Apple Accused of Not Doing Enough to Comply With South Korean App Store Law

[twintin]

"Excessive fees take away developers' chances for innovation"

This seem pretty lame to me. Regardless of the 30% fee, developers can set whatever price they want on their apps to cover their cost, earn some decent money and stay innovative (all competitors on the "iOS market" pays same fee).

What exact problem are we trying to solve here ?

 

[paulovsouza]

I really hope everyone finds a middle ground. I see Apple and Google retaliating. Maybe keeping features from developers, and charging them to make up for lost fees. Or something similar. That would lead to stifle innovation, that only hurts the consumer.

 

[bobenhaus]

Just comply with law.

$pple wants to be broken up is all.

 

[Mojohanna32]

Just comply with law.

"The law came into effect in September, but the exact details of what companies need to do to comply with it had not yet been fully drafted."

What law? it has yet to be defined. So parliament in Korea saying Apple is not doing enough to comply is utter BS. It shows you that all of this is just grandstanding to support the narrative that Apple and others like them are evil.

 

[Ceed]

Put a different tech company's name in these stories to replace the word "Apple" and literally no one here would be at their defense.

 

[vipergts2207]

"Excessive fees take away developers' chances for innovation"

Let's flip this argument around. "Removing [Apple's] fees takes away Apple's chances for innovation". It's somehow better for companies/app developers to freeload with Apple?

Considering Apple has somewhere around $200 billion in cash on hand, I don't think money is the cause for any lack of innovation coming from Apple.

 

[Rogifan]

"Excessive fees take away developers' chances for innovation"

Let's flip this argument around. "Removing [Apple's] fees takes away Apple's chances for innovation". It's somehow better for companies/app developers to freeload with Apple?

Right because the only money Apple makes is from developers. That $1000 phone doesn’t make them any money at all. How many people would be buying iPhones if the only apps available on it were 1st party Apple apps?

 

[I7guy]

Right because the only money Apple makes is from developers. That $1000 phone doesn’t make them any money at all. How many people would be buying iPhones if the only apps available on it were 1st party Apple apps?

In 2007 hordes of people bought the iphone 1. In 2021 there is expected to be some type of marketplace associated with computer like devices. As for the question, I don't know, could still be a substantial amount if the 1st party apps were good enough. And then there is the web for everything else.

 

[Rogifan]

What level of profit would no longer count as greedy? What fee structure would also not count as greedy?

First, what is Apple's gross profit margin on the App Store? Second, what is Apple's net profit margin on the App Store? What profit margin (gross and net) is appropriate? Why is that level appropriate? If Apple has a lower App Store profit margin, is it acceptable to raise margins elsewhere to make up for it? If not, why? What company-wide profit margin (gross and net) is appropriate (i.e., no longer "greedy")?

Should Apple take a different approach to the App Store? Should they offer it as a free public service and receive no compensation? Should they increase develop fees instead of having a 15-30% commission (or no commission for free apps)? Does Apple charging a commission mean Apple is greedy but companies developing apps that want to use Apple's services without paying mean they are not greedy?

Complaints don’t help without solutions. What is your solution?

I would argue what developers are charged should be related to what it costs for Apple to host their apps on the App Store. Of course we know that’s not what this is really about. Apple is earning way more than what is necessary to cover the cost of running the App Store. This is about Apple believing developers are successful because of them and thus they deserve a cut of the developers revenue stream. It’s harder in that instance to say what cut is fair because how do you prove Apple is or isn’t responsible for your success and if they are how much of your success should be shared with them?

 

[Rogifan]

In 2007 hordes of people bought the iphone 1. In 2021 there is expected to be some type of marketplace associated with computer like devices. As for the question, I don't know, could still be a substantial amount if the 1st party apps were good enough. And then there is the web for everything else.

Sure. My point is Apple and developers need each other. When iPhone sales growth started to slow and Tim Cook promised Wall Street that Apple would double ‘services’ revenue that’s when we really started to see the company get greedy about the App Store. I’d much rather if Apple’s ‘services’ were mostly about actual services, not rent seeking or taking 30% of every micro-transaction in the App Store. I’d love to know what percentage of services revenue comes from Apple’s cut of IAP. My guess is it’s a lot otherwise they wouldn’t be fighting so hard against allowing alternatives to their IAP.

 

[I7guy]

I would argue what developers are charged should be related to what it costs for Apple to host their apps on the App Store. Of course we know that’s not what this is really about. Apple is earning way more than what is necessary to cover the cost of running the App Store. This is about Apple believing developers are successful because of them and thus they deserve a cut of the developers revenue stream. It’s harder in that instance to say what cut is fair because how do you prove Apple is or isn’t responsible for your success and if they are how much of your success should be shared with them?

Apple is entitled to earn as much as it can from the app store the same as any (non-regulated) business that sells consumer related products is entitled to charge what the market will bear.

 

[Rogifan]

Apple is entitled to earn as much as it can from the app store the same as any (non-regulated) business that sells consumer related products is entitled to charge what the market will bear.

Except in most cases they’re not charging…I believe Tim Cook said 84% of the apps on the App Store are ‘free’. Most of the apps on my phone were free to download. A few games I paid to remove ads but then when they started charging $4.99 or $5.99 to remove ads I either stopped playing the game or put up with the ads. So basically you have micro-transactions in games subsidizing the App Store.

 

[sw1tcher]

Let's flip this argument around. "Removing [Apple's] fees takes away Apple's chances for innovation".

Compare Apple's annual revenue and net income to that of a developer?

Apple for all of fiscal year 2020
revenue =$220.747 billion
net income = $57.441 billion

It's somehow better for companies/app developers to freeload with Apple?

Does Apple charging a commission mean Apple is greedy but companies developing apps that want to use Apple's services without paying mean they are not greedy?

Developers don't freeload. They pay a developer fee to Apple. That fee gives developers "everything they need to develop apps for distribution" [1] so they can "reach customers around the world on the App Store" [2]

 

[Macaholic868]

A corporation not doing something that hurts its bottom line? I’m shocked, just shocked.

 

[UKitsme]

Just close down Appl store in S Korea, job done!

 

[ManDark]

To the folks saying Apple just needs to comply…



Maybe South Korea could get their act together and tell Apple exactly what they’re supposed to be doing?

And one more thing, if the Judge / S. Korean law ist making Apple comply the should also take responsibility for the Problems with this decision, becase i have nowhere seen anything that if this decision ist crap who will be held responsible ... Apple of course it "their" system

 

[ManDark]

What level of profit would no longer count as greedy? What fee structure would also not count as greedy?

First, what is Apple's gross profit margin on the App Store? Second, what is Apple's net profit margin on the App Store? What profit margin (gross and net) is appropriate? Why is that level appropriate? If Apple has a lower App Store profit margin, is it acceptable to raise margins elsewhere to make up for it? If not, why? What company-wide profit margin (gross and net) is appropriate (i.e., no longer "greedy")?

Should Apple take a different approach to the App Store? Should they offer it as a free public service and receive no compensation? Should they increase develop fees instead of having a 15-30% commission (or no commission for free apps)? Does Apple charging a commission mean Apple is greedy but companies developing apps that want to use Apple's services without paying mean they are not greedy?

Complaints don’t help without solutions. What is your solution?

I like that, short, clever and Exactly to the Point

 

[Ebarella]

Think of just the bandwidth costs of distributing something the size of Fortnite, with all its updates.

How does Epic imagine all that gets paid for? I mean, I get not wanting to give up a huge chunk of your profits, and maybe they could argue that Apple charges too much, but Sweeney thinking he should get a storefront and distribution and customer service totally free is super sleazy.

Cost are probably negligible and already paid by the annual $99 fee. I bet most of the real cost is paying reviewers

Everyone making the ridicolous bandwith claim. If it was so expensive, why does apple let "freeloaders" like Uber, Amazon, Netflix, Walmart, etc. in their store?

Uber moves millions of dollars a day in revenue and probably places a considerable burden to Apple's notification service. Yet they pay $0 of their revenue, while a small stickers app with no internet connectivity has to pay 15%-30% of whatever they earn

 

[I7guy]

Except in most cases they’re not charging…I believe Tim Cook said 84% of the apps on the App Store are ‘free’. Most of the apps on my phone were free to download. A few games I paid to remove ads but then when they started charging $4.99 or $5.99 to remove ads I either stopped playing the game or put up with the ads. So basically you have micro-transactions in games subsidizing the App Store.

Apple subsidizes the app store. If all apps went free, the app store wouldn't go away. These micro-transactions however, are a good business strategy, makes money all around.

 

[thejadedmonkey]

What level of profit would no longer count as greedy? What fee structure would also not count as greedy?

First, what is Apple's gross profit margin on the App Store? Second, what is Apple's net profit margin on the App Store? What profit margin (gross and net) is appropriate? Why is that level appropriate? If Apple has a lower App Store profit margin, is it acceptable to raise margins elsewhere to make up for it? If not, why? What company-wide profit margin (gross and net) is appropriate (i.e., no longer "greedy")?

Should Apple take a different approach to the App Store? Should they offer it as a free public service and receive no compensation? Should they increase develop fees instead of having a 15-30% commission (or no commission for free apps)? Does Apple charging a commission mean Apple is greedy but companies developing apps that want to use Apple's services without paying mean they are not greedy?

Complaints don’t help without solutions. What is your solution?

Apple purposefully obfuscates their iTunes and App store margins. But if you've ever had a problem and needed to talk to someone, they don't (at least didn't) even have a support phone number. They try to keep their costs very low.

But we can figure out some of their costs. AWS and Azure, who Apple use for their backend, charge pennies per gigabyte of data. 99% of developers' $99/year fee will more than cover the costs of hosting their apps, as well as the 5 minutes that a human needs to review the app. Given that credit card processors charge around 3%, this leaves Apple with a 27% profit margin on every dollar spend on the store, as well any remaining money from the yearly developer fees.

I don't want to get into a debate over the morality of profit margins, and how much is too much, but at some point there's a limit, and IMO Apple is beyond that limit. When you have a single developer developing a feature for a single client, the cost ratio is 1:1. But because this is software that can be duplicated ad-nauseam and not a potter making a vase, 100 clients would give you a 100:1 ratio. At some point, charging every client full price when you can sell the same wares many times over becomes... wrong, morally. At least to me, but evidently not to Apple.

 

[Wildkraut]

We'll see how this all plays out. Apple doesn't spend billions in legal fees for nothing.

South Korea is just the first of 10-20 countries which will punch Apple.

 

[SpotOnT]

Yep. Developers want a free ride. They even complain when Apple advertises their apps.... for free.

I am not sure that "developers" are complaining about either. There may be one or two developers that complain (like Epic), but mainly it is other interest groups that are stirring the pot for various reasons. In the US people are worried about the power of tech companies. In Korea people are worried about the power of Samsung. Neither of which have much of anything to do with developers, and their interests.

 

[Vjosullivan]

Yep. Developers want a free ride. They even complain when Apple advertises their apps.... for free.

They don't want a free ride; They want a bit of freedom from a monopolistic lock-in.

 

[Vjosullivan]

Doh!

 

[I7guy]

South Korea is just the first of 10-20 countries which will punch Apple.

They have the capacity to fight back.