Developers May Soon Be Able to Automatically Charge Apple Users for Subscription Price Increases

[jakebrosy]

My point is the entire Services segment is only at 15% of Apple’s revenue, and this specific situation could only ever hope to increase revenue by a tiny amount. But the downside is huge - many more users could cancel and stop signing up for new subscriptions because they don’t feel there are enough protections in place. It seems to me there must be another factor at play for them to risk so much to gain so little. Certainly the fact that Apple is continually being pulled in front of judges for accusations of having too much power standing between developers and consumers would impact a decision like this.

Yes. But the services segment has grown considerably in the past few years. And Apple is very interested in increasing what is effectively passive income: no product is delivered, no returns can take place, no warranty obligations are incurred, no marketing is required.

In fact the developers (based on their own self-interest) will seek ways to raise their own revenue which raises Apple's revenue without any effort or input on Apple's part. They can't even be blamed about a price increase since a 3rd party made the decision. And even a few cents of increased MONTHLY revenue across millions of subscriptions is not inconsequential.

Whereas if Apple decides to raise the monthly cost of something like iCloud there will be an outcry and people will complain that the richest company in the world is taking advantage of poor powerless consumers. On the flip side raising revenue by attracting more iCloud subscribers requires marketing (or additional services like Hide My Email or Private Relay) which costs Apple money.

Allowing developers to 'do the dirty work' by enabling effectively passive subscription price changes is a very, very easy way to reap benefits without much (any?) effort.

 

[gnipgnop]

Allowing developers to 'do the dirty work' by enabling effectively passive subscription price changes is a very, very easy way to reap benefits without much (any?) effort.

Yep...producing annual OS updates and annual hardware updates (which includes your own CPU/GPU designs) is all so easy compared to writing an app.

 

[AppliedMicro]

iOS/iPadOS apps will only run on iOS/iPadOS

That's not the issue. They could run elsewhere (in principle).
The issue is the other way around:

? iPhones and iPads will only run apps approved by Apple

(save for a few very limited and inconvenient/inaccessible exceptions).

iOS/iPadOS apps will only run on iOS/iPadOS. iOS will only run on Apple iPhones. iPadOS will only run on Apple iPads. So regardless of whether you download Netflix or a video game, the app has to make use of an operating system Apple created AND hardware that Apple created.

Theoretically: No, they don't only run on iOS/iPadOS. They could run on emulators just as well.
Someone could even make a third-party operating system that runs such apps (something like the Android subsystem for Windows, or ReactOS, or Wine for Linux/Mac) without the signature check Apple does.

In practice of course, running on other platforms is largely irrelevant (though they're is or used to be an iOS emulator, wasn't there?).

Here's the thing though: Windows apps can on Macs, without Windows being installed - just as model trains from one manufacturer can run on a model train system made by another. It's legal to make things interoperable. And it's beneficial for consumers.

You're trying to say that creating the app is somehow more difficult or noteworthy than creating the OS and hardware. In reality, it's the other way around.

It's not about difficulty or noteworthiness.

I can bake the most flatbread, carve the smallest and simplest toys out of wood or print out and cut little jigsaw puzzles using the most sophisticated and noteworthy oven, mixer, knife, dremel, printing machine laaser cutter or what not.

These products are still a product my creativity and workmanship.
Even if I'm selling them through the tool manufacturer's website or store:
I am the manufacturer (developer). They're still the middlemen.

Though that's certainly the oft-repeated claim made by Apple and their lawyers: Justifying demanding a commission on everything as compensation for all their (OS, store platform) reach, greatness and noteworthiness.

There are tens of thousands of app developers. How many companies currently offer phone/tablet hardware and an operating system for them that they've developed themselves?

There's hundreds of programming languages, code editors and SDKs to create mobile apps. Even cross-platform mobile SDKs that are not made by Apple. And APIs that Apple has chosen to publish and allow their freely and... well for free.

Apple have just decided to leverage their market share im mobile devices and OS to force developers to distribute their iOS apps through the iOS App Store.

 

[BC2009]

The opt-out should only work depending on the amount and frequency of the price increases. A 15% increase annually would make sense but if you do it more often or for a larger amount then it should be opt-in.

 

[mikethemartian]

Yep...producing annual OS updates and annual hardware updates (which includes your own CPU/GPU designs) is all so easy compared to writing an app.

What does hardware design updates have to do with maintaining an app store? Hardware sales is its own profit center. Apple isn’t selling hardware as a loss leader.

 

[BruiserB]

For the most part I always "cancel" subscriptions immediately upon starting them. Often I find that several weeks go by before I even notice the subscription expired...then I can renew/recancel the next time I want access to the content.

The exception being that Apple has changed its trials to end immediately upon cancellation instead of going until the end of the trial period. I just discovered yesterday that I had paid for 2 months of Apple Arcade after having the 3 month free trial and using it like twice before forgetting about it. Luckily Apple approved a refund for both of the months they had charged me.

For sure they should make people hit a button to continue subscription if prices increase.

 

[baslotto]

What a GREAT idea! Why don’t they skip the pricing altogether so we don’t even know how much a subscription will cost. Just for the surprise element! Please go ahead take money from my bank who cares how much..:

Price: $xxx, agree? “YES”

 

[gnipgnop]

What does hardware design updates have to do with maintaining an app store? Hardware sales is its own profit center. Apple isn’t selling hardware as a loss leader.

Hardware improvements increase the efficiency and functionality of both the OS and apps that run on it. That's why the tech press spends so much time focusing on hardware improvements. It has a direct correlation to advancements on the software side as well as user experience.

 

[gnipgnop]

Apple have just decided to leverage their market share im mobile devices and OS to force developers to distribute their iOS apps through the iOS App Store.

What was Apple's mobile market share in 2007? How did Apple "force" developers to distribute back then? What actually happened is that the iPhone was far more successful commercially than almost anyone predicted. Developers wanted to get in on something that was experiencing significant growth, just as they would have abandoned development on iOS if the public lost interest in the hardware.

 

[Rogifan]

What relevance does that have? If it were easy to make tens of billions every quarter on hardware then you'd have hundreds of different companies selling their own mobile hardware and mobile OS. In reality, even Microsoft flopped when they tried to do it. The degree of difficulty dwarfs anything related to app development.

I’m not sure what point your making. The point I’m making is Apple sells expensive hardware. Presumably some of the hardware revenues go to developing and maintaining software. When the App Store first launched Steve Jobs said Apple’s plan was to run it as a break even business. And there was that email from Phil Schiller back in 2011 wondering if the 70/30 spilt would last forever. He also suggested dropping the commission once the App Store run rate got to $1B/yr. He said Apple should do it from a position of strength not weakness.

Apple exec suggested cutting App Store commission to 20 percent as early as 2011

‘Just food for thought.’

www.theverge.com

 

[Rogifan]

When the App Store originally launched, 70/30 was the typical "store" arrangement for people that wanted a higher profile for their software than just a personal web site or mail order. Apple turned it around to 30/70 with the App Store. Now it's 15/85 for less than a million revenue or 30/70 for over a million revenue.

The idea that 15/85 or 30/70 is somehow abusive is a relatively new development and doesn't appear to be based on any other reality in a "store" environment.

OK but this has nothing to do with the cost of running the App Store or maintaining iOS, SDK’s etc. That’s what I’m taking about. Facebook doesn’t pay Apple anything (other than the yearly developer fee) because their app is free to download and nobody buys anything in it. Yet some indie drawing app has to give Apple 30% every time buys a new brush in the app. I also don’t think we can compare the App Store to a physical store because I’m not aware of any physical stores that sell things for free. Tim Cook said 84% of the apps on the App Store are free to download. So basically you have a small number of apps (mostly games) subsidizing everything else in the store.

 

[Rogifan]

Yes. But the services segment has grown considerably in the past few years. And Apple is very interested in increasing what is effectively passive income: no product is delivered, no returns can take place, no warranty obligations are incurred, no marketing is required.

In fact the developers (based on their own self-interest) will seek ways to raise their own revenue which raises Apple's revenue without any effort or input on Apple's part. They can't even be blamed about a price increase since a 3rd party made the decision. And even a few cents of increased MONTHLY revenue across millions of subscriptions is not inconsequential.

Whereas if Apple decides to raise the monthly cost of something like iCloud there will be an outcry and people will complain that the richest company in the world is taking advantage of poor powerless consumers. On the flip side raising revenue by attracting more iCloud subscribers requires marketing (or additional services like Hide My Email or Private Relay) which costs Apple money.

Allowing developers to 'do the dirty work' by enabling effectively passive subscription price changes is a very, very easy way to reap benefits without much (any?) effort.

You make a good point about passive income. I’d be curious how many people here have downloaded apps within the last year specifically because of promotion by Apple. I know I haven’t. Usually if I download a game it’s because I heard about it via an ad from another game not because Apple‘s marketing or App Store team turned me on to it.

 

[Rogifan]

Yep...producing annual OS updates and annual hardware updates (which includes your own CPU/GPU designs) is all so easy compared to writing an app.

What do 3rd party developer price increases have to do with Apple hardware and software updates?

 

[AppliedMicro]

How did Apple "force" developers to distribute back then?

Same way as today: Making sure that only Apple-approved apps are running on the device through digital signing.
They "muscled" themselves in, to be the middleman - on what was and unquestionably remains a very attractive platform.

 

[MysticCow]

NOPE

NOPE

NOPE

NOPE

This change is downright dirty, and I hope it never makes it past alpha/beta. We should be informed of price changes so we can give our informed consent.

 

[Apple_Robert]

I don't see this as a positive feature for me. I like the current practice much better.

 

[mikethemartian]

Hardware improvements increase the efficiency and functionality of both the OS and apps that run on it. That's why the tech press spends so much time focusing on hardware improvements. It has a direct correlation to advancements on the software side as well as user experience.

So? The customer pays for the hardware full price. That’s the end of it. Apple has already been rewarded for their hardware achievements when someone buys the hardware from them for cash. That’s what the money is for.

 

[Abazigal]

So basically you have a small number of apps (mostly games) subsidizing everything else in the store.

Sounds good to me.

Considering how there basically seems to be no love lost for freemium games, I propose that Apple go one step further. Tax these gaming companies 50%, while waiving the 15/30% for everyone else.

 

[BGPL]

Pure developer greed. They don't need to innovate or improve their app. At least in the "old days" we could stick with the old less-featured app or pay an upgrade to get the new app with improved-features... now you just pay no matter what kind of crap the developer delivers. You can find free or one-time payment options for just about any app.

 

[DeepIn2U]

**** that. This happens and I don't subscribe to any more apps. No way is it fair for a developer to increase the price of your subscription without notifying you.

Exactly.

This is like having your rent increase 20% 1 month then 200% another month. It’s not right.


Again one of the reasons I don’t subscribe to ANYTHING in tech clothing etc.

This compounded with alternative payment methods allows sketchy developers to quickly and continuously take funds from a user and hide the costs/increases under a logon from an external site which potentially doesn’t match the company or product name - leaving it even harder for a user to view or cancel or disable subscription and payments.

I’ve seen this in computer software over 2 decades ago for simple services like resume writing online etc.

When all this fails and tens of thousands of users get screwed and complain sooner or later a bill will have this fixed passed into law back to what it was like.

 

[DeepIn2U]

One simple reason. Their 30% cut.

How does a subscription though alternative payment channels than ApplePay or iCloud account direct payment come to Apple’s 30% cut?

With both the above there is no cut for Apple.

 

[Rookbird¥]

Yea if Apple does this then I will cancel all my subscriptions immediately.

 

[amartinez1660]

I hope this fails and burns massively. It only takes one unexpected price increase surprise over a client at the edge of deciding whether to keep or cancel said subscription.

That extra dollar or two gain greed might translate in losing a subscribed user for many many months.

 

[mrochester]

The only goal of something like this is to get customers to pay more with as little fuss, friction or care as possible.
Ideally without them even much noticing.

It's "boiling the frog" in service of increased subscription revenues.

How anyone would frame that as "good for consumers" is beyond me.

It’s definitely not good for consumers, but it is good for developers who seem to be the group of people Apple are expected to please these days.

Personally I want things to be better for consumers but regulators appear to have different ideas.

 

[Velli]

The EU is going to have a party with this.