Apple's Phil Schiller Initially Opposed 27% App Store Fee on External Purchases

[Abazigal]

Yeah we are worlds apart because developers have legitimate complaints about the 30% IAP. No it’s fundamentally not because if you have a successful app then apple where making about $256 million in 2018 from Netflix for ultimately just processing a fee
& that’s not right regardless of how you look at it.

I do feel that Apple does deserve a cut for the role the App Store plays in facilitating the transaction between a developer and the customer. Whether they deserve the full 30% is always open to debate, but I guess my point is that Apple does deserve something.

Because what people are essentially clamouring for here is for Apple to subsidise the costs of operating the App Store out of their own profits (essentially making it a loss leader), while allowing developers to leverage it (and Apple's technology) for their own purposes, without giving anything back.

I am not very surprised that Netflix is no longer allowing users to sign up from within the app, and I understand that Disney is now doing the same. It's par the course for any tech-based company whose business model is defined by low marginal costs. At first, Netflix was willing to pay the cut to Apple because they were focused on customer acquisition and convenience trumped profits (it's harder to convince users to navigate to an external website to create a new account when you are just starting out).

Now that they have enough subscribers (and data shows that growth is more or less plateauing), their priority will now turn to maximising existing revenue. Which means higher prices, lower costs and (of course), reducing the money they have to pay Apple by any means possible.

 

[Hails09]

I do feel that Apple does deserve a cut for the role the App Store plays in facilitating the transaction between a developer and the customer. Whether they deserve the full 30% is always open to debate, but I guess my point is that Apple does deserve something.

Because what people are essentially clamouring for here is for Apple to subsidise the costs of operating the App Store out of their own profits (essentially making it a loss leader), while allowing developers to leverage it (and Apple's technology) for their own purposes, without giving anything back.

I am not very surprised that Netflix is no longer allowing users to sign up from within the app, and I understand that Disney is now doing the same. It's par the course for any tech-based company whose business model is defined by low marginal costs. At first, Netflix was willing to pay the cut to Apple because they were focused on customer acquisition and convenience trumped profits (it's harder to convince users to navigate to an external website to create a new account when you are just starting out).

Now that they have enough subscribers (and data shows that growth is more or less plateauing), their priority will now turn to maximising existing revenue. Which means higher prices, lower costs and (of course), reducing the money they have to pay Apple by any means possible.

It’s not about it being for free it’s the 30% figure that’s the point it is too high when you break down the numbers hence the issue
The majority actually has an issue with it but the bigger ones are the only ones that can challenge them on it.

To your other point about developers not giving anything back & just using Apple’s technology for essentially free then ultimately that’s up to Apple to change that business model then isn’t it

And your other point about Lower costs & maximizing revenue well Apple as a company does that when you actually break down the numbers

 

[Abazigal]

It’s not about it being for free it’s the 30% figure that’s the point it is too high when you break down the numbers hence the issue
The majority actually has an issue with it but the bigger ones are the only ones that can challenge them on it.

To your other point about developers not giving anything back & just using Apple’s technology for essentially free then ultimately that’s up to Apple to change that business model then isn’t it

And your other point about Lower costs & maximizing revenue well Apple as a company does that when you actually break down the numbers

Just curious - do you think it’s reasonable for other platforms such as Sony and Nintendo to also take a 30% cut of revenue from games sold through their app stores, or do we assume that developer are fine with it?

I only ever hear Tim Sweeney whine about the App Store. So he only has a problem with Apple taking his money, but not other companies?

 

[Hails09]

Just curious - do you think it’s reasonable for other platforms such as Sony and Nintendo to also take a 30% cut of revenue from games sold through their app stores, or do we assume that developer are fine with it?

I only ever hear Tim Sweeney whine about the App Store. So he only has a problem with Apple taking his money, but not other companies?

his argument is essentially on the surface it’s the same fee but it’s fundamentally different for example Sony & Nintendo sell their hardware at a loss so they’re business model relies on it being competitive.
But the App Store are different because Apple for example sell their hardware at a profit & don’t actually do anything to help the gaming industry in general

 

[Abazigal]

his argument is essentially on the surface it’s the same fee but it’s fundamentally different for example Sony & Nintendo sell their hardware at a loss so they’re business model relies on it being competitive.
But the App Store are different because Apple for example sell their hardware at a profit & don’t actually do anything to help the gaming industry in general

That argument has always felt specious to me. Like if I were a game developer who just released a title for the PS5, why would I care whether the PS5 is making a profit or loss? All I know is that Sony is taking 30% from me regardless. And I am supposed to be fine with it.

And the best part is that the 30% rate actually predates Apple (it started with Nintendo). These platforms are also hugely profitable, so it’s clear they are collecting way more money than whether it cost them to subsidise their consoles.

The reality is that everything Apple is being accused of, there are also other companies doing the exact same thing, and getting away with it as well. At the end of the day, it feels like many critics target Apple because they feel like they can still in the court of public opinion, and all seem oddly quiet when it comes to other platforms such as Steam. The whole “but Nintendo loses money on each switch console sold” feels very much like flimsy rationalisation after the fact to avoid being seen as inconsistent or hypocrites.

 

[Hails09]

That argument has always felt specious to me. Like if I were a game developer who just released a title for the PS5, why would I care whether the PS5 is making a profit or loss? All I know is that Sony is taking 30% from me regardless. And I am supposed to be fine with it.

And the best part is that the 30% rate actually predates Apple (it started with Nintendo). These platforms are also hugely profitable, so it’s clear they are collecting way more money than whether it cost them to subsidise their consoles.

The reality is that everything Apple is being accused of, there are also other companies doing the exact same thing, and getting away with it as well. At the end of the day, it feels like many critics target Apple because they feel like they can still in the court of public opinion, and all seem oddly quiet when it comes to other platforms such as Steam. The whole “but Nintendo loses money on each switch console sold” feels very much like flimsy rationalisation after the fact to avoid being seen as inconsistent or hypocrites.

The reason why a games developer should care is because that’s the industry he’s in so it’s in their interests for Sony for example to be profitable that’s why
Because Apple sell new iPhones every year & they make a profit on said product every year
Yet Sony & Nintendo don’t bring a console out every year so for example the ps5 has only been out for just over 4 years now & I believe the switch is over 5 years old so these companies make a profit on them over time.
There app stores are dedicated game stores so it’s in the industry’s interest for them to be competitive.
Unlike the app stores on mobile because they don’t actually do anything to help the gaming industry because apple & google business model doesn’t work like that because it’s a generic store in his opinion

 

[fabbydabby1]

That argument has always felt specious to me. Like if I were a game developer who just released a title for the PS5, why would I care whether the PS5 is making a profit or loss? All I know is that Sony is taking 30% from me regardless. And I am supposed to be fine with it.

And the best part is that the 30% rate actually predates Apple (it started with Nintendo). These platforms are also hugely profitable, so it’s clear they are collecting way more money than whether it cost them to subsidise their consoles.

The reality is that everything Apple is being accused of, there are also other companies doing the exact same thing, and getting away with it as well. At the end of the day, it feels like many critics target Apple because they feel like they can still in the court of public opinion, and all seem oddly quiet when it comes to other platforms such as Steam. The whole “but Nintendo loses money on each switch console sold” feels very much like flimsy rationalisation after the fact to avoid being seen as inconsistent or hypocrites.

No the argument is this Apple sells new iPhones every year so they make a profit on that every year & within a few more years their customers then upgrade to a new replacement iPhone. Where as the game consoles like Sony & Nintendo keep the same product on sale for potentially 7 years so it takes them longer to make a profit on their product. It’s in the industry’s interest for Sony’s store & Nintendo store for example to be competitive because the games industry relies on it & it helps the developer in that industry if Sony for example make a profit.
that’s the point he’s making

 

[webkit]

Yep because it’s not a commanding lead.

My comment was that Apple's mobile OS share is largest; you first denied it (and still haven't provided source/proof) and then tried to move the goal posts. Sad.

It’s a couple of percentage points within a margin of error.

More nonsense and/or ignorance from you. According to Statcounter, iOS mobile OS share in the U.S. is currently around 58% while Android's share is around 42%. That's NOT "a couple of percentage points", it's 16 percentage points.

And when Apple had a 40% market share a few years ago the same broken record was being played.

What source had Apple's U.S. mobile OS share at 40% a few years ago? Is this just more nonsense from you or will you actually provide a source?

It’s a way to gauge spending per user. Not dominance.

More nonsense and/or ignorance from you. Total revenue is absolutely a common way to gauge a store's market share or dominance in a market.

 

[I7guy]

My comment was that Apple's mobile OS share is largest; you first denied it (and still haven't provided source/proof) and then tried to move the goal posts. Sad.




More nonsense and/or ignorance from you. According to Statcounter, iOS mobile OS share in the U.S. is currently around 58% while Android's share is around 42%. That's NOT "a couple of percentage points", it's 16 percentage points.




What source had Apple's U.S. mobile OS share at 40% a few years ago? Is this just more nonsense from you or will you actually provide a source?




More nonsense and/or ignorance from you. Total revenue is absolutely a common way to gauge a store's market share or dominance in a market.

Whats really sad is the continual denial of the legality of ios app store. It's true apple has a (legal) monopoly on it...at least in the US. The same that Honda has a legal monopoly on the accord. All of your bloviating is not going to change either of those.

It's true that 2023 was the first year iphone market share in the US, if operating system is the metric, climbed above 50%.

But none of that changes the fact the ios app store is legal in the US.

 

[fabbydabby1]

Whats really sad is the continual denial of the legality of ios app store. It's true apple has a (legal) monopoly on it...at least in the US. The same that Honda has a legal monopoly on the accord. All of your bloviating is not going to change either of those.

It's true that 2023 was the first year iphone market share in the US, if operating system is the metric, climbed above 50%.

But none of that changes the fact the ios app store is legal in the US.

The big difference is if you want to buy the Honda accord you can shop at various different stores & outlets
But on iOS in the USA as you say you only have 1 option & that’s the App Store because ultimately you don’t have an option

 

[I7guy]

That argument has always felt specious to me. Like if I were a game developer who just released a title for the PS5, why would I care whether the PS5 is making a profit or loss? All I know is that Sony is taking 30% from me regardless. And I am supposed to be fine with it.

And the best part is that the 30% rate actually predates Apple (it started with Nintendo). These platforms are also hugely profitable, so it’s clear they are collecting way more money than whether it cost them to subsidise their consoles.

The reality is that everything Apple is being accused of, there are also other companies doing the exact same thing, and getting away with it as well. At the end of the day, it feels like many critics target Apple because they feel like they can still in the court of public opinion, and all seem oddly quiet when it comes to other platforms such as Steam. The whole “but Nintendo loses money on each switch console sold” feels very much like flimsy rationalisation after the fact to avoid being seen as inconsistent or hypocrites.

I agree. But some claim smartphones are indispensable, ranking right up their with air, food and water and that is the justification for them to be regulated to death. Including fees and commissions. Imo, on this board a rational argument of why game fees of 30% are okay on gaming platforms, but not on Apple platforms. The distinction to be used is the profit margin, which to me, seems like a red herring.

 

[I7guy]

The big difference is if you want to buy the Honda accord you can shop at various different stores & outlets
But on iOS in the USA as you say you only have 1 option & that’s the App Store because ultimately you don’t have an option

It's the same product shopping at different locations.

Similar to the Wall Street Journal. Same product on ios and android, but multiple venues for delivery of the product - including web and print.

 

[fabbydabby1]

It's the same product shopping at different locations.

Similar to the Wall Street Journal. Same product on ios and android, but multiple venues for delivery of the product - including web and print.

Yes but there is a difference if you want to download an app on iOS how many stores can you go too

 

[I7guy]

Yes but there is a difference if you want to download an app on iOS how many stores can you go too

It's a leading question. The real question is: is it possible to distribute services digitally across the smartphone market? Because if the answer is yes, that means there is competition.

 

[fabbydabby1]

I agree. But some claim smartphones are indispensable, ranking right up their with air, food and water and that is the justification for them to be regulated to death. Including fees and commissions. Imo, on this board a rational argument of why game fees of 30% are okay on gaming platforms, but not on Apple platforms. The distinction to be used is the profit margin, which to me, seems like a red herring.

the reason why Tim Sweeney justification about apples 30% is because they sell new iPhones every year & always make a profit on their hardware every year & then people generally update their iPhones every couple of years. You don’t by a new PlayStation every couple of years they generally get refreshed every 7 years that’s the difference.
Plus the money Apple makes from the App Store doesn’t get reinvested to help the games industry out they keep that for themselves. That’s why he has no problem with dedicated games stores taking 30% because that’s in the industry’s interest so it benefits everyone in the games industry
where as apples App Store is a generic store
That doesn’t warrant the 30% charge in Tim Sweeney’s opinion.

 

[I7guy]

the reason why Tim Sweeney justification about apples 30% is because they sell new iPhones every year & always make a profit on their hardware every year & then people generally update their iPhones every couple of years. You don’t by a new PlayStation every couple of years they generally get refreshed every 7 years that’s the difference.

That doesn't mean that justification is worth anything. That's his convoluted thinking. Or maybe in his mind that's the legal justification./

Plus the money Apple makes from the App Store doesn’t get reinvested to help the games industry out they keep that for themselves.

Apple is not obligated to do that.

That’s why he has no problem with dedicated games stores taking 30% because that’s in the industry’s interest so it benefits everyone in the games industry

Then let him build his own platform. This was suggested before. Don't use apples' platform.

where as apples App Store is a generic store
That doesn’t warrant the 30% charge in Tim Sweeney’s opinion.

Sweeney is amongst the set of people who want access to apples customer base to sell whatever, and not pay anything. He lost the lawsuit in the United States on every point except for one. And many on MR, who view apple as anti-competitive I believe we really shocked as they thought Epic was in the right.

 

[fabbydabby1]

It's a leading question. The real question is: is it possible to distribute services digitally across the smartphone market? Because if the answer is yes, that means there is competition.

you can’t use one example about a Honda accord & the Wall Street journal as examples & when I say on iOS you can only go to one source to download apps
You then start whataboutary

 

[I7guy]

you can’t use one example about a Honda accord & the Wall Street journal as examples & when I say on iOS you can only go to one source to download apps
You then start whataboutary

The point is the ios app store belongs to Apple in the same way the Accord belongs to Honda. Both have a monopoly on the products they created. The same way Prime membership belongs to Amazon. It's not correct to say the ios app store is an illegal monopoly. Posters may have strong feelings about only one ios app store in the US, but that is the way it is and the courts have not said it's illegal.

 

[fabbydabby1]

That doesn't mean that justification is worth anything. That's his convoluted thinking. Or maybe in his mind that's the legal justification./

Apple is not obligated to do that.

Then let him build his own platform. This was suggested before. Don't use apples' platform.

Sweeney is amongst the set of people who want access to apples customer base to sell whatever, and not pay anything. He lost the lawsuit in the United States on every point except for one. And many on MR, who view apple as anti-competitive I believe we really shocked as they thought Epic was in the right

But he doesn’t use Apple’s platform for Fortnite so what are you going on about.
No that’s not he said that epic games takes 12% charge on their store as that’s the processing fee & for maintenance. Apple can easily do that because of the amount of new iPhones they sell every year & use the App Store they could still make a profit on the App Store that’s his point.
Yes they are under no obligation to reinvest money made from the 30% charge but again that’s the point they don’t actually do anything to warrant that & it just goes back into apples sky rocket because it’s a generic store

 

[webkit]

Whats really sad is the continual denial of the legality of ios app store.

What's really really really sad is all of the nonsense and/or ignorance and/or goal post moving you keep putting on display in your posts.

It's true apple has a (legal) monopoly on it...at least in the US. The same that Honda has a legal monopoly on the accord.

Not at all the same thing. We are talking about iOS share of the mobile OS market. The Accord's share of the automobile market is quite small compared to iOS’s share of the mobile OS market. To compare the two in this context is ridiculous.

It's true that 2023 was the first year iphone market share in the US, if operating system is the metric, climbed above 50%.

Mobile operating system share is clearly what I've been talking about but what source says 2023 was the first time iOS mobile OS share in the U.S. was above 50%? Is this just still more nonsense from you or will you actually provide a source?

 

[fabbydabby1]

The point is the ios app store belongs to Apple in the same way the Accord belongs to Honda. Both have a monopoly on the products they created. The same way Prime membership belongs to Amazon. It's not correct to say the ios app store is an illegal monopoly. Posters may have strong feelings about only one ios app store in the US, but that is the way it is and the courts have not said it's illegal.

Apple’s & oranges mate
If you want to download an app on iOS how do you do it?
That’s a grey area regarding if it’s an illegal Monopoly

 

[I7guy]

But he doesn’t use Apple’s platform for Fortnite so what are you going on about.

What the heck are you talking about? The bs he pulled in 2020 is exactly what got him banned from the app store when he deceived apple and introduced a direct payment option to Fornight.

No that’s not he said that epic games takes 12% charge on their store as that’s the processing fee & for maintenance. Apple can easily do that because of the amount of new iPhones they sell every year & use the App Store they could still make a profit on the App Store that’s his point.

His point, imo, is not valid.

Yes they are under no obligation to reinvest money made from the 30% charge but again that’s the point they don’t actually do anything to warrant that & it just goes back into apples sky rocket because it’s a generic store

And that is apples' prerogative. Remember the app store is strictly opt-in. For a dev, use it or not use it.

 

[I7guy]

What's really really really sad is all of the nonsense and/or ignorance and/or goalpost moving you keep putting on display in your posts.




Not at all the same thing. We are talking about iOS share of the mobile OS market. The Accord's share of the automobile market is quite small compared to iOS’s share of the mobile OS market. To compare the two in this context is ridiculous.




Mobile operating system share is clearly what I've been talking about but what source says 2023 was the first time iOS mobile OS share in the U.S. was above 50%? Is this just still more nonsense from you or will you actually provide a source?

Seems like we've been around this block, but here goes. The repetition does not make this correct. The root of this is challenging whether apple is an illegal monopolist or not with the ios app store in the US.

The answer is no today, may change in the future.

 

[fabbydabby1]

What the heck are you talking about? The bs he pulled in 2020 is exactly what got him banned from the app store when he deceived apple and introduced a direct payment option to Fornight.


His point, imo, is not valid.

And that is apples' prerogative. Remember the app store is strictly opt-in. For a dev, use it or not use it.

Right there that language He deceived Apple
How dare he.

Well its a very valid point because fundamentally it’s true in regards to Apple’s business model is each year.

And if Apple are not reinvesting some of that 30% charge back into the App Store then there’s no justification for it then except for being greedy greedy greedy & because on iOS there is no alternative in the USA

 

[fabbydabby1]

Seems like we've been around this block, but here goes. The repetition does not make this correct. The root of this is challenging whether apple is an illegal monopolist or not with the ios app store in the US.

The answer is no today, may change in the future.

The reason why Apple is not seen as a monopoly in some instances in the USA is because courts in the US tend to allow these kind of practices
That is why in other countries they are getting challenged on certain things like the 30% charge & no alternative link & either getting fined or losing the case