App Store Developers in South Korea Can Now Use Alternative Payment Providers

[wanha]

Do you know what,..Apple makes probably enough money from Google to run 10x app stores & still be profitable.

Have a look how much Google pays Apple.to be the default search engine in Safari!

Sure... but so what?

Apple shouldn't make profit from what they've spent years and billions building?

I mean, of course there need to be checks and balances (which is why governments are looking to regulate aspects of Apple's business), but to suggest they have some moral obligation to run the App Store at zero profit is based on pure idealism.

 

[Madmic23]

Once the rest of the world catches on this is going to cost Apple trillions of dollars over the next 100 years. I'd like to see the government step in and force Uber Eats to let their delivery drivers tap into alternate ordering and payment systems next. And force Burger King to sell Taco Bell products.

That’s really not even close to the same thing.

Uber is the service in that example, they can choose their own payment method.

Netflix is a service, but they are not allowed to choose a different payment system. See how that doesn’t make sense? Just because one is a real world purchase and the other is digital, Apple thinks that’s enough of a distinction to demand a commission?

You can buy something from the Amazon app, and Apple doesn’t get a commission. You can input whatever credit card you want.

However, you can’t purchase a Kindle book (also from Amazon) because Apple thinks they should get 30% of a transaction they have no role in. It’s ridiculous.

 

[Madmic23]

Sure... but so what?

Apple shouldn't make profit from what they've spent years and billions building?

I mean, of course there need to be checks and balances (which is why governments are looking to regulate aspects of Apple's business), but to suggest they have some moral obligation to run the App Store at zero profit is based on pure idealism.

Apple should make a profit from selling hardware and services they provide, no issues with that.

One of the services they provide to developers is an in-app purchase system. If a developer chooses to use that, Apple 100% should get a cut. They’re taking a lot of overhead off of that developer. It’s great for small independent developers.

However, there are many other developers in the world that have an existing payment system in place, for services completely run off of their own servers, like Netflix. Their app is a glorified web browser that can only access Netflix, that’s it. Why should Apple get a cut of that?

 

[Rogifan]

How is Apple collecting the 26%?

 

[CarAnalogy]

It’s coming for every market.

Exactly, Apple needs to do more to get out ahead of this. So far both times they have dragged their feet as much as possible and done the press release equivalent of whining about it.

They need to show they have a real plan to proactively address these concerns instead of continuing to bury their heads in the sand about it.

 

[CarAnalogy]

How is Apple collecting the 26%?

By tracking the purchase and invoicing the developer, I believe.

 

[Spaceboi Scaphandre]

Epic

Now let's get sideloading

 

[jdphoto]

Apple should make a profit from selling hardware and services they provide, no issues with that.

One of the services they provide to developers is an in-app purchase system. If a developer chooses to use that, Apple 100% should get a cut. They’re taking a lot of overhead off of that developer. It’s great for small independent developers.

However, there are many other developers in the world that have an existing payment system in place, for services completely run off of their own servers, like Netflix. Their app is a glorified web browser that can only access Netflix, that’s it. Why should Apple get a cut of that?

Because Apple still has to maintain/expand APIs that developers use to integrate with iOS to create their apps. Apple pays thousands of engineers to write/maintain these APIs, interface with developers (mainly during WWDC); they also develop/maintain Xcode and TestFlight. Then there is Apple's cost to operate the App Store and distribute apps, which is hundreds of millions of dollars a year in infrastructure fees (let alone the engineer time and the app review time). These are services developers are still using if they use their own payment methods and serve web content from their own servers.

All told they easily spend (could be more) a couple billion dollars a year before they start making profit. Apple chose a percent cut to take as opposed to a giant flat annual fee that would be hard to vary across developers based on their size. Apple taking 26% here is them saying that the 4% that was subtracted from 30% is the part that was for credit card processing/paying people to deal with people's payment disputes.

 

[wanha]

Apple should make a profit from selling hardware and services they provide, no issues with that.

One of the services they provide to developers is an in-app purchase system. If a developer chooses to use that, Apple 100% should get a cut. They’re taking a lot of overhead off of that developer. It’s great for small independent developers.

However, there are many other developers in the world that have an existing payment system in place, for services completely run off of their own servers, like Netflix. Their app is a glorified web browser that can only access Netflix, that’s it. Why should Apple get a cut of that?

I agree with you, friend. There are clearly some significant issues with some aspects of the App Store that need to be amended, streaming services for example.

If not, Apple will not be able avoid being seen as rent-seeking and will bring upon even more regulation upon itself and its practices.

My point was mainly a rebuttal to the commentator that the only value Apple on the App Store is payment processing and a platform owner's right to seek profit from its platform.

But as you point out, there are aspects of this that aren't good for competition and the ecosystem in general and need to be amended.

 

[tucupeis]

Developers have to pay a yearly membership fee, so even without Apple taking their cut the tools and access to that market aren't free.

The apps developers provide also draw people to and keep people on Apple's platforms and paying for Apple devices.

Being hostile to developers could also damage the brand.

Their complete control over the app store has also prevented competition in, for example, pricing models. Preventing developers from charging upgrade fees has encouraged the subscription model so many people dislike.

99$ per year is not enough... if they charged developers 100k$ then im sure they could let developers sell at lower or no commisions

 

[walnuts]

I still think John Siracusa's description of this on ATP was excellent. To paraphrase- its ok to for Apple to charge something , the argument is over how much. And with this type of service, and without strong government intervention, its really market-dependent. Game platforms have very similar percentage cuts (Apple probably copied that from the get-go). However, game platforms do a much better job of managing their relationship with their developers, generally making them feel that the value proposition is worth it on all sides. Apple instead adopted a very top-down attitude, and allowed this (perhaps fair) impression to develop that Apple was taking more than they are owed. Without correcting course, the next step is government intervention, which no one wants. Its probably too late, but Apple should have a long time ago recognized this and worked to make the App Store terms and conditions work better for everyone.

Muddying the waters though are companies like Epic, who do stuff like this themselves, but still made a very public argument that Apple is stealing from them.

Ultimately, I think the payment processing is small beans. I'm really hoping that Apple could reach a good compromise to avoid more terrible legislation. There are some of us who like the idea of a more restrictive environment for a device like a phone. I really do fear that if there are "alternative" app stores, big players like Facebook or employers will force us to use them, never again allowing me to have the device I wanted that was more restrictive.

 

[gnipgnop]

However, there are many other developers in the world that have an existing payment system in place, for services completely run off of their own servers, like Netflix. Their app is a glorified web browser that can only access Netflix, that’s it. Why should Apple get a cut of that?

Apple doesn't get a cut. Netflix successfully moved all of the payments to the internet years ago, just like Spotify and Amazon Kindle. Everyone's iPhone can access the internet.

 

[mrochester]

I still think John Siracusa's description of this on ATP was excellent. To paraphrase- its ok to for Apple to charge something , the argument is over how much. And with this type of service, and without strong government intervention, its really market-dependent. Game platforms have very similar percentage cuts (Apple probably copied that from the get-go). However, game platforms do a much better job of managing their relationship with their developers, generally making them feel that the value proposition is worth it on all sides. Apple instead adopted a very top-down attitude, and allowed this (perhaps fair) impression to develop that Apple was taking more than they are owed. Without correcting course, the next step is government intervention, which no one wants. Its probably too late, but Apple should have a long time ago recognized this and worked to make the App Store terms and conditions work better for everyone.

Muddying the waters though are companies like Epic, who do stuff like this themselves, but still made a very public argument that Apple is stealing from them.

Ultimately, I think the payment processing is small beans. I'm really hoping that Apple could reach a good compromise to avoid more terrible legislation. There are some of us who like the idea of a more restrictive environment for a device like a phone. I really do fear that if there are "alternative" app stores, big players like Facebook or employers will force us to use them, never again allowing me to have the device I wanted that was more restrictive.

Sadly the very developers that people hold so dearly to their hearts are the ones who are trying to ruin iOS for the rest of us.

 

[SoldOnApple]

However, you can’t purchase a Kindle book (also from Amazon) because Apple thinks they should get 30% of a transaction they have no role in. It’s ridiculous.

But that book sold on the iPad Kindle app never would have been purchased in the first place if not for the Kindle app being on the App Store. Uber Eats works on the same principle, they charge 30% commission from a restaurant because that restaurant would not have even made that sale in the first place if they weren't on the Uber Eats app. If anything Apple is more generous than Uber Eats, because Apple doesn't even charge a commission for physical goods sold through apps, only digital. Uber Eats charges 30% for physical goods, but Apple charges Uber Eats and the restaurant nothing at all.

 

[glindon]

Yes it will. If the governments force it tomorrow, Apple will do so.

Apple benefits from developers just as much as those same developers benefit from the App Store - by selling more devices. Although you wouldn’t think so given the extortionate fees Apple charges.

If the government forced that, then by extension no retail establishment would be able to mark up items that it sells or control what gets sold. It would be a free for all. You could just walk into your local starbucks, set up your lemonade stand, and start selling your lemonade, and Starbucks would just have to accept it. You’d get free access to their building, lights, hvac, bathrooms, customer base, etc. All for free.

 

[KevinN206]

Just use other tools, we don't badly need Xcode & Co. to develop.
SwiftUI is crap anyway.

Doesn't it still cost $99 per year to publish the app on the App Store?

 

[mrochester]

If the government forced that, then by extension no retail establishment would be able to mark up items that it sells or control what gets sold. It would be a free for all. You could just walk into your local starbucks, set up your lemonade stand, and start selling your lemonade, and Starbucks would just have to accept it. You’d get free access to their building, lights, hvac, bathrooms, customer base, etc. All for free.

Initially that won’t happen as the legislation will be targeted at specific companies (without actually naming them) but once the precedence is set it’ll be easier to argue it should apply in other places.

 

[Greenmaco]

For doing precisely nothing. This is monopolist behaviour that needs to be stopped.

Hosting apps and download servers on the AppStore isn’t free to Apple. Developers can’t just freeload and turn profit off the AppStore.

 

[KevinN206]

Does that annual fee cover all of Apple’s costs to run the App Store?

Apple grossed $86 billions dollar in 2021 from the App Store 30% commissioner. Do you really think it costs Apple that much to run and manage the App Store?

 

[mrochester]

Apple grossed $86 billions dollar in 2021 from the App Store 30% commissioner. Do you really think it costs Apple that much to run and manage the App Store?

It doesn’t really matter how much Apple makes from the store unless you are trying to argue that Apple shouldn’t be able to make so much money, in which case you are arguing more fundamentally against capitalism.

 

[KevinN206]

Hosting apps and download servers on the AppStore isn’t free to Apple. Developers can’t just freeload and turn profit off the AppStore.

They already pay $99 per year to have the app in the App Store. If that's not enough, then increase it. Maybe that will remove a bunch of crapware.

So many people don’t understand business. They seem to live in an oblivious utopia to how things really work.

“But we pay a yearly developer fee”

That fee is like buying a Sam’s Club or Costco Membership. All it does it get you in the door. You can’t just walk through those stores fill up your carts and walk out with everything for free. You still have to pay for the products/services rendered.

Apple has a right to do business the way they want within the guidelines of the law.

“Oh but Apple wouldn’t be anything with out the developer”

Yeah, but those developers wouldn’t be anything with out the system Apple created and paid for. The street goes both ways, but someone had to pay for it. Apple has a right, just like any other business, to turn a profit.

Is there room for improvement? Yes.
If you don’t like something, don’t support it.

I feel this analogy is flawed. Consumers of Costco and the App Store are not the same as merchandise manufacturers and developers. The analogy is more like a Dyson has to pay Costco $99 per year to display their merchandise on Costco and then for each sale, Costco takes 30% of the listed price.

 

[KevinN206]

Because Apple still has to maintain/expand APIs that developers use to integrate with iOS to create their apps. Apple pays thousands of engineers to write/maintain these APIs, interface with developers (mainly during WWDC); they also develop/maintain Xcode and TestFlight. Then there is Apple's cost to operate the App Store and distribute apps, which is hundreds of millions of dollars a year in infrastructure fees (let alone the engineer time and the app review time). These are services developers are still using if they use their own payment methods and serve web content from their own servers.

All told they easily spend (could be more) a couple billion dollars a year before they start making profit. Apple chose a percent cut to take as opposed to a giant flat annual fee that would be hard to vary across developers based on their size. Apple taking 26% here is them saying that the 4% that was subtracted from 30% is the part that was for credit card processing/paying people to deal with people's payment disputes.

Wouldn't all of that be paid for consumers and development who bought the iPhone, iPad, Mac, and all other Apple access? They have some of the highest gross margins of consumer electronics.

 

[KevinN206]

Sadly the very developers that people hold so dearly to their hearts are the ones who are trying to ruin iOS for the rest of us.

As Apple advocates would say, you have the option or choice of not buying from said developers.

 

[djphat2000]

For doing precisely nothing. This is monopolist behaviour that needs to be stopped.

How is Apple doing nothing? Do the stores in your local area do nothing when they sell products your looking for?

 

[mrochester]

Wouldn't all of that be paid for consumers and development who bought the iPhone, iPad, Mac, and all other Apple access? They have some of the highest gross margins of consumer electronics.

It’s paid by all of the above. It’s part of how Apple monetises its product and services. AFAIK there is no law that says if you make a profit selling hardware you can’t also make profit from selling software and services