Apple 27% royalty

[Cmaier]

So now we know that when Apple allows third party payment processing in apps, it will reduce its cut from 30% to 27%. This has sparked outrage from certain prominent developers on twitter, who shall remain unnamed.

What I find funny is that the same people who complained that “other payment processors only charged a few percent” are now upset that when Apple doesn’t do your payment processing, they only reduce their fees by that same few percent.

What these developers really wanted this whole time is for Apple to give them development tools, SDKs, a giant money-paying customer base, and ecosystem that encourages people to be willing to buy stuff, etc., for a pittance.

And I say that as someone who made a lot of money on the App Store and was one of the first 400 developers there.

 

[Nycturne]

I’m not surprised by this at all. Part of the development tools include services that are important once you start prepping to ship on the store: Crash reporting, energy reporting, app review, test flight. Apple clearly thinks this all adds value and charges for them, and continues to invest in better integration/etc.

That said, there are developers that honestly don’t even know about half the stuff Apple provides because they already built their own crash reporting system and the like. Or they might be web engineers building RN/Electron apps and don’t know just how rich the rest of the ecosystem actually is compared to what they are used to (i.e what they are giving up by being RN/Electron). And since Apple does require a paid account to submit anything to the store at all, I suspect many think that is what pays for the SDKs. So I can kinda get how some developers think the 30% is pure rent seeking from being the only way to deliver native apps on the platform.

Not that I fully agree with it. What Apple provides is valuable for solo endeavors and small teams just getting started. And I kinda like the idea that larger teams can‘t just integrate or deal their way out of the 30%. While I don’t always agree with the rules, I’m somewhat comforted by the fact that not even Adobe or Microsoft is exempt.

 

[Cmaier]

What you hear over and over again is that “payment processor X only charges me 3%, so that must be what payment processing is worth.” Apple’s position all along has been that the 30% includes a lot more than that, which is a position that Judge Gonzalez-Rogers agreed with. So nobody should be surprised when the price of admission drops by only 3% when you supply your own payment processor.

Apple still has to do app review, provide sdks, research new technologies including hardware to support new sdks, maintain the App Store including editorial, build and document developer tools, provide WWDC and other resources, advertise to bring customers to the App Store, etc. etc. All of this results in a large customer base with sufficient free income and trust to actually pay for apps, something that doesn’t exist on other ecosystems.

Nobody should be surprised by the 27% figure. And developers who think this is pure rent-seeking should shut up, band together, and try building their own ecosystem where they can sell whatever they want for free, and see how that works out for them.

 

[tobefirst]

I was thoroughly unsurprised by Apple's move to 27%. Such an Apple thing to do. I know that they still have work to do and that it should involve some cut of revenue, but 27% is too high, especially in markets in which they themselves compete.

 

[Cmaier]

I was thoroughly unsurprised by Apple's move to 27%. Such an Apple thing to do. I know that they still have work to do and that it should involve some cut of revenue, but 27% is too high, especially in markets in which they themselves compete.

Nobody is stopping folks in those markets from investing the billions of dollars that it took Apple to create this ecosystem in order to make their own.

 

[tobefirst]

Nobody is stopping folks in those markets from investing the billions of dollars that it took Apple to create this ecosystem in order to make their own.

I read that the first time you wrote it, thanks.

Apple believes their success is always 100% about what they do and 0% about what developers and others contribute to their platform. The truth is, Apple owes some of the success of the iPhone to the developers of the apps on its platform...but you don't see them handing out 27% of iPhone revenue to developers, do you?

 

[MEJHarrison]

I'm torn. The developer in me thinks Apple has done a fantastic job building a money making machine and they deserve every cent they get. As has been mentioned before, if someone disagrees with that, there are other options open to them. The consumer in me loves their products.

On the flip side I'm seeing a company worth nearly $3 trillion dollars. The government isn't printing them new money to sock away. That's wealth that has been transferred from individuals to corporations. And it seems to be in no danger of ever flowing in the other direction. That feels kind of unsustainable. Like in 50 years, the corporations, along with a few lucky Bill Gates types, will hold the entirety of our wealth.

With that said, the 27% number, along with the accompanying outrage, is quite amusing. In some way it's like taking your car to the shop, along with new parts you purchased yourself, then expecting those new parts to be installed for free since you didn't purchase those parts through their shop.