This is not the time to be strengthening the rules. You've got the Digital Markets Act already entering force in Europe which is going to most likely break App Store dominance over there in just a year or two. The US has senators eyeing the Open App Markets Act again after Elon's threat (and if it doesn't pass now, when senators see an open Europe and a closed US, what about then?). You've got antitrust investigations opened in the UK. This is time to be giving concessions hoping to keep power - not doubling down!
Edit: If Apple's claims about it being "privacy and security" are true, here's how to keep power. Drop the 30% cut, make a $25-$50 fee every time a new version comes out for a quality app review from a 3rd party independent board, drop some of the more onerous restrictions, and maybe then regulators would be willing to allow the App Store to remain. Instead...
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.
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?
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.
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:
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.
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.
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.
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.
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
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.
This seems like a consistent application of existing in-app purchase rules: purchasing a digital good to enjoy within the app requires IAP support for everyone else, so why not Coinbase? It's not clear (to me) that Apple is doubling down or strengthening the rules here.
If anything, I suspect that Coinbase intentionally violated the rules with this update so that it can sign on with Epic and Twitter in the fight against Apple.
So online banking apps should be charged 30% of forex transactions as well, right? Either way the whole comission thing is plain stupid. Maybe paying for app review & download but why for transactions?
But Stocks and Currencies aren't technically a digital good, they are partial ownership of a company or a hard currency. A NFT is exactly the definition of a digital only good, seeing as how a large number of NFT use-cases are to replace / make portable in-app goods sold in online games / mobile apps, which all currently require IAP fees to purchase on mobile. So this is just Apple applying the same rules to NFTs that apply to purchasing items in mobile games.
Apple was never going to allow the blockchain to remove their 30% cut on these purely digital items, as much as crypto folks preached that the blockchain would remove us from the shackles of App Store IAP payments.
forex transaction fees, which is different from forex transaction value.
yeah arguably if apple wanted to say "you're doing a forex trade in app, TD Ameritrade makes $10 in fees on that $20k transaction, we deserve $3 of that, and it needs to be paid via our IAP scheme" that's a consistent application of their rules at least.
again though, coinbase's PR department is doing what PR departments do, they've got you talking like coinbase would be charged 30% of the whole transaction and that's not actually what Apple is saying here... just like it turns out Qualcomm may not have been entirely honest about ARM's licensing changes and many of the specifics of EVGA's complaints are highly misleading or specific to their (atypical) business model, despite a generally-correct thrust.
Like, kinda funny that grown-ass adults don't understand that a literal PR department might not always be presenting the situation entirely fairly... and this is a business community we're discussing that in, no less. You need to apply critical thinking about why someone might be saying things now, and why they're saying them in that particular way... they're happy to lead you into a wrongful conclusion even if they themselves haven't said anything technically wrong: that is the conclusion they intended for you to draw and you consumed the information uncritically and you did draw that conclusion. They walked you right down the garden path there, give that PR guy a raise.
Just like Sony can argue for app-store openness on Apple's platforms but argue they shouldn't have to open their own platform to competitors too... they want to keep their 30% cut but force their competitors to give up theirs. And no, consoles are not sold at a loss anymore, PS5 hit hardware profitability around 6 months after launch...
For anyone who understands how NFTs and blockchains work, this is clearly not possible. Apple’s proprietary In-App Purchase system does not support crypto so we couldn’t comply even if we tried.
This is akin to Apple trying to take a cut of fees for every email that gets sent over open Internet protocols.
Since Apple's App Store is the only practical way to distribute apps on Apple devices, there isn't really a difference. The fact is that the owner of an apple devices has no control over their device.
I don't think that's a reasonable interpretation of the current rules, though. Apple doesn't (yet...) demand a 30% cut when you buy stocks via an app on your iphone.
This doesn't make sense because we can buy and sell crypto from Coinbase, Uphold, even Cash app right from our phones. We buy crypto and send crypto, and that has its own fees associated with it. Why does apple allow any app that support buying and selling crypto?
> And I think there’s no law or regulation that would forbid them from doing that.
They're lucky that the US has the particular form of "democracy" that they do, because I suspect the current regulations aren't exactly "the will of the people".
I read their thread before my comment because the title on this submission was pretty inflammatory. Their tendentious argument is exactly what made me think this was a trial balloon.
so what gives? I think someone is lying here. Maybe even bad enough someone could get fired if this doesn't get turned around. And if that's the case, it seems plausible to me that someone looked at 30% of "their" revenue going to Apple and just said fuck it.
Coinbase is facilitating purchasing between third parties. Do you have to pay 30% Apple tax when purchasing things in the e-bay app on an iPhone? (I honestly don't know, but these seem equivalent to me)
“Digital” goods is the differentiator. ebay, amazon and the like can sell physical goods without giving a cut. It is why you can’t buy kindle books in the amazon app, they would have to give apple a cut.
When you buy an NFT using the Coinbase wallet, you aren't buying it from Coinbase, you're buying it from some other random person. The Coinbase wallet is only being used to facilitate a person-to-person transaction, and view personal NFT collections.
It has been claimed elsewhere that coinbase charges transaction fees for these, i don’t know if that is true or not but if it is it does not seem to be an inconsistent application of the rules. It would be the same as buying a kindle edition from an independent publisher through amazon’s iOS app, amazon takes a cut so they have to pay up. I am not defending the policy just not clear to me this is an inconsistent application.
They would still take a cut. If the transaction is still happening in the Coinbase app then it is an in-app payment. It is still the transaction of a digital good.
It would be 30% of the ebay fee, I suppose. That would be wild though. Would banks be paying 30% of their account fees that are related to actions taken on the iphone?
Should apple also take 30% of every Venmo transaction I make? If I use my iphone to do a check deposit to my bank account, should apple take 30% of that?
> This seems like a consistent application of existing in-app purchase rules…
Exactly, the dumb/risky thing to do would be to make a special exception for Coinbase. This is no different from a consumer buying Robux to spend on a 3rd-party game.
This would only be comparable if Coinbase sold BaseBux through the app or something, which gave access to features within the app.
This is more like your stock broker app letting you buy a stock, although "cryptocurrencies aren't securities, they're speculative assets". So maybe more like buying art via an app.
It would be the silliest legal move to make any concessions until forced to by a court. If they indicate that they don't need that full 30% in enough different contexts, it will lend credence to a larger argument against 30% at all.
Disagree with it or not, were I Apple Legal, I would never in a million years allow a concession without a fight.
Microsoft is preemptively cooperating, and will likely not be forced to create a separate OS for the eu. Apple will be forced to create a EU specific one, one which not just lets people install other Appstore's, but which will ask the user if they want the google Appstore or a free one, or the apple one, the first time you start it.
Knowing when to lose is quite valuable. Microsoft learned that the hard way last time.
I mean, just make it 30%, or whatever, of stuff that uses their in-built app store payment. If you don't want to use their payment infra, you don't pay and you make whatever arrangements with the user both parties agree to. It forces them to justify their cut other as more than just rent-seeking. Netflix doesn't need any help getting a CC number. Or delivering apps, frankly. Apple inserts themselves as a middleman in that capacity for their benefit and theirs alone.
Neither the Open Markets Act or the Digital Markets Act will do anything about Apple's commission. You can have alternative app stores, sideloading, whatever. It doesn't change anything about using Apple's intellectual property and having to pay for it. All it will do is make the products worse for users. But developers aren't going to get the outcome they want, which is to ride the rails for free.
How is me making an app that makes API calls to iOS an "use of Apple's intellectual property"? I'm not distributing any IP besides my own, all I'm doing is telling the API to execute in a certain way inside the hardware the user already posseses.
A good analogy would be me making a new control panel for a mechanical machine, where the panel has metal arms and rods that connect to the machine's original mechanisms to bring about a certain result that the machine itself would be incapable of bringing on its own.
You wouldn't say I can't distribute that new panel I made because the original machine is patented, right?
Right - but those pushing for external app stores assume it will work that way. Instead... Apple's probably going to make some forms and demand manual reporting and commission payments.
However, it would be so contrary to the spirit, if not the letter, of the law that I expect any such attempts would quickly gain antitrust scrutiny and new legislation declaring that APIs and software included in a device may only be monetized at point-of-sale (with the exception of subscription plans marketed toward consumers). It is possible that a court would even see it as such a violation of the law's intended effect that they would step in.
No government is going to expropriate Apple's intellectual property just to move some money from Apple to developers. It also wouldn't get passed courts.
The whole point of the DMA EU regulations is that one should be able to make and distribute an iOS app without entering into a contractual relationship with Apple at all
As much as I believe companies can decide for themselves whatever they want to do within the law, this seems incredibly stupid. They're pushing the limits of their customer base, even the Apple fanatics..
At this point apple is just in denial. The eu alone will force them to make every user pick the default appstore on first install from alternatives including both something free and google, and probably samsung, and force them to provide easy to use api for everyone else.
Its hilarious to see the difference between apple, google and microsofts reactions. Two of them went we will fight tooth and nail, microsoft who tried that last time instantly went we are dropping the fees instantly, unless you want more? and will work with regulators to make open access ...
But they can't even take here. Obviously coin base can't give them 30% revenue even if they were willing to. That would be like asking for a 30% cut for deposits from the bank apps. This just seems like spite for the new rules.
Apple is asking for 30% of fees charged, not amounts exchanged. It’s like if a bank app charged you $1 to deposit $100; Apple would want $0.30, not $30.
Still debatable and I’ve got no sympathy for Apple, but this kind of OMG they want to take 30% of all cash flows response is exactly the misleading PR people are trying to gin up.
EDIT: here is what Coinbase themselves say:
Apple’s claim is that the gas fees required to send NFTs need to be paid through their In-App Purchase system
Coinbase isn't actually taking any cut of the transaction. The gas fee goes directly to the blockchain network itself. That fee varies depending on the total number of transactions, so as far as I understand it's actually not possible to have it go through Apple's in-app purchase system.
I'm not supporting Coinbase here, though, and I wouldn't be mad if this policy were actually just a tacit way to ban cryptocurrency transactions in the App Store. But your analogy doesn't fit.
Coinbase absolutely take fees that are unrelated to network fees. When you buy $COIN from Coinbase you don't touch the network at all they just note in their database that you bought 0.5 of $COIN for $10 total, $2 which was their fee. It doesn't hit the network till you withdraw it. This is the fee Apple is talking about.
No, it's not — Coinbase Wallet is their non-custodial wallet, meaning you actually get a real address on the blockchain rather than just a row in their database. https://www.coinbase.com/wallet
I don't think in banking apps you're purchasing anything while using the app (in-app purchases). If you buy an NFT in an app, you are purchasing it in the app, no?
No, you're purchasing it but it's not in the app. And you can absolutely pay bills in a lot of banking apps, or even use zelle to buy things in a store. The whole point of the nft is that you can trade it outside of the app. If I buy a physical limited edition poster on etsy does Apple get 30% of that sale?
> 3.1.3(e) Goods and Services Outside of the App: If your app enables people to purchase physical goods or services that will be consumed outside of the app, you must use purchase methods other than in-app purchase to collect those payments, such as Apple Pay or traditional credit card entry.
There is nothing wrong with them. They're maximizing profits. They will get away with it, they are so big. (The biggest?)
People will still support them, as long they can have the fastest phones/laptops. I started on a mac clone in the mid 90s (they almost went under), but I finally moved away last year, though I still have an iphone. The Linux desktop works great for developing.
Its a societal and network effect problem. This isn't new. We've been warned. We've chosen to ignore.
Apple is about 6.5% of holdings in SPY. It's economic suicide to hit them hard and they know it. Especially with impending recession and a heavy bear year.
This is not the time to be strengthening the rules. You've got the Digital Markets Act already entering force in Europe which is going to most likely break App Store dominance over there in just a year or two. The US has senators eyeing the Open App Markets Act again after Elon's threat (and if it doesn't pass now, when senators see an open Europe and a closed US, what about then?). You've got antitrust investigations opened in the UK. This is time to be giving concessions hoping to keep power - not doubling down!
Edit: If Apple's claims about it being "privacy and security" are true, here's how to keep power. Drop the 30% cut, make a $25-$50 fee every time a new version comes out for a quality app review from a 3rd party independent board, drop some of the more onerous restrictions, and maybe then regulators would be willing to allow the App Store to remain. Instead...