danox

john gibson said:

22july2013 said:

john gibson said:

If Apple was forced to compete for payment processing and as a result were only making as much as say Stripe was instead of 30% that would surely be a short term hit but all the additional commerce they would earn by digital content that can't be sold on iOS today would make up a good chunk of that. 

You are living under a myth that Apple's 30% fee is a payment processing fee, which is clear because you compared Apple to Stripe which is nothing but a payment processor. On the contrary, there are billions of dollars in expenses that Apple has which Stripe doesn't have. Do you realize that? For example, Apple makes development tools that are free to obtain and use.

Do you want Apple to start charging for all those free services when it loses its 30% exclusive fee? Here are a few examples:

• Do you want Apple to add a $1 processing fee for every "free" app that's available on the App Store?
• Do you want Apple to charge developers for its free tools such as Swift and xCode?
• Do you want Apple to charge each developer for each free API that is used by any app that they develop?
• Do you want Apple to charge end users each time their app accesses one of the currently free iCloud servers?
• Do you want Apple to charge developers a processing each time there is an update to their app?

All these free services, and dozens more, are funded through that 30% cut. If you want to reduce that 30% cut to 3%, then tell me where Apple will raise the prices to cover the $60 billion per year loss. Frankly, I don't mind if Apple choses to eliminate the 30% fee and start charging everywhere else.

It is a payment processing fee for digital content.  As I've said, I'm fine with the higher commission for apps and anything else that relies on the platform like games.  And stop pretending like the App Store is being run at or close to break even making extracting 30% from both apps and digital content is somehow required for the platform to survive.  We don't know the exact number but best estimates are close to a 70% margin for the App Store so any argument that 30% is required for the App Store to thrive is nonsensical.  

The difference between how to treat digital content and apps should be self-evident but if you don't see the difference take an example of digital content and think through what Apple says it provides for the 30% and tell me how it applies.  They don't provide discovery - individual eBook titles aren't advertised, searchable SKUs in the App Store.  Apple doesn't provide storage - unlike apps the developer handles that.  Apple doesn't provide distribution - unlike apps the developer handles that.  They don't provide the developer tools to create the digital content file.  So tell me, for an eBook, other than payment processing what specifically does that 30% cover?

To address your questions - no, I don't think a processing fee is needed for free apps.  But a question the judge had is a good one.  Using the eBook example again - why is the provider of the eBook subsidizing billion dollar corporations like Facebook?  

Apple does charge developers.  $99 a year.

As for APIs and iCloud - no I don't think developers should pay for that - there is no need for Apple to double dip.  Those kinds of services are more than covered by the 30-40% margins on iOS hardware devices no different than how they are on Macs which do just fine with alternatives to using the App Store and paying 30%.

If the end result was Apple lost the 30% on digital content and consumers getting a much better result led to their margins on the App Store going from 70% to say 40-50% why would you consider that a bad outcome?

gilly33 said:

williamh said:

22july2013 said:

A lot of people here are inferring that a hostile question from a judge means that the judge's decision will reflect her questions. This is a presumptuous belief. Many judges ask difficult questions so that their opinions, which are going to be favourable to the person being spoken to, have all the possible angles covered. I learned this from reading the US Supreme Court transcripts.

Or maybe she's an idiot judge. Both explanations are possible.

Ok, you make sense.  But why is this even in front of a judge? The only party to have violated an agreement is epic and Apple didn’t sue them. 

It’s not that really. Just that judging (no pun intended) from recent history this kind of thing doesn’t seem to  pan out in Apple’s favor. Admittedly, I’m no expert on these matters like some of you here. Just a layman’s observation. 

80s_Apple_Guy said:

The hole I see that may cost Apple this car is that free apps are serviced for nothing. That kind of negates Apple’s contention it needs to get a cut to support the work it does. I don’t agree with this, but Apple’s is arguing as if they have to justify their fees. They shouldn’t have to at all.