applied as those in-app purchases as they are not "consumed" on an iPhone. A Tesla iPhone game that offers in-app purchases for digital accoutrements of the in-game car? That is consumed and a fee will be levied.
So, I agree with those that say the premise of the AI article is incorrect. This webcam service is not an iOS platform digital good. Other people may fall the other way, but it isn't a clear cut case of this service being a digital good.
As for consumers and being exploited, be careful what you wish for. The App Store arguably has made software prices the cheapest they possibly can be. They do this by aggregating all competitors that are just a couple of near-frictionless taps away. So, there is hyper-competitive pressure to continue to drive down prices.
When you have multiple app stores, multiple places to get software, it introduces scarcity by making it harder to compare prices between apps and goods. With this friction in finding out what some competitor app or good costs, prices can rise, app sales can decrease, and digital commerce can decrease.
Apple argues it is a finder's fee or a facilitator's fee. The platform enables commerce of digital items, where without the platform, the digital good and commerce can't exist.
This doesn't convince me because of the examples already given of users who are consuming content on the IOS platform but not paying any Apple fee:
jbdragon said: Ya, Netflix, Amazon, HBO and others, if you pay directly from them, there is no 30% going to Apple.
From what I am now understanding, the Apple fee seems to only happen like this:
1. Apple insists that developers must not reveal to its customers that it's cheaper to buy the content elsewhere.
2. Apple exploits the customers' ignorance to overcharge them.
As for consumers and being exploited, be careful what you wish for. The App Store arguably has made software prices the cheapest they possibly can be. They do this by aggregating all competitors that are just a couple of near-frictionless taps away. So, there is hyper-competitive pressure to continue to drive down prices.
When you have multiple app stores, multiple places to get software, it introduces scarcity by making it harder to compare prices between apps and goods. With this friction in finding out what some competitor app or good costs, prices can rise, app sales can decrease, and digital commerce can decrease.
Yes, I can see that is a good argument for the Apple Store - the prices have struck me as very cheap. Also, I think the Apple Store is the world leader for quality and expertise, so I'm thinking that the big majority of Apple customers - me included - will stick with it. Nevertheless, I expect having multiple app stores will benefit us stickers - because when the Apple Store faces competition I expect it will offer us a better deal.
From what I am now understanding, the Apple fee seems to only happen like this:
1. Apple insists that developers must not reveal to its customers that it's cheaper to buy the content elsewhere.
2. Apple exploits the customers' ignorance to overcharge them. <snip>
Apple charges the fee to the developers, not to customers. It is up to the developers to decide whether or not to pass that fee on to the customer. A semantic difference, but an important one.
Also, there is value to both Apple and the developer with the current system. Apple recoups some of the costs of providing payment services, hosting, store maintenance, app review, platform development and miscellaneous intellectual property rights. Developers get the recognition that their service will be available on the devices that their best potential customers most likely own, and the reduced friction of conducting a transaction including the cancellation of a service where the customer deems it appropriate for their needs. Apple then gets the recognition that its devices are popular, and that drives a positive reinforcement cycle for all parties.
The marginal cost of software is effectively $0.00 so software pricing is all about recouping the initial capital investment and making a reasonable return on that amount. Services that are completely digital are very similar, although they may be subject to higher distribution costs (e.g. video traffic is not cheap as volumes grow) and in such a case need to pursue a pricing strategy that reflects a significant cost per unit.
It seems to me that Apple has always believed that digital goods and services are without exception zero marginal cost, and that attitude has informed Apple's stance on their entitlement to charge a fee. It's only the larger developers/providers of digital content that have the power to push back: some, like Netflix, have meaningful marginal costs and I can support their decision to either abandon payment via Apple or to charge an increased amount so that they can continue to make a profit. Others, like Epic, have zero marginal costs and are merely seeking to maximise the profit they make per unit; I find such arguments to be far less convincing.
As for the alert where Apple directs the customer to alternate payment methods via the DEV's website, that's old news.
It was an issue and I think one of devs was Netflix at the time, where they wanted to put a message with a hyperlink in the description of the app in the App Store and Apple clearly said "NO".
Oh, that doesn't sound good if Apple doesn't alert us, it sounds like they're trying to keep us in the dark about alternative payment methods and then exploit our ignorance. I don't like companies that play those sort of tricks on their own customers.
Well then you’d have to tell me which company/distributor alerts its customers that the same product they’re selling can be purchased elsewhere for less.
Does your grocery store advertise that “Tide laundry detergent” can be purchased at the Walmart down the road, for $2 less?
You would think AppleInsider would be familiar with their own stories. Here is a quote from one of their own articles that explains what is going…
Reader apps are defined as software that displays outside content on iOS, including previously purchased videos, music, magazines, newspapers and books. Previously purchased subscriptions to the same types of content are covered under the reader app umbrella. Such apps, like Netflix and Spotify, are allowed to operate on the App Store as long as developers don't urge users to conduct transactions outside of Apple's marketplace.
Does anyone else remember the Apple App Store launch event?? I do‼️
The audience went crazy with applause and cheering when Apple announced that their cut was ONLY going to be 30%.
Prior to Apples App Store, other platforms were charging 50% – 60% and providing none of the wonderful services that Apple did/does, not to mention the shear exposure that an app in the App Store gets!
Does your grocery store advertise that “Tide laundry detergent” can be purchased at the Walmart down the road, for $2 less?
Hi they sound pretty convincing analogies, but I'm thinking about what you said earlier: 'Netflix at the time, where they wanted to put a message with a hyperlink in the description of the app in the App Store and Apple clearly said "NO". '
I'm wondering if this is actually the opposite to your grocery store example. The grocery store wants to say 'buy Tide from us' but Apple are gagging them, so the customer actually ends up buying Tide from Apple instead.
I hope it's that sort of restrictive practice that the EU 'Gatekeeper' legislation wants to address.
Comments
So, the mental line Apple draws for what digital good or service the fee will apply to is something like "does a digital good or service require the platform to consume"? That's not "... require the platform to work". "Work" and "consume" are different, and there's definitely a back and forth across this line that Apple goes through on what that applies to, and a back and forth on policy.
The fee doesn't apply to commerce of physical goods since the beginning. They view this Tesla webcam subscription service as something that an iPhone doesn't enable. Tesla has multi-thousand dollar software unlocks in its app. A fee isn't applied as those in-app purchases as they are not "consumed" on an iPhone. A Tesla iPhone game that offers in-app purchases for digital accoutrements of the in-game car? That is consumed and a fee will be levied.
So, I agree with those that say the premise of the AI article is incorrect. This webcam service is not an iOS platform digital good. Other people may fall the other way, but it isn't a clear cut case of this service being a digital good.
As for consumers and being exploited, be careful what you wish for. The App Store arguably has made software prices the cheapest they possibly can be. They do this by aggregating all competitors that are just a couple of near-frictionless taps away. So, there is hyper-competitive pressure to continue to drive down prices.
When you have multiple app stores, multiple places to get software, it introduces scarcity by making it harder to compare prices between apps and goods. With this friction in finding out what some competitor app or good costs, prices can rise, app sales can decrease, and digital commerce can decrease.
This doesn't convince me because of the examples already given of users who are consuming content on the IOS platform but not paying any Apple fee:
Also, there is value to both Apple and the developer with the current system. Apple recoups some of the costs of providing payment services, hosting, store maintenance, app review, platform development and miscellaneous intellectual property rights. Developers get the recognition that their service will be available on the devices that their best potential customers most likely own, and the reduced friction of conducting a transaction including the cancellation of a service where the customer deems it appropriate for their needs. Apple then gets the recognition that its devices are popular, and that drives a positive reinforcement cycle for all parties.
The marginal cost of software is effectively $0.00 so software pricing is all about recouping the initial capital investment and making a reasonable return on that amount. Services that are completely digital are very similar, although they may be subject to higher distribution costs (e.g. video traffic is not cheap as volumes grow) and in such a case need to pursue a pricing strategy that reflects a significant cost per unit.
It seems to me that Apple has always believed that digital goods and services are without exception zero marginal cost, and that attitude has informed Apple's stance on their entitlement to charge a fee. It's only the larger developers/providers of digital content that have the power to push back: some, like Netflix, have meaningful marginal costs and I can support their decision to either abandon payment via Apple or to charge an increased amount so that they can continue to make a profit. Others, like Epic, have zero marginal costs and are merely seeking to maximise the profit they make per unit; I find such arguments to be far less convincing.
https://appleinsider.com/articles/22/03/30/apple-now-allowing-reader-apps-to-link-out-to-membership-websites
The audience went crazy with applause and cheering when Apple announced that their cut was ONLY going to be 30%.
Hi they sound pretty convincing analogies, but I'm thinking about what you said earlier:
'Netflix at the time, where they wanted to put a message with a hyperlink in the description of the app in the App Store and Apple clearly said "NO". '