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Apple Takes Risk By Telling Chinese Chat Apps to Disable 'Tip' Functions
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China doesn't follow rules unless it suits China. WTO can't enforce rules, agreements are followed only if it suits and ignored if otherwise. Contracts are 'guidelines'. So Apple, have you got the guts to follow through unlike others? And if you DO follow through, watch out for the state driven or state media backed backlash that will result in iPhones sales taking another hit. Wechat developers (Tencent?) and the state are close.
But you can do that already with many other (banking) apps. I use Chase app to pay friends, family, companies. There's nothing stopping me from paying app creators either. And it won't lead developers towards that payment method as they'll soon realize that once people download an app for free, many won't go back to tip.
When it comes to China, US companies need to better understand the culture and not apply a one solution fits all to that culture. If Apple wants to continue to gain success in the Chinese market they have to stop trying to treat this market like every other market and force the same rules to them. In this case I think Apple is not going to win in the long run trying to change or gain profit from something that seems to be a Chinese only culture detail.
If you want to succeed in China, just give in and accept they have differences that just can't be aligned to the rest of the world. If you don't like it, then pull your product out of China, period, but the revenue lost by Apple pissing of Chinese consumers is far greater then the revenue lost trying to get 30% of all money exchanged from this app.
All the Chinese government has to do is consider this is a banking transaction and this will force Apple to reconsider because there is no ****ing way a Western banking institution would tolerate Apple getting their greedy hands on part of an eTransfer facilitated through their mobile services, only the bank will get their grubby hands on that transaction.
If you want to succeed in China, just give in and accept they have differences that just can't be aligned to the rest of the world. If you don't like it, then pull your product out of China, period, but the revenue lost by Apple pissing of Chinese consumers is far greater then the revenue lost trying to get 30% of all money exchanged from this app.
All the Chinese government has to do is consider this is a banking transaction and this will force Apple to reconsider because there is no ****ing way a Western banking institution would tolerate Apple getting their greedy hands on part of an eTransfer facilitated through their mobile services, only the bank will get their grubby hands on that transaction.
Seriously. Apple's ecosystem is feeling more like Apple's turf/territory. They think they're the mafia and if you have something on their platform you owe them a cut!
To me, this is a slippery slope. We use the Cash app by Square to transfer money to each other all the time. Is Apple going to start taking 30% when I deposit funds into my square app?
Fair is fair. Apple has consistently insisted on getting their 30% vig for all digital purchases done through an app. They don't apply that to physical purchases or inter-bank money transfers. That is why I can purchase physical goods all day long through the Amazon app but I can't purchase an ebook. To avoid the vig Amazon has disabled digital in-app purchases and forced customers to go through the website. They can't even link to the website through the app. Microsoft used to do the same thing. At on time they had a button in their Office apps that would open a browser window to facilitate the purchase and Apple made them take it out. It doesn't matter if the charge goes through a user's Apple account or through an outside system, if the purchase is initiated anywhere in the app Apple wants its cut.
If the "tip" is for good service for a digital product then Apple should consistently apply their rules to which they subject other vendors and charge the 30% assessment. The tip button was an exploit by the developer to get around Apple's rules.
If the "tip" is for good service for a digital product then Apple should consistently apply their rules to which they subject other vendors and charge the 30% assessment. The tip button was an exploit by the developer to get around Apple's rules.
Just yet another reason not to buy an iPhone or iPad in China.
You are absolutely right in what you say, but you are misunderstanding the situation.
It's not about tips for the App developer. It's about Apps that provide you with a way to sent tips to other people.
Example:
You are enjoying free content of an amateur artist. You want to support his work so you visit his profile on WeChat and give him a tip.
Should Apple take 30% of that? I don't think so.
This move is pure greed. I hope it comes back to bite Tim in the ass big time.
Tim Cook you f'ed up. Chinese people don't care what phone they use as long as they can use wechat.
More reason for Chinese people to go patriotic and buy Huawei, XiaoMi and countless other homebred phones that don't do this asinine ****. Apple is really losing on the China front and big time.
More reason for Chinese people to go patriotic and buy Huawei, XiaoMi and countless other homebred phones that don't do this asinine ****. Apple is really losing on the China front and big time.
Neither are these "tips" button - it's moving virtual currency on the back end.
That's a bit of an exaggeration, maybe 20 years ago.
Shh. Apple will want to start taking 30% when I pay bills or transfer funds via my banking App.
Apple needs to stop nickel and diming people.
Apple has told several Chinese social networking apps to disable their "tip" functions to comply with App Store rules, according to executives at WeChat and other companies.
The tip functions in Chinese messaging platforms are free to use and allow people to send authors and other content creators monetary tips through transfers to mobile wallet accounts. However, according to The Wall Street Journal, Apple has decided that tips are equivalent to in-app purchases - similar to buying games, music, and videos - therefore Apple is entitled to a 30 percent cut of every transaction.
WeChat on iPhone
The move by Apple appears to be a way to eke out additional revenue from Chinese iPhone users as part of a broader effort to increase its market share in the country. According to research firm IDC, Apple's market share in China dropped from 16 percent in Q1 2015 to 9 percent in Q1 2017, while the iPhone has fallen to fourth place behind Chinese brands Oppo, Huawei, and Vivo.
On the other hand, Apple's App Store revenue in China overtook its U.S. App Store revenue in 2016 and became the biggest App Store market in the world. Making the tip function an in-app purchase in China's wildly popular chat apps would seem to be a sure-fire way to increase Apple's revenue. However, Apple's pressure on messaging platforms like WeChat is a risk and threatens to alienate huge Chinese companies.
Some social-networking apps have likened Apple's tactic to arm-twisting, according to The Wall Street Journal. Apple is said to have told chief executives at two companies that if they refuse to make the change, updated versions of their apps won't be made available and they could be kicked out of the App Store. "We don't charge anything as the platform, but Apple gets 30 percent for doing nothing," one of the executives reportedly fumed.
The annoyance stems from the way the tipping culture is viewed in China. Chinese app developers see tipping as fundamentally different from in-app purchases because users only tip voluntarily as a mark of appreciation when they consume content. But the biggest worry for Apple could be whether the Chinese government decides to intervene and side with the tippers.
Apple has suffered at the hands of Chinese state regulators before. But Apple also risks frustrating China's biggest company Tencent Holdings Ltd, the developer of WeChat, which has 938 million active monthly users. The messaging service works almost like an operating system all of its own, boasting multiple mini-apps that allow users to pay bills, book hotels, browse media, and more, without ever having to leave the chat platform. The nature of the system itself could be a threat to Apple's app revenue, while WeChat is arguably more important to Chinese smartphone users than any individual phone brand - iPhone included.
WeChat is in talks with Apple to try to find a new solution to the tipping problem and come to an alternative agreement, according to people familiar with the matter.
Article Link: Apple Takes Risk By Telling Chinese Chat Apps to Disable 'Tip' Functions
If this isn't a prime example of why their blanket 30% cut is ridiculous, I don't know what is.
Correct me if I am wrong, but Apple gets a cut of any ad-derived revenue from apps, right?
I suppose we could argue until the cows come home about just how big a cut Apple deserves, but I suspect that from Apple's perspective, tipping represents a way of circumventing its existing IAP rules. I don't think this is about raising revenue; it's simple Apple enforcing what they believe are app-store rules which developers are contractually bound to adhere to.
I suppose we could argue until the cows come home about just how big a cut Apple deserves, but I suspect that from Apple's perspective, tipping represents a way of circumventing its existing IAP rules. I don't think this is about raising revenue; it's simple Apple enforcing what they believe are app-store rules which developers are contractually bound to adhere to.
So what's apple going to do with Zelle? With over 19 of the top banks in America partnering together. It's no longer inter-bank transfers. Are they going to take 30% there? Absolutely not. If they were, I'm sure I wouldn't be the only one dropping apple in a heartbeat.
I wounder how this will effect the upcoming new Super chat feature of YouTube coming out where you can respond with $$$ to get your message promoted or to trigger events
china has nothing native and original to offer.Very little to lose?What happens to Apple's revenue and profit if this leads to a ban in the Chinese market? China is their largest market. Very little to lose.
Ignorant comment. I shouldn't be surprised by that on macrumors.
Who does Apple think they are, the government?
Remember this 30% cut when you donate to charity through Apple next time.