Define 'overpriced'. What's the source of the price you're relating this to?
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Apple Execs Discussed Not 'Leaving Money on the Table' When Deciding Apple TV Subscription Fees
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Define 'overpriced'. What's the source of the price you're relating this to?
And without these markups, you don't have tomatoes on the shelf at the grocery store because the supply chain doesn't exist. I don't see the "wrong" here.
Apple is owned by its shareholders, it has a legal responsibility to its shareholders to maximise profits. That is quite literally the reason why it is there, to make money. If it doesnt maximise profits, shareholders can sue. So opinions about fairness don't really come into it unless the opinions were to get to the point where they affect future profits.... these are the rules of capitalism.
Shaken to my core. To think a company is looking for ways to make more money is still a thing in 2021.
Do you understand how businesses operate? By earning revenue. Are you implying Apple shouldn't earn revenue? They're not a charity (granted they give back to society in many ways), they're a business.
You should have seen it before the App Store, a dev would be lucky to get 20%.
30% is fine for the first year for big developers. Apple provides the payment processor, subscription management, hosting, SDK development, checking apps and linked sites for malware, Xcode maintenance, operating system development, bug feedback, marketing materials on the App Store and support.
Apple has not charged for the development kits and yearly operating system upgrades for years and years.
Apple has not charged for the development kits and yearly operating system upgrades for years and years.
Everyone here complains then goes back to work for a company that tries to make as much profit as they can....
Apple has nothing on Cable TV providers, but yeah... $5/month is reeeaaaally bleeding the customer. LOL
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To those who are saying I do not understand how business works, why are you comparing brick and mortar business to platform? Their cost of operating business is fundamentally different than typical brick and mortars.
Bwhahaahah. Bro you’re delusional if you think apples profit margin is 30-35% across the board. Ya because you become a trillion dollar company on 30% margin. Keep drinking that Kool Aid.
All the meddlers here have obviously never run any type of business other than possibly a lemonade stand. When you make a product or service you set the price and not the consumers. No business would be in business if they let the customers set the price.
Businesses do not need to justify pricing to anyone, ever. For the sake of the argument let us assume the cut was 20%. Epic Games would still be complaining except it would be that 20% was too high. If other companies have some control over another companies pricing then we no longer have a free-market. A twisted way to look at this idea of controlling pricing could be another game company suing Apple because they allow free (or less than $50) applications in the App Store. The justification would be the same: "I cannot compete at that price point". Same for another gaming company suiting Epic for selling their games too cheap.
I have no sympathy for Epic Games as they entered a market where they knew all the rules and costs up front. The App Store was a success and now they want better pricing. You cannot build a business and then expect everyone to prop you because you do not like the terms of an agreement you signed.
The cost of selling fee is of no concern to any customers as everything is so cheap in the store that it is irrelevant. Paying less than $50 for any software package was not even possibly prior to the App Store. There certainly were never less than $10 or less than $1 options anywhere.
Businesses do not need to justify pricing to anyone, ever. For the sake of the argument let us assume the cut was 20%. Epic Games would still be complaining except it would be that 20% was too high. If other companies have some control over another companies pricing then we no longer have a free-market. A twisted way to look at this idea of controlling pricing could be another game company suing Apple because they allow free (or less than $50) applications in the App Store. The justification would be the same: "I cannot compete at that price point". Same for another gaming company suiting Epic for selling their games too cheap.
I have no sympathy for Epic Games as they entered a market where they knew all the rules and costs up front. The App Store was a success and now they want better pricing. You cannot build a business and then expect everyone to prop you because you do not like the terms of an agreement you signed.
The cost of selling fee is of no concern to any customers as everything is so cheap in the store that it is irrelevant. Paying less than $50 for any software package was not even possibly prior to the App Store. There certainly were never less than $10 or less than $1 options anywhere.
Why is this news? Why does this become a big deal? Apple is free to do what they want, and we are free to do what we want. Apple can set any price they want, whether we like it or not, and we can buy anything we want, whether Apple likes it or not.
Why do people respond with complete opposite scenarios? No one expects a company to make NO PROFIT, but at the same time, Apple makes more profit than most companies (as noted by cash on hand and record profits every single quarter of every single year). All that cash and profit comes from their customers pockets mostly due to the high profit margins on their products. Could they charge less and sell more? Sure. Are people happy buying Apple knowing they are not getting great value based on competition? Sure.
Also, the profit margins comes out of the pockets of every company they do business with because they cut their partners profit to the bloody bone. They are eaten up with greed. Profit is good... greed leads to poverty. Just study history with some semblance of objectivity.
Look, when communicating internally, and probably on an iphone, none the less, the point isn't perfect grammar. The point is to get your ideas across and into the forum of discussion. These communications, while potentially subject to public scrutiny, were not intended to be read by the public. Tim doesn't care the Eddie fat fingered a word or didn't capitalize the App Store.
I highly doubt that while you communicate with friends via text and email that you are 100% grammatically correct and NEVER make any mistakes.
The retailer is actually providing a valuable service, though. Physical products need shelf space. Shelf space means owning real estate and having employees that keep it presentable.
Apple isn’t doing anything comparable. They’re running some servers. That’s not something special a developer couldn’t do themselves. See all the free apps that are distributed for macOS, Windows, Linux, and Android.
People who have physical products want retailers to sell them - that’s a massive burden they don’t want to handle themselves. Many app developers don’t want Apple/the App Store involved in the transactions for their apps - it’s an easy thing they could handle themselves. They go through the App Store because Apple went out of their way to force developers to use it.
38% gross margins is far from greedy. Check their SEC filings. If they were producing 70% gross margins, then I would agree with you. Apple is far from greedy. I would also point to the number of environmental and social causes they not only support and push from a messaging standpoint, but they are putting dollars behind clean energy and working to make their entire system carbon neutral. If they were "greedy" as you suggest, they would be holding onto those dollars.
oh no, someone who actually understands business commenting here. The world may actually be ending, is it really possible?
And let us not forget, that is what the market charges (google, Amazon, etc, etc, etc). In general we let the market decide.
You really should note, in the end section on App Store fees, that those are first year rates. The rates have always dropped to 15% after the first year. That's a rather significant "detail", IMO.
Apple executive emails revealed in the Epic Games vs. Apple lawsuit highlight how the company came to its conclusion to take a 30% cut on all App Store transactions in a way that ensured it wasn't "leaving money on the table."
One email thread from 2011, spotted by The Verge, features Apple services chief Eddy Cue discussing the commission that the company should charge providers for content subscriptions accessed via Apple TV (an App Store on the set-top box didn't exist at the time.) Apple execs considered charging a 40% one-time cut, a 30% one-time cut, a 30% ongoing fee, or individualized deals with different providers.
Apple's team eventually decided to require the same 30% fees as it does on the iTunes Store and the App Store. Another email also discusses how Apple should negotiate referrals, where Apple TV apps link out to a provider's website for customers to subscribe directly to the service.
One executive said they wanted to ensure they protected the 30% fee that had long been enshrined in the App Store, but stated they would remain open to other deal structures.
Overall, the email thread appears to suggest that discussions evolved extemporaneously amongst Apple executives when it came to provider fees during the early development of the Apple TV platform, with maximum profit the main concern.
Amid increasing scrutiny over its App Store practices, Apple in November announced the Small Business Program, which saw App Store fees slashed to just 15% for developers earning under one million dollars per calendar year. The App Store commission remains at 30% for developers making over one million dollars per year.
The program has since received praise from many developers, but some larger developers including Epic Games criticized the move, saying it undermines the App Store's rules. Epic Games is ineligible for the reduced commission since it exceeds the $1 million earnings threshold. Apple said the program will benefit the "vast majority" of App Store developers.
Article Link: Apple Execs Discussed Not 'Leaving Money on the Table' When Deciding Apple TV Subscription Fees
