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Comment by sam0x17 | Hacker News Reader

I completely agree, but the real problem here is they are dependent on, nay, addicted to the revenue they get from that 30% cut. Only way to fix this is regulation and I believe that Apple's quarter-based short-sightedness will essentially ensure that they keep pushing until they get regulated.

If someone's OKR is based on quarterly revenue from App store, they aren't going to care until regulation is literally at their doorstep. That's next quarter, not this quarter. Next quarter that person could retire or quit.

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I was about to write a comment that Apple's App Store earnings are basically pocket change for them, but I looked up the most recent numbers and they've exploded.

They claim they gave devs ~$64Bn in 2021. That means they collected about $27Bn in revenue in 2021, and most of that is basically money for free and almost entirely profit.

It's probably about 10-12% of their profit and grows without them having to do much at all.

How much time to iUsers spend within native apps compared to third party apps? I'd imagine it's mostly third party, can't imagine tons of people spend a hour a day in the call log. If it was made illegal to take any cut on the app store, they would still have to run it otherwise that new iPhone is just a telephone and a browser, who's paying $1k+ for that?

Safari, photos, messages, mail, maps, notes…

So less functionality than a first or second generation iPhone, but you want to charge a months rent for it? Who cares what sensors and tech you have if there isn't any applications to take advantage of them? It's like releasing a state of the art game console but not having any games to play on it.

Their net income in recent quarters has been around $20B. So it's more like 30% of their total yearly profit (using your figure)

And don't forget, it's a line of profit that is literally them printing money at virtually no cost to themselves vs other markets where they have to actually produce physical goods. Yes they have to run the CDN behind the app store and do their crappy little moderation of things, but that's a few cents on every dollar.

Apple always pushes until they are regulated they put a spin on it trying to present what they are forced to do as hurting consumers. That’s their usual playbook.

Not that I'd ever expect it to happen, but the DOJ coming down hard on Apple like they did with Microsoft could go a long way to getting corporations to voluntarily rein in their aggressive business practices.

For anyone interested in the antitrust space, this is a pretty good (though excessively optimistic imho) newsletter:

https://mattstoller.substack.com/

I think they know regulation is imminent and are just wanting to milk it dry while they can

Regulation will make it worse long term; what we need is competition, which seems to be coming in the way of alternate android OS's. ~75% of China uses android, and they all use google alternatives. Huawei uses HarmonyOS, and there's no reason to believe this won't slowly make its way around the globe.

Competition doesn't work in these kinds of markets. The larger you are, the easier it is to retain your position. Social networks, app stores, things like this are desirable because of their size. They are classic monopolies and have to be regulated because the "free market of ideas" is physically incapable of doing so, because capitalism can't do this stuff properly without heavy restrictions.

Social networks are one of the most competitive spaces there are. I don't know you but I would bet my life savings that you're on multiple social networks, and you change networks depending on which add the most value to your life frequently.

What will be a massive problem is if the government says "App Stores can only have at max a 20% fee", and then to enforce this law they only allow two app stores, or it increases the barrier of entry for small players even more.

Dependent? From over here it just seems like they're Walter White with such a huge pile of cash that life itself becomes meaningless.

I think App Store revenue is pretty close to hardware revenue at this point, which is absolutely mind-boggling once you consider the volume/margins of the iPhone. 80-odd billion dollars of Developer Program subscriptions and 30% cuts, what a racket.

> App Store revenue is pretty close to hardware revenue at this point,

Fiscal 2022 Services revenue is 77 million and iPhone revenue is 220 million, so it's not there yet, but it's beating iPad (29 million) and Mac (40 million) combined which is nothing to sneeze at.

I don't think that Apple discloses App Store revenue separate from Services revenue

https://sixcolors.com/post/2022/11/apples-fiscal-2022-in-cha...

Hmm, I thought it's traditional media feature to confuse millions with billions, didn't expect that on HN.

Apple says they paid out 60B in App Store revenue to developers in 2021, if you used the 30% figure (which is unfair because they charge 15% on +1yr subscriptions and <1M revenue) that would be like 26B in commissions. Take that for what you will.

Would you like a [visual representation](https://www.statista.com/statistics/382260/segments-share-re...) of how incorrect you are? App Store revenue is part of "Services", which accounts for just shy of 1/5 of the company's revenue. The rest is by definition hardware. Certainly services as a growth division has been a big part of Apple's story to investors, but to say that App Store revenues is close to hardware revenue is clearly daft.

Companies exist to enrich shareholders and they all agree on one point: they want more.

Especially newer shareholders who just started their wealth building journey - they want more innovation and more products so the share price and dividends can increase as the company scales more.

Somebody should tell shareholders about the goose.

You and I both probably own some AAPL through an ETF. We should tell ourselves about the goose.

For-profit companies (especially large ones) are machines whose primary function is to make profits. Anything else they do along the way (employ people, make products, provide services, trash the environment, etc) is a side effect.

He's still got a point. there is no scenario where apple needs the money they get from app store, so there has to be another explanation. I mean, no one will convince me that a company with 366 billion in revenue is dependent on 12 billion in revenue from app store.

There is something we're not being told here. Because the reasons all these commenters are throwing out make zero sense.

> there is no scenario where apple needs

You're assuming the existence of a 'need'. Part of my point is that there doesn't have to be any 'need' for additional revenue beyond the revenue itself.

It also seems like you may be assuming that the person or people responsible for this and other similar decisions are incentivized to consider all of Apple's revenue as opposed to a specific subset of it, which I suspect is unlikely.

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