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Apple, Epic, and the App Store

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Re: Apple, Epic, and the App Store

#651

Post by perryizgr8 »

vageli wrote: post #74
cschneid wrote: post #27

The Hey saga emphasized that Apple has multiple products interacting in a single app store. * Screened apps - Apple only lets "safe" apps into the store. * Discoverability - Apple in theory lets users find apps that they didn't know about before. Customer Acquisition * Payments - Apple makes it easy to accept payments, for their 30% fee. One or all of those are useful and great. Where I have an issue is when they use…

> That feels like using an existing monopoly (actually a duopoly w/ google's similar practices) to force developers to purchase products they don't want. Hey didn't want to accept payments via apple, but Apple's market power and decisions were focused on forcing them to. In order to sell goods in a place like Walmart, a manufacturer is subject to onerous terms. Why is the app store different than a retailer limiting…

> In order to sell goods in a place like Walmart

This analogy only works if Walmart had a contract with 50% of Americans to buy everything from Walmart only and nowhere else. Those people would not be allowed to even grow their own tomatoes in their gardens, unless they pay Walmart $99 per year for that privilege.

Re: Apple, Epic, and the App Store

#652

Post by glogla »

jimmydorry wrote: post #459
colinmhayes wrote: post #449

Earlier quoted context omitted.

You're right, but you're not. Yes, Epic is trying to make money. But if Epic is allowed to open their own store it would be very good for small developers. Those things aren't mutually exclusive.

If they manage to land their store on iOS, expect them to do the same anti-competitive things they did in the PC market... paying studios to exclusively put their games on the Epic Store only. Even games fund raised by communities, and games already announced to be launching on other platforms. I don't see that as much of a win.

How is any of that anti-competitive? It's a fair competition between multiple app stores.

And Epic is also competing with Steam by having lower cut (5 % versus 30 % IIRC) leaving more money for the developers. It's good for the developers and consumers both.

Re: Apple, Epic, and the App Store

#653

Post by sandstrom »

wrkronmiller wrote: post #278
nemothekid wrote: post #47

Earlier quoted context omitted.

I assume their costs are just, Credit Card Fees, Infrastructure Fees (Bandwidth, Storage), Reviewers Salary. Not sure this adds up to 30%. I think the real reason is that when the Apple store was started, they looked around at the current prices for "software distribution". Retail was like 70%, and other app stores; for example the Danger Hiptop / T-mobile Sidekick charged 60% for their apps store, and the carriers w…

Maintaining XCode, running iCloud app-facing services, building/maintaining SDKs, etc... Apple has to pay for these somehow. They can either get the money by charging more for each iPhone or they can get the money from the real end-users of these products: Developers.

Programming languages, code editors and other developer tools exist for many platforms, without corporate backing. Developing apps for iOS would be very doable without Apple maintaining XCode.

But Apple are choosing to maintain XCode, not as a charity, but to make money selling phones -- $250 billion last year. It's not like they aren't getting paid for it…

Re: Apple, Epic, and the App Store

#654

Post by georgeecollins »

valuearb wrote: post #641
cromwellian wrote: post #352

"But Apple needs to fund the App Store. XCode, payment processing, reviewers, it all costs money". Yes, very little in comparison. Apple made $50 billion in revenue from the App Store in 2019. $50 BILLION. The data centers costs to serve up this are miniscule in comparison. Apple could build 50 datacenters PER YEAR EVERY YEAR for that revenue. Reviewers? A staff of 10,000 fulltime reviewers paid $200k per year would…

Apple doesn’t make $50B a year from the App Store. That’s roughly it’s entire services revenues. It’s estimated that developers had gross sales of $50B from the AppStore last year, of which $15B is Apples share before expenses. Apples audited financials tell us gross margins on services is 68%, and $9B of those services are from an annual payment from Google for search placement in Safari with a gross margin approach…

Developers pay to advertise their apps (some of it goes to Apple) Apple pays to market Apple TV, Apple Music. Apple doesn't need to take in revenue to market other people's apps, advertising them is a money maker for them.

Also, you are talking about the margins on all Apple's services, some of which are much more expensive than others. The margins that other digital software stores can charge suggest to me that they can be very profitable without the 30% cut.

Full disclosure: I am a longtime Apple shareholder.

Re: Apple, Epic, and the App Store

#655

Post by simonh »

harryf wrote: post #391
cromwellian wrote: post #352

"But Apple needs to fund the App Store. XCode, payment processing, reviewers, it all costs money". Yes, very little in comparison. Apple made $50 billion in revenue from the App Store in 2019. $50 BILLION. The data centers costs to serve up this are miniscule in comparison. Apple could build 50 datacenters PER YEAR EVERY YEAR for that revenue. Reviewers? A staff of 10,000 fulltime reviewers paid $200k per year would…

This is a great picking apart of Apples justification but I think the issue that most irks everyone who’s not apologizing for Apple is where did this magic number 30% come from? Which market forces created it? Here on HN most of us probably feel that product manager at Apple licked their finger, felt the wind and said “Yeah 30% seems about the most we can get away with” And what irks even more is once Apple set the p…

The App Store wasn't the first online store on mobile phones, there were stores for downloading ringtones and wallpapers on some devices and some primitive app stores particularly in Japan. The typical markup on these was 50% at the time, while typical retail markup is 40% for many types of goods. Consensus among pundits was that Apple would charge 50% and 30% was widely reported at the time as being surprisingly low.

Re: Apple, Epic, and the App Store

#656

Post by dtech »

donor20 wrote: post #521
naikrovek wrote: post #427

Earlier quoted context omitted.

> Epic has a monopoly on selling items inside Fortnite. 3rd party artists can't create anything that can be used inside Fortnite, neither inside the v-bucks store nor outside of it. There's no 3rd party "market" at all. Apple has a market where third parties can market their apps. Apple requires a cut of all purchases made through that store, which alone is not monopolistic. Apple also requires that you sell your iOS…

Xbox has a monpoly on their game store. Sony has a monpoloy on their game store. Come on - is this argument going to be used for all these too? Walmart has a monopoly on what sells in Walmart.

Once you decide to shop at wall-mart you can easily switch to other markets or buy items from other stores. not comparable at all.

If there were basically only Wall-Mart and Target to buy stuff from, and you had to commit to one for 2-5 years every time, you bet they should be under heavy scrutiny.

Sony and Microsoft are a better comparison, but different because 1) their consoles are huge loss leaders, phones are not and 2) they are way less essential and used by an order of magnitude less people than phones.

Re: Apple, Epic, and the App Store

#657

Post by fomine3 »

jimmydorry wrote: post #459
colinmhayes wrote: post #449

Earlier quoted context omitted.

You're right, but you're not. Yes, Epic is trying to make money. But if Epic is allowed to open their own store it would be very good for small developers. Those things aren't mutually exclusive.

If they manage to land their store on iOS, expect them to do the same anti-competitive things they did in the PC market... paying studios to exclusively put their games on the Epic Store only. Even games fund raised by communities, and games already announced to be launching on other platforms. I don't see that as much of a win.

Pay for studio to make game exclusive on store, how is anti-competitive? (Possibly the store might be BS but it's not anti-competitive matter)

Re: Apple, Epic, and the App Store

#658

Post by dtech »

sjwright wrote: post #584
ifmpx wrote: post #569

Earlier quoted context omitted.

I'd include walmart too if walmart is the only store I'm ever allowed to shop at.

Apple doesn’t force you to own an iPhone.

It does force you to use their app store for 2-7 years once you bought one until you replace it.

Re: Apple, Epic, and the App Store

#659

Post by vmladenov »

wmf wrote: post #109
vageli wrote: post #74

Earlier quoted context omitted.

> That feels like using an existing monopoly (actually a duopoly w/ google's similar practices) to force developers to purchase products they don't want. Hey didn't want to accept payments via apple, but Apple's market power and decisions were focused on forcing them to. In order to sell goods in a place like Walmart, a manufacturer is subject to onerous terms. Why is the app store different than a retailer limiting…

Target is across the street from Walmart. But if someone has an iPhone they cannot shop at the Google Play store.

Sure, in Mountain View, but otherwise the parent comment is correct. Charles Fishman’s book The Wal-Mart Effect[1] goes into great depth about how Wal-Mart suffocates smaller stores across America and turns around to arm-twist their suppliers.

[1] https://en.wikipedia.org/wiki/The_Wal-Mart_Effect

Re: Apple, Epic, and the App Store

#660

Post by pembrook »

SiVal wrote: post #312
vageli wrote: post #74

Earlier quoted context omitted.

> That feels like using an existing monopoly (actually a duopoly w/ google's similar practices) to force developers to purchase products they don't want. Hey didn't want to accept payments via apple, but Apple's market power and decisions were focused on forcing them to. In order to sell goods in a place like Walmart, a manufacturer is subject to onerous terms. Why is the app store different than a retailer limiting…

Suppose Apple and Google started making cars and put every other car company out of business. Both made the rule that if you bought their car, every product or service that went into the car also had to be purchased through them. You preferred the Apple car world to the Google car world. (All Google cars streamed your location and live video of you and your facially recognized passengers back to Google for analysis o…

This is the first good analogy I’ve read for understanding Apple’s power in a way that non tech people can understand.

The problem with most comments shouting “30% is too high!” is that it’s impossible to throw out a better number that isn’t entirely arbitrary. The issue isn’t the number.

The issue is the mechanism by which that number can be enforced.

If we agree smartphones have become essential infrastructure, needed for the modern economy to function, we should not allow just 2 companies to have such power over it.

What makes people uncomfortable about this though, is that Apple has really done nothing wrong to get here. It’s just that their product and the App Store concept they popularized became so successful, that it’s now essential to modern life.

For the people arguing against regulation, I totally understand the uncomfortable feeling that creates.

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