Elon Musk Says Apple's 30% App Store Fee is 'Literally 10 Times Higher Than It Should Be'

[Justin Cymbal]

Lol

He’s obviously referring to the ~3% commission that is charged to merchants when they accept credit cards

 

[Natzoo]

I am so confused, doesnt Tesla do the same thing?

 

[jumpcutking]

Like I understand that a payment processor takes about 3% but I believe distribution platforms take about 30% - industry wide. I know distribution deals that go high into the 60%.

I think a global 10% or 7.5% even that sounds reasonable to me. But that is just me.

 

[antiprotest]

I think 3% would be too low. It should be at least 10%.

 

[T'hain Esh Kelch]

Elon opens mouth again. More garbage spills out. Repeat.

 

[munpip214]

Maybe he is thinking of adding more Tesla subscriptions and wants them added to the Tesla app, but doesn't want to pay fees.

 

[nutmac]

He's not wrong

I don't know about the 10x part, but 30% is too much. Apple should make some money for creating, maintaining, improving, moderating, and hosting the platform. But Apple also benefits from 3rd party apps on their ecosystem, so some compromise should be made.

At the same time, I am not sure consumers will stand to benefit from lower commission. I think most developers will simply pocket the differences as a bonus.

 

[neuropsychguy]

How is the Hyperloop coming Elon?

How are Tesla and SpaceX doing? How is Neuralink doing? How did PayPal do when he was involved with it?

 

[OhMyMy]

Says the guy who charges $400+ for a charger that should’ve been included with a 100k car.

 

[munpip214]

3% covers only credit card fees. Then you have to pay the company for datacenters to host it, Engineers to design and maintain the app store/platform/programming language support, Then also to review the app store submissions.

 

[turbineseaplane]

Elon just likes attention

He just seems to "say stuff" for reactions

 

[Bawstun]

How is the Hyperloop coming Elon?

Very well actually…

 

[falkon-engine]

I agree that apple should collect fees to sustain the App Store and make a healthy profit.

But apple doesn’t charge commission for physical goods so Uber and Lyft don’t pay in app purchase fees as I understand it. So why is apple charging 30% on in app purchases for digital goods but not for physical goods?

I also don’t think 30% is a fair amount either. take epic games with in app purchases for Fortnite. According to Bloomberg, at one point epic games made $1.2 billion from Fortnite’s iOS users. Which meant apple collected hundreds of millions. there’s no way it costs apple 30% (i.e., hundreds of millions) of the billions that Epic Games to facilitate Fortnite’s in app purchases.

I don’t know what the fair amount should be, but 30% is too high. I believe if there was competition for in-app purchase processing Apple wouldn’t be able to competitively sustain the 30% tax. But there is no such competition on the iOS platform.

I believe consumers will benefit (from lower fees) if apple were open up in-app purchase processing to alternative providers.

 

[the future]

I never miss Steve Jobs more than in moments like this. He would have given jerks like Musk the appropiately acerbic answer.

 

[StudioMacs]

Musk should pay for my home internet and cellular data plan if it's supposed to be free.

 

[turbineseaplane]

Everyone knows the 30% is a massive rip off

Apple enjoys keeping the various functions and services for developers commingled in there so it's much harder for anyone (especially regulators) to debate the merits of what is provided and for what fee or percentage cut.

Being sort of vague and nebulous about what exactly makes up their cut is completely to their own advantage.

I'm happy to finally see various jurisdictions around the world putting up a fight and starting to no longer tolerate this crap from Apple. Their conduct and policies need to be dramatically reined in here.

 

[mikethemartian]

I’m surprised that Apple and Google are able to get developers to develop software for their platforms with a 30% cut off the top of each sale. It isn’t like retail where they get a 50% cut off the MSRP from the wholesaler or manufacturer because a retailer buys in bulk from a wholesaler and is purchasing a hundred or thousand units at a time.

 

[mariusignorello]

He can’t stop lying and abusing.

It’s time to end billionaires and the power they abuse.

Nobody needs to have a billion dollars.

They should be forced to sell assets and pay taxes whenever they hit a $100 million wall.

Even $100 million is mad money and makes the ultra wealthy abusive, dishonest and very corrupt.

Go make that money and sell your resulting assets, then you can subject others to it. Until then, shut up.

 

[neuropsychguy]

He's not wrong

Yes he is. A 3% fee would certainly lose Apple money. Why should Apple run managing the App Store at a loss?

We don’t know exactly how much money it takes Apple to run the App Store but across all services, Apple’s services have gross margins in the 70% range (most recent quarter, which was a higher margin than in the past). That is high but it means Apple at most, on average, could only reduce the fees by about 50% (factoring in net costs and estimating a little) to remain profitable. That’s even assuming Apple’s margins are that high on the 15/30% commission after factoring in costs to run the App Store. Also, apparently Epic runs a loss with a 12% fee (this could be partially due to all their money spent on exclusive and "free" games) so that's probably a minimum break even target for fees.

This means at best Musk could say Apple’s commissions are 2x as high as they "should" be (assuming Apple should not be allowed to make a profit on them).

 

[Pezimak]

I guess he's looking to buy some more Apple stock then.

 

[jimbobb24]

He cannot be right about everything....

 

[Apple Knowledge Navigator]

What's his assumption based on?

Also, why just single out Apple? Most platform holders are at 30% or thereabouts.

 

[MrTechAdvice]

Meta's (FaceBook) Metaverse will take roughly a 49.7 % cut and Why isn't complaining about FaceBook especially after buying Twitter? The answer is simple. Competition. Apple takes 30%. Also, Elon Musk wanted Apple to buy Tesla when it was about to crash. Elon Musk never complained about Apple until Apple started to make the Apple Car and poach Tesla employees. Despite if Apple should take a smaller cut or not. This isn't Elon speaking for the little guy. This is Elon trying to damage his competitor.

 

[srgz]

Tesla would NEVER create a walled garden! Unless you want parts or service 🤣

 

[anthogag]

Elon is a megalomaniac.