Apple Says Developers Have Earned Over $70 Billion From App Store Since It Launched

[truthertech]

Distribution costs money and distribution on a hugely popular, walled garden ecosystem costs lots of money.

No, it's not fair that Apple spends billions building an ecosystem that brings me access to hundreds of millions of customers in a secure set up where they will distribute my product, do my billing, collect my money, etc., and then wants me to pay to use it. Come to think of it, it is also unfair that Amazon charges me to list my product on their website. And Walmart wants almost 50% of the retail price of my product just to put it in their stores. Not fair! Where do these companies get off charging me to use their networks, systems etc.?

 

[routine_analyst]

That's a mind blowing figure.

The MR forum folks that claims Apple has no "vision" since Steve Jobs passing should remember he was strongly against the App Store.

Well... he was against it. Which allowed Apple to focus on making the iPhone a platform better than anything before it. Focus on smaller aspects, release them slowly and then when ready release a store that still allows Apple to have maximum control over the experience. Had he just haphazardly released a store like Google, the user experience would be a mess.

 

[kdarling]

It's a mind blowing achievement that I don't think gets enough recognition.

It's an incredibly greedy achievement, but mind blowing? How so?

Before the iPhone there were J2ME, Linux, BREW, Symbian, Windows Mobile, etc SDKs. Afterwards Android and Tizen ones. There were also app stores.

As noted, the main thing different with Apple is that they locked their standard smartphone users into only being able to download apps from the Apple App Store... with Apple acting as the censor. The excuse was that the apps were vetted and easy to obtain.

That's EXACTLY the behavior that Jobs had mocked the carriers for doing with flip phones. (Before Apple, smartphones were NOT restricted to certain app stores.)

 

[Michaelgtrusa]

If Opera browser were in the hands of it's creators, then i'd be concerned, however, what concerns me are all the junk that I see filling up the App Store that is from china and some India. This is killing the concept so many have worked hard to build. Another concern is the QT that has led to weaponized apps infiltrating the store! Apple has not addressed this issue! When you see real dev leaving the App Store, dev that have used their brain to create and not copy and steal, then be worried.

 

[Jsameds]

It's an incredibly greedy achievement, but mind blowing? How so?

Before the iPhone there were J2ME, Linux, BREW, Symbian, Windows Mobile, etc SDKs. Afterwards Android and Tizen ones. There were also app stores.

As noted, the main thing different with Apple is that they locked their standard smartphone users into only being able to download apps from the Apple App Store... with Apple acting as the censor. The excuse was that the apps were vetted and easy to obtain.

That's EXACTLY the behavior that Jobs had mocked the carriers for doing with flip phones. (Before Apple, smartphones were NOT restricted to certain app stores.)

Wow.

 

[Eric5h5]

How come and Apple/MS/Google can have 30% of MY revenue just to ALLOW me to provide an app for a specific platform?

Don't know anything about how stores work, do you? Before Apple implemented the now-standard 70/30 split, it was commonly the other way around. That is, you'd be lucky if you got to keep 30%. Good luck trying to sell stuff on your own, without the infrastructure of a popular store to support you. For example, selling desktop computer games without being on Steam is basically commercial suicide, unless you get really lucky (Minecraft) or you're already a huge well-known company that can do its own store (Blizzard, EA).

In reality, devs need the store and the store needs devs. It's worked out pretty well for both. Don't be insane or greedy.

--Eric

 

[OldSchoolMacGuy]

Seriously? Developers have NO CHOICE if they wish to access normal users, because Apple made it so that only apps from their own store could be bought and downloaded.

If there were more than one store available, then many smaller developers would be cool with going through a non-Apple, less greedy, perhaps far better vetted and advertised, alternative store.

Not to mention all the major app makers who would love to have their own stores, bypassing Apple's 30% grab.

And yet, we don't see that happening on Android. Developers still go to the main store because it offers the most exposure, despite the greatest commission taken.

Almost every store takes 30%. Those that charge less have mini viewership.

 

[C DM]

Don't know anything about how stores work, do you? Before Apple implemented the now-standard 70/30 split, it was commonly the other way around. That is, you'd be lucky if you got to keep 30%. Good luck trying to sell stuff on your own, without the infrastructure of a popular store to support you. For example, selling desktop computer games without being on Steam is basically commercial suicide, unless you get really lucky (Minecraft) or you're already a huge well-known company that can do its own store (Blizzard, EA).

In reality, devs need the store and the store needs devs. It's worked out pretty well for both. Don't be insane or greedy.

--Eric

But we should all be living in a utopia where no one needs to pay for anything and everyone can just magically have anything they want. And Apple is in the way of all of that!

 

[gsurf123]

Your comparing Apple to oranges. Digital vs brick and mortar store. I'm not sure why people continue to make this comparison.

Digital Store overheads are far cheaper than a physical store. Brick and Mortar stores need to take more of the selling price to cover their costs. Digital Stores do not.

The more important point is that only very few applications ever made it to retail shelves and that combined with the 50% take from the reseller made it all but impossible for only the largest companies to make it financially. Of course one could say they would make more money if apple allowed side-loading, but that is definitely not the case as the app store puts everyone "on the shelf" and is painless for the consumer to use.

Nothing is easier than getting an electronic payment from Apple every month without the hassle of processing payments. Credit cards take between 1.25% and 2% right off the top with the higher reward cards being north of 3% on top of the .30 (+/-) USD swipe fee. Plus if the card is not swiped (or inserted) at your place of business (ie phone and internet) then there is a fee for that on top of all the others. I also forgot the base processing cost of about $20/month even if you don't accept a single charge in a month. Chargebacks (angry customers), fraud, and returns have a cost associated with them as well. The way around the credit card processing fees is to just pay PayPal 2.75% or some of the other companies 3%. Oh, and I forgot the the myriad of sales tax filings to take care of.

The app store also gave everyone low cost apps that did not exist prior. Those who bought software in the 90's know that applications were $50 at a minimum. Of course there were outliers, but on the other side plenty were more than $100.

The app store is the equalizer. The concept of getting rich off of it is a pipe dream, but at least you will be considered published and have some walking around money.

 

[johnfrombeyond]

Do these companies have to pay Apple's annual fee to develop for their platform? If so, then Apple is out nothing.

A huge corporation just needs to pay $100/year for unlimited apps, whether free or paid. For every company that only pays the annual $100 and doesn't sell a bunch of paid apps, Apple is losing money in updating and maintaining the developer portal. Obviously, Apple makes it all back with the 30% cut from all the really big developers selling lots of apps. The "rich" app makers are subsidizing the indies and hobbyists. That's fine with me. Unfortunately, most indies who don't have a million dollar marketing budget just can't survive on iOS income like they could in 2010.

 

[Michaelgtrusa]

It's an incredibly greedy achievement, but mind blowing? How so?

Before the iPhone there were J2ME, Linux, BREW, Symbian, Windows Mobile, etc SDKs. Afterwards Android and Tizen ones. There were also app stores.

As noted, the main thing different with Apple is that they locked their standard smartphone users into only being able to download apps from the Apple App Store... with Apple acting as the censor. The excuse was that the apps were vetted and easy to obtain.

That's EXACTLY the behavior that Jobs had mocked the carriers for doing with flip phones. (Before Apple, smartphones were NOT restricted to certain app stores.)

Greedy? Those numbers should be higher that that.

 

[Kaibelf]

So apple made 30B just by using the Developers' IP. Good.

I wasn't aware that Apple should give developers a free platform and distribution network for free.

 

[Stella]

The AppStore is necessary due to the walled garden. People still do sell their software via "Shareware" ( put it in quotes because its an older term ! ). But people are lazy, they complain about license codes, having to use a search engine etc.

Advantages of an App Store is one central store - people don't have to look around the internet ( god forbid ). Also, makes it easier for developers - like you say - don't have to worry about payments, and more, integrate in license code mechanisms...

Its still recommended that people have a website for their iOS app... increases visibility rather than just relying on the Appstore discovery ability.

Larger companies still make more money off the App Store than individuals. The appStore has issues with app discovery, something that Apple is very slowly addressing.. but its too slow.

Your right about developer access - app stores do make it easier for individual developers, but it is getting harder for individual developers to make a lot of money.. The gold rush is over.


"The Rush" to the bottom for app pricing isn't necessarily a good thing. Now "everyone" wants something for nothing, which isn't viable. People will whine about an app that costs $5... they expect it to be $0.99. Now, software development becomes more difficult to make decent money. Basically, its made people *cheap*.

I've paid up to $300 for one individual software item before and got great value. I'm willing to spend money on good quality software. In the 1990s I paid around $200 for a word processor... great value.

When it comes to the MacAppStore - I rarely buy anything from there - I'll buy direct from the product website.

The more important point is that only very few applications ever made it to retail shelves and that combined with the 50% take from the reseller made it all but impossible for only the largest companies to make it financially. Of course one could say they would make more money if apple allowed side-loading, but that is definitely not the case as the app store puts everyone "on the shelf" and is painless for the consumer to use.

Nothing is easier than getting an electronic payment from Apple every month without the hassle of processing payments. Credit cards take between 1.25% and 2% right off the top with the higher reward cards being north of 3% on top of the .30 (+/-) USD swipe fee. Plus if the card is not swiped (or inserted) at your place of business (ie phone and internet) then there is a fee for that on top of all the others. I also forgot the base processing cost of about $20/month even if you don't accept a single charge in a month. Chargebacks (angry customers), fraud, and returns have a cost associated with them as well. The way around the credit card processing fees is to just pay PayPal 2.75% or some of the other companies 3%. Oh, and I forgot the the myriad of sales tax filings to take care of.

The app store also gave everyone low cost apps that did not exist prior. Those who bought software in the 90's know that applications were $50 at a minimum. Of course there were outliers, but on the other side plenty were more than $100.

The app store is the equalizer. The concept of getting rich off of it is a pipe dream, but at least you will be considered published and have some walking around money.

 

[Moorepheus]

A huge corporation just needs to pay $100/year for unlimited apps, whether free or paid. For every company that only pays the annual $100 and doesn't sell a bunch of paid apps, Apple is losing money in updating and maintaining the developer portal. Obviously, Apple makes it all back with the 30% cut from all the really big developers selling lots of apps. The "rich" app makers are subsidizing the indies and hobbyists. That's fine with me. Unfortunately, most indies who don't have a million dollar marketing budget just can't survive on iOS income like they could in 2010.

The question is, do the hobbyist/indies developers have to pay the $100 a year also? If so, then, just imagine how many developers are writing for the apple environment, now times that $100 per year. Your telling me, that if everyone gave away their apps for free, that Apple would go under. I don't think so. I would believe that the 30% apple makes off of purchases is PURE profit, just my opinion.
[doublepost=1496349271][/doublepost]

I wasn't aware that Apple should give developers a free platform and distribution network for free.

They don't, they pay a year $100 right to develop fee.

 

[Urban Joe]

This. There's been a number of app features that Apple's poached over the years from developers as "New iPhone Features Only Apple Could Come Up With" then turned right around and rewritten their App Store rules to exclude those same developers from keeping the features Apple poached or having other developers implement them in new ways by using the "Can't copy Apple's built-in features for iPhone" bs. All the while Apple's able to falsely claim they brought "innovative" features to market when all they've done is follow their founder's motto "Good artists copy, great artists steal"

Apple, Google, Facebook et al need a good strong dose of Sherman Anti-trust right up their greedy ARXE. They are the modern day robber barrons. Oh, don't forget Bozos at Amazon. "Siri, how do you spell Make America Great Again?" s-h-e-r-m-a-n | a-n-t-i-t-r-u-s-t

 

[davidespinosa]

Total app store revenue = $100B
Developer revenue = total * 0.7 = $70B
Apple revenue = total * 0.3 = $30B

What Tim won't say at WWDC: "Apple thanks the developer community for paying us $30B"

 

[Eric5h5]

But we should all be living in a utopia where no one needs to pay for anything and everyone can just magically have anything they want. And Apple is in the way of all of that!

Oh, wow, you're right...can't believe I didn't see that.

I would believe that the 30% apple makes off of purchases is PURE profit, just my opinion.

You would believe incorrectly, and that's a very uninformed opinion.

Now what I would like to see is the $100/year fee replaced by a one-time $100 fee. (Or maybe higher.) Having a fee to help prevent everyone and their dog from sending in trash and clogging the system (more so than it already is) makes sense, but I'm not sure what purpose it serves to have that be an annual fee.

--Eric

 

[E.Lizardo]

The App Store provides a lot. Keep in mind that for us developers, 30% is nothing compared to the 40-50% that a normal reseller takes.

The App Store provides a place to be seen. It means small developers who would never be found normally, now have the chance to be seen by an audience of millions. They build a market place and that has HUGE value.

Imagine you're trying to sell you hot sauce. How will your product be found? Getting your product into a big grocery chain like Costco means that millions could see and purchase it. That's what Apple is providing everyone with the App Store. Without that, these developers would just be selling it on their little websites which few would find due to their limited marketing abilities to rank well in search engines and be found.

Developers could choose to instead develop for Android and not pay those fees but Apple has created an ecosystem where people are cool with paying for good apps. Apple users spend on average 4x more than Android users. They're much more willing to pay for an app and that's hugely attractive to anyone looking to sell an app.

They also provide an easy way to update apps, advertise them, monitor sales, and many other tools that small developers wouldn't normally have access to.

Complain all you like about the 30% cut that Apple takes but the truth is that few developers are complaining. We get far more from the deal than the small fee we pay.

Shhhh! Stop making sense!

 

[Abazigal]

Without 3rd party developers, iPhone wouldn't be as compelling buy. Apple needs 3rd party developers as much as 3rd party developers need Apple.

Personally, I'd be insulted if Apple charged for Xcode in its present state!

Not all developers are created equal. With the App Store currently as bloated as it is, and flooded with tons of crappy apps not even worth the server space they are taking up, I feel that a purge is really in order.

 

[Stella]

TouchArcade is one of them.

Needs updating to 64bit... it will be purged otherwise!

There is a lot of **** on there. Some great apps just simply go unnoticed.

Not all developers are created equal. With the App Store currently as bloated as it is, and flooded with tons of crappy apps not even worth the server space they are taking up, I feel that a purge is really in order.

 

[Abazigal]

TouchArcade is one of them.

Needs updating to 64bit... it will be purged otherwise!

There is a lot of **** on there. Some great apps just simply go unnoticed.

Toucharcade has addressed this issue before. They don't want to update their app because they are afraid this will come under Apple's scrutiny. Currently, the app is flying under Apple's radar, and they prefer it stay that way. As it is, an app (technically) recommending and promoting other apps is frowned upon by Apple.

 

[Stella]

TouchArcade is also a review app - mirror image of the website. Would be rather dumb if Apple to start rejecting it. I know Apple rejected the original AppShopper for the same reason as you give, and that had to be modified for acceptance to the AppStore.

Toucharcade has addressed this issue before. They don't want to update their app because they are afraid this will come under Apple's scrutiny. Currently, the app is flying under Apple's radar, and they prefer it stay that way. As it is, an app (technically) recommending and promoting other apps is frowned upon by Apple.

 

[Michaelgtrusa]

Not all developers are created equal. With the App Store currently as bloated as it is, and flooded with tons of crappy apps not even worth the server space they are taking up, I feel that a purge is really in order.

I agree that a purge is needed but when you want to be in china's western created market you let the whole camel stay in the tent.

 

[Moorepheus]

Oh, wow, you're right...can't believe I didn't see that.


You would believe incorrectly, and that's a very uninformed opinion.

Now what I would like to see is the $100/year fee replaced by a one-time $100 fee. (Or maybe higher.) Having a fee to help prevent everyone and their dog from sending in trash and clogging the system (more so than it already is) makes sense, but I'm not sure what purpose it serves to have that be an annual fee.

--Eric

As for my opinion, you are right, as you are, we are all uninformed, because APPLE will never releases what their costs are for the App Store infrastructure and how much they are making off of App developers. We already know they make $100 per app developer per year on top of the 30% they take for any apps that make money. But, lets argue about what we do and don't know. You can have your opinion and I can have mine.

 

[Vorkeyjones]

I made about $5.00 out of the $70 Billon, and didn't get a check yet, because it's a very small amount.

I've earned about $13 and still waiting for my money as well.