“ Apple and Google are gatekeepers to all mobile devices (practically), but the value they add as gatekeepers is questionable”
If you own an app and remove it from all App Stores, you’ll quickly see what value they add. It’s the millions of users who are able to download your product.
What's questionable, AznHisoka, is what value the gatekeepers add for consumers by charging such a high tax.
Most of the value is being provided by the app developers.
30 - 50% is an acceptable markup in the retail world, like a bricks and mortar store selling furniture, but the purchase of virtual currency is not the same as a retail transaction. It's closer to the sort of service a money changer provides, or even a credit card merchant. The fee for such as service should be in the range of 3 - 18%, not 30%.
I have bought (for money) hundreds of iPad apps. Maybe 2 or 3 have been complete and total duds. I’ve bought (for money) tens of pieces of software directly from the developers’ websites with at least as many complete and total duds.
I’ll take the App Store experience thanks. Doesn’t matter to me what they charge. If developers want my money they’ll take the 30% haircut.
You are right, zepto, that developing, maintaining, and delivering the App Store requires work and resources, and Apple should be compensated fairly for it.
App store owners are compensated fairly by the 30% fee they charge as commission on sales. But the Fortnite case is not about sales. It is about the re-supply of virtual currency for use within a game. The customer is already established. There is no new selling or marketing or delivery required of the app store owner.
To recognise the differences between product sales vs ongoing consumable resupply, such as virtual currency, app store vendors should do what physical world vendors do and charge different fees that are commensurate with the value add.
Retailers charge 30-50% markup to cover the overheads of rent and sales staff. What Apple does with the app store is similar, and so their 30% fee is in step.
Forex dealers and banks charge 3% - 18% for financial transactions such as currency exchange and credit card financing. Given that Apple isn't even providing financing for Fortnite's virtual currency, a fee in the order of 5 - 10% would be reasonable in this case.
What's at stake here should not be the all or nothing duel that Apple has initiated by banning Fortnite from the App store. Apple should just evolve, and introduce a second tier charge for consumables.
Would it make sense for Walmart to charge one price (say $100) for every item it sells in every one of its stores? Of course not. Walmart and every other real world retailer charges different prices for different things, depending on how much value they add. Apple should do the same.
Apple didn’t initiate a hidden feature for an in-app store (flagrant violation) + an accompanying ad blitz + lawsuit. That said I kinda like the argument of currency, the problem I guess for Apple is that what’s the difference between fortnite bucks and any other IAP? I mean how would Apple differentiate it. Why not just make every app surrounded by a layer of conversion to your fake currency to get your commission down?
Wondering if instead Apple should look at pricing breaks when a customer spends over a certain amount on IAP or certain repeat transactions. In effect trying to differentiate the take they get for whatever initial bit but incentivize monetizing customers for the long haul. That has precedent with the subscription model they have been pushing to achieve similar pricing breaks as a compromise down to 15%
As you point out, awinder, it would be possible to rort the rules by charging zero for the app, and then making the bulk of the revenue come from the IAP, if the former costs 30% and the latter costs 0%.
Apple could overcome those technical nonsensibilities by simply defining a second tier lower charge of say 10% in a common sense way, and then granting second tier status to the kinds of transactions that deserve it in a common sense interpretation.
Without a second tier to app store pricing, Apple is not going to please all the people all of the time. Dissatisfaction is inevitable.
With a second tier, sensibly applied, everyone's a winner, all of the time.
I'm a human, xref. And I am new to Hacker News. If you feel that I am not fitting in with your expectations for the culture here, please feel free to suggest ways to improve our interaction. I will listen to you with open ears.
When you say "devoid of content" is that a criticism because you don't agree with my proposal that Apple introduce tiered pricing? Or something else? Would you care to elaborate?
There is a way you don’t seem to be taking this debate seriously. But in my view I doubt that means you are a bot.
For example your walmart analogy isn’t an analogy of anything in this situation and you don’t explain that.
And of now you are talking about Apple using common sense rules to decide what is an is acceptable, which of course is what they think they have been doing all along. People disagree on what is common sense.
The pattern is that you appear to be making interesting but flawed suggestions and then not taking seriously people’s responses to them.
It's not a coincidence and I have never heard a claim it was. Apple set it at 30% and Google decided not to compete on price. Of course it is legal to set the price of your product based on a competitor.
When competitors non-coincidentally decide to set their prices the same arbitrary number, that's called "price fixing" and it is potentially an antitrust issue.
I actually don't disagree with this, I just said it is not some "coincidence". Apple was first, Google decided to follow. Good for consumers? Probably not.
Top of the funnel discovery and verifying the app won't do malicious things is value. It's debatable if that's worth 30% of all in-app purchases (but then those also get the value of a trusted payment processor too). But it's silly to imagine that app developers aren't getting value from being in app stores.
If you own an app and remove it from all App Stores, you’ll quickly see what value they add. It’s the millions of users who are able to download your product.