avon b7 said: The solution is to make the App Store stand on its own two feet without strings from the mothership all over the place and actually make that division accountable for the services it provides.
Pointless exercise. Example: Apple has a "strings from the mothership" store for digital downloads of movies/television shows. The prices on that store are typically in line with what other stores of that type offer. That's no different than the prices for mobile apps on the App Store being typically in line with prices on app stores on Android. So while the EU and UK like to claim there would be bargains to be had with multiple stores, the reality is that the prices are always going to be very similar.
Apple could also make that store stand on its own two feet and unscramble the accountability.
Prices, whether they are similar or not, aren't the issue in this case.
You want a free market but at the same time you expect for governments to set laws regarding patents and enforce them. You can't have both.
Protecting against intellectual capital theft, and enforcing that protection, has nothing to do with a company being able to set the margin for specific products or services without government scrutiny. The marketplace will determine if a company is "gouging", and not buy/look elsewhere.
Didn't work with AT&T or Standard Oil or keep competition in browsers (until Microsoft got stopped by regulation) or stop <any financial crisis>. The market is not perfect. We can't doing old mistakes on repeat. Or well... U.S. decided to. Most of the world is moving on. This includes UK. Nations are indeed not alike. Some prefer to learn and adapt.
Neither ATT or Standard Oil was broken up because they were "price gouging" or for their high profit margins. In fact, for the average consumers, the cost of telephone service and gasoline (kerosene) were never lower, than when ATT and Standard Oil were monopolies. When they were broken up by the government, for the sake of "more competition", the cost of telephone service and gas, increased. It was the competition that were complaining about ATT and Standard Oil monopoly because they couldn't compete. Not because of the consumers complaining about the high cost of telephone service and gasoline due to ATT and Standard Oil "high profit margin".
What government "regulation" ended Microsoft browser monopoly on Windows. The EU in 2009? LOL That was case of too little too late. Microsoft lost their browser monopoly because Apple introduced their iPhone with the full internet on iOS in 2007. Which Google answered with Android and their Chrome browser a year later. As more and more consumers switched to mobile for their internet, Chrome took over the desktop browser market.
FYI- one could always change to a competitors browser on Windows. All the EU did was forced Microsoft to make the choice of browsers easier to install. It did nothing to offer more browsers to choose from. Chrome became the consumers choice on desk top because it was the browser being used on most consumers mobile devices.
I’d fire that accountant. If he can’t work out that 30c for every dollar a developer makes isn’t 75% he’s in the wrong business.
I mean my maths is pretty woeful but not that woeful.
You might want to hold on to that accountant, they seem to have a better handle on the situation. You are seriously really close to getting it though. As you said, Apple get's 30% of every dollar the developer makes. Profit margin is a subset of revenue. Apple's revenue is 30% of the developer's revenue. So, Apple's revenue is 30 cents not a dollar. The claim was that Apple's margins are 75% of Apple's revenue, not that Apple made 75% of the developers revenue.
Example, let's say you have me sell a book on your behalf and you agree that I get token 30% of the sale for my efforts. I post ads to sell the book, pay for packing up and shipping and all that kind of stuff. The book sells for 10 dollars. You get seven and I get three. My revenue is three dollars not ten. If my costs for the ad, packaging and shipping is 75 cents then my profit margin is 75% on my revenue. My revenue being the 30% commission.
It is interesting if you do best case vs worst case scenario.
You can get 10% discounts on App Store gift cards as an inducement to come in to stores even 4-5% everyday on various outlets. So assuming the stores cut is close to the 10% and might be used entirely for small developer transactions.
Then worst case is Apple are getting 5c in the dollar to run the store
best case they have a sale to a 30% developer direct charged to a credit card.
Add say 3% for card handling to the 5% store cost above and you can get close to 75% on a limited amount of sales.
It would seem 75% is not at all in the realm of possibility overall given the store should be contributing to some intangible amount of general OS and API development
I’m old enough to remember boxed (full packaged product) software which as a reseller we made 70% margin on. Add in a distributor’s margins, margin of production company etc and what was left for the developer was tiny.
I’m happy to pay for Apple to check any software I load on my phone isn’t full of spyware or other such things and to pay a fee for doing that.
Want to side load some malware? That’s your choice I guess
avon b7 said: The solution is to make the App Store stand on its own two feet without strings from the mothership all over the place and actually make that division accountable for the services it provides.
Pointless exercise. Example: Apple has a "strings from the mothership" store for digital downloads of movies/television shows. The prices on that store are typically in line with what other stores of that type offer. That's no different than the prices for mobile apps on the App Store being typically in line with prices on app stores on Android. So while the EU and UK like to claim there would be bargains to be had with multiple stores, the reality is that the prices are always going to be very similar.
Apple could also make that store stand on its own two feet and unscramble the accountability.
Prices, whether they are similar or not, aren't the issue in this case.
If the "price" (Apple 30% commission in this case) is not the issue, then why do Apple need to "unscramble the accountability" on how much it cost them to operate the Apple App Store? This so that the plaintiffs can use it to show that Apple "price" yield a 75% profit margin. How can the plaintiffs prove a 75% profit margin, if the "price" is not an issue?
The issue, whether you understand it or not, is that the lawsuit is claiming that Apple is not justified in charging a 30% commission and is only able to so because they have a "monopoly" with their app store on iOS, thus no competition.
But that is a losing argument. (Even if they manage to prove that Apple have a "monopoly" under current UK anti-trust laws.) There are over a dozen third party app stores and sideloading, on Android, so Google Play Store have plenty of competition but still able to charge a 30% commission. Microsoft, Sony and Nintendo game consoles app stores have competition in the form of physical media and they are still able charge a 30% commission. The Mac App Store charges a 30% commission, even though software can be loaded on to a Mac without going through the Mac App Store. Competition has not forced Microsoft, Sony and Google to lower their 30% commission. So why would the UK think that Apple would not be able to charge a 30% commission, if the Apple App Store was not a "monopoly"?
Not even the EU, with their BS "Gatekeeper" labeling, ever thought of regulating Apple 30% commission. They might be hoping that by forcing Apple to allow third party app stores on iOS, that consumers would benefit from Apple lowering their 30% due to competition in the market, providing of course that the developers pass along that saving. But they aren't holding their breathe, since that has not happened on Android. And here's another thought. If the EU government forced Apple to lower their commission, then third party app stores would become less profitable to operate as they must compete with the Apple App Store lowered commission. And if there's not much of a saving on the commission of a third party app store vs the Apple App Store, then the developer might as well choose the more trusted Apple App Store.
I’d fire that accountant. If he can’t work out that 30c for every dollar a developer makes isn’t 75% he’s in the wrong business.
I mean my maths is pretty woeful but not that woeful.
You might want to hold on to that accountant, they seem to have a better handle on the situation. You are seriously really close to getting it though. As you said, Apple get's 30% of every dollar the developer makes. Profit margin is a subset of revenue. Apple's revenue is 30% of the developer's revenue. So, Apple's revenue is 30 cents not a dollar. The claim was that Apple's margins are 75% of Apple's revenue, not that Apple made 75% of the developers revenue.
Example, let's say you have me sell a book on your behalf and you agree that I get token 30% of the sale for my efforts. I post ads to sell the book, pay for packing up and shipping and all that kind of stuff. The book sells for 10 dollars. You get seven and I get three. My revenue is three dollars not ten. If my costs for the ad, packaging and shipping is 75 cents then my profit margin is 75% on my revenue. My revenue being the 30% commission.
It is interesting if you do best case vs worst case scenario.
You can get 10% discounts on App Store gift cards as an inducement to come in to stores even 4-5% everyday on various outlets. So assuming the stores cut is close to the 10% and might be used entirely for small developer transactions.
Then worst case is Apple are getting 5c in the dollar to run the store
best case they have a sale to a 30% developer direct charged to a credit card.
Add say 3% for card handling to the 5% store cost above and you can get close to 75% on a limited amount of sales.
It would seem 75% is not at all in the realm of possibility overall given the store should be contributing to some intangible amount of general OS and API development
I’m not saying Apple is getting 75% margins. I was pointing out that the person I was responding to was calculating Apple’s revenue incorrectly. I don’t know what Apple’s margins are for the App Store but I’m 100% confident they are well above 30%.
I’d fire that accountant. If he can’t work out that 30c for every dollar a developer makes isn’t 75% he’s in the wrong business.
I mean my maths is pretty woeful but not that woeful.
You might want to hold on to that accountant, they seem to have a better handle on the situation. You are seriously really close to getting it though. As you said, Apple get's 30% of every dollar the developer makes. Profit margin is a subset of revenue. Apple's revenue is 30% of the developer's revenue. So, Apple's revenue is 30 cents not a dollar. The claim was that Apple's margins are 75% of Apple's revenue, not that Apple made 75% of the developers revenue.
Example, let's say you have me sell a book on your behalf and you agree that I get token 30% of the sale for my efforts. I post ads to sell the book, pay for packing up and shipping and all that kind of stuff. The book sells for 10 dollars. You get seven and I get three. My revenue is three dollars not ten. If my costs for the ad, packaging and shipping is 75 cents then my profit margin is 75% on my revenue. My revenue being the 30% commission.
It is interesting if you do best case vs worst case scenario.
You can get 10% discounts on App Store gift cards as an inducement to come in to stores even 4-5% everyday on various outlets. So assuming the stores cut is close to the 10% and might be used entirely for small developer transactions.
Then worst case is Apple are getting 5c in the dollar to run the store
best case they have a sale to a 30% developer direct charged to a credit card.
Add say 3% for card handling to the 5% store cost above and you can get close to 75% on a limited amount of sales.
It would seem 75% is not at all in the realm of possibility overall given the store should be contributing to some intangible amount of general OS and API development
I’m not saying Apple is getting 75% margins. I was pointing out that the person I was responding to was calculating Apple’s revenue incorrectly. I don’t know what Apple’s margins are for the App Store but I’m 100% confident they are well above 30%.
avon b7 said: The solution is to make the App Store stand on its own two feet without strings from the mothership all over the place and actually make that division accountable for the services it provides.
Pointless exercise. Example: Apple has a "strings from the mothership" store for digital downloads of movies/television shows. The prices on that store are typically in line with what other stores of that type offer. That's no different than the prices for mobile apps on the App Store being typically in line with prices on app stores on Android. So while the EU and UK like to claim there would be bargains to be had with multiple stores, the reality is that the prices are always going to be very similar.
Apple could also make that store stand on its own two feet and unscramble the accountability.
Prices, whether they are similar or not, aren't the issue in this case.
If the "price" (Apple 30% commission in this case) is not the issue, then why do Apple need to "unscramble the accountability" on how much it cost them to operate the Apple App Store? This so that the plaintiffs can use it to show that Apple "price" yield a 75% profit margin. How can the plaintiffs prove a 75% profit margin, if the "price" is not an issue?
The issue, whether you understand it or not, is that the lawsuit is claiming that Apple is not justified in charging a 30% commission and is only able to so because they have a "monopoly" with their app store on iOS, thus no competition.
But that is a losing argument. (Even if they manage to prove that Apple have a "monopoly" under current UK anti-trust laws.) There are over a dozen third party app stores and sideloading, on Android, so Google Play Store have plenty of competition but still able to charge a 30% commission. Microsoft, Sony and Nintendo game consoles app stores have competition in the form of physical media and they are still able charge a 30% commission. The Mac App Store charges a 30% commission, even though software can be loaded on to a Mac without going through the Mac App Store. Competition has not forced Microsoft, Sony and Google to lower their 30% commission. So why would the UK think that Apple would not be able to charge a 30% commission, if the Apple App Store was not a "monopoly"?
Not even the EU, with their BS "Gatekeeper" labeling, ever thought of regulating Apple 30% commission. They might be hoping that by forcing Apple to allow third party app stores on iOS, that consumers would benefit from Apple lowering their 30% due to competition in the market, providing of course that the developers pass along that saving. But they aren't holding their breathe, since that has not happened on Android. And here's another thought. If the EU government forced Apple to lower their commission, then third party app stores would become less profitable to operate as they must compete with the Apple App Store lowered commission. And if there's not much of a saving on the commission of a third party app store vs the Apple App Store, then the developer might as well choose the more trusted Apple App Store.
The price is not the issue because there is no competition on iDevices in the UK.
Whatever the price, Apple (and only Apple) takes a commission on the price and in-app purchases.
The final margins are affected by other factors such as those referred to in the article plus things like App Store add revenue.
Can Apple unscramble the accountability? Of course it can! Note how they say "all but impossible" but not 'impossible'.
Apple made it all but impossible by design.
If Apple were running the App Store at a loss you can bet they would know exactly where it was bleeding.
As for 'BS Gatekeeper' labelling, that's you're opinion and nothing more. It has nothing to do with the UK situation.
In digital platform scenarios, size, and the ability to distort the market, are utterly relevant and basically the reason the DSA/DMA came into being.
It is precisely why we currently have a duopoly on mobile phone platforms, and that level of distortion, without a shadow of a doubt spills over (and of course reinforces the dominant position) into the mobile but non-phone realm.
That all app stores charge the same commission isn't relevant as long as they aren't running a cartel.
How do you know they charge the same? AppGallery was known for not charging the same for years even if now its charging tiers have changed.
The point is that choice exists and price, within that choice, is just one factor. Others may include availability of certain kinds of apps etc. It also means the profits aren't going to just one company.
Maybe Apple could adopt a different commission for different types of apps, e.g. entertainment apps (music, games etc) at a higher rate than apps in the health category?
It’s the gaming industry behind all these lawsuits. They want to sell in-app for free, end of story. Nobody’s crying over health related apps. Games are like printers…the profit is in the ink sales, not the printers themselves and for games it’s the add-ons where the money is.
Conflating charging 30. cents for each dollar of cost too high is the height of ignorance. That 30 cents is not profit as they cannot be determined until all expenses are removed and there are many significant with the most significant being the freeloaders who charge nothing for the apps. They are freeloading off of those who sell their applications. Think about Facebook, Instagram and TikTok users who generate 100's of millions of revenue for Meta and ByteDance who in turn do not pay Apple a nickel for freeloading all of the infrastructure they provide for free.
In the words of many a US Democrat..."they need to pay their fair share". Another way to think about it is all of the small developers are paying for the big companies to profiteer.
Comments
Prices, whether they are similar or not, aren't the issue in this case.
best case they have a sale to a 30% developer direct charged to a credit card.
Want to side load some malware? That’s your choice I guess
Whatever the price, Apple (and only Apple) takes a commission on the price and in-app purchases.
The final margins are affected by other factors such as those referred to in the article plus things like App Store add revenue.
Can Apple unscramble the accountability? Of course it can! Note how they say "all but impossible" but not 'impossible'.
Apple made it all but impossible by design.
If Apple were running the App Store at a loss you can bet they would know exactly where it was bleeding.
As for 'BS Gatekeeper' labelling, that's you're opinion and nothing more. It has nothing to do with the UK situation.
In digital platform scenarios, size, and the ability to distort the market, are utterly relevant and basically the reason the DSA/DMA came into being.
It is precisely why we currently have a duopoly on mobile phone platforms, and that level of distortion, without a shadow of a doubt spills over (and of course reinforces the dominant position) into the mobile but non-phone realm.
That all app stores charge the same commission isn't relevant as long as they aren't running a cartel.
How do you know they charge the same? AppGallery was known for not charging the same for years even if now its charging tiers have changed.
The point is that choice exists and price, within that choice, is just one factor. Others may include availability of certain kinds of apps etc. It also means the profits aren't going to just one company.
It’s the gaming industry behind all these lawsuits. They want to sell in-app for free, end of story. Nobody’s crying over health related apps. Games are like printers…the profit is in the ink sales, not the printers themselves and for games it’s the add-ons where the money is.
In the words of many a US Democrat..."they need to pay their fair share". Another way to think about it is all of the small developers are paying for the big companies to profiteer.