> Because what stops Apple from making this 40% or 50%? 30% is a fair price?
Competitive pressure. 30% is pretty in line with what other platforms charge.
Apple has had the same 30% ever since it launched the App Store, back when it was much less dominant. They presumably picked it as a level that would make revenue but also not deter developers.
Collusion is the ugly cousin of monopoly. If you can't get a monopoly, work with your few competitors to set an industry standard fee in which you all make a killing and can claim the plausible deniability of "fair market value".
> There’s no world in which Nintendo and apple are colluding to set rates.
What makes you say that? And short of direct collusion, is it fair game if Apple sets the precedent and Nintendo follows suit without direct coordination? If the agreement is only alluded to without being directly stated, are we okay with the ethical precedent regardless of legal standing?
> Apple has had the same 30% ever since it launched the App Store, back when it was much less dominant. They presumably picked it as a level that would make revenue but also not deter developers.
They picked 30% because that was the iTunes Music Store cut. The iOS App Store was a direct clone of the iTunes Music Store in almost every way. It even existed inside iTunes for years. As a developer, I can still see "iTunes Connect" in some obscure areas of App Store Connect.
The documents from the Epic trial showed that the App Store was thrown together very quickly. Initially, Steve Jobs didn't even want third-party apps on iPhone and had to be convinced to add them.
> That doesn’t seem relevant to the question of whether Apple’s fees are in line with fees on other platforms such as on video game consoles.
I've never understood why video game consoles are the relevant platform. iOS is a general-purpose computing platform more akin to Mac and Windows. Indeed, iOS was based on Mac OS X. As an Apple user, I don't even play video games, on either iPhone or Mac. And as an Apple developer, I don't write video games either. Games are 100% irrelevant to my computing life.
> Plausibly iTunes 30% was chosen because it met the same goal: high enough to earn a good amount, low enough music companies found it compelling.
The problem is that the iTunes Music Store was based on selling 99 cent songs. 30% of that is just 30 cents. Before the App Store, computer software was almost never in the 99 cent price range.
> I've never understood why video game consoles are the relevant platform.
From the courts’ perspective, it isn’t. The relevant market definition, as established by the courts, is digital mobile gaming transactions.
I’ve called into the District Court’s hearings almost every day, and many days were spent on determining the relevant market, but the long and short of it is that this definition was chosen because:
- The impetus of the case was Fortnite
- Epic was unconvincing in establishing their EGS was more than just a gaming storefront, which limited the scope of the case to gaming
- the court established that free-to-play games generated the vast majority of the App Store revenue
You also have to remember that the court can’t just hand out judgments that affect things beyond the case in front of it.
This case was Epic v Apple and not, say, a class action by multiple app developers, so the court's conclusions will be limited to the facts that pertain to those two parties.
In other words, other markets might exist, but they might not be relevant to the case at hand.
Additionally, civil courts prefer to split the baby; in this case, this seems to be a middle ground between Apple’s proposed relevant market (games in general) and Epic’s (Apple’s App Store).
An interesting tidbit is that Nintendo’s Switch made a minor cameo of sorts because you can make transactions on it on the go (i.e., it's mobile). Still, the main competitor, according to the court, was Google, leading the court to conclude that Apple is primarily in a duopoly with Google.
Personally, I think video game consoles would be part of the relevant market because of the similarities in market dynamics. The way the payment for IP is structured (commission), the way entry to the market is managed (certifications, similar to app review), the way there’s a single brand market (i.e., monopoly by manufacturers), etc.
While the purpose of the devices might be different, the underlying products are the same (software), and the market mechanics are nearly identical.
Even the platform limitations are artificially created by the platform holder (i.e., what you can and can’t do on iOS is artificially limited, just like what you can and can’t do on consoles is artificially limited by Sony and Microsoft).
Drilling it down further, you’ll find that on Xbox, you have access to non-gaming apps, and plenty of people use their iPads as a game device for their kids. Further blurring these lines of purpose.
> As an Apple user, I don't even play video games, on either iPhone or Mac
You might not, but it wouldn’t come as a surprise to you that others might.
I, for example, play games on my Apple devices, as do others in my household.
> And as an Apple developer, I don't write video games either.
Same here. I mainly write apps, but I dabble in games and know plenty of other devs who make games.
> Games are 100% irrelevant to my computing life.
What I’m trying to say is that anecdotal arguments aren’t solid. This is not a dig at you; mine aren’t either.
> The problem is that the iTunes Music Store was based on selling 99 cent songs. 30% of that is just 30 cents.
I don’t follow this logic.
Does it matter if $300,000 is extracted via a million $1 transactions or 10,000 $100 transactions?
Ultimately, you end up paying $300,000 in commissions.
> Before the App Store, computer software was almost never in the 99 cent price range.
There’s a lot to unpack with this simple statement.
First is, of course, that the race to the bottom is a pro-competitive symptom.
If we, as devs, didn’t have to compete so hard, we wouldn’t have to sell our software at low prices.
Ironically, this is good for consumers, but the devaluation of software isn’t so great for us developers.
Secondly, this, of course, undermines your iTunes $0.99 argument. Whatever it used to be, it’s now the same as with songs via iTunes.
Does this mean you’re ok with the 30% commission or 15%, whichever applies to you?
This is why I’m saying I have a hard time following your logic because I guess I don’t know exactly what you’re trying to say.
Lastly, before the App Store, the revenue cut developers got was abysmal. I don’t know if you’re old enough to recall any of this. I barely am, but it wasn’t pretty.
In brick-and-mortar times, you would have a good deal if 40% made its way to you, but more often than not, it was a 70/30 split, with only 30% making it to you, with outliers as low as 10%.
Specifically for “smartphone” software, this continued for a while, with carriers being cutthroat regarding revenue split.
In the years before the App Store, things got better with Nokia and BlackBerry, who adopted a revenue split closer to 50/50, and Qualcomm’s BREW actually was “good” at times with an 80/20 split in favor of developers.
The problem with those, however, was that the barrier to entry was relatively high and costly.
Then Apple came along with their 70/30 split, which, as you said, was a copy-paste from the iTunes Store. Still, because both an all-encompassing commission (payment processing wasn’t a separate charge as was typical before then) and because of the abysmal revenue splits in the decades before while also having a comparatively low barrier of entry, it was received with literal cheers.
Although I think people were also happy not to have to deal with carriers anymore, that was a huge pain.
Sure, App Review can be a pain for some, but it’s a utopian publishing pipeline compared to the hoops one had to jump through and the negations you’d have to go through every time before the App Store came along.
Does that mean that Apple is perfect?
By no means, there’s plenty they can improve on, but within the historical context of the time, it was like offering someone a glass of ice water to someone who was stuck in hell (to paraphrase a quote from Jobs on iTunes on Windows that didn’t age well).
I couldn’t care less about the commission. I was content with 30%, and I knew what I eagerly signed up for. The 15% discount was a nice bonus, and I think I got, and still get, my money’s worth and then some.
While my experience is overwhelmingly positive, I think there are other, more pressing matters for me as a developer that Apple can improve on.
> Does this mean you’re ok with the 30% commission or 15%, whichever applies to you? This is why I’m saying I have a hard time following your logic because I guess I don’t know exactly what you’re trying to say.
Let me start with this, because it may clarify a lot. I qualify for the Small Business Program 15%, and while I think that Apple's developer services are totally crappy and not even worth 15%, from my perspective the cut is not among the App Store's biggest problems, and I would happily pay an even larger cut if I actually got a good return for the investment.
My goal was merely to highlight the historical origin of the App Store, which is important in understanding how we got to this point today.
> The relevant market definition, as established by the courts, is digital mobile gaming transactions.
As invented out of thin air by Yvonne Gonzalez Rogers. But I'm not really interested in arguing the legalisms. I think the decision was bad, but that's par for the course in our legal system. I'm more interested in the public debate over the issue, here on Hacker News, on social media, in the news media, etc. Regardless of what the judge decided, the people in the public who defend Apple often point to gaming consoles and consider them to be the relevant platform.
> What I’m trying to say is that anecdotal arguments aren’t solid. This is not a dig at you; mine aren’t either.
I'm not sure what you think I was arguing, but it was simply that iPhone is a general-purpose computing device. Of course gaming is one of those purposes but definitely not the only purpose. Indeed I would argue that gaming is not even the main purpose, because after all, iPhone shipped in 2007 with zero games, and while Apple has created a lot of apps for iPhone, Apple has created almost no games for iPhone. (I think they had a Texas Hold'em game way back in the day, and they also made Warren Buffett's Paper Wizard.) I wasn't trying to deny that people use iPhone for gaming; that would be a silly argument.
You can argue that gaming consoles have some additional capabilities besides games, but does anyone ever buy a gaming console who doesn't play games at all? That would be silly and pointless. Yet huge numbers of people buy iPhones and iPads and Macs with no desire to game on them. Thus, I argue that those are general-purpose computing devices, unlike gaming consoles.
> Does it matter if $300,000 is extracted via a million $1 transactions or 10,000 $100 transactions?
Yes. 30 cents is actually a very good deal for a 99 cent transaction. I don't think you'll find a better one, and many payment processors would charge 30 cents plus a percentage. At least as far as payment processing is concerned, though, 30% is a crappy deal for a $100 transaction. So the question is, how much does the App Store add to the value above and beyond payment processing? I would argue, not much in most cases.
> Ironically, this is good for consumers, but the devaluation of software isn’t so great for us developers.
I dispute that it's good for consumers. You get a different type of software in a race-to-the-bottom market. When the platform makes it difficult for developers to produce quality, well-crafted, sustainable software, you get exploitative crap instead, and I think the epithet "crap store" is richly deserved.
You can really see the difference in the Mac App Store, because on the Mac, developers don't have to be in the App Store, and quite a few important apps are missing entirely.
It didn't have to be that way. The iTunes Music Store model was a very poor fit for software. For example, the "top charts", based on unit sales, was one of the main ways to get noticed in the App Store and was a big reason for the race to the bottom. The top charts are tolerable for music, where every song and album is more or less the same price, but it doesn't work well for software, the price of which varies greatly, so unit sales are not a good representation of the quality of the software.
> In brick-and-mortar times, you would have a good deal if 40% made its way to you, but more often than not, it was a 70/30 split, with only 30% making it to you, with outliers as low as 10%.
30% of $100 is $30. 70% of $0.99 is $0.69. I'll happily take the 30% cut of the much higher price.
> Sure, App Review can be a pain for some, but it’s a utopian publishing pipeline compared to the hoops one had to jump through and the negations you’d have to go through every time before the App Store came along.
This was not my experience. Before the iPhone came along, I was a Mac developer. We sold our software on the web directly to customers, bypassing all middlemen except for payment processors. Apple got a 0% cut. What happened in your comment was the same as I've heard in most arguments defending the App Store: the "history" goes directly from brick-and-mortar times to the App Store, completely ignoring the golden age of indie developers selling software on the web.
iOS was based on Mac OS X, UIKit was based on AppKit, and of course they both used Objective-C as the programming language at the time. The App Store was practically an invitation for Mac developers to jump in right away, and many did. But the business model of the App Store was atrocious compared to the Mac. (The Mac App Store, a clone of the iOS App Store, didn't open until 2011). From my perspective, the App Store experience was nearly infinitely worse than the Mac developer experience. It was not like "offering someone a glass of ice water to someone who was stuck in hell". Rather, it was more like kidnapping someone already in heaven and sending them down to hell.
This is why I make so much of iOS being a general-purpose computing platform. It's very much like the Mac, except for the form factor, and it could have been much more like the Mac in terms of third-party software. And at least in Europe, perhaps it will be soon.
I appreciate your clarifications, in some cases it seems I misunderstood what you were saying.
> I qualify for the Small Business Program 15%, and while I think that Apple's developer services are totally crappy and not even worth 15%, from my perspective the cut is not among the App Store's biggest problems, and I would happily pay an even larger cut if I actually got a good return for the investment.
I’m sorry you’re unhappy with the services and tools offered in exchange for the commission.
As I stated before, I was already happy with what I got for 30%, the 15% is a cherry on top for me.
I’m one of the few (it seems) that’s very happy with Xcode and its improvements, I’m also very happy with the advancements made on frameworks and SDKs over the last decade or so.
It has made my work so much easier and without many of the latest improvements much of what I currently do wouldn’t be possible.
Code level DST support has also proven to be invaluable to me.
> As invented out of thin air by Yvonne Gonzalez Rogers. But I'm not really interested in arguing the legalisms. I think the decision was bad, but that's par for the course in our legal system. I'm more interested in the public debate over the issue, here on Hacker News, on social media, in the news media, etc. Regardless of what the judge decided, the people in the public who defend Apple often point to gaming consoles and consider them to be the relevant platform.
It’s not invented out of thin air, but based on well established case law and legal principles.
I used to practice law between my original stint in software and my current career in software and based on my legal knowledge I’d say that both the original judgment as well as the affirmation by the appellate court is a logical and sound legal conclusion.
But I understand that you’re mainly interested in the “every man’s discussion”, that’s fine.
> I'm not sure what you think I was arguing, but it was simply that iPhone is a general-purpose computing device.
I’ve addressed this both from a legal perspective as well as my personal perspective.
I think it’s safe to say that no new insights can be gleaned from a back and forth and we just fundamentally differ in our views on this.
> Yes. 30 cents is actually a very good deal for a 99 cent transaction. I don't think you'll find a better one, and many payment processors would charge 30 cents plus a percentage. At least as far as payment processing is concerned, though, 30% is a crappy deal for a $100 transaction.
I don’t think it makes much of a difference when taking volume into account. The “pain” is the same, it’s only a matter of difference to how it feels.
> So the question is, how much does the App Store add to the value above and beyond payment processing? I would argue, not much in most cases.
Perhaps not with that framing, I’d argue the question is really how much does Apple as a company add to the value as the commission structure first and foremost serves as payment for being able to use their IP.
The answer is easily found I’d say, try and reinvent the wheel for yourself, leave as many frameworks to the side and let me know how it goes.
For me SwiftUI alone is worth its weight in gold given how much time it has saved me.
> I dispute that it's good for consumers. You get a different type of software in a race-to-the-bottom market. When the platform makes it difficult for developers to produce quality, well-crafted, sustainable software, you get exploitative crap instead, and I think the epithet "crap store" is richly deserved.
I don’t agree with you on this either. I’d argue that the golden age of apps is here, if only because of the many high quality indie apps.
Something that would’ve been impossible without the available tools and frameworks, something that was completely absent in the software market decades ago.
> 30% of $100 is $30. 70% of $0.99 is $0.69. I'll happily take the 30% cut of the much higher price.
This seems rather shortsighted. $30 > $0.69 sure, everyone can see that.
But pushing 100 units at $100, leaving you with $300 is less than pushing 1000 units at $0.99 leaving you with $690 and that’s a conservative estimate.
I could’ve never dreamt of having as many sales as I have now and that’s not even opening the can of worms of recurring subscriptions.
Do I wish software was valued more these days? Definitely. Does the sheer volume make up for the loss in headline price? Also definitely.
> What happened in your comment was the same as I've heard in most arguments defending the App Store: the "history" goes directly from brick-and-mortar times to the App Store, completely ignoring the golden age of indie developers selling software on the web.
Great and you can still have that golden age. macOS is open enough to sustain that after all.
I didn’t skip from brick-and-mortar to the App Store, instead I highlighted the abysmal environment of the faux smartphone era. Why? Because a) we’re mainly talking about iOS and b) macOS is open.
You can choose to ignore that part, but that doesn't change the fact that everyone and their mom was cheering for a 30% haircut and a simple publishing process after having gone through hell with carriers.
> I’m one of the few (it seems) that’s very happy with Xcode and its improvements, I’m also very happy with the advancements made on frameworks and SDKs over the last decade or so. It has made my work so much easier and without many of the latest improvements much of what I currently do wouldn’t be possible.
> Code level DST support has also proven to be invaluable to me.
You're talking about things that have nothing to do with the App Store. These same tools are used by Apple to make their built-in software. They're also used by Mac developers outside the Mac App Store.
I'm talking about the App Store itself, as well as tools and services directly related to the App Store, such as App Store Connect.
> The answer is easily found I’d say, try and reinvent the wheel for yourself, leave as many frameworks to the side and let me know how it goes.
> For me SwiftUI alone is worth its weight in gold given how much time it has saved me.
Again, you're talking about things that have nothing directly to do with the App Store. The iOS and macOS system frameworks are not the App Store and would exist even if the App Store were eliminated.
> Something that would’ve been impossible without the available tools and frameworks, something that was completely absent in the software market decades ago.
Same thing here. Nothing to do with the App Store. And in any case, they were available decades ago. Xcode is 20 years old. UIKit is based on AppKit, which itself originally came from NeXTSTEP over 30 years ago.
> But pushing 100 units at $100, leaving you with $300 is less than pushing 1000 units at $0.99 leaving you with $690 and that’s a conservative estimate.
Your math is wrong. 100 x $30 = $3000, not $300.
Anyway, indie developers can't "make it up in volume". One of the most difficult things for an indie developer is marketing and getting discovered by customers. That's why we need sustainable prices. Not to mention paid upgrades.
> You can choose to ignore that part, but that doesn't change the fact that everyone and their mom was cheering for a 30% haircut and a simple publishing process after having gone through hell with carriers.
Was the pre-iPhone mobile software market even as big as the Mac software market? I'm skeptical. It certainly wasn't as big as the Windows software market, which is also open. Open platforms were the norm.
Competitive pressure. 30% is pretty in line with what other platforms charge.
Apple has had the same 30% ever since it launched the App Store, back when it was much less dominant. They presumably picked it as a level that would make revenue but also not deter developers.
The App Store hasn’t got a monopoly on computing.