Comment by rswail | Hacker News Reader

Comment by rswail | Hacker News Reader

I'd really like to know how much all the people whinging think it would cost to offer the following to developers. Crunch your numbers and show your work:

1. A development platform that includes the toolchains and emulators for all the variations of the Apple hardware/OS environments (including the ability to distribute test versions to a restricted audience)

2. A secure platform for taking payments, including all chargeback risk, local consumer taxation requirements (VAT etc) worldwide.

3. A secure platform for in-app purchases, subscriptions, DRM on content (leave aside the arguments for/against)

4. Mechanisms for secure distribution to employee BYOD of employer specific applications, including capabilities to remove them from departing employees

5. A marketplace with search and discovery (however imperfect) that also provides for customer reviews, screenshots etc

Currently all of that (barring the MDM of point 4) costs a developer:

* $100/year

* 30% of purchase/subscription/in-app revenue

First of all, that $100 a year should cover all of what you just listed.

It costs Apple approximately $100 million to run the store. If the ~20 million developers are chipping in $100/yr, Apple is looking at $2 billion in fees just from developers. You can further take the costs of developing a secure platform just from the sales of iOS devices. (Its not like the iPhone is useful without the AppStore).

Apple is one of the most successful companies in the world worth over $2 trillion. They would be just fine dropping the fees from 30% (now 15%) to a more standard 2% for a basic transaction fee.

This is entirely ignoring the value third party developers bring to Apple's platforms. I'd argue Apple has hugely benefited from a robust selection of third party apps available via the App Store, and the quality and diversity of apps on that store has been a core part of the value proposition for their hardware.

Exactly. In many other markets, the retailer takes a full half of the sales prices. For instance, my parents are professional sculptors, and standard gallery commissions are 40-50%.

A gallery offers prime-time, often times exclusive, exposure. It puts your work in front of a small, but exclusive, group of high-quality prospects and commands their undivided attention.

Apple does no such thing. It offers no exposure in return for their fee. Once published, your app is but an anonymous drop in the sea.

True, but the thing they offer doesn't require thousands of humans to administer either. Renting a building downtown and staffing it with a couple sales people is very different than the army of humans curating apps and developing the software requisite to produce the polished, trusted experience people get from Apple's ecosystem.

Apple's net profit margin is around 23% including hardware and everything else they do. Their app store margins are dramatically higher, possibly as much as 90%. A gallery's 40-50% commission translates to 0-50% margin after expenses and they do much more for you - exposure.

There's a considerable difference between galleries holding physical goods with extremely limited space and needing to curate things for a specific market, and one of the largest corporations to ever exist approving software to sell on a virtually limitless marketplace for every niche and need imaginable.

Then let there be a new retailer that takes less than Apple. If the percentage is truly unsustainable, they'll fail and we'll keep using Apple's App Store anyways. That would still proper competition in the market to set prices rather than whatever Apple's monopoly decides to set prices at.

This is a strawman argument. To see why, lets compare with Facebook.

How much money does it cost to develop API servers to deal with apps which use Facebook sign in?

How much money does it cost to run those API servers in a performant manner?

How much money does it cost to make sure that those servers are secure?

How much does Facebook charge? 0.

I could keep going (or find many other examples), but the point is that the justification of a price based on the seeming cost to the provider isnt relevant.

The issue for me here is that I should be able to run the apps that I want on hardware that I have purchased. Imagine if you buy a TV and then all of a sudden, the Netflix app is removed from the TV because Netflix didnt pay the tv manufacturer AFTER you've already purchased it.

It's not strawman, because the discussion is whether or not Apple provide value for money to developers for their 15/30% cut of revenue from Apple's customer base.

The discussion about whether owners of the Apple device are getting value for money and/or freedom to use as desired is a separate discussion.

As for the last example, I purchased cable TV that had a Disney channel on it. Disney stopped providing that and wants me to buy their app instead. The cable TV subscription also used to include Comedy channel but removed it from their lineup.

Who is at fault there?

That’s because Facebook earns its money from selling targeted ads based on all of the data that they collect about their users. Apple doesn’t do that.

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