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Apple is actually asking for 100% of SaaS mobile revenue

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Re: Apple is actually asking for 100% of SaaS mobile revenue

#41

Post by lshepstone »

I'm starting to see a whole bunch of posts/comments about people reacting to losing 30% of their SaaS software revenue but no one seems to be calling out the Apple contract specifically lists content as defined as magazines, newspapers, books, audio, music, video. So I don't see where the SaaS angst is coming from.

Apple can charge 30% for apps and content because the ENTIRE product is being delivered on iOS. They can't charge that cut for SaaS because only a subset of the product is being delivered.

Could Apple attempt to take a cut from SaaS products if a user signed up from within your app IN THE FUTURE...sure, but I doubt they'd be stupid enough to try for 30%. Should Apple be compensated in some way for hosting/downloading your mobile app for your SaaS backend...maybe, and I'd be prepared to pay some commission if it drove signups, it might just be a tad lower than 30% though.

Re: Apple is actually asking for 100% of SaaS mobile revenue

#42

Post by jonknee »

raganwald wrote: post #32
jonknee wrote: post #14

Earlier quoted context omitted.

Apple has suggested that if you offer subscriptions (or purchases) outside of your app that you need to do it inside your app. At the same price. Hence the whole drama over Kindle--the purchases are done on the Amazon website but Apple has stated they want 30%.

"but Apple has stated they want 30%...." of the revenue from those people who purchase content or subscriptions inside the application. If you purchase your content on Amazon's website, you can play it on an iOS device and Apple doesn't expect a cent.

Well, Apple's play is they just ban Amazon's app if they don't cough up the cash.

Re: Apple is actually asking for 100% of SaaS mobile revenue

#43

Post by mithaler »

YooLi wrote: post #39

"... they will need to give Apple 30% of their subscription revenue for all customers that want to access SalesForce via mobile." Wow, a huge post based on this flawed understanding. It isn't 30% of every customer that accesses the mobile app, it's 30% of each client that signs up via the mobile app. The rules are pretty simple. If you offer subscription service purchasing elsewhere, like your website, you also must…

...and if your profit margin is close to that 30%, as it is with many businesses, you are now required (should you choose to develop an app for iOS) to sell your product to users whom you have to support and stand a very good chance of gaining nothing from.

In other words, such a business would be required to offer an option to hand off all of its profit to Apple, should it choose to offer a native iOS app. Apple gets a better experience for its customers, and the third party gets more customers it gets zero profit from. I can understand if such a business would find this unacceptable. (And look at it from a user's perspective: if given two options, one-click billing through Apple or time-consuming credit card entry through a web portal, which do you suppose the majority of users will take?)

So how exactly is that understanding flawed?

Edit: More details added, and some wording correction.

Re: Apple is actually asking for 100% of SaaS mobile revenue

#44

Post by saturdaysaint »

As I added in the content section, I think that SaaS providers have the leeway to pass along the "Apple tax" to iOS users and thus embarrass Apple a little bit here. I'd like to see a service at least try to make an "iOS plan" - if a service is normally $10/mo, create a separate plan (that would be the only way of accessing the content for iOS users) that costs enough to offset Apple's take. This plan would cost the same both on the service provider's website and in the app, and would be the only way of accessing the service's content in the app, meeting Apple's rules... it would just be conspicuously more expensive than the version for all other platforms.

I'm not normally the self-promoting or blogging type, but since I'm an enthusiastic user of many of these iOS services (Rdio, Netflix, Audible, The Economist...), I expounded a little bit here: http://www.thetechbastard.com/post/3326771970/a-hypothetical...

Re: Apple is actually asking for 100% of SaaS mobile revenue

#45

Post by ryanwaggoner »

mithaler wrote: post #43
YooLi wrote: post #39

"... they will need to give Apple 30% of their subscription revenue for all customers that want to access SalesForce via mobile." Wow, a huge post based on this flawed understanding. It isn't 30% of every customer that accesses the mobile app, it's 30% of each client that signs up via the mobile app. The rules are pretty simple. If you offer subscription service purchasing elsewhere, like your website, you also must…

...and if your profit margin is close to that 30%, as it is with many businesses, you are now required (should you choose to develop an app for iOS) to sell your product to users whom you have to support and stand a very good chance of gaining nothing from. In other words, such a business would be required to offer an option to hand off all of its profit to Apple, should it choose to offer a native iOS app. Apple get…

You're using the words profit and revenue interchangeably.

Re: Apple is actually asking for 100% of SaaS mobile revenue

#46

Post by ZeroGravitas »

raganwald wrote: post #32
jonknee wrote: post #14

Earlier quoted context omitted.

Apple has suggested that if you offer subscriptions (or purchases) outside of your app that you need to do it inside your app. At the same price. Hence the whole drama over Kindle--the purchases are done on the Amazon website but Apple has stated they want 30%.

"but Apple has stated they want 30%...." of the revenue from those people who purchase content or subscriptions inside the application. If you purchase your content on Amazon's website, you can play it on an iOS device and Apple doesn't expect a cent.

Well they do expect a cent. Because they've banned you linking to the website, and they've forced you to use their in-app billing system, and they've banned you from incentivizing customers with a lower price elsewhere and they're taking a huge cut from in-app purchases. So unless you can telepathically control how your customers sign up, Apple's going to be getting quite a few of your cents.

It's a bit more complicated than Apple getting 30% of all your sales, but it's also more complicated than Apple just letting the iOS customers choose how to buy. You'll lose some random part of that 30% depending on your customers buying habits.

Re: Apple is actually asking for 100% of SaaS mobile revenue

#47

Post by portman »

groby_b wrote: post #35
portman wrote: post #16

Earlier quoted context omitted.

What would a "content-free" app look like? Aren't all apps, by definition, based on content? I'm not meaning to be cute or trite -- I'm genuinely confused from the press release which category of apps will fall under these new rules. Which is why we'll need to wait for the legalese in the iOS developer terms to understand what this _really_ means.

"content" is actually well defined in the App Store terms. And it doesn't include SaaS under it.

You mean these terms? http://www.apple.com/legal/itunes/us/terms.html

Here is "content" being used to mean "everything that's in an app":

"The Application Provider of each Third-Party Product is solely responsible for that Third-Party Product, the content therein, any warranties to the extent that such warranties have not been disclaimed, and any claims that you or any other party may have relating to that Third-Party Product."

And here is the section on subscriptions, in which content is, in my opinion, not well defined:

"Certain App Store Products may include functionality that enables you to purchase content on a subscription basis (“Paid Subscriptions”)."

I just scanned all 72 mentions of the word 'content' and couldn't find the definition you're alluding to.

Re: Apple is actually asking for 100% of SaaS mobile revenue

#48

Post by mithaler »

ryanwaggoner wrote: post #45
mithaler wrote: post #43

Earlier quoted context omitted.

...and if your profit margin is close to that 30%, as it is with many businesses, you are now required (should you choose to develop an app for iOS) to sell your product to users whom you have to support and stand a very good chance of gaining nothing from. In other words, such a business would be required to offer an option to hand off all of its profit to Apple, should it choose to offer a native iOS app. Apple get…

You're using the words profit and revenue interchangeably.

You're right; I've updated the post, thanks for the correction. :)

Re: Apple is actually asking for 100% of SaaS mobile revenue

#49

Post by dazzla »

saturdaysaint wrote: post #44

As I added in the content section, I think that SaaS providers have the leeway to pass along the "Apple tax" to iOS users and thus embarrass Apple a little bit here. I'd like to see a service at least try to make an "iOS plan" - if a service is normally $10/mo, create a separate plan (that would be the only way of accessing the content for iOS users) that costs enough to offset Apple's take. This plan would cost the…

What about Apple's rule that the in app subscription needs to be the same or better than available elsewhere?

Re: Apple is actually asking for 100% of SaaS mobile revenue

#50

Post by cicero »

GrandMasterBirt wrote: post #23
towelrod wrote: post #15

Earlier quoted context omitted.

That's not what is happening here. My company makes all of its money from subscription services that we sell directly to customers. Now if we provide a IOS app to access that content, we risk losing 30% of our revenue if the user happens to sign up via the app instead of via our website. I'm not sure what "open alternative" you are referring to. My website -- built on "open" everything, other than the subscription co…

Now take that and move that to Amazon's domain. The currently offer insanely low prices. Selling each book with a 30% to apple can make their profit margin zero or less. Which means that either Amazon must raise prices on their products and thus giving Apple the ability to compete vs Amazon on price via unfair advantage or Amazon pulls out giving apple a monopoly. I don't think Microsoft ever made these sort of polic…

If Apple continues this course, they will lose developers and apps to Android, which could drive consumers to switch to Android as well. I've been a happy iPhone customer until now, and I'm strongly considering switching to Android when my contract expires this summer.
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