> 2,000,000 installs is a minimum of $45k in fees, even with $0 USD revenue
> this seems obscene
This is why I never cared about the 30% take: it was combining all the costs you'd have anyway into one simple number. People just acted like those things were all free just because Apple wasn't explicitly listing them.
Could you optimise your expenses better by splitting them?
Probably.
And that may even be worth forcing the issue from a competitive PoV, because it means some customers will be effectively subsidising others: A weekly updated 2 gigabyte app that's free in the app store gets its bandwidth paid for in part by a 30 Mb app that charges a $10 monthly subscription and gets an update every 3 months.
But even then, companies are expected to make profits. What's the level where it's fine for Apple to say "we want this much extra just for us"? For a lot of people the answer seems to be "zero!" — while this probably would not disincentivise Apple from making iOS given they also profit on the hardware, it would almost certainly disincentivise Google from bothering with any updates to Android.
I don’t see why smartphones inherently have to be a special case of computer where the manufacturer or OS developer gets to keep their finger in the pie after the sale. I can install any software I want on my desktop or laptop, and nobody gets a cut of it unless both the seller and I freely choose to use an app store.
>I don’t see why smartphones inherently have to be a special case of computer where the manufacturer or OS developer gets to keep their finger in the pie after the sale.
In a pure technical sense, you're right, a mobile phone's computer doesn't have to be locked down such that the manufacturer like Apple controls the subsequent financial transactions on it.
Instead of technical reasons, what happened was Apple taking advantage of historical control of cellphones by the carriers that was in place before Apple flipped the relationship around in 2007:
- (1) before 2007, the cell carriers like AT&T and Verizon controlled what kind of software could be on the Palm Treo, Blackberry, Motorola, etc.
- (2) Apple showed an iPhone prototype to Cingular/AT&T that impressed them so much that they were willing to give up software platform control to Apple. This was the first time a phone manufacturer had the leverage to do this.
Cingular was lagging behind Verizon so that's why Cingular was willing to play ball and relinquish control.
- (3) after 2007, Apple now controls the phone's software ecosystem with their App Store restrictions and it's a power they want to keep. In their mind, they feel justified since they are the ones who spent money on developing the phone and they're allowing more "freedom" of 3rd-party software than the carriers did.
Apple's perspective is that its smartphones are not "open" computers like the IBM PC and Macbooks. Instead, it's the "closed" computers like the Sony PlayStation.
Another "closed" computer is the AMD Ryzen + Linux system in Tesla's infotainment system. There is no "Tesla app store" for it. Instead, a 3rd-party app like Spotify has to forge a formal contractual partnership with Tesla to get integrated into the car's software. Some stories about that: https://www.google.com/search?q=spotify+signs+partnership+wi...
Likewise, is there any technical reason why Tesla can't let you sideload any app on the car? No. But Tesla doesn't let you.
I had a Palm Centro back in those days; you could install anything you wanted on it, and as far as I know the WinMo devices were the same. The situation you describe was the case for "dumbphones" or "feature phones", but Apple is the one who extended it to smartphones.
Of course, Apple are also the ones who extended smartphones to a mass-market product, as before then devices like the Centro were very niche.
While there were certainly closed phons prior to iPhone, there were also open platforms like Windows Mobile. You could run whatever app you wanted to on Windows Mobile.
The relationship between phone manufacturers, OS providers, and careers was pretty complex that nearly every combination of openness and restrictiveness was part of the market before 2007.
But if it was a smartphone then it allowed third party apps to be installed without restriction. However, the OS itself might have been heavily controlled and/or modified by the carrier. It was common that say, Microsoft, would release an OS update and then that OS update goes to the carrier for testing and modification and then sometime later you get it. Apple, of course, was not interested in participating in that system.
Part of the early success of Android was that being an open platform meant that carriers retained a huge amount of control and they would release heavily customized carrier-specific phones.
> it's the "closed" computers like the Sony PlayStation.
PlayStation is seen by most people as an appliance for playing video games. Phones, on the other hand, are explicitly general-purpose computers. The iPhone is literally the only case of a "closed" general-purpose computer in this entire universe.
> Likewise, is there any technical reason why Tesla can't let you sideload any app on the car? No. But Tesla doesn't let you.
Cars are effectively bullets, they can kill people, so you can't just install anything in a car. I'm sure there's plenty of laws requiring Tesla and other car manufacturers to lock down car software.
(Just like there are laws requiring phone manufacturers to lock down phones - you can't just install an app that lets you override the GSM protocol and mess with the spectrum, not even on Android!)
Well, if you have a desktop/notebook with any kind of wi-fi chip you also cant override the protocol as not to mess with the spectrum, but you still get free reign over the rest of the machine.
All that to say that if things are properly compartmentalized there is no danger in letting the user install any software he desires.
This is a really nice well-researched take that rhymes with a lot of stuff I used to read back around 2007-2009.
But it's 2024.
I grew up on the App Store, maybe I'm just old and cranky at 35. But my guess is 95% of people cry in pain when they see a wall of text about how Verizon charged for J2ME apps in 2004, therefore iPhones iPads Apple Watches Vision Pros are special exemptions and Apple should be able to bill "$0.50 per install per year." whenever a binary is installed on a device you paid for. There's 0 reason for it.
Indeed this is something that has bothered me for 20 years, though significantly more so as phones have come to resemble general purpose computers more than just phones. Back then, I explicitly bought a Cingular phone instead of Verizon, because it ran a stock flavor of the Motorola OS, rather than the custom whatever that Verizon models shipped with which didn't let you install mp3 ringtones or j2me games.
Arguably the Steam Deck is a video game console with that open model. It gets fuzzy though because an open video game console looks like a general purpose computer.
Samsung phones come with a Samsung store in addition to Google Play for instance. All of Samsungs software go through their own store, and they also sell apps on it.
So instead of "opening up" the iPhone if customers really care about the multiple app stores feature they could buy the phone with that feature correct?
It's not really any different in my mind than phones with more battery life, a better camera, or any other product mix.
In general I agree with you, I don't want my phone to be a general purpose computer.
But the situation here is that there is now an actual law mandating that no, you're not to allowed host an app store on your phone OS without allowing alternative app stores.
For an exaggerated analogy, you can't make a car without seatbelts and tell consumers that if they value safety they should purchase a different brand of car.
>>I don't want my phone to be a general purpose computer.
Too late. It already is. Which makes all these restrictions on what you can and can't do with it stupid especially if its gonna sell for an amount of money nearly equal to reasonably spec'ed laptop.
Every single child who plays Fortnite in Android does it. You can't install Fortnite through the Play Store anymore after the payment processing lawsuit stuff.
> The problem is no one has made a smartphone with that open model.
Android is fully open. No one is making you use Google services. You can, in fact, buy a Pixel and simply uninstall the Play Store. As a developer, you can distribute your app without any Google involvement whatsoever.
Well, it's important to make the distinction between the Play Store and Google Services (the software). Plenty of things _depend_ on Google Services, some of them you have no option, like bank apps.
It's true however that you can use microG to replace Google Services, but even then some banks will block your account upon doing that (happened to me).
Granted, this really is a completely different point to what you were discussing, and I do agree with you. But, if we want truly open ecosystems, we need standards that ensure the authenticity of the user. Unfortunately, that gets distopian fast.
There's also Ubuntu Touch which I hope gathers steam. I installed it on an old Pixel 3a I had lying around mostly for fun, in much the same way I did for GalliumOS install on an old HP Chromebook.
That you then can't really do anything with either because of the super limited HW support (due to only using "free" drivers) or because they're so slow you just give up in frustration. Or lack of apps.
At least in the case of the Librem 5 its wildly overpriced for what you actually get (if you ever actually get it that is).
How is the limited hardware support connected to the free drivers? You can install Mobian, postmarketOS on a Librem 5 already. Pinephone is supported by 15+ operating systems.
If you think the hardware is slow, have a look at SXMo.
> if you ever actually get it that is
They've been delivering the phones within 10 days since a long tome already. Sent from my Librem 5.
I own an HP laptop. Why should HP get any money from what I do on my laptop and the software I install on it? I already paid them. Their product is the laptop.
Let's suppose that I still use Windows, which was installed on that laptop. I'm using Debian instead, but let's forget about it. Anyway, HP probably paid Microsoft for the OS. That's all that should be. I don't see any reason for me to pay Microsoft.
Now, let's suppose that both HP and Microsoft switch to a subscription model where the laptop costs some xx Euro per month and for the OS. Then it's different, I would think if I want to enter into that relationship and if I do then I would be OK for them "to keep their finger in the pie".
I won't use Windows anyway and I probably won't buy a subscription based computer. On the other side that would make me upgrade more often. It's more or less what some people do when selling their Mac to buy a new one. Sometimes the new one is not that good though.
The vast majority of consumers prefer and benefit from aspects of this control. Despite all the horror stories (both fp and fn) they keep the App Store much safer then mass direct installs would be.
Okay, and they can keep that control while some minority choose to host elsewhere. Androids Play store (pending some anti-trust issues, ironically) still has the majority of apps there and it'd be doubtful that any android alternative store can steal that mindshare away.
> Androids Play store (pending some anti-trust issues, ironically) still has the majority of apps there and it'd be doubtful that any android alternative store can steal that mindshare away.
If so, why did Google feel the need to bribe developers to keep their apps on the Play store?
I did mention that part briefly. And I am still a bit confused about the decision as well given some of the subjects that suppressed.
I guess 2010's Google didn't want any trace of a popular gaming store to take over, given that we now know F2P mobile games are 70% of the app store revenue (and I'm sure it's similar to Google). If EA made the supposed Steam of Android and most games chose to focus on the EA store, that's a huge cut into Google revenue, even if most other apps would still be on the play store. So better not to risk it at all.
Well, not to put too fine a point on it, but the reality is that yes consumers do get some bit of benefit, but the real hole in the argument being made is that OS developers do make money off of us using our computers.
We all had to pay the licensing fee for the software. For many of us, a fee is paid yearly to the OS developer on our behalf. Just because the fee is not explicitly placed against our own debit/credit card balances doesn't mean a fee isn't being paid.
But even the fee argument misses the point. Myself and others are not asking that Apple not charge a fee. My feeling was that 30% on App revenue for example was too much. Given that the charges are now being itemized out in the open a bit better, do I still believe the fee was too high? I cautiously respond 'yes'. But I can now see where I might have been mistaken about what the amalgamation of the costs incurred to run this thing look like.
I guess all I really wanted was transparency. Let's get it all on the table and see what's what. Maybe 30% is a good deal? Maybe it's not? I don't know if you don't tell me everything that went into that. Consumers should be
informed, that's probably more what I believe now. I no longer believe we should change the model before we get a better idea of what the costs will be going forward. That could bankrupt a lot of small devs right now.
Perfectly valid, I feel that way about all subscription-based non-ownership — I want to buy a thing and have it and "they" can't take it away from me.
On the other hand, I'm old enough to remember when operating system upgrades were around 10% of the price of the original computer (for each upgrade, about once per year but not at all regular), and when I couldn't afford a compiler.
They’re not a special case, they’re just like game consoles which are similarly locked down. The PC is the special case and I think that’s an accident of history. If the PC were brand new today it would be a locked down, walled garden like all the rest.
The PC is “the one that got away” in fishing parlance.
I think the distinction in my head is that game consoles are explicitly single-purpose (or very limited-purpose), whereas smartphones are playing at being general purpose, but only insofar as their manufacturer approves of that purpose.
Personally I see the broader trend towards highly-restricted corporate-controlled hardware (of all types) as something explicitly detrimental that we should push back on wherever possible.
> I don’t see why smartphones inherently have to be a special case of computer where the manufacturer or OS developer gets to keep their finger in the pie after the sale.
You mean like consoles, set top boxes, and smart TVs?
Personal computers are the special case where you don’t have to pay the platform provider - there are far more phones+consoles+set top boxes than computers
As far as I know I can sideload apps onto my smart TV, and Sony isn't get a cut of my streaming subscriptions. Ultimately, though, those devices generally don't pretend to be general-purpose, whereas I think smartphones do, just with restrictions such that the manufacturer can keep a revenue stream going.
That’s not according to case law. Google got in trouble explicitly because they advertised their operating system as “open” and then changed the rules.
Apple was very explicit from day one and anyone who buys an iOS device knows exactly what they are going to get.
What costs that are rolled into Apple’s 30% are you saving on? Payment processing is let’s say 3% (including chargebacks). Delivering updates is just pushing bits, practically zero. What else are they doing?
If Apple features you, then I guess it’s pretty fair to say you’ve paid a marketing expense, but they feature a tiny percent of apps. Most of us get nothing but buried in the app store.
I'm not the person you responded to, but I'd also include stuff like developing the APIs developers use, Swift and SwiftUI, Xcode, developer docs, etc. Basically everything that Apple does that makes it possible for a developer to produce a high quality app on their phone. Apple has to pay for all that somehow, and that revenue has to come from somewhere. Product sales are one place, but it's a one time purchase and so there's even less incentive to support old phones. Charging per app install is a pretty easy way to do it, aligns the incentives decently well, and a cost to the developer proportional to how much users/benefit they get.
They could also just charge a large cost for access to the SDK a la console systems, or not actually track the downloads but have a license agreement where you pay based on your user base like other ecosystems (Unity?).
> Apple does that makes it possible for a developer to produce a high quality app on their phone
This is not one sided at all. Historically generally Apple benefited more from developers releasing apps on their platforms than the other way around. Arguably that's still the case.
> Apple has to pay for all that somehow
So by selling devices? How did they pay for developing OSX/macOS and their APIs and tools for decades?
> They could also just charge a large cost for access to the SDK a la console systems,
There are many exploitative and unfair things they could do because of their dominant positions in the market, yes that's correct.
1. Apple and Microsoft have both developed these things for 40 years without the fees and restrictions. They do it for the health of their ecosystem to sell devices/OSes.
2. The only reason there are two mobile OSes with significant marketshare (instead of more than two) is the app library. WinMo never took off because even though it was a wonderful OS, they couldn't get developers to make apps. It's hard to imagine now that any party, even one with practically infinite money like Amazon or Apple or Samsung, could develop a successful mobile OS because they'd be launching with two million fewer apps.
Chromebooks have been selling briskly with a relatively new OS because people no longer cared about apps on desktops when everything started working in a browser. This is the obvious attack vector for phones. If you can do everything in a browser you can do in an app, the door is open for another OS. That's why Apple doesn't want third-party browsers.
> Apple doesn't develop those SDKs and tools in order to make money selling them to developers; Apple develops that stuff in order to sell iPhones.
Nobody buys an iPhone because of the SDK.
Nobody… except perhaps developers.
Apple makes those things so that developers make more apps for their phones, which they want to support in order that people continue to buy new phones.
> Apple charges 30% simply because they can, and nobody has stopped them.
Yes.
And unless the government says "the thing we don't like is specifically the price", what you're going to get from demanding side-loading and other app stores is going to look like the same price charged in a more complex way that's distributed differently over all the developers.
This also means that it's likely some app providers will suddenly discover their costs go up.
As a consumer, I'm fine with however this shakes out: I spend almost nothing on apps anyway, and the selection is too large for me to care about the size and diversity within the marketplace.
As an iOS app developer, I have no idea how any of these options may or may not affect the demand for my skills on the job market, but I still don't care much because GenAI is a much bigger change than all of these options combined.
As an investor, I've been expecting Apple to hit the upper limit for corporation size before monopoly lawsuits 2 trillion dollars of market cap ago, which is one reason why I bought S&P 500 instead of APPL (the other being I'd like my income and my investments to avoid too many correlated failures).
To add to this historically Apple charged for OS updates. Windows still does. With iOS Apple switched their model to making the updates free and charging developers on the backend to monetize their software.
But most companies have some plan to monetize their software even if they also make money on the hardware.
Nothing quite says "high trust ecosystem" as when the people charging you 30% also make a buck on top from competitors putting their app in front of customers looking for your app by name.
> Building and supporting the SDKs that developers use to make money.
You're implying that this is a somehow onesides transaction and Apple is doing developers a favour while Apple always needed third party developers as much as developers need them (with iOS of course this balance changed a bit which allowed Apple to become a lot more exploitative than they were before/still are if we're talking about macOS)
Yes, and Epic charges a lot less for their support. We say how Unity was eviscerated for a much cheaper runtime fee, I can't imagine Apple gets away with triple the pricing.
Is it? Epic doesn't only provide and engine to make a game with. Online services, access to extremely high fidelity assets (meta human, Quixel megascans), photogrammetry. And of course it's working on its own store. All of these have a lower cut even if you don't negotiate.
The primary purpose of the 30% fee is not payment processing or delivering updates, it is the licensing fee for the use of Apple's intellectual property (SDKs and developer tools).
The primary purpose of the 30% is to get 30% of money. If apple could get away with 60 they would. Apple more than pays for the SDK development just with their cut of child casino apps they sell. Everything else is just free cash.
And? You can say the same about pretty much anyone that sells anything. Why does a restaurant charge $15 for a cocktail that costs them 50 cents to make?
Does Google charge a .50 per install fee for Android apps not installed via the Play Store? Does Microsoft charge a .50 per install fee for Windows apps not installed via the Windows Store? Apple is just making these charges up, because they think they can get away with it. It doesn't cover any real costs to Apple, above and beyond what you already pay for when you buy an Apple device.
I am wondering how the EU market will react. How many businesses in the EU have free apps that have more than 1 million users? Will businesses start charging for their apps in the EU just to recover the cost, or pull out entirely? Maybe more will offer fully featured websites and drive customers there instead. I don't know, but it seems like a stupid move on Apples part, a big game of chicken.
Is an app like eBay free in your definition? Because then you have Allegro, which is giant here in Poland. Apps from telcos. Public transit apps. InPost over here is quite big in deliveries. I think Alza in Czechia and Slovakia can easily have a couple million users.
Not very many businesses, but there are quite a few biiig ones.
Here on HN I often read startup stories about services which, on one hand, “nobody” has heard about, and which, on the other hand, “quickly grew to a couple million users and started having scalability problems”, which then spawns some story about scalability tricks. Always leaves me astonished as to how the heck some another glorified todo list/cat picture thing can rake millions of users so fast, but here we are.
I suspect there are way more niches in which tens of millions of users live, which the rest of us can just be ignorant of. It’s only when you approach a billion users that you can be sure “everyone” at least has heard the name of the service/app.
eBay is a great example for this case, yes. It would be very easy for ebay to stop distributing an iOS app in the EU, and instead push those users to using the ebay web app. Ebay could put more resources into making the webapp better, and avoid paying Apple a ridiculous annaul per installation charge.
But the thing is, the free apps can also just use the pre-existing distribution mechanisms. Of course, it's giving Apple the leverage to say, "see? No one* wants to use the alternative stores!", but also think that if you have an entire team with experience and established relationship of App Store review shenanigans, you just continue to use it.
It's more interesting about the upstart companies who might get big one day.
There a free apps that don't exist on iOS simply because Apple doesn't want them in their store. These apps are not necessarily malicious, but may contain content that Apple wishes to censor. If Apple continue to say what is and is not allowed on iOS, then nothing/not much is gained by this regulation.
Edit: Of course, eBay will likely continue to be allowed.
I wasn't aware that there was a choice for EU developers to use the new pricing model or the old one? If free apps can stick to the "30% of nothing" commission, yeah, I suppose most will do that.
As threeseed mentioned, most free apps esp. those without a per-install revenue source (e.g., Wikipedia) will likely not use the new model and stick with the old model which doesn't charge per app install
I suppose ultimately, the market is fragmenting and Apple is aiming to pull and set levels to encourage as many developers as possible to stick with the current system.
I suppose they're counting on the fact that inertia and laziness will encourage continued loyalty when it comes to non free apps.
Right I agree, the new model does seem quite punitive especially if you don't have an existing business model.
Imagine a new developer publishes a free app without a plan for monetization, and then it goes viral. They would be on the hook for thousands of dollars.
Unless they have a reason to switch most new apps will likely stick to the old model
> Does Google charge a .50 per install fee for Android apps not installed via the Play Store?
Give it about a month, and I'd guess so.
> Apple is just making these charges up, because they think they can get away with it.
Yes, with my non-existent MBA I assumed that's how most businesses set prices?
Business are not your friend, they're looking out for themselves only. This is why I do actually like governments: they can force businesses to be more aligned with public interests, even when that costs shareholders some dividends.
More fees can make them more money, but if they raise it too high developers will stop developing for the platform. It's up to Apple to decide on the right trade off where they make money and have a competitive platform to Android and Windows.
This applies similarly to many other businesses. There is a sweet spot for prices to maximize profit.
Let's see where they find their 30% if browsers were required to provide (essentially) 100% features of native apps, and if they were required not to charge for them.
Maybe iPhone costs would increase a few percent, probably not.
Fun fact: they already do. (Or at least Mozilla did, but given their massive engineering power it would be surprising if Google wasn't doing it as well).
From what I heard at a Mozilla meetup a few years ago, the only thing that prevented Mozilla to ship the actual Firefox to iOS back then was Apple ToS banning apps with their own JIT compiler built-in.
>A weekly updated 2 gigabyte app that's free in the app store gets its bandwidth paid for in part by a 30 Mb app that charges a $10 monthly subscription and gets an update every 3 months.
I've been wondering for a long time why there are no delta-updates at Apple...
I don’t think that’s true. People complain about tipping culture, which generally demands about 15-20%, sometimes less (e.g. for whatever reason, hotel housekeeping only gets a few dollars even if the room is $100 per night). If tipping 10% was the norm, you think there would barely be any complaining?
The buyer always wants the transaction to be more affordable and the seller always wants the transaction to be more profitable. The exact numbers don’t change that.
I think the thing that angers people is that the cost feels hidden, even if it’s common knowledge. You look at menu prices and see a price but tips, taxes, and credit card processing fees aren’t included. It can take you by surprise if you’re not thinking about it, even if you’ve been through the same dance many times before.
If I were running Apple, I would instead find a way to charge for developer accounts, code signing, etc. Things that are set up ahead of time and can have a known value, charged for upfront. I believe this would feel more fair, no matter the cost.
This is nonsense. Apple executives have repeatedly claimed that the 30% fee was a good deal compared to retail boxed software which they say was the norm in 2005 or so, but really there were large numbers of small independent software vendors making good money through specialised e-commerce vendors like DigitalRiver or the original Kagi with fees in the 8-15% range iirc, or just selling direct with payment processors like PayPal for ~5%. Bandwidth was not a big cost back then and still isn’t today unless you’re doing something like 4K video streaming.
> Kagi with fees in the 8-15% range iirc, or just selling direct with payment processors like PayPal for ~5%. Bandwidth was not a big cost back then and still isn’t today unless you’re doing something like 4K video streaming.
That's untrue, from my experience using Kagi (payment processor and marketplace/in-app SDK) to sell shareware in c. 2010.
Kagi had fixed fees in addition to a percentage, so anything sold for $5 had close to 30% just from Kagi, and my bandwidth also independently ended up close to 30% of my post-marketplace fees.
Hmm, perhaps my memory is from more like the $15-20 price point. Lower sale price would result in greater percentage being eaten by fees for sure. I remember using eSellerate c. 2005 and it was much less than 30%.
> this seems obscene
This is why I never cared about the 30% take: it was combining all the costs you'd have anyway into one simple number. People just acted like those things were all free just because Apple wasn't explicitly listing them.
Could you optimise your expenses better by splitting them?
Probably.
And that may even be worth forcing the issue from a competitive PoV, because it means some customers will be effectively subsidising others: A weekly updated 2 gigabyte app that's free in the app store gets its bandwidth paid for in part by a 30 Mb app that charges a $10 monthly subscription and gets an update every 3 months.
But even then, companies are expected to make profits. What's the level where it's fine for Apple to say "we want this much extra just for us"? For a lot of people the answer seems to be "zero!" — while this probably would not disincentivise Apple from making iOS given they also profit on the hardware, it would almost certainly disincentivise Google from bothering with any updates to Android.