Do you actually KNOW why the government broke up standard oil?
Agreed! Apple’s ONLY paid out $120 billion to developers, so CLEARLY damaging the industry irrevocably, right?
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Ridley Scott Comments on Epic Games' Parody of His '1984' Ad
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Calling 30% "greedy" and being ok with 25% is silly. If they were charging 70% and allowing developers 30% i would agree with you. 30% is far from greedy.
I'm not sure I understand your argument. The antitrust violation would not be about the IAP service market outside of iOS, but Apple's IAP service being protected from competing against third-party IAP services within iOS.
While they do indeed have every right to an opinion, they do not have any right whatsoever to make demands. Apple offers a service and (as you said) access to a market for a set price. Epic can either pay that price and use the service or not. What Epic did was:
1. agree to Apple's terms
2. make good profit with it for years
3. suddenly breached contract
4. made a PR campaign trying to portray Apple as the bad guy
5. complain that Apple actually upholds said contract and applies the sanctions outlined in it for this particular case
Now THAT is a parody!
Epic has made Billions more fir Apple than he could even dream of. The fact that the CEO of Epic is worth Billions more the Tim Cook speaks volumes.
They sell a subscription. Users are directed to buy it directly on Netflix's site. Amazon did the same, and they also offer individual purchases of media. Spotify and Fortnite tried to do the same thing, both were disallowed.
Edit: As mentioned in the reply thread, I was wrong about this. Amazon doesn't direct users to purchase outside the app. They offer IAP purchases, but evidently this is by choice, since Spotify just says you can't buy in-app.
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Yes, because Epic's business is about games. Corporate social activism is slactivism and virtue signaling so you dont get held hostage on twitter.
You make a good point. Developers can ONLY profitably develop for devices that allow development to occur AND have a way for the developer to protect their investment. IF the platform provider doesn’t make the effort, then they can still sell closed devices, much like Apple did initially. And, if the device is compelling enough, it doesn’t matter that Nokia, Palm, and Windows CE had FAR more developer support AND software available for purchase, people WANTED the iPhone and bought it with no expectation that there would ever be an App Store.
Would they be AS successful? It’s hard to say, but let’s assume that Apple and Google wouldn’t be AS successful. Apple would still be successful, the iPhone would still be a hit BUT the $120 billion worldwide that Apple paid out to developers just wouldn’t have happened. Given that Android has much greater marketshare but doesn’t pay out as much to developers, that would be a serious hit to developers worldwide. That’s why it’s nice to think that they need each other, in my mind the reality is that there are millions of developers that would never have been able to see success without Apple, while Apple would surely have still seen somewhat less successful, but still massively successful.
They don’t get exceptions to the rules, the rules are amended to in a way that both parties can agree to. So, if anyone else comes along with the same sort of business, AND they go by the same rules, they get the same benefit as the big guys, no negotiation required.
Netflix, Amazon Prime, Kindle, Spotify, etc., are all in a special category called "Reader" apps, which was established about eight years ago after Kindle became an issue since Amazon was selling e-books for it.
Originally, Apple said it wanted a 30% cut of Amazon's Kindle books as well if they were being bought through the app, but when the dust settled, Amazon agreed to remove all purchasing capabilities from the Kindle app — even web links had to go, and Apple decided that was acceptable.
The rule has been the same ever since. Basically, if you're a media subscription service, whether it's for books, music, or movies, you can avoid the whole IAP thing provided you don't provide iOS users with any links to actually go and sign up elsewhere. However, if you offer purchasing capabilities in your iOS app, you need to use Apple's payment system, and pay Apple it's 30% cut (for the first year — it goes down for subscribers that you retain after that first year, as long as they continue subscribing through Apple's IAP system).
Once upon a time, both Netflix and Spotify allowed IAPs in their respective apps, giving 30% to Apple for those subscribers. Eventually they decided they didn't want to do that (and of course, being Netflix and Spotify, they didn't really need to), and pulled out the IAPs, letting customers figure out that they could simply subscribe online — even through the Safari browser on their iPhone. Others, like Rdio back in the day, and YouTube today, keep IAPs in, but simply mark up the transactions by around 30%. For example, YouTube Premium is $12/month on Youtube.com, but $16/month if you buy it through the YouTube app. Contrary to popular belief, Apple does allow this (years ago, there was a policy that prices had to be the same, but that hasn't been the case since around 2011).
The only more recent development is that a few online streaming services, of which Amazon Prime is the most notable, have signed a special deal with Apple to allow them to sell digital content like movies and TV shows through their own payment systems rather than using Apple's IAP, subject to certain conditions, and in exchange for promising to fully embrace all of Apple's features, such as Apple TV, Siri, AirPlay 2, and Apple's TV app. Even then, there appear to be a few catches... for example, with Amazon's arrangement, purchases go through Amazon only for those users who already have an Amazon account with a credit card on file, otherwise they're processed by Apple, which still takes the normal 30%; users aren't given an opportunity to sign up for an Amazon account or add an Amazon payment method in the app.
Too young probably. That was after Alien and Blade Runner, and before Legend, Black Rain, and Thelma & Louise. You'd have to be in your fifties at least to know.
I think most people are mixing things up here. The issue is not if Apple is a monopoly or not. The issue is if they are abusing or not of their dominant position. They are. A 30% cut on apps sold in the app store is high but acceptable. BTW, Epic charges 12% on their games store. What is completely unacceptable is the cut they take on in-app purchases and subscriptions. It's like if a truck manufacturer sells you a truck and then wants 30% on every fee you collect by transporting stuff. It's not related to apple's role in the purchase, it's an abuse that apple can do because they have a dominant position.
An additional problem, which is related, is that apple also competes with their own services. Apple music gets the full 10 dollars a month from every user, they don't have to pay the 30% fee. Apple imposes absurd rules for xCloud and Stadia (they would have to approve any single game) effectively keeping them out of the apple ecosystem because they want to protect their own gaming services. This is an abuse of dominant position as well and it's unfair competition
One similarity are bank and credit cards. What if Mastercard starts charging a 30% fee on everything that you buy?
An additional problem, which is related, is that apple also competes with their own services. Apple music gets the full 10 dollars a month from every user, they don't have to pay the 30% fee. Apple imposes absurd rules for xCloud and Stadia (they would have to approve any single game) effectively keeping them out of the apple ecosystem because they want to protect their own gaming services. This is an abuse of dominant position as well and it's unfair competition
One similarity are bank and credit cards. What if Mastercard starts charging a 30% fee on everything that you buy?
Mmmmm you are right! Apple should start charging a higher flat fee so that even free apps would shoulder more of the costs... that might discourage free apps from being released, but hey, who would be hurt by that? Oh, right...
Seriously? Let the free Apps be free!
Excuse me, but if you are talking about "profit margin", that demonstrates that you have no idea what you are talking about.
There is gross margin: If you have an iPhone in one hand and your card in the other hand, how much is Apple better off if you buy that iPhone vs. if you put it back on the shelf? That's gross margin. It doesn't take into account any of the cost that Apple has whether you buy the phone or not. For example, Apple pays the rent for the store, the salary of the employees, all the development cost, advertising, etc. etc. etc. whether you buy the phone or not.
And there is net margin: That number tells you how much money Apple makes from all the phones, taking into account all the cost. That number is a lot lower.
Dropping prices by 30%, Apple would go bankrupt, because the money they make from each sale is not enough to keep the business afloat. But you say "prices are currently on the ridiculous scale". Apple has competitors. The whole Android market mostly (not much else unfortunately). If the prices were "on the ridiculous scale", people wouldn't buy iPhones. Nobody is forcing them. Nobody is pointing a gun at their head. So the prices are what people are willing to pay.
But how is it different than all the other stores that also charge the same 30%? Google(they're being sued too), Microsoft, Nintendo, sony, Samsung, etc.
What are Epic's expenses? They are in-app purchases. 100% gross margin. They could give them away for free.
No, the issue is solely whether Apple is monopoly. If they're not, and they charge a ridiculous amount, 1. it's their right and 2. the market will decide against them. Same with MasterCard. US laws don't usually decide prices.
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Apologies, but I don't know what point you're trying to convey. What does Tencent's ownership stake in Epic have to do with a company using the commercial to promote some social issue?
i think i got a good grasp, but why don't you tell me.Do you actually KNOW why the government broke up standard oil?
Agreed! Apple’s ONLY paid out $120 billion to developers, so CLEARLY damaging the industry irrevocably, right?
This is a great summary. For some reason I thought Amazon was actually directing users to pay outside the app, but they're not. I also wrongly remembered Spotify having to allow IAPs to purchase premium, but no, they just say you can't sign up in-app. Tried both of them now.
Epic charges 12% for you to put your binary on their store without very much else for it, a discount if you use Unreal Engine but any other tooling Epic isn't really contributing towards. Apple charge 30% and provide the hardware, the operating system, the development tools and SDK's (including the simulator) plus the App Store and IAP. Apple provide on going updates and improvements for the software, SDK's and API's to their developers. As a part of funding the App Store and related expenses they charge 30% to regain their investments.
In your truck manufacturer example, the truck manufacturer sells you a truck and that's it. However a truck costs significantly more, you're looking at maybe $100k to buy the truck then more for trailers or similar. It doesn't provide updates for your truck, it doesn't add new features to your truck for free, it doesn't give you a new machine learning SDK or similar. Further more the analogy fails on how software in general is generally licensed not bought which isn't even an Apple precedence but a wider software industry problem. Apple have chosen a revenue sharing arrangement very similar to many others where if you make no money, you pay nothing to Apple.
What is Apple unfairly competing with for xCloud or Stadia though? They don't have a cloud gaming service, nor do I think they will because physics makes it a subpar experience for a lot of games. So who are they competing with by blocking those apps?
I don't think it's the right decision for the Apple ecosystem to block those streaming apps however it's not unfair competition and Apple have been consistent that they will decide what does and doesn't run on their platform. It's in the original App Store launch video. I think it's starting to go to a crazy extreme but it's still their choice, it's a market differentiation factor. On the flip side this means Apple are leaving customers on the table for whom those features are important and now Android, or some other platform, could pick them up.
Then you switch to VISA or AMEX and after a while Mastercard loses so much marketshare that they bring their fees back down to be competitive. The problem is since Apple introduced the 30% fee for the App Store in 2008, the Apple marketshare has gone from single digits to roughly half of the market and from 500 apps to two million. There isn't really a market signal that what Apple is doing is not valuable to consumers.
They aren't directed to do anything. That's the difference. They're given an option only to "Sign In".
Spotify charged 12.99 as an IAP. They put in a message along the lines of "Get it cheaper by going directly to our website" complete with instructions on how to cancel the recurring payment first, then instructing them to wait until that month expired, then go to the webpage and sign up again. The update got blocked. They reacted by removing IAP entirely.
Fortnite put in something that circumvented the app review process and the App Store entirely, they got their app pulled.
Amazon offered Apple their own storefront on Amazon.com, updated their reseller agreement to only use certified resellers, and charges Apple rent. In return, they put on the Prime Video app. It's a 2 way contract.