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Comment by drewcrawford | Hacker News Reader

> Taking a 30% cut on a $100 purchase is not economically viable

The market for a $100 app isn't very large, and that price point is also a target for fraud / scams / accidental purchase complaints. This risk is offset by additional review scrutiny, but the cost for that additional scrutiny is amortized over a small number of potential customers.

The result of all this is that $100 purchases are expensive for Apple to run, and Apple as a rational actor should discourage them. I wouldn't be surprised to learn that the whole $50+ market runs at a loss that is covered by the cheaper apps.

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Even for a $20 item 30% cut is not acceptable either, considering what Apple actually did is simply app hosting + payment processing. App Store did a really bad job on app discovery and promotion, so I don't think they deserve anything on marketing. However, they can charge developers for being featured on the front page.

> App Store did a really bad job on app discovery and promotion

You think most app buyers found their apps outside the app store? Unlike folks reading HN or tech sites and trying new apps thanks to app launch news, the normals I know find their apps only within the app store (other than the occasional app roundup in a mainstream printed magazine).

If you look at the CC processing industry, ranging from 5% fees for the most basic service (transaction + cc + merchant + bank) to 15% fees for an end to end service that cuts you a check, the 30% to also manage the user authentication and customer service is a reasonable deal, completely aside from marketing.

Finally, as a user, I don't want featured apps to be the ones paying to be featured. Not cool.

From my own experience and friends I know, users rarely go the app store and search for a term. What they do there is check out the high ranked apps. The most effective way of discovering an app is still recommendation by mouth or websites. There are a lot of app review blogs out there for a good reason.

We are talking about different business. apps/ebooks generally don't have a high margin.

15% for an end to end service? Citation Please! Paypal, Stripe, Braintree and those guys don't even come close to that. If you are getting charged 5% in fees in this day and age then you are doing something wrong... at least here in the USA.

Apple has a cost of no more than 2.5% for credit card fees, and its probably even a few tenths lower than that. That I will guarantee (seeing as how I have seen companies in the $5million/year range get that percentage from an end-to-end provider, and Apple is quite a bit more than that in volume).

What I think is really ridiculous is that they want to charge 30% for subscription type services. One time app purchases... ok, maybe I can see that. But for a $5/month or more subscription being bought through there its absurd and making it more of a pain for the user because the app developer is forced to break with the single-billing system due to costs. So, simplicity actually hinders the experience here.

> Citation Please!

My company has developed a CC gateway server, and has processed as much as $80M a year in transactions for a single client. This is a business I've spent a lot of time in.

Also note that digital goods and physical goods are different categories. A full service provider of "digital goods only" processing for clients without merchant accounts charges much more than a company like Paypal, Braintree, or Stripe, which process for physical goods as well.

Apple also provided a large amount of eye balls for services that is available through the Apple app hosting system.

> App Store did a really bad job on app discovery and promotion, so I don't think they deserve anything on marketing

I have never understood this argument. It's a bit like saying "WalMart does a bad job promoting milk discovery, so I think they should sell it at cost."

This post is not about the price for an app, but the price for a service (SkyDrive) provided through an app. The market for services is huge. If you deliver a service paid through an iOS device, Apple wants a 30% cut.

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