Not to be a broken record here (eg [1]) but IMHO Apple has made a strategic error here. You never, ever want a court to define the landscape you wish to operate in. it ties your hands and could easily go against you. You are almost always better off seeking settlement to avoid those outcomes.
A 30% cut for small developers makes a certain amount of sense. It enables a lot of developers who would otherwise be unable to get a payment pipeline (or at least easily get one) to have a revenue model on the App Store. But it makes absolutely no sense to big publishers like Epic, Apple, Netflix or Amazon, who all have their own payment processors already.
A 30% cut on billions a year in revenue is a big incentive for challenging Apple's payments monopoly.
Apple instead should've offered volume discounts for "Partners", scaling down to 10% or even less. Being a Partner means abiding by certain contractual conditions. Challenging Partnership terms ends your sweetheart volume deal. This simply changes the math from:
- Win: Pay less than 30%
- Lose: Keep paying 30% (ie no loss). To anyone who thinks the likes of Amazon would be kicked off the App Store, you're crazy.
to:
- Win: Pay less than 10% (so the upside is smaller)
- Lose: Have to pay 30% instead of 10% (huge downside).
The truth is that Apple uses that 30% as a slush fund. it makes it's way back to bigger publishers in backroom deals ("incentives"). You, as a smaller publisher paying 30%, are paying for that.
Unfortunately I believe short-term greed got a hold of Apple management. When it was 30% of a new, much smaller market it made more sense. There are costs involved in running the App Store, vetting apps, hosting apps, etc. But 30% now? It's become a huge profit center.
So Apple may well lose control over payments because they're trying to hold on too tight to that cash cow.
Personally I don't think users want or would benefit from alternative App Stores. But being able to buy digital goods on Amazon like I can with physical goods (which was another carved-out exception) with my Amazon payment information? That's entirely reasonable and I think Apple is making it inevitable.
>You never, ever want a court to define the landscape you wish to operate in. it ties your hands and could easily go against you. You are almost always better off seeking settlement to avoid those outcomes.
I agree but I really think Apple has backed themselves into a corner now. Their App Store revenue is such an enormous chunk of their income (direct and indirect) that to remove their monopoly on distribution and payments now would cut their profits by double digits. Their stock price would plummet. I don't think they have a choice but to drag this out for as long as possible, in every country they can. I think it is inevitable that many countries will order Apple to unbundle the App Store and allow competitors, but many will not, and the process will take years or even decades. In the mean time, Apple stands only to gain.
In terms of strategic calculus, I think this makes sense, even if it means they will eventually receive worse strategic positions in certain countries.
They really could prevent it from happening through branding/psychological manipulation - allow sideloading and put it behind many warnings/hide it similarly to android’s dev menu with 7 clicks on God knows what.
Governments no longer have a teeth, pro-users will be happy, and for apple everything will remain the same as even the pro-user will continue to use the AppStore for nigh everything.
Something like this would certainly release a lot of regulatory tension. I suppose they've run the numbers and concluded that a significant chunk of their subscriber base would be willing to jump through said hoops for cheaper services and apps.
I don’t know, I think youtube vanced would be the most common target, which would only cut into google’s profit. For the ~1 dollar apps, people would rather buy it and other subscription-based programs would also continue to be purchased through apple I believe, decreasing their immediate profits only by a small margin, but potentially making it last for much longer. But of course I don’t know all the details they do.
> A 30% cut for small developers makes a certain amount of sense.
These are the developers you want to support the most in the hope that they don't die before they become bigger and generate more revenue for you. They also don't generate that much revenue for you right now, so overcharging them isn't nearly as profitable as overcharging the big players.
And overcharging the little guy but not the big guy is bad PR. There are a lot of them and they'll spend their lives complaining to anyone who will listen that you're destroying their business and making it impossible to compete against "volume discount" conglomerates.
> Apple instead should've offered volume discounts for "Partners", scaling down to 10% or even less.
So then they lose most of the money anyway because the "volume discounts" go to the people with the most revenue. Might as well lower the price for everyone.
> You, as a smaller publisher paying 30%, are paying for that.
It's been 15% for over a year now[1]. Plus it's 15% for all subscription fees after one year for all developers. I think they actually forced Google to reduce developer fees to remain competitive.
It's hilarious that in an antitrust case, you would suggest charging 30% for everyone but 10% for some self-selected group through separate "partnership" contracts.
It is not funny, it is a sad reflection on how incentives on corporate litigation work.
(And in case you missed it, he didn't suggest it as the best moral/legal outcome, but as a better strategy for Apple Inc to continue abusing their monopoly unchallenged).
I'd sign up for Steam on iOS immediately. I'd also sign up for the Epic store for free games. If Nintendo had a store I'd sign up for that too. I don't think I'm alone
This should have been the case from the beginning, but I think maybe Apple thought that the app store was always going to be many indie devs and maybe a few slightly more organized outfits making some millions. I don't think they ever envisioned a day where billion dollar companies would have material stakes in the app store
A 30% cut for small developers makes a certain amount of sense. It enables a lot of developers who would otherwise be unable to get a payment pipeline (or at least easily get one) to have a revenue model on the App Store. But it makes absolutely no sense to big publishers like Epic, Apple, Netflix or Amazon, who all have their own payment processors already.
A 30% cut on billions a year in revenue is a big incentive for challenging Apple's payments monopoly.
Apple instead should've offered volume discounts for "Partners", scaling down to 10% or even less. Being a Partner means abiding by certain contractual conditions. Challenging Partnership terms ends your sweetheart volume deal. This simply changes the math from:
- Win: Pay less than 30%
- Lose: Keep paying 30% (ie no loss). To anyone who thinks the likes of Amazon would be kicked off the App Store, you're crazy.
to:
- Win: Pay less than 10% (so the upside is smaller)
- Lose: Have to pay 30% instead of 10% (huge downside).
The truth is that Apple uses that 30% as a slush fund. it makes it's way back to bigger publishers in backroom deals ("incentives"). You, as a smaller publisher paying 30%, are paying for that.
Unfortunately I believe short-term greed got a hold of Apple management. When it was 30% of a new, much smaller market it made more sense. There are costs involved in running the App Store, vetting apps, hosting apps, etc. But 30% now? It's become a huge profit center.
So Apple may well lose control over payments because they're trying to hold on too tight to that cash cow.
Personally I don't think users want or would benefit from alternative App Stores. But being able to buy digital goods on Amazon like I can with physical goods (which was another carved-out exception) with my Amazon payment information? That's entirely reasonable and I think Apple is making it inevitable.
[1]: https://news.ycombinator.com/item?id=28485655