They might have a point when it comes upfront sales of apps and games. Steam also charges 30%, and the Xbox, Playstation and Nintendo Switch stores also charge similar if not higher premiums, as does other comparable app stores.
Where it get’s ugly is when Apple wants a cut of everything that happens after the sale of the app, too, like wanting a cut when I buy a new book in the Kindle app (and Amazon refusing, instead making it impossible to buy books in the app).
Steam charges 20% to games that sell over $50 million, and 25% over $10 million. Even though those games tend to be bigger and use more bandwidth, they were running into the problem that some of those companies were managing to get bargaining power (Valve announced the change around two days before the launch of the Epic Games store with a 12% cut). Bandwidth isn't actually much of a significant cost.
Yeah % cuts for products sold in stores is nothing new or unreasonable. But once the user has the app on their device, the "store" is now the app and there should be no cut of fees for things sold inside the apps own store.
With software can't you just hack this by selling a free "Epic Store app" and allowing all games and software to be purchased there.
If the "store" is now the app then how does Steam get their cut? Do they just disallow any product that has a "store" inside of it? What constitutes a "store"?
This is the hard question. Apple has already reduced subscription cut to 15% after 1 year, but do they deserve even that?
This isn't bad. There _should_ be able to be an Epic Store app which sells products without the Apple cut. Since Epic has done all of the work setting up the store and processing payments.
Steam gets their cut by developers listing their games there directly. Epic already has a store app and yet Valve still makes money because the steam store and ecosystem provide value that justifies the cost even when alternatives exist.
IMO what cut Apple deserves is the wrong question. A democratic society can in principle decide that the public would be better served if Apple had to allow alternative app stores, and enact legislation accordingly. Whether Apple deserves to establish itself as the sole gatekeeper and take a cut whenever they can manage isn't really a concern. I think using anthropomorphic language like "deserves" for a company isn't even conducive to thinking about this.
I'd ask this instead. Would it be beneficial for society as a whole if iOS had to allow alternative app stores?
Why should Apple be forced to include an app store on THEIR operating system? If they want to be the gatekeeper of all their software, it is on them as a private company to do so.
It is likely beneficial for society as a whole for iOS to allow alternative app stores, but that doesn't make it right for the government to force them to do so.
If the citizens of a particular country want to force Apple to allow alternative app stores, they can. It's their country. Apple can ignore their market if they don't like the rules.
What makes it fair is not that that other companies as you list have similar practices.
What makes it fair is that Apple is a private company, entitled to these kind of business decisions. As such, free market forces should then determine if the true cost of distribution (which is basically what App store provides) is more or less than what Apple charges for it. It does seem that this is still one of the most efficient ways to distribute an app to the end user, as witnessed by the sheer number of developers (silent majority) willing to take the 30% cut vs a loud minority (usually big companies on their own) that isn't.
Is this a joke? Of course it's the 'most efficient' way to distribute an app on iOS - it's literally the only one. 30% wasn't determined by market forces, because it's a monopoly and there is no competition. Your only other choice is to forsake >50% of total smartphone users.
I was not talking about distributing the app on iOS, but distributing an app. If you want to leverage iOS to distribute your app, then 30% is the price for that distribution and vast majority of developers accept it as a good deal as witnessed by enormous volume.
No, volume does not indicate that something is a 'good deal'. When market failure occurs (e.g. due to lacking competition), prices are distorted. How much this impacts volume depends on elasticity. A good with relatively inelastic demand will have high volume whether there is a good deal or not.
And you can frame it however you want, the price for iOS distribution is not determined by market forces because there is no competition for it. Distributing an application on android is not an alternative, but complimentary. It's like if there were two delivery services in the US, each covering one part of the country. It doesn't matter that there isn't only one delivery service, both of them still have a monopoly because they're not competing in regards to what they actually sell.
But I argue there is no market failure here. You can distribute the app via web or Android. iOS just one of the options that you are free to boycott if you find the fee unreasonable. The fact that vast number of developers don't (although they have a choice) proves my case.
> the price for iOS distribution is not determined by market forces because there is no competition for it.
Perhaps you misunderstood. The price for iOS distribution is determined by Apple; whether that price is a good value is determined by market forces. Again, it seems that it is indeed a great deal, because vast (and silent majority) of developers accept it.
> It's like if there were two delivery services in the US, each covering one part of the country.
But it is not. You can reach your user via Web or if they are mobile via Android or Windows phone. Apple can not be blamed if your user prefers to use iPhone (despite it being most expensive) and now you have 30% cost of distribution to reach them. That is exactly type of an outcome a free market would produce. The freedom here is expressed in your user's ability to pick their mobile device and by no stretch of imagination Apple has a monopoly there.
>The price for iOS distribution is determined by Apple; whether that price is a good value is determined by market forces. Again, it seems that it is indeed a great deal, because vast (and silent majority) of developers accept it.
The famous monopoly cases (e.g. Standard oil or Bell system) also had tons of customers, that's what happens when demand is rather inelastic. If you want to say that artificially inflated prices due to e.g. a monopoly can still be a good deal because people are still willing to buy it, then we shouldn't be content with just good deals because they still cause harm to society overall by not being pareto efficient. Apple can't charge the rate they do purely by the strength of their distribution service - it's the device base that is the real value and only by anti-competitive measures can they keep the price up.
>But it is not. You can reach your user via Web or if they are mobile via Android or Windows phone.
What if Apple also decided that every transaction made through their browser had to give them a cut? The situation doesn't fundamentally change (you could still just offer your app to android/desktop users), but I think it's pretty clear that this would be anti-competitive. They might not have a monopoly on smartphones/devices, but they have such a large share that boycotting them isn't really an option.
Users are also currently funneled into apps due to how web is limited in functionality as determined by Apple. e.g. if your app needs long term local storage you now need an 'real' app because Apple changed it so that web app local storage gets cleared on the regular. Windows phone has also been dead for years now.
> If you want to say that artificially inflated prices due to e.g. a monopoly
Perhaps you misread, but I am saying opposite of both. I am saying that both Apple's prices are not high, proven by number of people agreeing to pay them in a market where other options to distribute an app exist, and that Apple does not have a monopoly.
> What if Apple also decided that every transaction made through their browser had to give them a cut... but I think it's pretty clear that this would be anti-competitive.
It is not pretty clear? There are plenty other options on the market in terms of a browser.
> They might not have a monopoly on smartphones/devices, but they have such a large share that boycotting them isn't really an option.
At least we can agree that Apple does not have a monopoly. Everything else is market forces at play. My argument was that the price set by Apple for distribution is such that it is acceptable to majority of developers. If Apple set an unreasonable price instead, say 70% cut, I am sure that a lot of developers would simply not develop for iOS, nor would iOS achieve same reach it has. Thus we can only conclude that Apple carefully picked a price which is both acceptable by vast number of people and maximizes Apple's revenue at the same time. This is free market at its finest.
This isn't a free market. A free market would be that the user purchases the device and that they are free to do whatever they want with what they own, including installing third party stores.
Whether Apple is a monopoly that is still to be determined and entirely different discussion. If it is it would have much bigger problems that the one discussed here.
This discussion is about where Apple as a private company has a right to charge 30% for the distribution on its platform and I argue that it has every right to do so.
Where it get’s ugly is when Apple wants a cut of everything that happens after the sale of the app, too, like wanting a cut when I buy a new book in the Kindle app (and Amazon refusing, instead making it impossible to buy books in the app).