Total revenue. So it assumes upfront cost and IAPs are all the same.
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South Korea Passes Bill Banning Apple From Requiring Developers to Use App Store In-App Purchase System
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Total revenue. So it assumes upfront cost and IAPs are all the same.
Maybe I'm over simplifying the situation, but I think the easiest solution for Apple would be to reduce the App Store commission by 3%-5% (i.e. charge 10%/12% - 25%-27%) and let the (world wide) developers use whatever payment system to their heart's content right, and of course with caveats (like developers having to register a payment system with Apple to collect this upon payment charged by developers to their customers, etc)? It'll be BAU for Apple.
The Bill most likely didn't say Apple cannot charge for whatever services the App Store is providing right? Just that developers must be allowed to use third party payment system?
I have to admit I have not read the Korean Bill that's been passed.
The Bill most likely didn't say Apple cannot charge for whatever services the App Store is providing right? Just that developers must be allowed to use third party payment system?
I have to admit I have not read the Korean Bill that's been passed.
It’s coming, it’s coming, the freedom is near…
EU and U.S. discuss 'mutual interest' in antitrust legislation, digital market cases
U.S. Associate Attorney General Vanita Gupta has spoken with EU Commission's competition chief Margrethe Vestager about their mutual interest "in promoting competition in a fair, global marketplace anwww.imore.com
This is literally just politicians patting each other on the back saying look at how good we are. From the European side unelected politicians even. As long as there are no concrete actions it’s meaningless.
Also if you like “freedom” so much, you can buy an Android phone just about everywhere and sideload it full with whatever shady apps you’re into.
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Comments like hours make me so sad, at how little thought people put into the long term ramifications of what is happening.
And if these security updates and software updates that you mention are so important to you, perhaps you should consider how this will affect them. Apple currently develops and gives its software to consumers for free (i remember paying for them years ago). You gleefly celebrate taking away the only source of revenue that pays for them. So apparently you dont realize that either Apple will have to start charging users for software again, or devote significantly less resources to improving them. Sucks for him you say? No... it is going to suck for everyone. The money has to come from somewhere. These products do not appear out of thin air.
Your whole post is brilliant; some common sense on this forum!
Bypassing Apple/Google will just end up having Trillion Dollar company passing off their profit to Billion Dollar companies. We all know most of the revenue generated from App Stores are from a small handful of apps/games/etc ...
Most of the other apps are either free, no method of charging people money without spending money they don't have, or not good enough to charge people money.
Apple already lowered their cut to small developers from 30% to 15% ...
This doesn't solve anything really.
Most of the other apps are either free, no method of charging people money without spending money they don't have, or not good enough to charge people money.
Apple already lowered their cut to small developers from 30% to 15% ...
This doesn't solve anything really.
How dare you respond to these posts with numbers and factPhil Schiller mentioned in a private email to Steve Jobs the possibility of HTML5 posing a threat to the recruitment of developers for the App Store given Apple's commission and HTML5's lack thereof. Clearly this hasn't transpired. In no way does this imply that Apple thought their commission was egregious. In fact, internal communications suggest Apple thinks its commission is very competitive.
It's also evident that Apple has been improving the tools available to developers for analytics, development, and marketing. They would have zero incentive to do any of this if they had a monopoly. This demonstrates that they are competing with other companies for developers. Further, the growth in app developer revenue would be minuscule if Apple had monopoly power because they would be extracting every bit of that growth to maximize their profit.
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Apple doesn't report App Store P&L in public filings because they don't even have an internal P&L which is a practice they keep all of their internal businesses. The only P&L Apple makes, even internally, is for the whole company. Fundamentally because individual business P&Ls can be very misleading and uninformative for a company as diverse and interconnected as Apple.
What does Amazon charge for their AppStore? 30%. What did Microsoft charge on their Windows App Store when they shipped Windows Phone? 30%. What does Samsung charge for their Galaxy Store? 30%. What do Xbox, Nintendo, and Playstation charge? 30%. What percent of ad revenue does YouTube take? 45%. What does Audible charge for audiobooks? 60-75%. What does Twitch charge of subscriptions? 50%. What does Amazon Prime video direct charge? 50%. What does Barnes and Noble's Nook charge? 35%. Uber and Lyft? 20-25%. Stubhub and Ticketmaster? >30%. Uber Eats and Grubhub? 15-33%. Aptoide? 25%. Steam? 30% for first $10 million in revenue, which is virtually everybody, 25% between $10 and $50 million, and 20% on revenues above $50 million.
China has a very competitive Android app marketplace due to the prohibition on Google Play. MyApp from Tencent? 55% commission for games. Huawei? 50% for game in-app purchases. 30% for paid downloads and non-game in-app purchase. OPPO Store? 52.5%. Vivo? 52.5%. MIUI? 50% for games, Tencent negotiated lower rate of 30% for their games.
Net profit is calculated after the commission is taken out. There are lots of cuts one could cite that amount to more than half of one's profit margins. It is merely your opinion that that the charge is "insanity." Clearly, other digital marketplaces charge similar commissions to Apple's store.
Further, Apple's products and services are perfect examples of differentiated products. Differentiated products often have price premiums substantially above marginal costs and this is not at all indicative of a lack of competition. Epic at one point had an 86% profit margin on Fortnite and Epic as a company has a significantly higher profit margin than Apple. Avengers Endgame had an 85% profit margin. These are all examples of differentiated products.
From a consumer perspective I've never had a problem finding an app that I was satisfied with, therefore it's hard for me to see how app discovery is broken if we as consumers can find what we're looking for. Just because you make an app and it fails to receive attention doesn't mean "discovery" is broken. YouTube takes 45% of ad revenue and guess what? My videos have 10 views. Does that mean YouTube's discovery algorithm is broken? I think most people would strongly disagree, perhaps going so far as to say their algorithm is so good that it is destructive to self-control and time management.
Again, in markets with differentiated products there is no reason to expect that prices will be close to marginal costs.
While free apps may be subsidized by paid apps the inverse is also true. Free apps also subsidize paid apps by increasing customer traffic to the App Store.
Apple's refund policy extends beyond fraud to accidental charges and dissatisfaction. The same does not apply to credit card charges below transaction cost of $50. It is also significantly more hassle to deal with a credit card company compared to Apple's website. I've been through both several times.
I agree with you. I wouldn't say that giving your payment info to a company necessarily exposes you to fraud. But it does increase the risk, nonetheless this argument is rather weak because all of us give our payment info to an array of companies every day.
I think the fraud argument comes into play more if side loading existed. Android apps and games that are sold as side loaded apps are regularly stolen and made available on torrent sites to download free of charge and without any costs for in-app payments. Fortnite itself has been directly lifted from Epic's website and is available on other sites.
This doesn't take into account the fact that side loading will significantly increase the iOS threat model making the platform significantly more attractive to hackers and scammers. With over 1 billion users disproportionately located in high income countries and significantly more private data than personal computers, it will be target number one for exploitation. Even Apple can't overcome the world's best hackers and scammers.
None of the bills regulating the App Store in the U.S. are going to pass. They were authored for publicity reasons and to increase donations to certain organizations and are not going to get traction because most of the public considers these issues niche. And lawmakers are unwilling to sink so much political capital into a bill where a great deal of the public disagrees, even more don't care whatsoever, and the opponents have a lot of resources to deploy against the bills.
Just 3% of bills submitted to Congress become law. 3%. The idea that any bill at this stage is going to pass is wishful thinking.
The EU as any observer will notice is similarly all talk and no action.
I don't think they will increase the annual fee. They'll just write the revenue share into the license agreement.
That's merely your opinion. Right now, Epic charges a 12% commission on the Epic Games Store (certain to rise after their publicity stunts are over). The company has a fraction of the features that other online stores/game launchers have and they don't have virtually any resources deployed for customer support or developer support. Excluding the payments they are making for exclusive games and other recruitment efforts, the store is breaking even. Including those payments, they are losing hundreds of millions of dollars per year. Epic is subsidizing the store with profits from their other divisions. Epic claims the store will be profitable by 2027. We'll see. A lot can change in 6 years. Epic might not even be around.
If you believe this bill is going to result in more profit for developers, you are kidding yourself. With that said, this particular bill isn't about increasing options. It's a lackluster and pathetic attempt pushed by big developers to free ride on Apple's intellectual property and services. How disappointed they are going to be when they realize the true repercussions. Be careful what you wish for.
. Really nice to see a factual accounting of commissions in other stores.We agree, adding some context;
I don't like the use of the word free. Updates are provided at no additional cost to the consumer. They are provided at no cost thanks to revenues from the entire ecosystem. Free to consumer does not mean no cost to Apple. Apple provides software updates far longer than almost any handset maker (approximately 6 years).
The "unreasonable" hardware prices and App Store revenues are what allow Apple to provide new features at no additional cost. They are simply built into the revenue model.
Same as "free" windows updates. Those free updates are being paid somewhere. Either the ultimate consumer pays for them or they come from revenue that is buried somewhere in the pipeline or the manufacturer pays for them out of the revenue..
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The reason why iOS updates are free is because of the high cost associated with buying them. There is no need for Apple to charge for updates. The Mac Appstore is a barren wasteland of **** and Apple does not need to charge for macOS updates even tho it is not that popular.
Looks like every internet-connected device is part of the Telecommunications Business Act, seems logical.
Statutes of the Republic of Korea
elaw.klri.re.kr
I agreed with your post till you used the term “shady”.
I have 3 stores I use and none of them are shady by any definition.
I don’t know that it would be “too much” if it is based on use. It would just mean that apps would have to limit their notifications to revenue-generating ones or move things around to not rely on Apple for storage of user data, app hosting, etc. It could actually create more competition for those services and allow companies greater choice.
Companies may do things that are say, socially responsible, but the reason they do so is to bolster the bottom line, which is the sole reason they exist; except for rare types of corporations. Econ 101.
And Apple will eventually find a way to charge more for the tools.
No doubt. They wil simply change how they charge.
One reason they are free is a way accounting is done - Apple used to have to charge for some bescaue of how revenue is booked, with iPhones were booked differently.
(note: these are more geared toward current US proposed legislation, so everything may not be directly applicable to South Korea’s law)
https://forums.macrumors.com/thread...-in-app-purchase-system.2308535/post-30204247
Also, for an in-depth article on Apple’s monopoly status that I came across/ found interesting see: https://www.google.com/amp/s/seekingalpha.com/amp/article/4450792-apple-the-benefit-of-the-doubt
Post in thread 'South Korea Could Ban Apple From Requiring Developers to Use In-App Purchase System'
https://forums.macrumors.com/thread...-in-app-purchase-system.2308535/post-30204247
Also, for an in-depth article on Apple’s monopoly status that I came across/ found interesting see: https://www.google.com/amp/s/seekingalpha.com/amp/article/4450792-apple-the-benefit-of-the-doubt
Peter Drucker 101. https://en.wikipedia.org/wiki/Peter_Drucker A company exists to provide a service.
Getting back to the thread topic. Can't imagine how Apple is going to respond as the government is now dictating their revenue stream no matter how they couch the title of the legislation.
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South Korea today passed a bill that bans Apple and Google from requiring developers to use their own respective in-app purchasing systems, allowing developers to charge users using third-party payment methods, The Wall Street Journal reports.
The bill was originally supposed to be voted on yesterday, however, more urgent matters presented to South Korea's National Assembly meant the bill was postponed. The bill is an amendment to the existing Telecommunications Business Act. It aims to ban Apple and Google from unfairly exploiting their market position to "force a provider of mobile content, etc., to use a specific payment method."
Apple's App Store has been under increased scrutiny in recent months. South Korea's bill represents the first time any government has taken substantive legislative steps to crack down on the platforms. Lawmakers, developers, and others have called for increased regulation of both Apple and Google's app distribution services, noting the companies' potential to engage in anti-competitive behaviors.
Under the now passed bill, Apple in South Korea will no longer be permitted to limit developers to only use its in-app purchasing system, which grants it a 15% to 30% commission for all purchases made. The commission has been under the spotlight ever since game developer Epic Games attempted to bypass Apple's App Store policy by implementing a direct payment method for users last year.
Apple has called its in-app purchasing system a safe and secure way to allow users to purchase digital goods within apps, while some have called the company's commission unfair. As we noted yesterday, Apple operates its App Store under one set of rules applied to developers internationally. While South Korea's bill is specific to users in the country, it may have a domino effect worldwide.
Besides a 15% to 30% commission on all in-app digital purchases made, Apple charges developers a $99 annual fee to be part of its Apple Developers program. Those two revenue streams are just a few ways Apple maintains a profit for the App Store. In the third quarter of this year, the tech giant reported an all-time high revenue record of $17.5 billion in its services business, including the App Store.
Update: In response to the bill passing, Apple has provided MacRumors with the following statement. The statement, the same one used previously when asked on the legislation, says that user trust in the App Store will decrease as a result of the bill.
Article Link: South Korea Passes Bill Banning Apple From Requiring Developers to Use App Store In-App Purchase System
Expect Apple to start selling two versions of each product.
One as now where Apple offers an incredibly secure environment but you can only install and purchase through Apple's mechanism.
And the second one will come with all the restrictions removed and a warning in very large letters that when you are hacked or have your identity stolen, you should complain to the South Korean government and not to Apple.
If Apple decide to do this is, I am fully expect South Korea government will fine Apple for selling version that only install purchase through Apple’s mechanism.
First version is direct violation of the law.
Government from time to time will regulate how companies make money. Government sometime monopolize certain industry. There is nothing odd with government pass law to mandate how companies can make and not make money or how companies can operate
I agree that developers should be free to use other options but I’m really bummed about it. I truly appreciate that all my subscription purchases are stored in a single easy to access place. Since every app developer and their mother is designing everything around subscriptions, this is more important than ever. I think we can all agree we’ve left some unneeded subscription or two uncancelled because we couldn’t find where to go to cancel them.
At the very least I hope apple provides a solution to maintain that functionality. Like a direct link to cancel the subscription on whatever site the developer uses.
At the very least I hope apple provides a solution to maintain that functionality. Like a direct link to cancel the subscription on whatever site the developer uses.