Apple's 15% Deflection Tactic

  • The other (slightly earlier) big thread on this is https://news.ycombinator.com/item?id=25135410.

  • but you pay for the distribution / tools / OS etc is a common sentiment I see here. No, the yearly fee should pay for that, and the user for the OS. And anyways, what if I don't want to, why cant I distribute it myself?

  • I just want to be able to run and distribute my own apps. It’s ridiculous and just plain criminal that this is not possible. Apple does not own my device and does not get to dictate what I do with it. Phones are so locked down that they are a real threat to personal computing and software engineering. The day where apple stops indies from publishing apps is near.

  • I love how here on HN this is being painted as if it were some heinous underhanded move by Apple.

    Meanwhile in my Twitter thread, every single Indie developer I follow is over the moon about it.

    Whatever the end goal here, Apple is helping the smallest developers the most here.

    And yes, there are a lot of places Apple can do better, but the cynicism around this is overblown.

  • We've been seeing these blog posts for over a decade and this doesn't offer anything particularly new.

    It would be nice to see one that actually offered constructive and workable legal solutions other than "make iPhones general computing devices" even though the concept has no meaning in law and would bleed into other industries.

  • > General computing platforms should be protected from such predatory practices by manufacturers through strong government regulations.

    I find it much more plausible that any regulations will end up entrenching market incumbents and closing off potential avenues for disruption. In other words, this can only make the situation worse or keep it somewhat the same, it won't make it better.

    > Stifling innovation isn't good for anyone, and as more and more people become software developers, this really just hurts the small guys ... Indie developers need protection from monopolistic and anti-competitive practices from larger players in the market through strong government regulation, not a discount on their first $1m in sales.

    Indie developers aren't the only stakeholders here, platform users are as well and any regulation will need to take into account their needs and interests. In purely numerical terms, the latter group outnumbers the indies by 100x or more. Realistically speaking, whose needs will any regulation give more precedence?

    The top concern amongst tech users today is security, whether its security of personal data or a more diffuse sense of security concerning the integrity of public discourse conducted online. It's very hard to imagine any kind of regulation protecting indie devs without also introducing regulations on the distribution process itself, in order to protect end users in these two areas. The only thing harder to disrupt than a commercially dominant player is a commercially dominant player ensconced in a complex regulatory regime. This is not a reality that indie developers or myself (personally), particularly like, but it's the reality we have. Ignoring it won't make it go away.

  • I cannot disagree with a single word in that article.

    I would also go further and mandate that all general purpose computing devices should be forced to have an unlocked (or easily unlockable) boot loader so you can easily acquire full control over your device and even install competing OSes.

  • I think most people forget that Apple is paying the merchant processing fees on all of these transactions. On a $0.99 sale typical rates are 3% + $0.30. I’m quite certain Apple doesn’t pay full rate, but it’s entirely probable that they lose money on smaller transactions.

    They have soft costs for app review and distribution but I can’t imagine they are significant whatsoever relative to merchant fees.

    This is a fantastic loss leader to build marketshare and nurture app growth. They will probably have a lot of fledgling devs plow that incremental money right back into ads in a ā€˜virtuous’ cycle.

  • I'd really like to know how much all the people whinging think it would cost to offer the following to developers. Crunch your numbers and show your work:

    1. A development platform that includes the toolchains and emulators for all the variations of the Apple hardware/OS environments (including the ability to distribute test versions to a restricted audience)

    2. A secure platform for taking payments, including all chargeback risk, local consumer taxation requirements (VAT etc) worldwide.

    3. A secure platform for in-app purchases, subscriptions, DRM on content (leave aside the arguments for/against)

    4. Mechanisms for secure distribution to employee BYOD of employer specific applications, including capabilities to remove them from departing employees

    5. A marketplace with search and discovery (however imperfect) that also provides for customer reviews, screenshots etc

    Currently all of that (barring the MDM of point 4) costs a developer:

    * $100/year

    * 30% of purchase/subscription/in-app revenue

  • If I make $0 a year I should be able to put the app on my phone without having to pay as well. And not just for 7 days and have to resign it every 7 days.

  • I am an gadget fan. I wouldn’t be caught dead with an Android or a Windows thingy in my hand. Also a small dev. Here is the thing. Apple offers no revenue promise when I publish my app on iOS. If I don’t figure out how to market my app, it will just sit there and rot. But as soon as someone buys my app, I have to pay 15% to Apple. What for? It did NOT help me get my customer. If my app gets featured then may be I ll pay for the purchase bump. But what if I don’t want to be featured if it’s not worth the cut. I am paying plain and simple because Apple has the key to my customers phone. Where I come from, that shit is called extortion.

  • I don’t get why people use the argument that they couldn’t possibly need the revenue from the App Store to keep it running. It isn’t a non profit business. What about all the money they spend on the hardware research and so many many other things. Some initiatives fund others and stock holders are very happy to see a profit.

    I keep seeing critics, who may also be developers, arguing with developers on why they should be unhappy. The truth is, there are enough happy developers and customers to show that there is a healthy ecosystem. If there wasn’t then it would leave a gaping hole for a competitor.

    I’m happy to pay for apps and happy to pay my cut for selling apps on the platform.

    There are benefits to having a closed ecosystem just as there are to an open one. There are trade offs. I’m not sure why anyone complains about the Play store charging similar fees when you can distribute apps on android in other ways. If that is so much better for developers and Apple doesn’t earn their cut then I would expect to see a mass exodus to Android development.

    I personally prefer developing for iOS and Mac. I don’t mind their fees. I find the customers to be very happy. I appreciate alternative perspectives but the tone of all of these articles complaining about Apple making money off of the ecosystem they created is so off putting to me.

  • The only concern I have is Apple has incentive to promote higher take apps over lower take, so they benefit more from pushing the 30% take apps over the 15% take.

    As long as we don't end up with a tiered App Store like XBOX Arcade or Steam Greenlight back in the day then all good. If the 15% apps become pushed less that is no fun.

    There is some benefit to a standard price market, most stores are 30% [1]. Tencent MyApp was even 55% until 2019 [1]. Epic Games is 12% but they said they are profitable around 7%-8% [1][2]. Steam, Sony, Google, Apple, Microsoft, Amazon all 30%[1].

    If everyone went to 15-20% across the board it would be better. I am concerned about tiering of the market and down the line lower take apps being less pushed.

    [1] https://www.gamasutra.com/blogs/SimonCarless/20200903/369516...

    [2] https://www.gamasutra.com/view/news/341249/Heres_why_the_Epi...

  • They would have so much goodwill across the board if they dropped it to something like 10%.

    Apple has made these mistakes before (eg. the iBooks price collusion lawsuit).

  • At least it's better than what Steam did, which is cut its rates on high-revenue games but keep the 30% cut on small, indie titles[1].

    [1] https://www.rockpapershotgun.com/2018/12/01/steam-taking-sma...

  • Apple didn't lose much by reducing commission to 15%, when they are top heavy, anyways. Based on one of the articles (not sure about how trustable data was, though), while the new commission effects 98% of developers, the net revenue impact would be on the order of a percent or two.

  • >Developers should be free to choose the payment processing service that best serves their needs, whether that's Stripe or Paypal or Apple's built-in offering. Apple's payment processor should be chosen because it's better, not because you have no other choice.

    I'd like to note though, that users also should be free to choose the processing service that best serves their needs, not because they have no other choice. I'd much prefer paying with Apple Pay instead of Paypal. If Apple ever allows developers to provide different payment processors, I hope they make it mandatory for developers to also include Apple Pay as one of the options (just like they did with Sign in with Apple).

  • We need digital consumer rights laws. Badly.

  • I understand that 30% is big, and does have an impact on some business models, but it also acts to align the incentives of the platform-developer with those of the app developer. The fact that Apple makes a bunch of money off apps makes it beneficial for them to continue supporting the ecosystem, by providing APIs, functionality, and other support.

    What surprises me most about Apple's model is why they don't offer better support to developers. It seems that iOS the 'rich users', whereas Android has the 'cheap users', so Apple doesn't even bother improving the developer experience.

  • I've been an Apple developer for decades, but the last few years have been exhausting and I'm ready for a break. So I'm switching 100% to Linux development.

    For now that means contracting work for others, who are integrating Linux into their systems (embedded), but as soon as I start seeing a viable way to get paid to build Linux-only software for a mass market, I'll take it.

    Personally, I think the old models work fine on Linux: shareware/freeware, donation-ware, simple/cheap licensing terms, etc.

    I wonder what the SublimeText and Reaper guys get for their Linux builds? I'm sure it is not insignificant, but I'm not sure its significant...

  • I'm a bit slow thinker, so it took me some time to put this into words. This article helped me to do it.

    Google and Apple app stores are mechanisms which are used prevent, snuffle and destroy competing digital services. They prevent competition by collecting 30% tax. They snuffle competition by setting their own rules and controlling app store visibility. They destroy competition by closing companies from stores. Why it is important, is that smartphones are the most used platform to consume digital services. Digital services can be apps, music or anything distributed digitally.

    Why it is financially so small business right now, 15Bn for Apple right now, is just that they have not used their full leverage yet.

    Why you need to make rules for all App stores, for example Facebook virtual reality, is that it is feasible, that these will later become platforms, mainstream customers expect to have services.

    How it works (if further explanation is needed): 1. If you are offering digital services to consumers or companies, your customers will expect them to be present in both platforms. 2. You have to pay tax, so both of these companies take a cut of your business, which prevents competition. 3. They can add offer the same service, and advertise it over your services, which snuffles competition. 4. Even been closed out by either of these, likely destroys your business.

    4 happened to one of my products

    I'm building a new product, and I think it is likely, that Apple and/or Google will use 3 to compete against me in some timeframe. Even if they don't I will be paying 30% tax forever.

    Edit: Now that I think about his further, nothing prevents extending their reach to nondigital services as well, such as airbnb sales - they just need a new 'innovation' to the app store rules

  • This article has the timeline wrong about Steam.

    Steam was established earlier than the App Store, and everything you buy there is very locked down to the Steam platform. Try uninstalling Steam and still play your bought games and they wont work.

    Also Steam has an even higher rate than 30%. Yet Steam get a free pass in most rants like this, why is that?

  • I think that a private company making their own hardware product should be allowed to control what third parties get access to their hardware and should be allowed to charge whatever they like for it, and the market will decide whether or not there is any demand for it.

  • iPhone or any "mobile" phones are not actually phone's. They used to be, at a point in the distant past. With internet connection and a processor more powerful than the computing systems of the past era, these devices have to reclassified as mobile computing devices. Then these predatory tactics would be subject to antitrust, and the perpetrators can be brought to justice. Or, is the legal system and the elected representatives so inept to act on behalf of people?

  • > For decades, developers were able to create and distribute their software, whether free or for a fee, to anyone with a PC or laptop.

    But if you wanted to get paid, whether by going through a distributor or building your own payment- and billing system, it would cost you way more than just 15% (especially if you factor in the lost time dealing with all that).

    Global distribution, sales support and payment, for just 15%, that’s possibly the best deal that’s ever been available to developers.

  • The definition of general computing devices i.e. Personal Computer (PC) is correct and applies to smartphones. Making open usability a legal requirement makes sense and is what we need already for a long time. The difference between a cellphone and a smartphone is that the former is an appliance and the later a portable general purpose computer.

    @John Luxford. Thanks!

  • I’ve said it before. Because Apple has that tax the incentive to create an alternative OS is very very high and it needs to be because it’s a monumental task. So the question is: do you want to be stuck with iOS and Android forever (lower incentives by governmental demands) or do you want to see a new player in the market in a decade or two?

  • I'm sure this has been mentioned before, but the most basic thing I do not get about these complaints is if the people making them have ever seen the markup and overhead that goes into retail sales of physical products? It's not like I can manufacture a product, send it to Walmart or Bestbuy or whatever, and expect them to only add a few percent on top for credit card processing fees, so I can reap almost all the potential profit.

    I realize what some developers are looking for is a way to directly reach consumers. Have they ever tried to ship physical products to consumers? Logistics takes a lot of effort. Sure, we're talking about software so the "shipping" costs are so small that it's hard to even measure on a single download of an app. However there's a whole virtual storefront with curation, ratings, security, payment processing, and the APIs and hardware platform trust that comes along with it.

    If we go back to the physical store analogy, a lot of indie developers are getting value from being featured in the Apple or Google stores. It's a little like a large national retailer picking up some startup's product to feature in their stores. Or it's like being allowed to open a small store in a mall with major anchors. It means that the mass market will see your product and will trust it better than if you have some small shop off in some weird low rent location.

    Maybe 30% is too much for this, or maybe the app review process should be better, or maybe developer support should be better, but acting like the platform and the store don't cost anything to maintain, and aren't worth anything seems really naive.

  • How have we forgotten how expensive software packages to develop such free to distribute applications were.

    Or worse, that such software packages actually came with a distribution license, where royalties the way beyond any 2020 "tax" had to be paid back per installation of software developed with such compilers.

  • Sigh.

    > The 30% number was based on what video game consoles were charging developers.

    Actually, the 30% number was based on what Facebook were charging developers.

    Like I get that we're all nerds here, and thus hate FB, but can we at least remember that the reason the west has F2P games everywhere is because of Zynga, Facebook and Farmville?

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  • I think this can be relevant talks about Hinkley Point C and raising price and compares it with other options. https://www.youtube.com/watch?v=E5lg73SDYUw

  • The only solution not listed is that unfortunately you have to get the government involved.

  • These days im hounded by apple marketing reps begging me to spend money advertising in the app store. So now we pay for access (yearly fee), discovery (apple ads) and if we happen to get anyone to pay (apple tax). Tim Crook!

  • I'd bet a pretty significant number of current mobile apps would do just fine as PWAs, rendering this whole kerfuffle moot.

    More developers should be pushing for improvements in web tech rather than just accepting whatever Apple decrees.

  • I really hope governments crack down hard on companies like Apple and Nintendo. You shouldn't not be allowed to force control of the device after you sell it if the customer.

  • Important to remember: 30% is an issue, but unilateral control to ban, censor, and "pull" entire businesses offline on a whim is even more scary and dangerous.

  • So Apple creates a closed ecosystem and everyone is cool with it for years and now we are demanding that they need to make it an open ecosystem?? Lolol

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  • Does apple use this to pay the tax too? In India, there is an 18% tax. Should an app has to pay 18% tax and 15% tax(totaling 33%) to apple?

  • Developers: please start supporting and advocating Linux, then we'll all have (hopefully) a better alternative future.

  • If they would produce good documentation we might actually build native apps instead of web apps.

  • I wish I had the problem right now of making sure that my revenue for 2020 doesn't exceed USD1.4m gross/USD1m nett.

    Oh to have the terrible concern that my monthly revenue next year doesn't exceed USD98K, or that if it does, it's no less than USD120K.

    My heart bleeds.

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  • I can be wrong, but I believe that Steam predates Apple Store.

  • Deflection? I thought it was a big 'FU' to Epic.

  • If one considers the App Store as a marketplace and that it can be considered analogous to E-Commerce marketplaces, then a 15% fee is actually directly in-line with the standard set by Amazon and Walmart.com.

  • I have purchased 25 Acer Swift 3 laptops this year for my staff. They cost about $650. They come preinstalled with unnecessary Norton antivirus software (which defaults the installation of a lighter version in its standard uninstall flow), Dropbox, Firefox, ads for Netflix and Amazon on the desktop, and a persistent ā€œWould you like to use Skype?ā€ popup program separate from Skype itself. Consumers have a clear choice to tolerate this bloat, or to pay more to Apple to avoid it and ensure only high quality software runs on their computers.

  • Is it 15% or 50%?

  • Do people think Apple is running a fucking charity?

    It’s business. Grow up, deal with it.

  • Teach a man to write on paper and he will tire his arm out, but teach a man how to blog and he will spew nonsense all day long and gain followers!

  • Apple's reluctance to fully supporting progressive web apps makes me think they see PWAs as a real threat. As long as the APIs continue to mature, I could see PWAs being the the thing that breaks down the gatekeeper wall for apps and returns the web to being open again.

  • Jesus Bitflipping Christ, talk about being dammed if you do!

    Apple should just close up the App Store for good and let everyone build their own billion user marketplace from scratch.

    At this point I’m certain rival companies are paying people to pretend to whine about anything Apple does, to make them do exactly that.

  • Change is coming, Apple can feel it (which is why they made this PR move), Epic can feel it, some devolepers can feel it (complaining about Apple and Google a year ago felt like talking to a wall), yet some people on HN can’t feel it, or just plain refuse to.

    It is about time Apple gets pulled down to Earth and faces scrutiny like all other major companies do.

  • >Does it really cost Apple anywhere close to $15bn/year to maintain the app store's review process and hosting infrastructure?

    This.

  • >Now that Microsoft and Apple have introduced app stores on Windows and macOS, they plan to slowly erode our freedom on PCs too so that they can reap the same financial benefits on our labour on all computing platforms

    I haven’t seen any indication that MS is trending in this direction, nor could I envision how they would go about doing such a thing. Fuck Apple though. Rent-seeking scum.