Apple Pays $100 Million to Settle Developer Lawsuit and Agrees to Multiple App Store Changes

[PlayUltimate]

In case some people don’t know, it’s incredibly difficult to start any business and succeed. Failure is a bigger possibility than success and the entry point is several order of magnitudes than a computer and $99.

This minimal cost is one of the HUGE advantages for an Apple Developer; the financial cost of failure is small. Look into a business franchise, starting a consulting business, getting into real estate flipping, or opening an online web store and the costs and risks are multiples higher.
Note: the people complaining about the App Store seem to be the ones that have become successful.

 

[Nuno Lopes]

Or... the App Store will provide me an all-in-one solution that covers app hosting, bandwidth, payment processing, tax collection around the world, ID management, etc. It's basically a turn-key solution for a small fee. I'll do that.

Individuals such as your self should leave in the table 30% of the revenue if not more.

It does not seam that the following will help you much. But just as general information, I know of a small startup that built an app / platform, B2B (you know what that is right?), number of registered users close to 40k, revenues close to a million that spends in hosting and iplatform infrastructure around 25k a year. Try cloud services such as AWS and Azure.

Website? There are many options out there, some of them free some of them payed. Try webflow for instance.

Payment? Stripe, Paypall are good options … but first build your product. This is the lesser of your challenges.

Don’t forget accounting and billing. Wether you got with the App Store or not, you still need that. Granted that with the App Store you only need to process one customer billing. But is your app or service iOS only? What about Android … what about Desktop and Web? Are you requiring all those scenarios to do through the App Store for payment … silly boy.

Now you if aren’t even a dev, I would think of hiring one. Depending were you leave … in US … budget from anything between $80k to $250K.

I think the App Store like things are good to build an MVP … and see how things go. But the moment you actually have a business around your digital service think different. The more control you have over the chain the better .. learn from Tim Cook.

Good luck.

Cheers

PS: How many of you guys use Google and other stuff to look for interesting apps, games or whatever to buy? Do you guys simplly use the App Store to guide your app choices? Personally I’ve almost never use the App Store for that matter … when I go there most of the time for a specific App, say a game that I saw advertised on youtube, or on some article … sometimes even friends tell me about it (devs marketing). Most often from links out side the App Store to it … try the app (if there is a trial) and pay,

 

[cmcbhi]

If you, as a "developer" don't like the terms of the AppStore, leave.
I don't "side load " (=opendevice for scam/stealing) anything

 

[cmaier]

While I think App Devs should abide by the terms of the App Store if they distribute via the App Store, they should be able to distribute their apps via methods outside the App Store and not follow those rules but Apple disallows that.

I mean is it Apple's lawn? Or the Users? They own the phone, shouldn't it be their choice and not Apples? More an argument to allow 3rd party stores on iOS than force Apple into terms they don't want for their App Store, however.

You own your phone but you didn’t create it. You don’t own the operating system. You don’t own the sdks. You don’t own the intellectual property. You don’t own the copyright. You don’t own the patents. You didn’t spend billions of dollars creating swift, SwiftUI, the compilers, xcode, interface builder, UIKit, etc etc.

You also didn’t create a system of app curation that created a user base trusting enough that they are willing to spend money on apps, unlike what happens on every other App Store.

So, yeah, it’s apple’s lawn.

 

[cmaier]

Is there a chance this will lead to Kindle allowing buying books in-app or is this not relevant?

Nope. What it will allow is Amazon to email you to say if you want to buy books, here’s how.

 

[subi257]

"From the beginning, the App Store has been an economic miracle”

It’s been an economic miracle for Apple; not for most developers.

If it was not for the Apple app store, there would not be all of said developers.....there would have been no app store, iirc Apple's app store preceded the Google play store, so in effect Apple created the avenue for so many people to become developers.

As a side note, I can't even begin to tel you how many .99 apps that I bought, knowing that they look like crap, but at .99 who cares...I'll try it.

 

[subi257]

"From the beginning, the App Store has been an economic miracle”

It’s been an economic miracle for Apple; not for most developers.

Hey, those developers didn't have to sign on with Apple.....they could go else where.

 

[icanhazmac]

So it’s ok for Apple to have a monopoly over what apps we can have on our devices?

Some of us prefer a single, reputable source for apps and payments, it is one of the reasons I bought in to this ecosystem. You can buy an Android or jailbreak your iPhone if you want more "freedom".

When the dev for a fart app gets hacked and all your info is being sold on the dark web you will wish you had just bought the app from Apple.

My favorite app developer decides they’re done with the Apple App store and I have to go buy an Android device?

If you like the app that much, yes. Same as if a developer decides to make games exclusive to either Xbox or Playstation.

But they have to charge us an extra 15% to 30% to pay Apple.

Correct, so they aren't losing anything. The idea that app prices will drop by 30% if devs are allowed to make their own app stores and choose payment processors is laughable.

 

[falainber]

The physical phone belongs to the phone owner. But the copy of iOS that runs on the phone doesn't. It's just intellectual property with no physical manifestation; and all the phone owner has is a license to use it, granted by Apple, and subject to terms and conditions.

That does not make the analogy any more valid though.

 

[vladi]

exactly. iOS is the best platform to target for developers because ios users actually spend money.

Why? Because the sdks allow developers to create great apps, and because apple makes it easy to avoid getting ripped off. When you buy an app it doesn’t automatically sign you up for email spam. If you subscribe, you can easily cancel your subscription from one place, without having to call a telephone and escalate through three levels of “customer service” who are paid to prevent you from cancelling. And even though there are exceptions, when you buy an app on the App Store you are much less likely to be downloading a scam app than from other app stores. All this means that customers are much more willing to spend their money. It’s perfectly fair for Apple to demand a cut of sales in exchange for access to these customers.

See. That's exactly what Apple is doing here. Telling you that you can't do something while actually you can but you have to take them to court to so a judge could tell them what your rights are no matter what it says in your agreement. You could have alway canceled the subscription with a single email or a 10 seconds phone call but AOL wanted to to retain you so they were telling you all kinds of scary stories and switching you from someone in Vietnam to somone in US that collects percentage if they retain you. But yes, you simply saying I don't want your service anymore in writing or over the phone was just and always enough to cancel the service.

 

[0924487]

So wait... do developers think 99 cents for an app or IAP is too high?

Are developers really itching to sell stuff for 49 cents?

Or do they want the minimum price raised?



Again... do they think the Developer Fee is too high?

You get a TREMENDOUS amount of value for your $99 yearly fee.

You're getting all the development tools, API access, testing capabilities, storage, e-commerce, worldwide tax calculations, cloud capabilities, etc. It allows anyone to create and sell apps to a billion potential users.

Read more here...

I'm struggling to think of a situation where the $99/year Developer Fee is a barrier to entry.

The $99/year fee prevented a lot of open source projects from porting plug-ins to Safari and iOS apps from making it to the app store, as no one is there to pay the fees. For the ones that did, they had to charge a fee, which is not charged for any other platforms. Oftentimes, you are free to download the source code and compile and sign it yourself, but they are just not in the app store.

A good pair of examples would be Keepa and Dark Reader, one canceled Apple platform support, the other was forced to charge a fee to cover their Apple fees. Also, note that if you charge a fee, you need business reporting and accounting with the IRS, which amplifies the barrier to entry.

 

[svish]

Relief for developers!!! Well done.

 

[TheToolGuide]

Flawed analogy. The lawn (the phone) does not belong to Apple. It belongs to a phone owner. It's the phone owner who needs to agree to install and app or an alternative app store. It should not have anything to do with Apple.

An interesting analogy. Technically we don’t own our lawns completely. Sure our names are on the property but we still pay taxes to the local government and there are laws that regulate our use of our property. I get they are not exactly the same.

Apple has clearly done well for themselves, developers, and customers with the system they have. They would not be a popular phone manufacturer if they were not. Customer‘s chose their phone for the features they developed and the security they were offered with it. Developers were attracted to the platform because of the potential customer base. As they grew they wanted a bigger piece of the $$ pie. They argue its on behalf of the customer.

I don’t completely agree with that argument because any customer who really wants that freedom can go to another phone platform and if they like the Apple hardware designs but not Apple’s software policies they could jailbrake their phone to assert more control on their device.

Apple has rights to impose rules on their platform (lawn). However it is important to make sure they haven’t implemented rules that prohibit legitimate growth of developers and maybe 30% is to high. I think there’s room for discussion there.

 

[cmaier]

See. That's exactly what Apple is doing here. Telling you that you can't do something while actually you can but you have to take them to court to so a judge could tell them what your rights are no matter what it says in your agreement. You could have alway canceled the subscription with a single email or a 10 seconds phone call but AOL wanted to to retain you so they were telling you all kinds of scary stories and switching you from someone in Vietnam to somone in US that collects percentage if they retain you. But yes, you simply saying I don't want your service anymore in writing or over the phone was just and always enough to cancel the service.

Is there maybe some punctuation missing from this?

 

[Kyrie188]

I think very often the key reason why there are such disputes of whether Apple should open up their ecosystem or not is because people want iOS to be more like Android. What they often neglect / overlook is that if they think that way, then they are probably not the target market that Apple is trying to sell to. Hence, many think that Apple is seeking to increase its market share when interestingly, iPhones has never been the best selling phone worldwide. It has never been Apple's plans.

Apple's target market is for people who want that walled garden. People who wants that security; people who wants that lack of customisation; people who want lesser options. If you belong into this group, then you are going to purchase an iPhone. If you don't belong to this group, then you should not be purchasing an iPhone (and perhaps consider an Android instead). This way, everyone ends up happy and going their own way.

This whole thing only becomes an issue when one group wants the other to adjust to fit them (when it is never the intention of the company to do so). Therein lies the frustration. It is like telling your local coffee joint to start selling handbags. It is not that they can't, but it is not their plan to do so. They are aiming for coffee customers, not handbag customers.

Imagine if Apple users ask Google to make Android a walled garden. There would be a huge uproar in the Android community. People who wants a walled garden should purchase an iPhone, and people who wants more freedom (to side load or have alternative payment modes) should buy an Android phone. Just like people who wants expensive food should visit a fine dining restaurant; and those who just want to fill their tummies can visit a fast food restaurant. There isn't anything more right or wrong with either, and both parties end up happy.

 

[insoft.uk]

The current lowest price is .0.49 so are some developers asking for a price lower than 0.49, or are the asking for smaller increments like 0.50 starting from 1.00

I’m a small time developer and will not support Android because it’s not a wall garden setup way too open so can’t afford to support such a risky platform, put all that effort and work just to have someone download it from a pirate site and side load it, why I stick to iOS

 

[Eso]

Exactly how is apple denying developers their paycheck? Do you mind if I set up a store and sell waffles on your front lawn? Or if I did that do you think you should maybe get a cut of the action?

Oh this should be a fun analogy.

suppose I don’t mind, but I demand 30% of your revenue. If you sell $1 MM worth of waffles, so you think it’s reasonable that it cost you $300,000 to rent a lawn?

Oh and by the way, you can’t sell any of your waffles anywhere else, especially a neighbors lawn if (god forbid) they offer to charge you less. So you either sell your waffles on my lawn and on my terms, or you don’t sell at all. Aren’t you grateful to me?

 

[farewelwilliams]

you shouldn't have to pay to make safari extensions. the best extensions are made by people and groups who work in their free time and don't charge.

99% of chrome extensions are trash and/or are not trustworthy. https://www.tomsguide.com/news/chrome-extension-spyware

You need some sort of curation in order to weed those out. Safari extension store isn't 100% fool proof but won't be as bad as Chrome.

 

[djphat2000]

Agreed.

But if developers will be allowed to use outside payment systems... will they at least have to show who is handling the payment?

Maybe a little "Square" badge or something in the app? Or a "Powered by Stripe" notation?

I've had no worries buying tons of little apps and utilities from the App Store because I knew Apple was handling the payment.

But it terrifies me to think about typing my credit card number into some unknown black hole.

That's just it, you at present. have zero idea what they will use. And by the looks of it. They will use the CHEAPEST THING POSSIBLE, that works of course. And of course, act surprised when something bad happens to their customers accounts.

 

[djphat2000]

Oh this should be a fun analogy.

suppose I don’t mind, but I demand 30% of your revenue. If you sell $1 MM worth of waffles, so you think it’s reasonable that it cost you $300,000 to rent a lawn?

Oh and by the way, you can’t sell any of your waffles anywhere else, especially a neighbors lawn if (god forbid) they offer to charge you less. So you either sell your waffles on my lawn and on my terms, or you don’t sell at all. Aren’t you grateful to me?

I don't think that is how it works at all.
This is more like, you want to sell your waffles at say iHop or a Waffle house. A place that already sells, you know. They're own waffles. And while that Waffle House or iHops say's "Sure, you can sell your waffles in my store. However, you owe me 30% of your take. Do we have a deal? If not, you can try iHop or the Diner down the road."

Now, if said waffle maker says "no, I think I want to make more than 70%". That person can go purchase land and build their own store. They could lease space at another location. Something akin to say, build your own phone and store to sell your own stuff. Or, try GooglePlay store and see if you can get a better deal. OR, side load on Google, OR make a Web App on Apple. Both of the latter will net you closer to 100% of what you sell. The middle two will maybe get you closer to 100% but, require more work. OR you can just give up 30% to Apple and get with developing and making money.

The other thing is, how much does it cost to make said app? We don't know that. I'm sure building Candy Crush was not cheap, but they don't even charge for the app. IAP keeps them going and they do fantastic on that. It's a constant revenue stream. It's most likely the cheapest part of the applications development. They don't have to charge $9.99 or $49.99 for a game. They can make on $100's of dollars on each customer. Cause we just want to beat that level and will spend another .99 or $9.99 a week to do it.

I think developers make plenty. If they have a quality application.

 

[Rogifan]

If a purchase is made via the app store as a direct result of any of Apples services (App Store search or IAP) Apple deserves every cent of commission for that sale.

I sure as hell dont think that it would be cool if the developer could tell the user inside the app. I think thats a lazy-ass free ride on Apples coat-tails.

However

If you have a freemium app and are sending out newsletters to customers telling them about your premium service that they can sign up for on your website. Thats fair game

If someone finds your website and app due to all the time and money you put into marketing, signs up for your premium subscription via that website and THEN downloads the app via the app store where I then enter my credentials. Thats also fair game.

Marketing is expensive, and IAP's are the most convenient and I'd guess, highest converting form of impulse sales ever invented.

I don’t think Apple should be taking a cut unless they’re directly responsible for the sale. I honestly can’t remember the last app I downloaded or purchased because of Apple marketing/promotion. I think assessing developers for the cost of maintaining the App Store, app downloads, software SDKs/tools, developer relations etc. is one thing. Rent seeking is completely different and Apple should get out of that business. Of course some will argue there are exceptions - especially around games - where Apple can say you wouldn’t exist without us and therefore if you’re successful we deserve some of it. But Apple getting a cut of Kindle book sales just because you read them on an iPad is ridiculous. Amazon should be able to allow people to buy a kindle book inside the app without having to pay Apple. Just let people use the same Amazon account that they do for physical goods or when they use Amazon’s website. Browsing for a book inside the app and then having to go outside the app to pay for it is just poor user experience.

 

[cmaier]

Oh this should be a fun analogy.

suppose I don’t mind, but I demand 30% of your revenue. If you sell $1 MM worth of waffles, so you think it’s reasonable that it cost you $300,000 to rent a lawn?

Oh and by the way, you can’t sell any of your waffles anywhere else, especially a neighbors lawn if (god forbid) they offer to charge you less. So you either sell your waffles on my lawn and on my terms, or you don’t sell at all. Aren’t you grateful to me?

Then I am out of luck. I don’t own your lawn, so I have no inherent right to customers who frequent your lawn. That’s life. If I wanted to, I could have bought your house (made my own infrastructure, ecosystem, devices, operating system, etc.) but I didn’t. I was too cheap and lazy. I didn’t have the foresight.

But if I go to court and demand the right to sell waffles on your front lawn for less than 30%, I will be laughed out of court.

 

[jimbobb24]

Arbitration is a good way to solve problems. Apple didnt get everything they wanted, but neither did developers. Tough solutions for tough problems.

On the whole these look fair.

This means we will soon see apps at 49¢. Madness. Race to the bottom goes on.

 

[Kyrie188]

Amazon should be able to allow people to buy a kindle book inside the app without having to pay Apple. Just let people use the same Amazon account that they do for physical goods or when they use Amazon’s website. Browsing for a book inside the app and then having to go outside the app to pay for it is just poor user experience.

I'm not sure if you have the whole picture here. What is being taxed are non-physical goods (physical goods aren't) and they are free to purchase on Amazon's website without going through Apple. The only 2 things that are being debated here are actually:

1. Developers want to be allowed to use alternative modes of payment:
   1. Either by side loading the app / using an alternative app store.
   2. Or be allowed to choose an alternative form of payment mode.
2. Developers want to be allowed to tell people on the iOS app to pay elsewhere (so that they either get a better cut, or that they can pass cost savings to customers).

If you think about it, it doesn't affect consumers in any significant way because consumers who really want the discount, would've done their homework, and paid for the books elsewhere. This is actually a lot better than physical stores already. Imagine if Target told you that you can purchase the book from Walmart, bring that receipt and then they will permit you to read that book in Target? The inconvenience is intended so that people who don't want to do so will just purchase through Apple so that they get the cut. Apple does not force the user to do so, and the user is free to seek other ways to purchase. Just not through the iOS app.

In the end, as what I always say, the main issue is that people are trying to get iOS to become more like Android when they fail to realise that they are not Apple's target market. People buy the wall garden for the wall garden; if they didn't want, they should just purchase an Android. Imagine if Apple users asked Android to establish a walled garden. What an uproar it would be.

 

[jimbobb24]

"From the beginning, the App Store has been an economic miracle”

It’s been an economic miracle for Apple; not for most developers.

No one forces them to be on there. No one is guaranteed making money. Most actors dont make a lot of money. Most basketball players dont make any money. Being a developer doesnt change the reality that most small businesses fail.