john gibson

jungmark said:
I don’t think it’ll be good for customers in the short term or Devs in the long term. 

Customers like convenience. Many aren’t going to navigate to a website, sign in, add CC info, submit payment. Wait for the funds to process then go back to the app and determine if the app updated with the payment. 

Devs are going to realize the pains of processing CC, secure user logins and have it sync up to the apps. Plus they’ll see less customers buy in-app stuff. 

Devs already use services like Stripe which in many ways is superior to Apple's offering.  We have an analagous situation on the Mac.  Many do opt for the simplicity of using Apple IAP and many more realize it isn't.  

For an app that is cheap the Apple offering will be preferred by many.  It's where you get to products/services that have nothing to do with iOS where the developer is incurring all the costs that they won't want to incur 30% for a service (payment processing) that they can get for ~3% elsewhere.  

Then there are products like eBooks and Comics which are impossible to offer on iOS.  This ruling makes those potentially available to consumers which will be a huge improvement for users.  As most already have an Amazon account there is nothing inconvienent about it.  For other products/services, you don't hear too many issues with people engaging in eCommerce for physical products from the iPhones so I don't think the entering payment details is too much of an issue especially since with services like Stripe developers could even offer Apple Pay.

AppleZulu said:

Which is why they'll likely end up coming up with fee structure changes to recapture what's lost. I'd look for something that makes life much easier if developers stick with the existing App Store payment structure. 

Or maybe accept the fact that something like a 65% margin on the AppStore instead of a ~75%.     

j2fusion said:

I guess next we’ll see signs from the manufacturer in Walmart saying you can get a better deal for this item at Target. 

Not to worry.  No one has suggested the app store will have to show ads for alternative payment methods.

What Apple was doing was the equivalent of a retailer like Walmart selling an iPhone and then requiring that user go back to Walmart to purchase iCloud or Apple Music and ending that is good for consumers.

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?

Kind of sad when governmental officials who have made it to positions as high as governor have so little (none?) knowledge of something as core to this country as the First Amendment.