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

[Abazigal]

Nobody says that Apple shouldn’t make anything from the App Store
However based on the business model they have by selling new iPhones every year & making a profit plus the huge amount of traffic they have using the App Store they could easily still make a profit on 12 to 15% IAP charges because of the huge volume of traffic they have.

Which raises the question - what’s your yardstick, and who decides what a “reasonable” profit margin for Apple ought to be?

Another example is Steam, and I am not sure what exactly they do to help promote the gaming market besides aggregate a customer base for developers to sell to, and the company is clearly very profitable. Perhaps you can enlighten me on what Steam does to justify their 30% cut as well?

 

[I7guy]

If your a small developer starting out you don’t have a choice but to accept to IAP charges

As a dev one doesn’t have to enter into an agreement with Apple.

What part of that don’t you get that’s why the bigger developers can challenge it & get special treatment like Amazon do

It’s a part of business the largest customers usually get special concessions or treatment.

Or remove IAP like other big developers
& more to follow.

Why would they do that?

It was funny just stop now

 

[fabbydabby1]

Which raises the question - what’s your yardstick, and who decides what a “reasonable” profit margin for Apple ought to be?

Another example is Steam, and I am not sure what exactly they do to help promote the gaming market besides aggregate a customer base for developers to sell to, and the company is clearly very profitable. Perhaps you can enlighten me on what Steam does to justify their 30% cut as well?

It’s not about who decides or not but there are factors involved I’m not suggesting that companies shouldn’t make a profit of course they should.
However on the surface you could say this other company’s charge 30% so it’s exactly the same.
One could look at it this way based on how the smartphone industry is these 2 companies could easily cut the fee down & still comfortably make a profit every year based on how the 2 companies operate compared to other industries that have online stores.

 

[Abazigal]

It’s not about who decides or not but there are factors involved I’m not suggesting that companies shouldn’t make a profit of course they should.
However on the surface you could say this other company’s charge 30% so it’s exactly the same.
One could look at it this way based on how the smartphone industry is these 2 companies could easily cut the fee down & still comfortably make a profit every year based on how the 2 companies operate compared to other industries that have online stores.

I don’t disagree with everything you have said, and I don’t think that there is anything wrong with Apple taking 30%, for the simple reason that Apple created the iPhone, they created iOS, and they popularised the concept of the modern App Store. Yes, Apple is incredibly profitable because of this, and look who is being taxed the majority of that 30%. Freemium games like Fortnite, and these are companies who get the least sympathy from me, simply because their own business model is essentially zero marginal costs.

The end goal of Tim Sweeney is to be able to get his own App Store into iOS, where he can not only keep 100% of IAP revenue, but also host other developers’ apps and charge them a cut.

In this context, they will never be satisfied with any cut that is not zero percent, however low it may be.

Meanwhile, companies like Spotify and Netflix have already moved outside of the App Store, subscription revenue gets taxed 15% after the first year, and small developers who make under $1 million also pay only 15% of revenue.

Are you really arguing that companies that released games like Diablo immortal and clash of clans are not making enough money themselves?

 

[fabbydabby1]

I don’t disagree with everything you have said, and I don’t think that there is anything wrong with Apple taking 30%, for the simple reason that Apple created the iPhone, they created iOS, and they popularised the concept of the modern App Store. Yes, Apple is incredibly profitable because of this, and look who is being taxed the majority of that 30%. Freemium games like Fortnite, and these are companies who get the least sympathy from me, simply because their own business model is essentially zero marginal costs.

The end goal of Tim Sweeney is to be able to get his own App Store into iOS, where he can not only keep 100% of IAP revenue, but also host other developers’ apps and charge them a cut.

In this context, they will never be satisfied with any cut that is not zero percent, however low it may be.

Meanwhile, companies like Spotify and Netflix have already moved outside of the App Store, subscription revenue gets taxed 15% after the first year, and small developers who make under $1 million also pay only 15% of revenue.

Are you really arguing that companies that released games like Diablo immortal and clash of clans are not making enough money themselves?

No what I’m saying is there is a big difference in a company that has about 132 million user accounts regarding their store & a company that has 1.4 billion users.

Furthermore there is one difference Apple & google’s business model is setup up differently from other companies not everyone has a customer base of over 4 billion people.

The epic guy is wanting his own store yes but his point is his store he charges 12% because he thinks that’s reasonable

I’m not arguing the point about buying skins or additional content for games to help you complete said game & that’s a different argument.

You might think it’s perfectly reasonable for Apple to use 30% IAP charge that’s fine
But there is a fundamental differences between Apple & the games console makers

 

[Hails09]

As a dev one doesn’t have to enter into an agreement with Apple.

It’s a part of business the largest customers usually get special concessions or treatment.

Why would they do that?

Well ultimately developers don’t have a choice if they want to use both platforms to sell their product so they can earn a living

No it’s not because companies like Amazon force Apple into special concessions because it benefits Apple.

Well the reason why some big developers have removed IAP is because of issues with it on iOS & well we know of 1 other company that’s about stop IAP because it no longer benefits them for what they want to do & that’s ultimately their choice to do that.

What’s odd is Apple would rather lose that additional revenue from these companies & do a sort of deal with them just to let them remove the option to receive no income from them
It’s very telling that

 

[I7guy]

Well ultimately developers don’t have a choice if they want to use both platforms to sell their product so they can earn a living

The choice is made to engage with Apple to sell their wares. If you are in someone’s house you play by their rules.

No it’s not because companies like Amazon force Apple into special concessions because it benefits Apple.

Larger companies for the most part get special deals.

Well the reason why some big developers have removed IAP is because of issues with it on iOS & well we know of 1 other company that’s about stop IAP because it no longer benefits them for what they want to do & that’s ultimately their choice to do that.

Sure. Agree.

What’s odd is Apple would rather lose that additional revenue from these companies & do a sort of deal with them just to let them remove the option to receive no income from them
It’s very telling that

Ultimately the seller decides in the price point that they want. Many companies don’t accept a lower price point for their services, even though it’s reduced revenue.

These companies value their services at a price point and often don’t accept a lower price point.

 

[Hails09]

The choice is made to engage with Apple to sell their wares. If you are in someone’s house you play by their rules.

Larger companies for the most part get special deals.

Sure. Agree.

Ultimately the seller decides in the price point that they want. Many companies don’t accept a lower price point for their services, even though it’s reduced revenue.

These companies value their services at a price point and often don’t accept a lower price point.

Not all big developers get special concessions regarding the 30% fee hence why some have removed IAP

No it’s very telling that Apple has not managed to negotiate any IAP with the developers who have dropped it & are now earning zero income from them.

 

[I7guy]

Not all big developers get special concessions regarding the 30% fee hence why some have removed IAP

No it’s very telling that Apple has not managed to negotiate any IAP with the developers who have dropped it & are now earning zero income from them.

Good. Send a message to Apple. However it should be noted that Apple made bank from epic in the US and still kicked them out. So there’s that.

 

[webkit]

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.

We've been going around the block because you continue posting nonsense, and have repeatedly been unwilling or unable to provide sources/proof to support your claims. If Apple is operating in such a "fair" manner, I don't know why you feel the need to dismiss or downplay their dominance through dishonest or inaccurate posts. Is this an ignorance issue, misunderstanding issue, or do you just feel you have to intentionally lie?

 

[I7guy]

We've been going around the block because you continue posting nonsense, and have repeatedly been unwilling or unable to provide sources/proof to support your claims. If Apple is operating in such a "fair" manner, I don't know why you feel the need to dismiss or downplay their dominance through dishonest or inaccurate posts. Is this an ignorance issue, misunderstanding issue, or do you just feel you have to intentionally lie?

All the bloviating in the world isn’t going to change this: https://en.m.wikipedia.org/wiki/Epic_Games_v._Apple

And the percentage of units of iOS vs android in the US is not going to change anything.

 

[Hails09]

All the bloviating in the world isn’t going to change this: https://en.m.wikipedia.org/wiki/Epic_Games_v._Apple

And the percentage of units of iOS vs android in the US is not going to change anything.

What are you actually going on about now?
You do understand that epic deliberately wanted kicked off the App Store or else they could have just left.

Well it depends on how you look at it in sending a message to Apple in regards to the 30% IAP
Because the big developers that are no longer using it are doing well without it & Apple don’t make a cent off them being on the App Store but yeah that’s a win for Apple in your books.

 

[I7guy]

What are you actually going on about now?

What is your point?

You do understand that epic deliberately wanted kicked off the App Store or else they could have just left.

They wanted to create a situation where they could sue Apple in court. Was that not clear enough? And hopefully take down the iOS App Store, but it backfired.

Well it depends on how you look at it in sending a message to Apple in regards to the 30% IAP
Because the big developers that are no longer using it are doing well without it & Apple don’t make a cent off them being on the App Store but yeah that’s a win for Apple in your books.

Yep. Apple is not forcing any dev to use iap. The same way free apps don’t require any software payment to Apple. If that’s what a dev wants to do, then it’s okay with Apple.

Remember Apple kicked epic out of the app store without batting an eye. They do not care, imo.

 

[Hails09]

What is your point?

They wanted to create a situation where they could sue Apple in court. Was that not clear enough? And hopefully take down the iOS App Store, but it backfired.

Yep. Apple is not forcing any dev to use iap. The same way free apps don’t require any software payment to Apple. If that’s what a dev wants to do, then it’s okay with Apple.

Remember Apple kicked epic out of the app store without batting an eye. They do not care, imo.

Mate exactly in your own words
They don’t care
Hence why your argument about the 30% IAP is very flawed

 

[I7guy]

Mate exactly in your own words
They don’t care
Hence why your argument about the 30% IAP is very flawed

There is no flaw in the argument the business model is legal in the US and Apple is charging the rate they see fit. And the devs can use Iap or not.

All the other discussion is commentary and opinion around that.

 

[fabbydabby1]

There is no flaw in the argument the business model is legal in the US and Apple is charging the rate they see fit. And the devs can use Iap or not.

All the other discussion is commentary and opinion around that.

There is a flaw in your argument because you are one sided & pro every single decision that Apple make.
It doesn’t matter if it’s the 30% IAP & the good & bad that come with that.

Or if it’s software features that older phones don’t get like certain iOS 18 features because of the chip & ram situation that Apple even say on their website you would still deny it.

 

[I7guy]

There is a flaw in your argument because you are one sided & pro every single decision that Apple make.
It doesn’t matter if it’s the 30% IAP & the good & bad that come with that.

That’s not a flaw in my logic. That’s a bias in your thinking about the dislike for that one commission. While the rules for the iOS App Store have undergone a bit of refinement over the years, they are what they are. Engage with Apple or not.

Or if it’s software features that older phones don’t get like certain iOS 18 features because of the chip & ram situation that Apple even say on their website you would still deny it.

The point is? Fans will always support Apple and critics will always criticize Apple?

 

[fabbydabby1]

That’s not a flaw in my logic. That’s a bias in your thinking about the dislike for that one commission. While the rules for the iOS App Store have undergone a bit of refinement over the years, they are what they are. Engage with Apple or not.

The point is? Fans will always support Apple and critics will always criticize Apple?

There is a flaw in your argument because when anyone presents anything to yourself in regards to the 30% IAP your argument is constantly is Apple is correct because they have never be found guilty yet just because they haven’t been found guilty doesn’t mean it’s correct.
Now I will leave it there

 

[webkit]

And the percentage of units of iOS vs android in the US is not going to change anything.

If, in your opinion, it's not going to change anything then why do you feel the need to dismiss or downplay Apple's dominance through repeated dishonest or inaccurate posts? Is this an ignorance issue, misunderstanding issue, or do you just feel you have to intentionally lie?

 

[I7guy]

There is a flaw in your argument because when anyone presents anything to yourself in regards to the 30% IAP your argument is constantly is Apple is correct because they have never be found guilty yet just because they haven’t been found guilty doesn’t mean it’s correct.
Now I will leave it there

The flaw in your argument when anyone brings it up is that it’s not correct. But the justifications of why it’s not correct to me are off the wall.

It’s factual that Apple is operating within the law even if some don’t like the fees. Even if they are not affected by them.

 

[fabbydabby1]

The flaw in your argument when anyone brings it up is that it’s not correct. But the justifications of why it’s not correct to me are off the wall.

It’s factual that Apple is operating within the law even if some don’t like the fees. Even if they are not affected by them.

When I’ve pointed out legitimate issues with the 30% IAP charges & what companies have said who have actually dealt with Apple

You are just dismissing it as Apple are right & these issues are wrong yet when companies challenge it in other countries & Apple lose or have to pay fines you suddenly say oh but it doesn’t happen in the USA & have it in for Apple.

 

[I7guy]

When I’ve pointed out legitimate issues with the 30% IAP charges & what companies have said who have actually dealt with Apple

You are just dismissing it as Apple are right & these issues are wrong yet when companies challenge it in other countries & Apple lose or have to pay fines you suddenly say oh but it doesn’t happen in the USA & have it in for Apple.

What legitimate issues? That companies don’t like it and yet they engage with Apple anyway, because money/revenue? That companies want access to apples customers base for $0?

That taking the side of customers (especially since it’s an opt-in relationship) is just as bad as taking the side of Apple?

 

[Hails09]

What legitimate issues? That companies don’t like it and yet they engage with Apple anyway, because money/revenue? That companies want access to apples customers base for $0?

That taking the side of customers (especially since it’s an opt-in relationship) is just as bad as taking the side of Apple?

That’s where your argument falls apart because on one hand you say Apple makes the rules regarding IAP fees & if companies don’t like it they don’t have to use it right

But then on the other hand when companies then say to Apple this is too high & we want too negotiate it & then Apple doesn’t budge these companies then remove the option you are then saying these companies are using Apple’s products for free
You can’t have it both ways.

 

[I7guy]

That’s where your argument falls apart because on one hand you say Apple makes the rules regarding IAP fees & if companies don’t like it they don’t have to use it right

Not sure where you are from, but here in the United States, if you want to do business with a first party and don't like their terms, you don't do business.

But then on the other hand when companies then say to Apple this is too high & we want too negotiate it & then Apple doesn’t budge these companies then remove the option you are then saying these companies are using Apple’s products for free

That is a factual statement. And I also said, I believe Apple doesn't care. (I mean I'm sure they care but they did kick Epic out of the apple market.

You can’t have it both ways.

Neither can you.

 

[webkit]

Not sure where you are from, but here in the United States, if you want to do business with a first party and don't like their terms, you don't do business.

It’s not always that simple, especially when there is a company controlling a significant portion of a market (as Apple does with the mobile OS market in the United States) and restricts/blocks competition in that market (as Apple does with iOS app store/distribution in the United States). A mobile app developer saying they won’t do business with Apple has to throw away around 58% (according to Statcounter) of the market in the United States.