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Comment by risyachka | Hacker News Reader

I personally don't have a problem with 30% (sure I with it was more like 15% :) - this is their store, they are not forcing you to buy a phone or laptop. If you do then you agree to the rules.

My main problem is that they apply their rules to everyone in a different way, just like Google.

And they don't even hide it and have written in their TOS that if your app is deleted for a violation, and another app is not it is ok and they decide if to enforce tos or not.

If they remove my app for violation - no problem. I can even do their job and send them links to apps that have the same violation, so they can remove them too. Nope, only my app.

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I totally get the "their store, their rules" take, but it doesn't hold up in this case. Unlike most retail, there is no other store to go to. Sure, I could buy an Android phone, but the policy isn't much different there. The fact of the matter is that Apple & Google own the mobile ecosystem.

It is one thing to claim that the your marketplace is doing developers a service by distributing and putting their apps in front of their massive audience. Fine - collect 30% for downloads/subscriptions that come that way. Unfortunately, there is effectively no other way to consume software on these devices. Keep your 30% of downloads/subscriptions that originate from your marketplace, but let me opt-out of your marketplace and still get my product to my customers without your help.

There are linux phones, and web browsers

The typical consumer is not going to use linux.

If we don't facilitate them, they'll never use alternative platforms.

This reply (a version of "if you don't like it, write your own") is the most heinous and disingenuous reply out of the space of possible replies. The sum of time and work required to do that is completely unrealistic: Apple is not creating the ecosystem but rather it is the developers creating the ecosystem for Apple, while Apple is just playing arbitrary gatekeeper and tax-collector as the entity with the monopoly on making the rules. The "value" Apple is adding is essentially negligible if you consider in your calculus that Apple is actively stamping out competition to its platform and further fortifying its monopoly and doing little else. Developers do not choose to stay on the Apple platform anymore than essentially any American can choose from whom they buy their water or electric utility service (privatized utility monopolies are a whole other discussion, but apropos because Apple and Google, through their own extreme anti-competitive actions and policies, have forced people to use their platforms, effectively creating something that walks and quacks just like a public utility monopoly). You could conceivably haul the water yourself from the nearest river, or whatever (I will mention solar panels because where I live, in fact you cannot install solar panels without one of the limited number of permits from the local electric monopoly -- sound familiar?). Developers can choose which of the two monopolies will write the rules for their app -- rules which are almost exclusively about taking a cut and killing competition. But this is not a choice, and saying it's a choice is a kind of absurd baiting tactic. It has been clear for some time that Apple and Google are operating monopolies and staying the ire of the Justice Department through some sort of regulatory capture. I'm sure there are late-90s Microsoft employees that can't believe what they're seeing.

It is possible to use other app stores with Android. Samsung, Amazon etc have their own app stores which can run side by side with Google's.

Yeah I came here to post the same. I don't actually think the App Store policies are the problem per se, but rather the fact that you can submit your app and really not know what the result is going to be. Maybe there are edge cases where you know going in that it may require subjective approval, but for a run of the mill commercial / personal app you should be able to easily check if you're compliant and get a very fast approval.

Treating each developer and app case by case is just bad faith.

Most retailers have margins in the range of 0.5% to 4.5%

30% is clearly not a reasonable margin...

I think placement in the App Store should be considered not in terms of credit card fees but more like placement on the shelves of a supermarket.

I don’t know the economics of supermarkets but I do know it’s not just cost+. Sellers have to buy display space, participate in promotions, etc etc - all on top of the cost of the actual goods.

I’m too lazy to look it up but I wouldn’t be surprised if the gross margin in the App Store is in the same region as for non essential supermarket goods.

Apple didn't become a trillion dollar company by collecting small margins.

It's fair to assume that the 30% has a fat profit margin.

I can see why people may think I’m defending Apple, but I’m not. I made my point badly but I’m trying to say that the way to explain the 30% is not in terms of the low cost of cards etc but in terms of the norms of other retail businesses.

30% is a high number relative to credit card fees, but a quick google (see my previous comment) suggests it would result in a GP in line with supermarkets. I think it’s a good comparison because supermarkets provide retail shelf space and access to consumers for a very large number of barely differentiated goods...

Think of the 30% as a retail mark-up rather than fee. If you were to sell cookies at a supermarket you can expect that the supermarket would add 50%. It’s the same in the App Store except that you’re supposed to add the 30% yourself.

I guess it scales better that way. In any case, I suspect the 30% has very little to do with Apples costs, and much more to do with retail profit norms.

What’s happening with Hey is that they’re setting up a little card table out in the supermarket car park, and trying to sell their stuff. I can’t imagine any supermarket letting that happen for long.

Given the state of the App Store, that placement is the equivalent of a needle on that grocery shelf.

So now on top of the 30% you give Apple, you also have to buy ads in that same store for it to be more visible to users (assuming a competitor hasn’t outbid you).

And that 30% you’re already paying? It doesn’t replace your marketing requirements one bit, so that “placement” by Apple doesn’t justify that fee.

No I think you misunderstand. I’m not saying the 30% is Ok, nothing like that. I’m just saying that if you want to understand why it’s 30%, perhaps looking at other storefronts is better than just comparing it to the raw card fees.

A quick google suggests I’m right [0] - Coles is a large Australian supermarket chain that makes gross profit of 24.4%, which after card and infrastructure is probably about Apple’s GP on the App Store.

So sure, 30% is a lot, and I personally think it should be less, but it seems very much in line with other storefronts.

[0] https://www.gurufocus.com/term/grossmargin/GREY:CLEGF/Gross-...

My point is that, regardless of their cut, the "exposure" the App Store supposedly brings is likely practically nil, unless you're lucky enough to get 'featured' by them. So it's not like you end up being able to save costs by getting rid of your marketing department because "hey, you're on the App Store!".

Additionally, you're not allowed to sell the same software at a different, higher, cost to make up for Apple's cut, so you effectively and up losing even more revenue, since you need to keep your own existing marketings costs, maybe even have to pay into Apple's ads on top of your 30% to market there as well for actual exposure, since you essentially end up as a needle in a haystack, because the App Store is full of cheap crappy apps that Apple is pushing developers to create to fill up their store, because "courage". (edit: I read from other comments that differing costs seem to be allowed now - "Hallelujah, it's a fucking miracle!")

Additionally you don't have any option of providing the download yourself-they force you to use their "service", and hence "pay" for said service, instead of being able to control that cost yourself. Because "courage".

And besides, I don't see how comparing fee structures between completely different industries as justification for Apple's cut is a valid argument in this case ("they do it too" or "they're even more" means the other guys are just as bad or worse - it's shouldn't be a pissing match of "who's worse?").

I keep saying this, I’m not trying to validate it, I’m trying to understand it. And anyway, almost all of your points also apply to supermarkets. You think app stores and supermarkets are somehow different kinds of markets but they are not. Economically, apps and food are both commodities, and App Store and supermarkets exist to concentrate the audience in order to generate profit, not for their suppliers.

Australian supermarkets are renowned for screwing their suppliers, for example. It’s probably no coincidence that their gross margins are similar too.

Maybe you can come up with another established market that deals in huge volumes of undifferentiated goods in a single market? Large DIY stores come to mind. Apart from scale, why do you think the economics of the App Store are appreciably different from these other marketplaces?

Anyway - I seem to be jettisoning all of my karma trying to explain how we can frame the problem in order to understand it, because understanding something is the only way to change it. But nobody seems to understand my points let along agree with them, so I’ll stop now.

Well, 30% isn’t their margin. It’s their gross revenue. Calculating the margin would require knowing their hosting / development costs for the App Store ecosystem.

Sure, they have some infracture and personel cost to maintain the store.

But I think we're talking about millions here, not Billions...

I wonder why a competitor hasn’t sprung up if it’s just millions.

You need a phone to be a competitor.

There are hundreds of phone manufacturers.

Should be pretty easy to topple Apple if you just need to throw a few million at the problem.

And what about the costs of designing, building, marketing and supporting iOS ?

Very much getting into the hundreds of millions if not billions.

This is their product, and they are not giving it away for free, last time I checked...

Retailers do not have margins of 0.5% to 4.5%. They might have net margins around that amount, but their gross margins are generally closer to 30-40% depending on the industry. Clothing retails have insane gross margins. Grocery stores have terrible ones.

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