As a developer with more than a handful of apps on the AppStore, I can understand as one grows, desiring to move away from the 70-30 split, get better data around users and conversions, etc. This will become an interesting test if I flip. I'm not exactly thrilled about figuring out Paddle/Stripe/BrainTree/Paypal again, subscriptions and verifications, but there are a couple of struggling Apps in the portfolio that I need better data on the lack of conversion to standard price that it may be worth it.
All this said, I think everyone forgets after the first year of continuous billing per customer on subscriptions the percentage drops down to 15%, from the 70-30 to 85-15, which gets pretty close to operational profit parity for small shops.
Also sometimes forgotten is that although doing your own handling of payments through someplace like Stripe has a much lower percentage fee than Apple, it also has a per transaction fee that is typically around $0.25-$0.30.
If the app is selling inexpensive things, such as things at the popular $0.99 price, 30% to Apple is going to be less than 2-3% + $0.30 to a third party payment processor.
Micropayment rates are usually much lower, think 4 to 5 cents plus 5% for small dollar transactions with a normal merchant processor that actually underwrites your account upfront unlike Stripe.
The Visa/MasterCard auth fee can be below 10 cents for larger payments as well, and depending on card type and brand program the percentage can be below 1%
If I agree to sell your product, in the exchange I can obligate you to agree not to direct customers away from my store. Walmart doesn't display advertisements for Target. A grocer that sells Joe's fruit would no longer sell it if it had stickers directing customers to Joe's Fruit Stand. Apple has no obligation to promote competitors. And any competitors are free to create their own package managers and sell their own software, they just can't expect Apple to market them. In commerce contracts, noncompete clauses are legal and ubiquitous. Is Android anti-competitive because I can't run Apple software on it? Apple has not cornered a market through anti-competitive practices. They became successful by selling superior product that is massively popular, and Apple is not the only hardware manufacturer, mobile or otherwise, nor the only software developer. The hardware and software markets have a myriad of vigorous competition on which Apple protecting its IP has negligible or no effect whatsoever. What software developers have AppStore policies run out of business? Developers are making more money than ever thanks to Apple.
The article never once mentions "anti-competitive practice," nor, dare I say, does the judgment. While Epic's allegations of anti-trust were dismissed, the court found "Apple violated California's unfair competition laws by barring developers from telling users about other ways to pay." Your interpretation of this finding that Apple "did have an illegal, and anti-competitive practice" is absurd, and you are merely attempting to couch terms in the same allegations that were dismissed. Neither Apple, nor any storefront, is required to do their competition's marketing for them. The judgement merely states that Apple can't ban links to other forms of payments, without any of the specifics that you are falsly claiming. And there is a pretty good chance Apple will appeal the ruling, so even if your allegations are correct, which they are not, this likely isn't the final ruling. And it stands to reason that if developers agree to Apple's terms, they should abide by them and not claim anti-competitive practices when in fact the issue is whether they should be allowed to ignore their contractual oblication. Why would Apple be required to sell software for a developer if that developer undermines Apple's fee for doing so? Apple's appeal will likely drive this home. Or they will extract a fee for selling a developer's product for them in some other mannor. So maybe cool your jets a little, because not only are you not right, in fact, you are wrong.
Its on page 1: " in favor of Epic on its claim under California’s Unfair Competition Law"
> Your interpretation
You can just read the quote that I posted. Its in the ruling.
> Neither Apple, nor any storefront, is required to do their competition's marketing for them.
They are required to allow outside links. So yes, thats what the ruling says.
> The judgement merely states that Apple can't ban links to other forms of payments
Oh, so you agree with me! Got it. I am glad that you agree, that yes Apple is required to allow outside links, and yes it broke California unfair competition laws, as determined by the judge.
> there is a pretty good chance Apple will appeal the ruling
Did you not know that this was already the appeal?
> if developers agree to Apple's terms, they should abide by them and not claim
Actually, if those terms of service include banning links, then no developers should not abide by illegal terms like that. As the judge ruled that such terms are illegal, and developers don't have to follow them.
If the judge rules that the terms break California law, then developers should not follow them.
> Why would Apple be required
Well, Apple would be required to allow outside links, because thats what the judge just determined.
They should required to do that, that are required of them, by the california unfair competition law.
> not only are you not right
Hey, both the original judge and the appealed judge panel actually agree with me, not you.
> "the trial judge did find that Apple violated California's unfair competition laws"
> There's the line there from the article.
You have used terminology that was absent from the article and the decision, namely, "anti-competitive practices." To be quite clear, the decision finding that Apple violated California's unfair competition laws in no way means that Apple engages in "anti-competitive practices."
> Its on page 1: " in favor of Epic on its claim under California’s Unfair Competition Law"
Again, see above. You have over reached with your language, and are now trying to sweep that under the rug.
> > Your interpretation
> You can just read the quote that I posted. Its in the ruling.
It is not in the ruling. The ruling does not use your terminology, "anti-competitive."
> > Neither Apple, nor any storefront, is required to do their competition's marketing for them.
> They are required to allow outside links. So yes, thats what the ruling says.
That is not what it says. It says they violated California's unfair competition laws by not allowing alternate payment methods. It does not state Apple is required to allow outside links. So that is not what the ruling says.
> > The judgement merely states that Apple can't ban links to other forms of payments
> Oh, so you agree with me! Got it. I am glad that you agree, that yes Apple is required to allow outside links, and yes it broke California unfair competition laws, as determined by the judge.
No, because you are using language that does not apply to the case nor Apple. You are being intentionally inaccurate to spin a false narrative.
> > there is a pretty good chance Apple will appeal the ruling
> Did you not know that this was already the appeal?
Irrelevant straw man. Did you read the article? "Apple may appeal... a larger group of judges on the 9th Circuit or to the U.S. Supreme Court."
> > if developers agree to Apple's terms, they should abide by them and not claim
> Actually, if those terms of service include banning links, then no developers should not abide by illegal terms like that. As the judge ruled that such terms are illegal, and developers don't have to follow them.
> If the judge rules that the terms break California law, then developers should not follow them.
Then Apple can pull their contract for breaching agreed to terms of the contract.
> > Why would Apple be required
> Well, Apple would be required to allow outside links, because thats what the judge just determined.
That is not what the judge said. You are extrapolating beyond the scope of the case and incorrectly rewording, and the result is inaccurate at best and false at worst.
> They should required to do that, that are required of them, by the california unfair competition law.
The California unfair competition law does not require Apple to allow links.
> > not only are you not right
> Hey, both the original judge and the appealed judge panel actually agree with me, not you.
> The legal system is on my side, not yours.
Unlikely. Laws and judgements are meticulous and specific. If the judgement does not include the order, "Apple is required to allow links to alternative forms of payment," which it does not, then that is not the judgement. The judge found that Apple violated California's unfair competition laws, not that Apple engages in anti-competitive practices, and not that Apple is required to provide links to alternative forms of payment.
> To be quite clear, the decision finding that Apple violated California's unfair competition laws
> It says they violated California's unfair competition laws
Awesome! So you agree that yes the courts have ruled that they violated californias unfair competition laws. I am glad that you are conceding that this is the case.
> Then Apple can pull their contract for breaching agreed to terms of the contract
No, not if the contact breaches california's unfair competition laws! In that case, Apple would not be allowed to continue that unfairly competitive action.
> The judge found that Apple violated California's unfair competition laws
But you have to concede that this means that Apple cannot continue to break that law.
So yes, Apple has to change its behavior! You have to admit that yes Apple has to stop doing the unfairly competitive action.
> Awesome! So you agree that yes the courts have ruled that they violated californias unfair competition laws.
Not quite. Effect does not precede cause. I corrected you, and you then parroted my correction.
> No, not if the contact breaches california's unfair competition laws! In that case, Apple would not be allowed to continue that unfairly competitive action.
Apple is not required to issue contracts, nor even keep the AppStore running. Closing the AppStore, for example, would satisfy California's unfair competition laws.
> But you have to concede that this means that Apple cannot continue to break that law.
So yes, Apple has to change its behavior! You have to admit that yes Apple has to stop doing the unfairly competitive action.
This is known as question begging, and it is fallacious.
the percentage Apple takes off the top. If your app or subscription costs $1, you receive $0.70 for each sale. As mentioned, for subscriptions, the second year Apple only takes 15%, so you receive $0.85 per subscription dollar.
It's even more complicated, if your company makes less than $1mm in revenue, Apple discounts their first year take to 15% also. This makes work for the MBAs at startups to make somewhat complicated revenue forecast spreadsheets.
It's a fun puzzle trying to rent a movie from Amazon on an Android phone. In the Amazon app, the page for the movie will say "Available to rent or buy", but with no way to do either. Sometimes, it'll tell you that you have to rent or buy it in a browser. So then you get to try to figure out how to prevent Amazon links in the browser from opening the Amazon app. Before you figure it out, it's time to go to sleep.
The infuriating thing is that Amazon has its own app store, and I would happily install the Amazon app from there for a less frustrating experience, but the Amazon App Store doesn't even have the Amazon app.
Apple is likely to maliciously comply by allowing external links yet introducing new restrictions and guidelines that will dissuade developers from even trying.
This would be in line with their attempt to charge further commissions in South Korea and the Netherlands after being forced allow alternative payment systems for certain app categories.
Prior history from the Netherlands last year indicates that Apple offered to take 27%, rather than 30%, when payment is processed by a third party. The US judgment is compatible with that proposed practice.
This is so depressing, seeing that justice does not look like to make sense anymore in face of money and political power plays.
Like for the Assange case.
Sure there is no proof, but I'm quite sure there is some form of corruption going on in getting that kind of justice decisions...
> I wonder why a US appeals court is needed for that decision.
Because it was an issue disputed in a US District Court case, and someone disagreed with the outcome.
> This should be obvious to any laymen who has heard that antitrust legislation exists.
The same decision (applying California unfair competition law on the headline question) also found Apple was not violating anti-trust law, so, your hypothetical layman would have come to the right conclusion only by coincidence, on the wrong basis.
My comment was sarcastic. Of course the legal system works like you describe.
The spirit of antitrust legislation is that competition should not be harmed by one or few dominant players. I would claim it is very clear that Apple (and Google) harm competition in the mobile space. If this cannot be prevented using the existing laws, new legislation is required. Monopolies and duopolies are harmful.
You might discover that even laymen disagree with each other far more often than you might think.
Most things that make it to court, and especially to appeals, actually have important arguments on both sides. If it's in court, it's pretty much by definition non-obvious.
If you want to shitpost, i guess no one can stop you. But this is the end, not the beginning. It's a little late to demand someone bottlefeed you the merits of the case.
A "win" for Apple, in an individual battle, merely means that the status quo remains unchanged. They have to win every battle, to win the war.
And Apple is already losing very significant battles elsewhere.
For example, in the EU, with the soon to be in effect App Store laws, Apple is being forced to allow sideloading, and won't be able to charge the 300% fee, in the EU.
In the USA, maybe this court case fails. But there are more court cases being brought against them, and also laws being considered that could force Apple to change anyway, even if they win the current court battles.
I disagree its less important. A great majority of the most popular apps in the app store (not counting games) are SAAS businesses, they will benefit enormously by redirecting sign ups to their own websites. I think this will have a pretty big overall affect for developers on iOS if they can maintain good conversions this way.
One area not discussed often enough with the App Store for subscription apps is the percentage of people that have a billing issue and end up churning because of it. This can be anywhere from 8-20% depending on your app. Because purchases are anonymous on the App Store, you have little ability as an app owner to ping your customer and say "Hey, your credit card failed, click here to update it".
Supposedly Apple will be making some moves to rectify this in iOS17 but handling subscriptions yourself makes this pretty easy...
This is really exaggerated. 80% of all App Store revenue comes from sleazy pay to win games and loot boxes (according to the Epic trial).
The streaming apps have either completely abandoned in app purchases (Netflix, Spotify, YouTube TV, etc) or they allow outside purchases.
Not to mention apps that require out of band subscriptions to use or sell physical services and have an option of Apple Pay (standard credit card charges) like Uber.
Even if in app purchases only charged standard credit card processing fees, that’s the least of the problems for the Indy developer.
how much do you think is fair? the platform, APIs, and developer liasing are not free. what “tax” is fair so that apple can build the platform that enables developers to make money?
Microsoft did quite well for decades with Windows, never once charging developers to distribute on the platform. Apple does quite well with macOS. The value proposition of the App Store is access, period.
Instead, Microsoft charged thousands of dollars per seat per development tool, and even more for access to documentation (I have an old set of MSDN CDs around somewhere).
It’s two sides of the same coin, and I think the idea of taking a percentage of revenue does a better job of aligning platform owners and developers.
This is not really true. It was relatively easy to obtain a copy of visual studio for rather cheap if you tried. I know because I used their tools all through high school, college, and beyond and was rather poor during those times in the late 90s/2000s. I always managed to stumble on free licenses. They never tried to leech your revenue later on either.
Microsoft was very active in giving free licenses out for education, but those licenses often wouldn't allow for commercial use. If you've never been through a license audit, their legal team would usually make you pay through the nose or suffer through a lawsuit if they found you weren't using the right license for your dev tools.
That said, they'd generally target bigger businesses over smaller dev-only shops.
You should be able to install any software you like on devices you paid full price for. Apple should make their money selling phones, computers, tablets, an operating system which should run on every PC, and digital content like music and books.
All this said, I think everyone forgets after the first year of continuous billing per customer on subscriptions the percentage drops down to 15%, from the 70-30 to 85-15, which gets pretty close to operational profit parity for small shops.