Apple Shares Praise From Developers Happy With 15% App Store Fee Cut

[ksec]

There are lots of details that has yet been released. Problems like 1 Million and 1 Cent which has been discussed a lot within developer community. ( I do wish it is like progressive tax where the first million are charged at 15%.) Most of the companies with over 1 million revenue are actually gaming companies. Which stands at the market rate of 30%.

But Generally speaking I think 15% is a fair price. There are at least 4% from infrastructure and payment processing alone. ( Averaging out Worldwide ) The 10% Apple receive are for Gate Keeping.

The only thing that needs to improve now is their billing system and customer relationship management in between Developers / Vendors and End Users. At this moment it is a complete pile of mess. ( At least not up to a high standard ), which is something DHH often complains about. And he is not alone on this problem.

 

[szw-mapple fan]

But developers should pass the savings onto the consumer. Otherwise people here backing up developers about Apple's percentage is stupid silly and consumers backing developers like this are just saying, "We're here to stand up for developers against the evil giant called Apple".

You want Apple to take care of developers, but as a consumer you should expect the same from developers to the consumers. If not you're just helping developers pad their pockets.

Developers with less than 1 million in sales tend to be selling either very cheap apps or apps targeting niche audiences. As a consumer of these I would much rather the app have longevity in extended support and future development than getting a small discount. Of course, if Apple did this for larger developers I would expect a discount.

 

[ksec]

so does Uber/Postmates etc pay 30% of each delivery to Apple?

Not sure if this is a rhetorical question.

But 30% are only charged on Digital Goods. So if you buy anything from Amazon or Calling a Real World Services like Taxi / Uber there are no 30% charges.

 

[Apple_Robert]

I bet it wasn’t hard to find Developers who were happy with the new 15% fee.

 

[developer13245]

This is really just an emotional gesture, aimed at making people "feel better" by helping the "little guy".
It does not substantially address the main issues regarding Apple's App store policies.

 

[szw-mapple fan]

Tim Cook was lying to Congress when he told Representative Henry Johnson, "We treat every developer the same."

This is clearly not the case when developers are paying different commission rates.

That’s a flawed argument. Developers are not predefined to earn a certain amount each year and any developer can have the potential to earn above or below the cap. They are charged the same commission rate no matter who they are and what app they develop.

 

[rgeneral]

If I remember correctly. This was normal even back in the mainframe days for software. Your cost was dependent on how fast your CPU was. So for a small company they paid less as they usually have a lower speed. Large companies paid more cause they can afford it.

 

[Doomtomb]

Since Epic made this case for the smaller guy, will they now lower their store percentage to match Apple for smaller game developers? 😆

Their store rate is already lower.... 12% for everybody regardless of size.

 

[Asarien]

Anyone one else feel like Apple did this just to rub it in Epic's face?

The real question is; would Apple have done this if it weren't for Epic...?

After 12 years of stubbornness, it takes a giant to pressure another.

 

[Rogifan]

Curious now what the justification will be to keep the 30% for larger companies? I thought the argument was that it was necessary to cover the costs of hosting/distributing/curating the app store content. How is that suddenly cheaper for smaller developers only?

It may seem like a smart move by Apple but I can see it backfire spectacularly with regulators.

I suppose Apple will justify it the way governments justify progressive tax systems. This way Apple can look like the good guy while still raking in all that sweet game IAP.

 

[Rogifan]

You pay per transaction, you won't get back billed for all your previous transactions if you go over a million, you just start paying 30% from then on, until the next year starts, then you're back to 15%.

Also "We treat every developer the same" is not the same as "We will treat every developer the same"

I don’t think you start out at 15% every year. If you go over $1M and hit 30% that’s your rate for the next year.

For Pete's sake, stop making ignorant posts if you don't know what the hell you're talking about. The 30% only applies to earnings beyond 1 million.

https://www.apple.com/newsroom/2020/11/apple-announces-app-store-small-business-program/

I’m pretty sure that is not the case. I mean big name developers aren’t being charged 15% on their first $1M in App Store revenue. If you’re a bigger developer making at least $1M each year you’re never paying 15%.

 

[CarlJ]

The term "gerrymandering" makes absolutely no sense here. Sweeney has just had another epic failure in logic and rational thought.

Sweeny can go jump in a lake. Preferably a frozen one. And preferably jumping from a great height. Any shred of merit in his case has been completely negated by their idiotic, over the top presentation, that's been extremely misleading (according to judges).

 

[BeefCake 15]

Thank you Mr. Cook!

 

[BeefCake 15]

Earn less than $1,000,000.00? Pay 15 percent commission.

Earn $1,000,000.00 or $1,000,000.01? Pay 30 percent commission.


Tim Cook was lying to Congress when he told Representative Henry Johnson, "We treat every developer the same."

This is clearly not the case when developers are paying different commission rates.

How is that different than many other industries doing similar deals.

 

[Maconplasma]

Developers with less than 1 million in sales tend to be selling either very cheap apps or apps targeting niche audiences. As a consumer of these I would much rather the app have longevity in extended support and future development than getting a small discount. Of course, if Apple did this for larger developers I would expect a discount.

Developers are in sales just like anyone else. I mean Black Friday is coming up and people want discounts from even the small mom & pop stores who have high overhead. Developers have low overhead. 1 million in sales is no joke and don't for one minute think that's all the money many developers have. But by all means demand that Apple take care of the developers while the developers don't take care of you. Remain happy paying full price. It doesn't guarantee you longevity of an app, extended support or future development. You're overly optimistic or you have your eyes closed very tightly. People are paying $$$$$ for monthly subscriptions to ProTools and the company still won't update all it's plug-ins for 64bit. SMH.

 

[Maconplasma]

This is a nice move. I'd still like to see them do more. I'm a full-time web developer. But I like tinkering with iOS / MacOS on the side. The problem is, if you don't pay the $99/year, you're super limited. They keep tightening things down every single year. As of last year, I think I could only install 3 apps at a time on a personal device. And they were only good for 7 days.

I think they need to loosen those rules a bit. At this point, I just want to play around. Learn some. Explore. If I come up with a great idea, I'd gladly pay the $99. But until I reach that point, it feels like they're throwing every road-block they can in my direction. I had one app idea I wanted to explore. But it became such a hassle, I eventually just stopped playing with it. The testing aspect (it used Apple Watch data) was too annoying. There used to be a much higher limit on apps, and they lasted forever like any other app.

I don't see why a free account can't be allowed to be a useful thing. If I can only install on my personal devices, it shouldn't really matter to them. In fact, they should encourage people in my position, not limit them. Tinkering leads to ideas which leads to apps which leads to them getting money. I don't understand their position here. Or why they keep making it worse every year (to be fair, I don't know what the policies are this year).

I'd like to see them throw a little love to the beginners/amateurs who aren't yet ready to become full-blown Apple Developers. Or at the very least, remove all the road blocks they've added over the years.

Does Google have a free account for Android tinkerers?

 

[sw1tcher]

What made you such a fanboy for Epic? They literally breached their contract with Apple after years of being fine with it. Their argument was that the 30% was hurting the little guy. Now it’s not.

I'm an Epic fanboy because I pointed out the fact that Epic's commission is 12 percent vs Apple's 15 percent? Wow.

It's not as if Apple's never breach a contract (i.e. Qualcomm), right? Maybe Epic took a page out of Apple's playbook.

 

[Kabeyun]

Spotify said that Apple's fee change demonstrates that "App Store policies are arbitrary and capricious," while Epic Games CEO Tim Sweeney said that Apple is "gerrymandering the community with a patchwork of special deals" with the program.

What an utter crock. Suddenly any price decrease reflects earlier “capricious pricing,” and any tiered pricing schedule reflects “a patchwork of special deals.” I wonder if even they believe the crap they’re shoveling.

 

[gaximus]

I don’t think you start out at 15% every year. If you go over $1M and hit 30% that’s your rate for the next year.

You could be right, but I remember seeing somewhere that you started over every year, but I don't think it was a reliable source. If this is the case then if you were just about to make $1 million toward the end of the year, and you were sure you would make about the same amount next year, it would make financial since to stop sales of your app until the beginning of the year.

 

[Abazigal]

That's... the whole point. It's about getting developer goodwill at the expense of a minor hit on Apple's profits. Nobody promised better prices.

Remember how one of the criticisms of the 30% cut was that developers were charging consumers higher app prices because of this? I (rightfully) pointed out that app pricing had no link to commission rates because software has no marginal costs

So now Apple lowers their cut, but developers keep prices the same and pocket the difference.

Funny how criticism against Apple keeps shifting like the wind.

 

[Abazigal]

Curious now what the justification will be to keep the 30% for larger companies? I thought the argument was that it was necessary to cover the costs of hosting/distributing/curating the app store content. How is that suddenly cheaper for smaller developers only?

It may seem like a smart move by Apple but I can see it backfire spectacularly with regulators.

It works because reducing the rate for smaller developers will barely cost Apple any money, when the majority of their App Store revenue comes from a few larger companies earning supernormal profits.

The justification is pretty simple - Apple will simply argue that it is unable to lower the 30% revenue share by much unless people are OK with them running the App Store at a loss from an operating income perspective.

In this context, I feel that the 30% revenue share for the giants is fair and should remain in place. I am not sure what they have to complain about exactly when they are already earning so much money.

 

[InGen]

I believe it’s only 30% on the sales over $1M. The first $1M is still only 15%.

Well this is a big overlooked detail, can someone confirm if this is indeed the case? That would mean less of what someone previously commented with “Apple is not longer treating all developers the same” as for the most part they would all fall under the same commission structure. And there would be a good grey area of developers making $1.5 million benefitting from 15% on their first million and feeling the rich man’s sting on their additional half a million. Making it something every developer is prone to.

 

[developer13245]

I’ve been a solo iOS dev for about 7 years and while this woulda been nice when I was actually making good money on the App Store I’m still happy to see it.

Unfortunately I do mostly sports app so I was destroyed by Covid so 15% of close to nothing won’t help much this year but hopefully it does in the future.

I assume the app market has become a place where the top 1% make about 90% of the store rev so I doubt apple will see much if any lost rev.

Agree. I've been in the store since 2008. 15% would have made a difference back when there was decent money to be made, but those days are gone. Most people don't realize it can cost 20,000 - 30,000 to contract a professional illustrator to generate graphics for even a very simple app or game. I write all the code for my apps, but professional artwork is needed - your app has ZERO chance of being considered for featuring without pro artwork AND translations.

I've worked on several app ideas (some fully implemented) that never made it to completion. The deciding factor was the cost for pro artwork and meta data. I consider "decent" money to be at least 60-75% of what a developer would make working for someone else. The 25-40% cut in pay was worth the possibility of achieving a successful entrepreneurial outcome. But those days are long gone. Apple greatly benefited by the huge number of developers who rushed to create apps for iOS. But there were very few developer success stories - Apple embellishes this for emotional marketing purposes.

People commenting here about how developers have "low overhead" have ZERO idea of what it takes to develop an App.

Also, it's not possible for developer pass a 15% discount to customers when Apple's App store pricing system only allows fixed tiers at $1 USD increments. That $0.99 app can't be reduced $0.85 - this is a problem with Apple's store pricing policy which remains unresolved.

 

[Abazigal]

Well this is a big overlooked detail, can someone confirm if this is indeed the case? That would mean less of what someone previously commented with “Apple is not longer treating all developers the same” as for the most part they would all fall under the same commission structure. And there would be a good grey area of developers making $1.5 million benefitting from 15% on their first million and feeling the rich man’s sting on their additional half a million. Making it something every developer is prone to.

It’s not a progressive tax.

If a developer earns less than 1 million dollars the previous year, he pays only 15% to Apple in the current year.

If he earns more than 1 million, it’s 30% all the way.

It’s either 15% or 30%. Not 15% of the first million. The point is to benefit smaller developers who were already earning way below this amount. Not subsidise the larger players.

 

[truthertech]

Curious now what the justification will be to keep the 30% for larger companies? I thought the argument was that it was necessary to cover the costs of hosting/distributing/curating the app store content. How is that suddenly cheaper for smaller developers only?

It may seem like a smart move by Apple but I can see it backfire spectacularly with regulators.

Regulators don’t get to pick a percentage, at least not in the United States. And Apple never said they we’re running their businesses “at cost.” They make, and report, a huge profit on services such as the App Store.