I’m seeing a lot of positive comments on HN about this: to me it seems to be purely a cynical piece of PR on Apple’s part.
They hope to significantly reduce the pressure on politicians to take a close look at their App store practices by significantly reducing the absolute number of developers suffering the full impact whilst taking the minimum possible hit to their revenue. This has nothing to do with “doing the right thing” or “accelerating innovation” and everything to do with limiting the number of outraged letters to senators from devs, the number of newspaper interviews with prominent indie developers & so on.
Indie devs have an outsize PR impact relative to their revenue contribution, so buy them off with a smaller revenue tax that delivers outsize returns if it prevents the 30% house rake on the majority of Apple’s App Store income coming under scrutiny.
Apple / Google’s 30% take is the anti-competitive elephant in the room here, not a few crumbs thrown to small developers.
This news doesn't mean people shouldn't continue to put pressure on Apple and legislators to address the core issue (app store competition), but it's still really good news for small developers.
It should also solidly put down all of the arguments we were seeing about whether indie devs and lawsuits putting pressure on Apple and legislators are at all worthwhile. A drop in app fees by 15% is a substantial win, and the reason that drop happened is because Apple is now scared of critics, bad PR, and how that might impact future legislation against them.
The number of hot takes I was seeing about how the Apple/Epic fight benefited literally no one and it was just two companies arguing about who got to take all the money... it's very clear from this program that the overall pressure on Apple has been making a difference.
It's not so large a difference that devs should now stop fighting for better terms, but it's positive to see Apple at least partially show signs of cracking, or at least acknowledge on some level that they're frightened about the potential outcome of this fight. And there are a lot of small devs who are going to be making a lot more money just because of this minor victory.
> I was seeing about how the Apple/Epic fight benefited literally no one and it was just two companies arguing about who got to take all the money... it's very clear from this program that the overall pressure on Apple has been making a difference.
Very true! This new change by Apple, although obviously a PR move, is still evidence that these legal fights against Apple are working.
This is a very clear example of why the lawsuit against Apple was a good thing, and why people should continue to put on more pressure against Apple. Because it forces them to make changes like this.
> The number of hot takes I was seeing about how the Apple/Epic fight benefited literally no one and it was just two companies arguing about who got to take all the money...
Most of the people I saw who I knew using these takes had a substantial vested interest in Apple prevailing, so I doubt it'll change their opinion.
It's good news unless it diffuses the momentum for more.
Solidly? Not really. Still believe the Epic and Apple fight is all about Tim Sweeney being a greedy business man. Zero proof this 15% reduction has anything to do with pressure from that legal battle. Apple has made rev share changes in the past unprovoked (like 15% for sustained subs). How long do you think this change was in the works for? If this change was a response that’s great. But I would bet in that case Apple did it to take wind out of Epic’s sails around standing up for little devs. Apple just showed they cared about them in a single change. Will Epic back away now? Fat chance.
>is all about Tim Sweeney being a greedy business man
Tim Sweeney provides one of the most advanced game engine technologies in the world completely for free for all revenue under 1 million. After 1 million you pay 5% on revenue over that, if your game makes $1,200,000 you pay Tim Sweeney $10,000.
If you make 2 games and both games equally make 600K you pay Sweeney nothing.
It's definitely a business but not sure "greedy" describes this.
The Unreal development fund also regularly funds competitor open source game engines, like Godot Engine. Tim Sweeney is definitely not someone I'd describe as "greedy."
Have you chosen the most heinous crime you can think of for this goofy analogy, in hopes the immorality of murder would tarnish Tim Sweeney by association?
Probably just reduction ad absurdum. But I think about this every time I make one whether this rhetoric and is doing as you say. At the very least it has the smell of bias, which could make the listener believe you were trying to slander.
Tim Sweeney is Epic's majority shareholder, so if you believe his actions were harmful to shareholders, doesn't that contract your stance that he was motivated by greed?
Agreed. But those aren’t the only shareholders. They took action that will ultimately damage the others (when this whole thing plays out). Do you think every shareholder is in agreement with this move?
> Apple just showed they cared about them in a single change.
Apple just showed they care about their image. If they really cared about small devs, they can allow third-party app stores or platforms like Epic's, which would really help developers by bringing down processing costs.
I agree that the concept of a store within a store should exist for Epic and for users. I think “processing costs” is not really the issue. Apple’s revenue sharing business agreements just happen to be collected at processing time. They could easily invoice later. The core issue is: how much should Epic pay to have their own store on the iPhone?
> Apple has made rev share changes in the past unprovoked (like 15% for sustained subs)
That wasn't an unprovoked change, it was an olive branch to companies like Amazon that were pressuring Apple for more attractive terms.
> But I would bet in that case Apple did it to take wind out of Epic’s sails around standing up for little devs.
Right, that's what I said. Apple is facing pressure from Epic, it's getting bad PR in press releases from other large companies like Microsoft, indie devs are starting to get mad, and legislators are starting to float ideas about antitrust.
Apple is in a position where they need a positive PR push about their app store policies; they need to be able to hit back at the negative press and claim that they're offering more attractive terms than the competition. They're in that position because the negative pressure is working; it's forcing them to respond.
> Zero proof this 15% reduction has anything to do with pressure from that legal battle.
Short of email leaks or Apple publicly admitting that they're doing this to take public pressure off of their store policies, what would convince you that these changes are related to the current legal battle(s) they're facing?
My take is that we've seen this happen multiple times with multiple companies. Steam went through the same process with Epic: they got slammed by publishers for doing very little work in courting them, and as a result, they changed some of their terms to be more attractive to large studios. Microsoft originally ported IE to Macs to help try and rein in suspicions that they were trying to turn the web into a Windows only platform. Apple's recent review process overhauls are minor concessions to try and get people to stop talking about the negative experiences that publishers like Basecamp have had with opaque rules and rejections.
At some point, when you look at the broader industry, you start to see patterns, and those patterns are that broad, uniform negative press and lawsuits are often (but not always) effective tools when it comes to forcing companies to at least make small concessions on their policies. I think it's very reasonable to look at this change as an indication that Apple is scared of antitrust and thinks that it is possible that further antitrust efforts might succeed.
>to it seems to be purely a cynical piece of PR on Apple’s part.
Oh please.
Has it ever occurred in the history of the world that the selfish motives of two different parties aligned? i.e. Apple gets good press for helping smaller developers and the smaller developers get increased revenues. It happens all the times, and it's called "good business".
You can keep waiting for Apple's App Store executives to cover themselves with sackcloth and ashes and repent of their terrible policies. Let me know how that works out.
If Apple didn't fear either Epic's lawsuit or Congressional action, or both, they'd never reduce their app store cut, for anyone, ever.
This announcement means Apple knows that neither public opinion nor the law is on their side and they're about to lose really, really big. And they're hoping if they can flip this around a bit and get control of the narrative, they can convince regulators they will self-regulate... while continuing to get a third of the revenue from all the most lucrative developers.
Google's new Gmail privacy settings fall in the same boat: They'd rather lose data from a small portion of their users if it might deter the government from taking away all of it.
Apple doesn’t fear Epic’s lawsuit for the merits of the lawsuit itself. Apple fears how Epic can use their devoted base of video game players to create a PR frenzy that turns the lawsuit into a popularity contest.
The more damning implication is that Apple, one of the world's most highly valued brands, a brand name that has historically commanded 50%+ gross profit margins on commodity goods sold as luxury goods, is losing a 'popularity' contest to a video game company. Talk of changing times!
> they can convince regulators they will self-regulate... while continuing to get a third of the revenue from all the most lucrative developers.
So what?
Seriously, who cares if Epic earns 14 bzillionty dollars this month, or 20 bzillionty dollars?
At that scale, the 30% is such a terrible thorn in your side?
Come on. Cry me a damn river.
The 'narrative' here is Epic pretending they care about anyone except themselves and that this ridiculous song and dance is about it being 'good for everyone'.
Let's try something positive instead:
What should they have done then to make you happy?
Seriously; if this is such a cynical, terrible move, what should they have done?
Provide an officially-sanctioned way to install alternative software sources.
macOS has that; Apple will even certify third party developers so that the system can still validate software outside of the Mac App Store. That kind of security model would be perfect for iOS and would moot pretty much all the substantive parts of Epic's complaint.
> Apple will even certify third party developers so that the system can still validate software outside of the Mac App Store. That kind of security model would be perfect for iOS and would moot pretty much all the substantive parts of Epic's complaint.
That's a really good point. Why isn't the dev community talking about getting Apple to do this on iOS?
It would allow sideloading while maintaining security, and a somewhat more fair amount of control from Apple.
Just because it is something YOU want doesn't mean we ALL want it. I appreciate Apple's review of apps and their store policies. While no human endeavor is perfect it is at least an attempt to keep their platform more secure, safer for kids, higher quality, and more trustworthy.
Opening up the platform to other app stores means they have less control over the experience on their platform it opens more avenues for malware.
Why are Apple users so quick to recommend me Android when I point out this particular flaw with iOS? And yes, I do consider distrusting the owner's software installation preferences to be a flaw, especially when Apple is certainly capable of maintaining a robust and safe third-party distribution ecosystem on macOS. The Mac isn't demonstrably less secure because you have a sanctioned way to install Steam onto it. Likewise, Apple doesn't lose the ability to maintain the quality of the Mac App Store because people might get their apps on Steam.
"Safer for kids" isn't a factor here; Apple already provides tools for parents to lock down their children's devices should that be necessary. This would also presumably have an option (or default) to disable third-party apps, in the same way parents can already disable specific App Store and built-in apps.
> less control over the experience on their platform
I value the customer's ability to install programs of their choosing on a phone they purchased. It seems strange that we see it as desirable to concentrate authority over billions of devices this way. Taking a step back, it's sort of a "what could possibly go wrong" scenario.
I have and use AltStore. It's amazing what they did, but it's certainly not Apple-sanctioned; they have to jump through a large amount of hoops in order to get your code signing certificate and then get iTunes to install the app for you. This also requires giving AltStore your iCloud password, among other things, and it resigns the app as yours. It technically works, but it doesn't work well.
> Seriously, who cares if Epic earns 14 bzillionty dollars this month, or 20 bzillionty dollars?
The narrative here is amazing, because you're not sympathizing with Epic because they're so big and have so much money... but they're still the little guy compared to Apple. The scale of Apple's monopoly profit makes Epic look like a corner pharmacy in Montana.
Epic is part of TenCent which is close to having a monopoly on games these days.
But separately, the only reason to root for ‘the little guy’ is if the little guy is somehow hard done by.
We dislike the fact that Apple makes some money by charging developers 30% for payment services, software delivery, and operating a storefront that users feel safe to buy from.
We say 30% is too much to change for that, because the margin is way too high. Fair enough.
Epic on the other hand makes its money from selling in game currency to children.
Epic has a 40% stake, and controls Epic’s access to the Chinese market. There may be other rights attached to their share.
Sweeney may technically still have the majority vote, but he can’t do anything they seriously oppose, or not do anything they are strongly in favor of without facing serious consequences.
This is entirely false. Because while Blizzard, the NBA, and every other "American" company was busy sucking up to China in the last year, Tim Sweeney blatantly stated players in his games should feel free to support Hong Kong.
Epic didn't bow to China like other American companies did. And Epic didn't even stay silent. Epic made a clear statement in opposition to China.
That should've put to bed any of this silly "it's controlled by China" nonsense. Tencent just likes having a good stake in a company that prints money.
You are correct that Epic Games made 5 billion dollars in revenue in 2019, according to Venturebeat [1]. However, Apple Insider reports that Apple made 59.7 billion dollars in revenue in their third fiscal quarter (March, April, and May) of 2020 [2].
Epic's definitely not a little guy, but compared to Apple, it looks more like a respectable medium-sized company.
I find Apple's revenue numbers and market value truly staggering. Few companies seem to be able to compare.
And Epic isn't asking for a benefit for themselves: They're using those billions to fight for not just themselves, but thousands of smaller developers. Over two hundred of them joined Epic's little "app dev union" of sorts recently.
Yes, Apple sells one of the most successful products in human history... and they also illegally use that power to control the market and extract revenue from thousands of other companies who have no choice but to do business with them.
“ And Epic isn't asking for a benefit for themselves”
False: Epic wants to pay less commission themselves, and to be able to take a cut of other developers work.
One big difference between Apple and Epic is that Epic didn’t do any work to create the platform.
As to those smaller developers. Apple just cut the commission for them in half. A lower level than Epic was promising. Apple seems to care about the smaller developers.
Epic is not fighting for anyone but themselves.
Let’s note that more than half of Epic’s profits belong to just one man.
I think Amazon, Microsoft, Facebook, and Google would also be considered iOS developers, since they publish apps on the App Store. So in terms of market value, Epic is definitely not the biggest player in the Apple ecosystem.
Although, if we're going by how popular the apps are on the store...I could see how Epic would be considered a heavyweight on the App Store.
> If Apple didn't fear either Epic's lawsuit or Congressional action, or both, they'd never reduce their app store cut, for anyone, ever.
Except they have done exactly that in the past. In June 2016 Apple introduced a subscription billing model which reduces the fee to 15% after the first year a customer is subscribed.
Interestingly the top benefactor is Google, as YouTube is #1 for subscription revenue in 2019 according to TechCrunch.
Subscription revenue on Apple's store was $3.6B of ~$50B in 2019, so 7.2% of app store revenue overall.
It's absolutely true that Apple doesn't have a lot of pricing pressure on their 30% fee, since their platform is so compelling and especially since most competitor App Stores charge the same amount. But it's also absolutely false that they have never lowered their rate.
I agree that this is good news. But let's keep "selfish motives of two different parties" in perspective to the size and power of one side over the other.
This program came in after more than decade after the app store was created and when Apple is finally under increased public scrutiny for anti-competitive behaviour. Apple made an estimated $20 billion from the app store last year alone with estimated profits from that revenue being around 90% [1]. Being able to afford to half the commission over night speaks to how disconnected the commission is to the costs in running the store.
Why were they able to take 30% and continue to take 15% commission off of all sales? Because the value of the app store is only created via continued practices of anti-competitive behaviour. Ex:
2) Banning the mention of alternate methods of payment (restricted customers harmed by paying higher fees)
The argument that the app store charged "market rate" is also not a fair comparison. Your comparing one completely closed market to other open markets that Microsoft and Google produced. Both main competitors allow for competing app stores from their own for example.
> Why were they able to take 30% and continue to take 15% commission off of all sales? Because the value of the app store is only created via continued practices of anti-competitive behaviour.
Also, because Apple created the most valuable mobile software market in the world, by creating the iPhone, continuing to release top-notch phones year after year, and by creating the App Store itself.
It remains true that iPhone users buy software at a rate that totally dwarfs Android. This could be traced to a number of reasons, but I wouldn't dismiss the App Store monopoly as one of them.
You can describe this as anti-competitive, just keep in mind that you're assuming your own conclusion. You could make the same argument for Apple's refusal to license their OSes for hardware they don't manufacture, I would be similarly unimpressed.
As a user, I would like a stress-free way to sideload apps which don't meet Apple's standards for inclusion on the App Store. Don't see why Apple would want to give away their competitive advantage by letting other stores sell software for their phones, but I could imagine them making side-loading less onerous, that would be nice.
> Also, because Apple created the most valuable mobile software market in the world,
No, they created the possibility for the most valuable mobile software market in the world. Third-party developers were the ones that created it into the most valuable mobile software market in the world.
> by creating the iPhone
Creating the iPhone does not explain the source of the App Store's value, only that one is "tied" to the other. Which leads to my next point.
> You can describe this as anti-competitive, just keep in mind that you're assuming your own conclusion.
It's anti-competitive according to the law. The practice of selling a service (ie: commissions from App Store) as a mandatory addition to the purchase of a different product (ie: iPhone) is called tying. In the United States, most states have laws against tying, which are enforced by state governments. In addition, the U.S. Department of Justice enforces federal laws against tying through its Antitrust Division [1].
> No, they created the possibility for the most valuable mobile software market in the world. Third-party developers were the ones that created it into the most valuable mobile software market in the world.
No, they literally created the market. The products sold in my supermarket don't create the supermarket either.
Whether what Apple does meets the legal definition of tying is an open question. I doubt it, clearly you're convinced, which is to say, you're assuming your own conclusion.
It’d be a lot easier to believe if the change didn’t coincide with an incoming administration who has already signaled they’d be looking at anti-competitive practices. Those aligning incentives have an exquisite sense of timing, as it happened exactly as those talked of enforcements started becoming real.
>It happens all the times, and it's called "good business".
I would have agreed with you if Apple had,
Paused and in any sort of PR, Marketing, or answer direct from the executive team that they are at least thinking about the issue. Except they double down on thinking they deserved that 30% if not more. ( Perfectly Fine )
Did not take hard stand against developers and thinking themselves as so righteous. ( Also Fine )
But then suddenly turn around and act like Santa to Help SME or smaller developers, when Apple are under pressure in multiple countries for their App Store policy.
May be Tim Cook did not realise, Apple has turned into hypocrite just like Google did in their Do No Evil era.
It's along the same lines of what Microsoft did when they were being investigated as a monopoly: throw a bone to smaller developers (or in Microsoft's case, kids in school) which actually just grows their market share (in Microsoft's case, kids learn to use Microsoft products and take that to work, in Apple's case, more devs see profitability in the Mac garden).
> Apple / Google’s 30% take is the anti-competitive elephant in the room here
No. They both built a distribution channel on which developers build, but they're not open markets. Those app stores are the property of their respective creators (this is a flaw of the app store paradigm in general, at least for those who want full control over their software).
Both Apple and Google are fully within their rights to charge whatever they want within their app store and enforce whatever capricious whims they like on apps that they distribute. It's the same as traditional book publishers writing their contracts with authors they publish. Which is why open platforms and device jailbreaking remain valuable for those of us who believe in personal ownership of our software.
Appoogle are a duopoly. You can’t get significant sales on mobile phones without going through their respective App Stores, which both charge 30%. What a coincidence!
Your comparisons with book publishers are specious: if I write a book today I can go to any of a number of publishers, none of whom have any kind of control over access to readers. Or I can even self-publish and sell direct.
Jailbreaking is a complete irrelevance in market terms: It’s effectively impossible to sell on Apple devices without paying Apple’s tax & very difficult to sell on Android devices (which Google controls via carefully written contracts with mobile phone manufacturers) without paying Google 30%. We have anti-monopoly + market collusion laws for good reasons. It’s about time they were enforced.
I don't think that's a fair assessment at all. Both Google and, especially, Apple have spent millions of dollars, hours, and effort to create their respective App Stores and the people and tools needed to run them. There's a reason why there's a difference, in the real world, between a Walmart and a Target or Sprouts. Likewise, there's a difference between Apple, Google, or anyone else's App Stores. The main difference being that Apple makes it easy and far less risky for customers to pay for what they're getting. Developers aren't buying into just the App Store, they're buying in to the whole group of customers that said App Store brings with them.
> Both Google and, especially, Apple have spent millions of dollars, hours, and effort to create their respective App Stores and the people and tools needed to run them
Both Google and especially Apple have also spent millions of resources and money, making sure they are the only app store in use (by default).
They could have spent some of those millions creating a set of rules for independent app marketplaces to be able to distribute content on their platform instead of locking everyone in to theirs'.
I love how we suddenly have better ideas for how the most successful public company should allocate their resources to serve their customers (developers are second tier, sorry). We sometimes forget they are sitting on mountains of money because they execute good company decision making, not because they are doing weird things to protect a monopoly. Like there is some meeting near the top between execs happening where someone goes "lets do X!" and another exec replies "no but doing X would harm our monopoly, we cant' do that". Do people think decisions are really being actively made to protect a monopoly?
With this rationale no monopoly should ever be investigated, broken up, etc.
The whole problem with monopolies is that they actually harm the consumer by protecting their monopoly from encroachment by someone else. So yes people really think decisions are being made by a monopoly to protect their monopoly (and their profits). A chunk of those billions they have is actually money generated by these monopolistic practices.
It's juvenile to imagine them sitting at board meeting and discussing "How can we protect our monopoly?", that's like saying the NSA is discussing by board meetings "how can we further invade everyones privacy?". But they most definitely are discussing how they can protect their market share and how to edge out competition.
I am sure they do discuss those things. This is why Google has onboarding training around not framing any communication around competition. The optimist in me says this is actually to help infuse a culture of good decision making and trying to combat this kind of monopolistic thinking. I guess there is another side to this that is not so good natured. I guess this is an argument around intent. Are they actually trying to be good, or hide evidence of being bad, by the highest level of these companies?
You're missing the point. Apple doesn't want independent App Stores because that's not what their customers want. Their customers want a simple way to install apps that they can trust and to pay for things in a way that they can trust. Independent app marketplaces are anathema to that.
> Both Google and, especially, Apple have spent millions of dollars, hours, and effort to create their respective App Stores and the people and tools needed to run them.
Google and Apple spent Millions 'claiming' Patents/IP, monopolizing new discoveries, and 'earning' Billions.
"Place Silicon Valley in its proper historical context and you see that, despite its mythology, it’s far from unique. Rather, it fits into a pattern of rapid technological change which has shaped recent centuries. In this case, advances in information technology have unleashed a wave of new capabilities. Just as the internal combustion engine and the growth of the railroads created Rockefeller, and the telecommunications boom created AT&T, this breakthrough enabled a few well-placed corporations to reap the rewards. By capitalising on network effects, early mover advantage, and near-zero marginal costs of production, they have positioned themselves as gateways to information, giving them the power to extract rent from every transaction.
Undergirding this state of affairs is a set of intellectual property rights explicitly designed to favour corporations. This system — the flip side of globalisation — is propagated by various trade agreements and global institutions at the behest of the nation states who benefit from it the most. It’s no accident that Silicon Valley is a uniquely American phenomenon; not only does it owe its success to the United States’ exceptionally high defence spending — the source of its research funding and foundational technological breakthroughs — that very military might is itself what implicitly secures the intellectual property regime." [1]
No, because there are other alternatives. The App Stores in these cases aren't considered their own market segments because they rely on the purchase of device to access them. Those devices are available from a large number of providers. Don't like Apple? Get an Android phone from any number of providers. Don't like the service? Switch to another carrier. Until the law changes to a point where companies have to allow other people to dictate their platforms (which will never happen), a company can do whatever it wants so long as it doesn't prevent a competitor from spinning up their own version.
Amazon will pay a pittance for ebook sales unless you’re exclusive with them, and they’ll generally use their market leading position to limit your choices at every step.
I'm publishing the same (paid) app on Google Play and on Amazon's store, which is AFAICT the most widely used alternative (outside of markets where Google is not active).
My Amazon income is less than 2% of the Google income.
Should this make a difference? Just because users don't actually use alternative app stores doesn't mean the alternatives don't exist. It's not like Bed Bath & Beyond gets to complain that they don't get as many customers as Target. It has to be okay for a company to find themselves with naturally large marketshare simply because they do good business. If Google is doing something unkosher to get/keep their marketshare (and they are) then that's what you have to go after.
Absolutely. Anti-competitive laws aren't intended to prevent current market share, but rather level competition for future market share.
If Google has 99% current market share for mobile OS, props to them. They deserve it for working like heck, delivering something amazing, and finding a model that allows them to distribute for free.
If Google has 99% market share, and ensures it keeps 99% market share in the future by setting up licensing deals to tie Google Apps + App Store together... that deserves a lot more scrutiny.
Which just goes to show how Google’s and Apple’s investment of tens of billions of dollars building out their respective ecosystem presents a tremendous opportunity to developers.
Amazon made a half-hearted effort to compete in the space and the result is “less than 2%” in your case.
> tens of billions of dollars building out their respective ecosystem presents a tremendous opportunity to developers
That's... one way to look at it.
Another way is that they'd be spending even more if there were more healthy competition in the alternative app store market.
Amazon is incentived to run an Android app store now, in the same way Microsoft was incentivized to maintain an ARM build of Windows: it's not a corporate priority, because it doesn't make business sense for it to be until the playing field changes.
Amazon made a bunch of poorly performing and uncompetitive Android phones, and then bailed before doing the hard work of actually differentiating their product. The results are totally expected and if anything demonstrate the market is competitive, not anti-competitive.
Users don’t want an “alternative App Store market”. They want a place where they know the apps they download won’t steal their data or crash their device, where the billing policies are clear and predictable, where you can set parental controls and get refunds on accidental purchases.
Apple doesn’t have customers because they are the only one who you can buy water, electricity, or internet from at your home address. Apple has customers because people willingly and happily shovel their hard-earned money at them because their products are freaking amazing.
In no universe can anyone say that the progression / advancement of smartphones and smartphone applications indicates a stagnant market or one in need of forced government intervention.
From what I can see iPhone 1 with its 400MHz Samsung CPU and 320x480 display and its half dozen apps -> iPhone 12 with its 8 core 3GHz A14, 2532x1170 display, and millions of apps demonstrates conclusively that consumers are winning out tremendously over the last 13 years due to a highly competitive market driving truly massive R&D investment in this space.
I think the problem that people actually have with Apple is that they are so far ahead of the pack, and people don’t see where the inevitable disruption is going to come from just yet.
There's almost a infinite number of things they could do that would be illegal that you might also call 'anti-competitive'.
IMO, as long as there are viable competitors to Apple, and as long as Apple is not colluding with its competitors, Apple should be able to implement any lawful policy on its own device that it chooses.
Apple can't violate its existing contracts with its customers or developers (e.g. threatening to kick off all Unreal Engine apps, e.g. lock customer data unless a ransom is paid). Apple can't use App Store policy to commit crimes, like extortion (e.g. offering to buy an app developer, and saying they will ban them from the store or increase their commissions to 50% if they don't accept the buyout).
As long as their policies have a justifiable and legal business purpose (whether you personally agree with the policy is irrelevant) that's applied consistently (within human limits of consistency) they should be free to make their own product however they want, and charge what they want for it.
Decouple payments/subscriptions from distribution (AppStore). Allow us to pay using Stripe, PayPal, Amazon Payments, Google Pay, Apple Pay, or any of a host of other payment processors: the developer can choose his own payment platform, just like in the rest of the world outside of the iPhone.
That's a good first step towards competition that would allow Apple to keep the AppStore exclusivity -- for now.
At the very least, they would need to decouple the payment processor in a way that still provides the user all of the following;
1) No need to re-enter billing information across apps
2) A centralized UI for the user to manage all their
subscriptions, enforce consistent billing policies,
request refunds, etc.
3) Enforce parental controls and family approval
policies which may be configured on the account
4) Prevent any surprise billings or unauthorized charges
5) Ability for Apple to force a refund even if the app dev won't
And probably many more technical measures. Otherwise, you are directly damaging a key value proposition provided by Apple and demanded by their users.
In the end, the payment processor is a red herring. Apple isn't charging 30% for the payment processing -- they probably pay less to run the charge than Stripe does. For example, for $0.99 charges, the app developer pays Apple less for their entire fee than Stripe would charge them just to run charge.
The 30% fee is Apple's share for creating the entire ecosystem. Everything from the programming language, the platform, the API's, the security framework / secure enclave, the app review, the distribution model, the billing system, the cloud services for software delivery/push notifications/updates/shared storage, all the way up to Apple's customer support lines. Actually running the payment gateway is perhaps the very least of it.
> Another way is that they'd be spending even more if there were more healthy competition in the alternative app store market.
This simply isn't true. Android is much more open yet app spend is way lower compared to the smaller marketshare iPhone.
An open app market means a flood of free apps which means less money spent. Good Devs will absolutely lose in this scenario. Outsourced sweatshop devs will do everything cheaper.
We've barely been able to get people to stop referring to all Android devices as "Droids". The average person doesn't even know about alternate app stores, yet alone have the will to seek them out, install them, search for an app, and then pay for it (likely having to enter payment info this time). You might as well tell developers to release their apps on the dark web.
I'm sure you can release niche apps on these stores, but the general market isn't moving away from the Play Store any time soon, and that's where the money is.
Well, there is Amazon Appstore for Android, where you can buy digital goods (apps and games as well) on an Android device.
Idk if the Amazon Appstore is available for IOS with the same terms. Can you buy IOS apps via Amazon Appstore on an IOS device?
Apple does not allow third party app stores on iOS. There's at least one third party store that you can side-load using developer tools but it's definitely not something the average user is aware of.
> What happens to a phone manufacturer who ships a phone with an alternate App store?
You get to be the best selling Android phone every year. Are we all forgetting that Samsung ships their own app store? Nobody uses it because it's garbage but that's not Google Play's fault.
You can't implement background installation of apps, automatic upgrading, or batch installation or upgrades of apps on Android outside of the Play Store. The competition is intentionally hobbled.
If we look at market share for mobile app distribution, the vast, vast majority of it goes to the App Store and the Play Store. The competition isn't even a blip on the radar.
Should that work in that way on desktop also? With Microsoft/Apple being free to restrict apps to their store only, and taking a cut of every transaction made outside the browser?
If not, what's the difference with phones/tablets?
The difference is just a historical choice. The desktop platform owners chose to be open in that way, but they didn't have to. Games console makers chose to go the locked down route at about the same time (in the grand scheme of things). The Mac launched long after many locked down games consoles existed. They just chose different strategies.
> desktop platform owners chose to be open in that way, but they didn't have to
They probably did. The industry was small. Attracting developers in significant numbers meant convincing people to become developers. That is a huge hurdle. Platforms with entry fees didn't build app ecosystems that attracted end users.
By the time the iPhone was announced, developers were plenty and the software business model proven. Apple had resources to subsidize onboarding with a well-documented, rich API and good native apps.
No, but it seems to be the direction those two companies are moving anyway. Just look at Windows 10 "S mode". I'm just glad we have Linux as an option on the desktop to get away from that nonsense.
The difference I see is more about Apple specifically, because unlike, say, Google with Android, they have full vertical integration. They make both the hardware and the OS. Everything about Apple is focused on complete corporate control over the experience.
If Apple decided to only permit apps distributed through App Store X on OS X, I wouldn't be at all surprised. That's Apple's MO. And there is a customer segment I think that serves, which is the consumer market which doesn't want to think about maintaining their own digital security, because Apple seems like a reasonably benevolent dictator in this respect, as much as developers dislike the cut they take. Requiring Apple to open their devices to third-party app stores would break this vice grip they have on the experience and, IMO, degrade the experience for Apple's end users (even if it might make things nicer for developers).
I think they should be allowed to do it. If we let them get away with it because the alternatives are worse then that's our own fault.
Hard to fault a business for realizing that they have a stupid amount of leverage because people have made themselves dependent on you and charging more.
> Both Apple and Google are fully within their rights to charge whatever they want within their app store and enforce whatever capricious whims they like on apps that they distribute.
actually isn't always true - especially when it hurts consumers. of course it isn't up to us here to decide if it does. remember that private doesn't mean unregulated.
Just look at what Apple has accomplished in the meteoric rise of the iPhone. This is strong evidence of a company that is competing like hell to keep and grow its customers base.
“Hurting consumers” would be an almost Orwellian characterization of the smartphone technology revolution driven predominantly by the competition between Apple, Samsung, Google, Huawei, etc.
The problem is when by "competing like hell", you compete so hard that you suppress your competition. The issue that anti-competition laws seek to redress is the suppression of other competition.
Except the competition isn’t suppressed, and there’s no actual monopoly here.
What we have is a pretty clear case of a minuscule minority of users bitterly complaining that a company isn’t making its products exactly the way they want them to.
A store is allowed to charge what it wants for its products. A store is allowed to set the policies that it wants for the goods that it sells in its own stores.
It just so happens that Apple’s customers absolutely love its products, and that Apple’s products are absolute technological leaders in their space.
Apple didn’t get there, e.g. like Facebook by buying up the competition any time it started to emerge as a threat. They got there through decades of focused development and investment.
> A store is allowed to charge what it wants for its products. A store is allowed to set the policies that it wants for the goods that it sells in its own stores.
A store is allowed to block you from using any other store? These aren't natural continuations or logical extensions of meatspace, stop pretending they are.
This is literally not what’s happening. The iPhone is their product. If you don’t want to use their products and their store you do not have to. Buy a different device. There are plenty.
Apple doesn’t get to tell Google, Samsung, Huawei, LG, OnePlus, Fairphone, etc. how to build their devices.
The one device they do get to decide how it works is the iPhone. Because they created it, they own it, and they get to decide its future.
Their device, their decision. The consumer gets to decide if they like it or not. Overwhelmingly, they decide that they do.
The same exact argument could be used regarding the desktop PC.
Do you think that microsoft could prevent competing web browser from being installed on the PC, if it choose to do so?
I think not. They would lose that anti-trust lawsuit.
> Because they created it, they own it, and they get to decide its future.
No, actually they dont get to decide that. If they are breaking anti-trust law, via anti-competitive behavior, then there are certain actions that they cannot do.
> The consumer gets to decide if they like it or not.
The consumers, or other companies, can also sue them for breaking anti-trust law, which Apple is required by law to follow.
Maybe we can both at least agree the normative claims I’m making are true absent a monopoly finding.
Anti-trust only applies if there’s a finding that Apple is a monopoly. The jury, so to speak, is still out.
If Apple was found to be a monopoly, then there may need to be some restrictions placed on how they operate.
But I think controlling how your own product works is the presumed default, even if that product is wildly successful, as long as that success is through actual product merit, and not done deceptively or through illegal collusion.
> Anti-trust only applies if there’s a finding that Apple is a monopoly. The jury, so to speak, is still out.
Wrong again, you can violate anti-competition law without being a monopoly. You're correct that it hasn't been decided in a court of law.
I'm saying that I think they are engaging in anti-competitive behavior, you are saying "actually it is okay because they haven't been judged to engage in anti-competitive behavior in a court of law", which does not seem contrary to my claim, which is that I think they should be judged to engage in anti-competitive behavior.
The case law on this is not as definitive as you are claiming. I don’t think their behavior is illegally anti-competitive.
Sure, you can say that not supporting a specific 3rd party application (e.g. an App Store) on your device is “anti-competitive” but obviously not illegally so for any business.
Behavior which is totally legal can become illegal in a monopoly situation.
> Their device, their decision. The consumer gets to decide if they like it or not.
and now you're telling me that the case law isn't definitive?
That's my whole point - you're making strong assertions as if they are the way the law works, when they are just your personal opinion on how things ought to work. Numerous decisions in the past have required companies to change how they do things on their devices. I'm not saying the case will be decided against Apple.
It comes down to what you mean by anti-competitive. If you mean illegally anti-competitive then there’s a debate to be had. If you mean “anti-competitive” in the sense that they don’t offer their entire code base MIT licensed, then 100% they are anti-competitive in that sense, and they have every right to choose to be.
To somewhat oversimplify, you are allowed to not invite competitors to sell to your customers in your own backyard. Unless you are a monopoly. Because then that “backyard” isn’t rightfully yours to control.
At the moment I am inclined to believe the iPhone is Apple’s own backyard and they should have dominion over what happens there.
If you want to confiscate Apple’s backyard, you do it at the risk that you damage a company that has done a great service for the world, and a company that IMO deserves the benefit of controlling its own destiny and should be left to continue innovating on its own terms.
If someone thinks they can do better then there’s trillions of dollars in market cap on the line and I welcome them to try. Apple won’t stop them from trying, but will certainly compete fiercely on the merits.
> of course it isn't up to us here to decide if it does
I also think it shouldn't be up to courts. It should be up to the consumers themselves. They generally seem quite happy with Apple and Google.
On the other hand, if there is a consumer need that is not being met by Google or Apple, it is a prime opportunity to disrupt the market with a new offering that fulfills that need. If Google or Apple stamp that out or have done so in the past, then I will agree it's an anti-competition issue.
The point is that Apple and Google have used their market power in other verticals (hardware, services) to lock all other competitors out of the mobile app distribution market. They are acting as private regulators of who can publish a mobile app, which is unacceptable if we still claim to support competitive, public markets.
How would a consumer even know if they were happy given the lack of options? Are they actually happy, or do they just have bigger issues to worry about? That's why we hire experts to act as regulators for new industries.
> Both Apple and Google are fully within their rights to charge whatever they want
They are within their right to charge what they want. But it is anti-competitive for them to use significant market power to leverage themselves in other markets.
The lawsuit is not about the 30% cut. Instead, the anti-competitive behavior is that Apple prevent competing Apple stores using its significant market power.
Are you kidding me? This is great news for indies and small companies, to which I count myself, and I will be making 15% more money. Dude, I'm really happy reading this announcement today, thanks Apple, what else is there to say? I think some of you might have trust issues, and are stuck in a spiral of negativity, it's getting a bit weird. Now Google please follow!
Not the OP but I think your reaction is exactly what Apple is hoping for here - contentment with more money in your pocket.
But it also shows behavioral economics at work: developers have been so anchored to the 30% split that this change looks amazing, but why isn't the 15% the norm regardless of revenue size? Effectively Apple is "settling" or "bribing" small developers with this change, so they aren't compelled to join the antitrust movement led by bigger players.
From a business standpoint, Apple is trying to splinter the critics into various factions. A bit extreme analogy but it's akin to inciting conflict within the opposition - actually almost textbook monopolistic behavior. Segment the market by offering tiered incentives.
This reminds me a bit of the Netflix stance on net neutrality. They were for until they grew big enough and could pay off ISPs. ISPs essentially created the proverbial moat for Netflix.
Not for users who wish to use the macOS without engaging in Apple's services business.
It's already impossible on iOS, due to the fact that you cannot install any software except via the App Store, which requires an Apple ID.
At the moment it is possible to continue to use a mac and download and run software without an Apple ID, but if the trend of only releasing software via the App Store continues, that will become more and more difficult.
Even totally free apps in the App Store require that you identify yourself to Apple to download and use them.
Apple leadership has repeatedly said they aren't going to further restrict app installs on MacOS. Craig Fredaspaghetti just spoke about this in interviews on the Apple Silicon/Big Sur release. They use MacOS every day themselves, and deeply care about what it's different use case requires.
There are, as I understand it, certain notarization entitlements for APIs that Apple will only grant for App Store apps, such as VPN apps. This is the first I've heard of functionality being restricted to MAS apps (and prohibited from signed/notarized apps that are downloaded outside of MAS).
I was told this by the WireGuard team when I inquired why the WireGuard macOS VPN app is only available via MAS and not direct download (such as the Windows wg client).
I'm not 100% sure it's true, though, and am testing now. ProtonVPN claims to be working, with packet filtering for non-VPN traffic (kill switch) on 11.x, and they've a direct download, so it's possible that the wg devs are mistaken.
Apple leadership is answering in the implied context of "someone with an Apple ID". I'm never using my Apple ID again on a mac for any reason.
It's not even the 30% cut itself. It's the inevitable necessity to go through Apple if you want any presence on iOS. The only solution I see here is to allow proper sideloading.
Apple keeps trying to spin the app store as a way for users to discover apps, when in reality, the reason developers publish their apps there is that it's the only way onto the millions of iOS devices worldwide.
Making it hard for the regular joe to pirate apps is a big part of apple's allure me as a developer.
Your app/game won't be 24h on the play store without the apk popping up on some random site, ready to be downloaded.
I don't see a way to do proper sideloading without opening this avenue. Maybe a mac os style notarization scheme, but apple gets a lot of flack for that too.
You can't have it both ways. Either it's as closed as iOS and apps can't be pirated, or it's as open as Android and it's possible to pirate apps. Restrictions on what can be installed and user's ultimate control of their own device are mutually exclusive.
That said, I'd choose to have control, even as an app developer. Piracy is a fact of life.
One benefit is that if an app is successful but expensive, it opens up for competitors to undercut by price. With piracy, many users would rather pirate the expensive #1 game than to run the lower cost #1938 game. With such a closed system, users will choose cheaper applications and it will help #1938 to rise to #45.This is very good for indie developers.
Another benefit is for the consumers. When developers overprice their software, and users can pirate - they might. Then the developer blames lack of sales on piracy. However, when piracy is impossible, the developer can't blame piracy and must seek the true cause of poor sales, be it a high price or lack of quality.
There's a lot of coverage already on the negatives with a closed store.
In practice, I don't think the discovery aspect of app stores matters that much for anything but utility apps where you would search stuff like "docx viewer". It does matter for all kinds of apps when they feature something, and that's about it. Almost all developers have their own ways to drive traffic to their apps.
I mean, I've been making Android apps since 2011, and I think that the role of app stores themselves is vastly overrated too. They have their place and they're nice to have, sure, but it's silly that OS vendors are allowed to have their own ones and either demote or outright ban anything that doesn't go through them. The transition to "always-online" was supposed to be more empowering, not more limiting.
"But people would install malware..."
It's okay for new technology to require education before one can make use of it. It's about time we get over it and stop treating users like children.
Personally, I think the iOS App Store would still maintain it's market positioning even without iOS's technical lockout. Most people stay on the first app store they see and hate having to switch to new ones. First mover advantage is everything; look at the relative uptake rates of Steam vs. Origin or Epic Games Store.
I'm not even talking about alternative app stores. Just let me distribute my app to my users from my server, without Apple inserting itself where it doesn't belong.
Agreed. And it's frustrating to see most people getting tricked this easily.
In the old days, when telecommunications devices and networks were getting monopolized like this, we'd break the company up into smaller entities, and then regulate the hell out of them, especially on monopolized/duopolized prices.
In a just world, Apple would never be allowed to set the app store tax at all, a group of state or federal regulators would have strict price caps set by the public at large and enforced by state or federal law. (This is how many places still handle Electricity and Natural Gas. This is approximately what we did to AT&T, when they tried this same crap).
If you own a monopoly/duopoly, you should expect to be heavily regulated like one. If you don't like that, stop monopolizing that market. This isn't rocket science, it's the conservative position on this issue.
And/or are you cynically interpreting this as a piece of PR to rake in the karma? Nearly every act by every person or institution can be interpreted as a cynical attempt to curry favor. Who gets the benefit of a doubt and who gets condemned?
Or clearly a result of Covid. Or clearly a result of Republicans’s and Democrats’s newfound love of using tech companies as punching bags. So many single, all-encompassing theories that clearly fully account for every act.
So had Apple done this but told no one it wouldn’t be PR — and you’d be praising them right now? Would they be allowed to tell the affected developers?
The FAANG are random assortment of companies that share little in common aside from being large. Facebook and Google monetize eyeballs but in very different ways. Amazon is a logistics and retail and PaaS powerhouse. Netflix streams movies. Apple sells hardware and services and, in stark contrast to Facebook and Google, temperamentally despises performance advertising. Google and Apple (and Microsoft and Salesforce and Nintendo and…) have walled garden marketplaces.
Apropos a dubious assertion the grandparent made, Google and Apple are also the driving forces behind the two most feature-filled web browsers that enable ever more sophisticated web apps to run on smartphones outside of their walled gardens at no charge.
So, what are the necessary and sufficient conditions to make a company a FAANG, aside for assisting with the construction of a snappy acronym, and what are the conclusions that flow from those conditions that justify your assuming every one of their acts is best assumed to have been done in bad faith?
I think it’s more targeted specifically at Epic, although maybe they thought it might help more generally with antitrust too. Epic made a big deal in their lawsuit/PR about how apples policies negatively impact smaller developers, and that they were standing up for them. With this change apple can now push back on this point against Epic, as it’s unlikely they will drop the lawsuit.
It’s something I’ve been torn on for a while, on the one hand 30% seems way too high for most apps (maybe you could make an argument for a few that rely more heavily on apple infrastructure). But on the other app stores do provide a lot of benefits like auto-update, malware scanning, reviews, distribution, etc. that most apps couldn’t or wouldn’t do by themselves.
> How can it be a “purely cynical PR piece” when there is an actual reduction in cost for developers?
This is a great question that assumes the responses here are mostly rational (not to minimize how anti-Apple folks feel, which is also legitimate). This is awesome news for small developers.
> Apple / Google’s 30% take is the anti-competitive elephant in the room here, not a few crumbs thrown to small developers.
It's not just the rate that's anti-competitive, it's that these two companies have stifled competition in mobile app distribution for over a decade now.
There is no viable competition in this space because Google and Apple never allowed for real competitors to the App Store and Play Store to exist. You have to use the App Store to distribute mobile apps on iPhones and iPads, and if you want automatic updates, background updates or batch installations/upgrades on Android, you have to use the Play Store.
These days, if you want to install an app whose developers didn't pay the Apple tax, macOS will make the app appear radioactive, and as if it is either broken or malicious. Same goes for Android, where apps distributed outside of the Play Store invoke scary warnings, and are hindered when it comes to automatic updates, background updates, or batch installs.
Good point, and I agree. Developers and users should have the freedom to use the payment processors of their liking, without having their mobile operating system's vendor deciding for them.
I don't see how this helps with antitrust though. Either way, it is an actual policy. Newsworthy, at least.
Also, a comment isn't necessarily positive or negative. This isn't a poll on Apple's HN approval rating. It's an announcement of a thing Apple is doing.
Commission size has nothing to do with anti-trust here. Apple didn't increase the rate from 2008, hence there's no basis for argument of anti-trust violation. It does undermines public (non-judicial) argument that App Store fee is bad for small developers, though.
Apple has revenues of about $275bln, and a net margin of about 21% company-wide, meaning $58bln.
The app store sold about $50bln worth of stuff in 2019, Apple's 30% cut would therefore mean $15bln in revenue. If they operated the app store at a least a 70% margin (and really, if they didn't, then I'd be rather surprised), that would mean a good $10bln in net profit from the app store, or 17% of their total net profit.
And that's still not accounting for the network effect the app store creates, or the business intelligence.
It might not be the biggest elephant ever, but it's not what I'd call a tiny baby elephant either.
"no growth left in selling phones" is kind of the wrong way to look at it. Even if their number of units sold per year never grows, it's a very healthy revenue stream because they manage to convince existing customers to buy new hardware. Considering the cost per phone the revenue per customer is pretty high just from selling phones if they can get them to buy every 2-3 years.
Naturally, the 30% take from the app store is bigger, but that's a matter of overall volume, not growth. The app store is a cash cow and will remain so even if its numbers start trending down.
Unfortunately — because I am a longtime Apple user & developer — I have to agree that this is a cynical gesture designed to deflect regulatory scrutiny.
Moreover, I expect that this announcement is mostly paving the way for Apple to force all Mac OS apps to be distributed via the Mac App Store (as they do on iOS).
The optimist in me doesn't want to believe it. But this is probably consistent with Apple's economic incentives. Especially because the major role of Macs in the world is to provide a platform for developing iOS apps.
This week I ordered an M1 Macbook Air. Not because I really need it, but because a couple years from now I will be happy I have a machine that can run Big Sur, which will be remembered as the least restrictive OS of the Apple Silicon era.
Apple is the biggest corporation in the world. We can like their products, but we shouldn't give them more credit than, say, ExxonMobil or Foxconn or Goldman Sachs. They will make choices based on what creates the most profit, nothing more. That's not cynicism; it's why corporations exist at all.
I disagree with the assumption that restricting Macs to the MAS would be profit-maximizing for Apple. The context and expectations are different, and such restrictions -- hobbling many uses of macOS -- would drive developers away from Macs to competing platforms. I'm not even sure what those restrictions would look like; can I not execute arbitrary Python code? Can I not install Python packages from PyPI? (And how are they going to stop me, exactly?) Can I not use clang to compile a C project? To what extent can MacOS really be locked down in a way that doesn't drive away any developer who's not making iOS apps?
And if the Mac software scene stagnates, Apple eventually loses their core constituency.
I'm referring to GUI apps like the kind currently sold in the app store. There has long been a path to sell these apps direct to customers. But with each OS release, it has become more onerous (codesigning and notarization and whatnot). Still, no one wanted to tolerate the 30% tax. Now it's 15%.
The noise around the app store reminds me of all the complaints when Adobe said it would move its apps into the Creative Cloud on a subscription basis. Yes, a certain percentage of customers left. But the extra revenue more than made up for the loss.
> significantly reducing the absolute number of developers suffering the full impact whilst taking the minimum possible hit to their revenue
It also reduces their anti-competitive effect on new entrants. Now they have a beachhead. Sounds like a win-win.
There should be an additional tier between e.g. $1mm and $25mm. Though that still wouldn't satisfy an absolutist constituency. So maybe this is the most efficient compromise.
> This has nothing to do with “doing the right thing”
Who cares? I'll take effective solutions from self-interested actors over well-intentioned bumbling.
> everything to do with limiting the number of outraged letters to senators from devs
Sounds like a responsive political system.
If your concern is the App Store's 30% take from large developers, good news: they have the resources to find recourse in courts. Small developers don't. Given this has zero effect on Epic, it has zero effect on their case. (Just, perhaps, its lobbying effect in Congress.)
It has zero effect on Epic’s bottom line, but a potentially huge effect on their lawsuit - they were portraying themselves in the media, and likely the lawsuit as well, as “fighting for everyone, especially the little guys”. All of a sudden, they are left fighting for the fat cats.
The revenue at stake for apple is likely almost nothing. As soon as a company (not app) makes over 1 million in purchases via apple, then they start paying the full amount. So, apple is losing 50% of the revenue from companies that dont make at least that much. Which is small potatoes to apple.
According to this App Store revenue is around $50B and developers affected by this[1] make ~5% of that revenue, or around $2.5B Cutting that in half, we're talking $1B+.
Indeed, that's small potatoes for Apple. But then, everything is small potatoes compared to iPhone sales.
But far, far bigger than even a big PR stunt. Orders of magnitude bigger.
It's the opposite of Steam's response to Epic, which was to lower the cut for larger publishers and larger selling games only. The reason is those publishers and big players could credibly threaten to leave the store. Apple has a monopoly so no one could credibly threaten to do so (without challenging the monopoly in court, like Epic did).
Steam reduced it for publishers with bargaining power. No one has real bargaining power on the App Store.
Cynical or not, putting pressure on companies works and negative attention is a valid tactic when the issue is subject to reasonable debate.
Considering their volume fifteen percent should still allow them to rake in ridiculous amounts of money. However one area I still support Apple is selling of additional product within the store should still be subject to a charge; as in the Epic store selling additional games should be subject to the same rules as selling any content on the store yet you should be able to purchase outside the store and redeem codes within apps to use them; similar to how Steam allows developers to sell keys outside of Steam
> Apple / Google’s 30% take is the anti-competitive elephant in the room here, not a few crumbs thrown to small developers.
This percentage is something that small businesses feel, but is not really what makes the marketplace for apps “anti-competitive”, and personally I think it’s a distraction from the main issue:
Is the total addressable market for “apps” defined by and exclusive to a single platform (iOS, Android, etc.) or not?
How you answer this makes the percentage either a number arrived at through a competitive market or a “tax”.
In the nineties (1990-1999) we had a distribution deal in the USA with the PowerUp! catalog for a software product that moved a few millions of copies. Of the $24.99 sticker price we received something like $0.80 and that was an USA-only deal. Giving 30% for a worldwide deal when the distributor takes care of all the billing and taxing and accounting and distribution is the deal of the century.
But they don't need to take care of billing, taxing, and accounting. Stripe does that well. PayPal. Many others. Open it to competition. Decouple payments from the distribution (appstore).
If someone is submitting something that can be knocked off really quickly, maybe the problem is that they're submitting something that there isn't a good market for.
A lot of people complain about how hard it is to make money on the App Store. Typically we hear only about the 30% as if that is the cause of people’s woes.
Clearly the 30% is a factor, but there are other more significant factors that determine success.
Of course there might be other reasons to scrutinize big companies like Apple, Google etc. but isn’t the best policy the one you don’t even have to implement because the actors in the market acted beforehand already?
It is when the policy enacted is reasonably close to the one you'd expect from intervention. There are multiple possible outcomes here ranging from this being insufficient progress to enough progress splintered across separate changes (which outsiders don't necessarily see a whole.)
Agree. It is _too little, too late_, as they say. 15% is still a very high fee, and we all know that this is a movement to improve public opinion in light of recent events.
Nintendo also takes a 30% cut, although it used to be 35% for WiiWare games. This does NOT include the cost of acquiring development hardware, which usually sets you back $1000 at most. 30% is actually the industry standard; Steam takes 30% and Epic Games takes 30% for smaller titles.
Regarding your comment on captive platforms, I think there's a bit of a difference between a home console and a smartphone. A home console is considered a luxury item, while a smartphone has quickly become a necessity in today's connected world.
For home consoles, market competition is fierce. Not only is there Nintendo, Sony, and Microsoft, but there's also the PC gaming market, which includes devices in a variety of form factors. There's also multiple storefronts. You can buy console games from physical stores, in which case physical retailers take a cut, purchase Steam keys from other vendors, trade physical games, etc. In summary, there's a lot of ways to acquire your games.
In contrast, smartphones are seen as a necessity by many, and there are really only two options: Android or iOS. Each has a dedicated storefront that captures almost their entire user base. This gives Apple and Google a LOT of power over what people can run on their devices, and it practically gives them a guaranteed source of income. I can see why people's attitudes are different towards the Apple/Google duopoly, and that few people are complaining about Nintendo's monopoly on the eShop.
> there are really only two options: Android or iOS
Now, you subtly moved the goalposts here. I'm not even saying you did it on purpose, just drawing attention to it.
Nintendo, Sony, and Microsoft, are hardware manufacturers with integrated, proprietary software stacks, just like Apple. Androids are made by dozens of manufacturers, and you can side load, use the App Store of your choice, and so on.
The fact that Play Store does the lions share of business is the sum of: doing a great job, and nudging users in that direction through various defaults. Fact is, you can load what you want on an Android, and to me that undermines the case for forcing Apple to do likewise.
I'd still like the ability to sideload apps on my iPhone, and think it's worth pushing on Apple to get there. But as long as there are general-purpose phones available for purchase, and there are, I don't see the anticompetitive argument in the iPhone being a console: either put up with it or don't buy one.
I'm drawing a distinction between a bad business decision which customers should push Apple to change, and anticompetitive behavior which governments should force Apple to stop engaging in. I don't see the case for the latter.
I agree with your argument that the policies on iOS app development are similar to the policies enforced by console manufacturers. I think any regulation pushed onto Apple to open up the App Store will actually affect the home console market, too.
I'm just struggling to figure out why the PERCEPTION is very different between iOS and the home console market. It feels like many iPhone users do not believe their smartphone can be substituted with one from another manufacturer. Those same users also complain that they're locked into the App Store. (I think there's a few people in the comments here that have done exactly that.)
At the same time, the majority of mobile app revenue is coming from iOS, which is pushing app developers to the platform, even though they dislike the terms of the App Store.
I'm not sure what the solution is here, but an ecosystem with a large number of members who are unhappy with the status quo doesn't seem very sustainable.
> I'm just struggling to figure out why the PERCEPTION is very different between iOS and the home console market.
I think a lot of it is the Hacker News effect. Folks around here take free-as-in-free-software seriously, and good for them (us). I'm confident the median iPhone user just downloads apps and uses them; they haven't thought much about alternate app stores and probably wouldn't use them if they were available. I'm pretty sure that iPhone users who complain about software freedom are a tiny minority of all users, especially since the wild world of rooted Android phones is out there for people who feel strongly about such things.
I do get your point, though: consoles are luxury playthings if you're not in professional esports, and phones are a de facto necessity of modern life. It doesn't follow that most, or even many, iPhone users, are discontented with Apple's policies: I figure the bulk of them haven't thought about it once, quite sure my mother and brother haven't.
“In today’s news Apple announced the opening of its iOS platform to allow users to install any apps they want from any alternative App Store. Posters on ycombinator.com denounced the move as a cynical attempt to generate positive PR. Said one, just because Apple has listened to us and stopped doing the evil things we asked it to stop, does not mean we won’t find new things to criticize it as evil for.”
Spoken by someone who is clearly not an Apple App Store developer. If you were an App developer like myself, you'd realize what a huge change this was.
First, most Apple devs don't care about alternate app stores. Those provide nearly zero additional revenues to devs on every platform they are available.
Second, most Apple devs don't want the Apple App Store to lose it's primacy, they realize that it's hugely beneficial to their revenues. The security, the app vetting, the single sign on, single purchase account, and easy subscription management and refund features, is a huge reason that we make far more from the App Store than Google Play, despite Androids SIX TIMES larger installed base. Apple attracts the best app customers and makes them super comfortable with buying and subscribing to apps.
Most Apple developers by far largest concern was the large percentage of revenues Apple took. And they addressed that today.
At 15% we can use App Store purchasing for far more things, and I'm already having those discussions with clients today.
Apple has bought off small App vendors in order to protect the 30% rake they take from the big sellers: That you’re happy with the change is not exactly surprising is it? Who wouldn’t be happy being told they’re getting a 21% revenue increase for nothing!
Meanwhile, Apple continues to use their dominant position to extract 30% of the revenue of the most profitable Apps, whilst people like you go out to bat for them. Must be great to be in Apple PR :)
Locking in developers to only use their AppStore and not anything else, taking %15 of small businesses revenue for payment processing, and all this in the middle of a pandemic and still taking credit for being "generous" and "industry leading". All this while the average payment processor take around %3.
And don't forget the reason they're doing it is to diffuse criticism of their monopolistic restrictions, to help them in their fight against Epic, which is actually fighting for the same rights that these small time developers really need.
The App Store is a lot more than “payment processing.”
If you sell 100 installs on the App Store as a small developer. How many would you sell if there wasn’t an App Store? You’d have to advertise — people just don’t show up at your website. PPC is expensive. And you have to learn how to do it. It’s hard for someone that doesn’t spend their time learning about PPC. It’s hard to get good ROIs even when you do know what you are doing. If you spend $0.50 per click and you sell your app for $3, and you have a 25% conversion rate (which is extremely high,) how much did it cost you to get that sale?
Then once they do get to your website, they have to pay. Ok, 2.9% + $0.30. Now they have to securely download the app. Where is your app hosted? Apparently that’s free and doesn’t cost you anything? Who maintains that system? How pays for that electricity? And updates? And security? Apparently all of that is free and takes zero time?
Chargeback? Uh oh. That’s a $20 fee while you have to fight and document the dispute. Maybe that takes 20 minutes, but more like 45 minutes by the time you write the challenge letter. Digital products, especially games, have a high rate of fraud compared to many industries.
Then there are sales taxes. Are you collecting and remitting the precise amounts to the various jurisdictions where you are selling? How about a sales tax permit? Do you have that?
And trust? I’ll buy an App Store app, but installing an app from some random developer without any assurances I am not installing something nefarious?
If you sold 200 downloads from your website but 300 downloads from the App Store but pay the 15-30%. What makes you more money?
Have you ever sold a product to a retail store? A $10 product in a retail store is purchased from the manufacturer at $5. If there is a distributor involved, that $10 product is purchased from the manufacturer at $2.50. Physical products are obviously different than digital, but the product distribution model for any product has markup across the chain. A manufacturer selling DTC has to have the infrastructure to sell to consumers, thus they aren’t selling at $2.50 anymore. Shipping 100 cases of a product to a distributor is a lot less work than shipping that same volume to individual customers. If you think of the App Store as a distributor — 30% is a bargain.
I think that many app developers don’t realize what things actually cost — when they do, they’d quickly realize they make far more money from the App Store than they would make selling it directly.
Difference is, in retail if I want to get my product to the masses I'm not locked in to selling in or two on particular retail stores.
Your comment shows the glaringly obvious problem. We don't need two monopolized appstores to "decide" how much of a cut should go to appstore maintainers for all the (real) work they do. Opening u the ecosystem for more appstores or more venues to get apps will keep the prices to a market-driven norm as opposed to a monopolized fixed percentage.
They hope to significantly reduce the pressure on politicians to take a close look at their App store practices by significantly reducing the absolute number of developers suffering the full impact whilst taking the minimum possible hit to their revenue. This has nothing to do with “doing the right thing” or “accelerating innovation” and everything to do with limiting the number of outraged letters to senators from devs, the number of newspaper interviews with prominent indie developers & so on.
Indie devs have an outsize PR impact relative to their revenue contribution, so buy them off with a smaller revenue tax that delivers outsize returns if it prevents the 30% house rake on the majority of Apple’s App Store income coming under scrutiny.
Apple / Google’s 30% take is the anti-competitive elephant in the room here, not a few crumbs thrown to small developers.