30% is really a huge cut. It’s almost half of what the developer makes. Apple absolutely does not provide half as much in value as the app’s developer. They can only charge that because people literally have no alternative but to pay the piper or get out of the business entirely. There is no free market at work here.

The developer gets less than 50% of the retail cost of a game.

https://www.quora.com/How-much-do-game-companies-make-from-e...

That's including a publisher, retailer, physical distribution and the platform royalty (the platform is sorta like apple in this comparison) though. So a very different situation than IAP's in the app store.

A more telling comparison would be a download-only game that was self-published by the developer since app store apps don't usually have separate publishers, physical distribution or retailers.

Although I agree that the lack of open alternatives for app distribution in the game console world is pretty similar.

And the game developer has to usually pay a license fee to the game engine maker.

That's the same for the app store though if you use libraries /frameworks that cost anything.

Exactly.

For many small/medium businesses, the Apple/Google tax is often much higher than the founders salaries.

I think, you never tried to publish your book. Or being a publisher and trying to sell your book in a bookstore. In my country bookstores works with 43-47% cut.

About the value apple provide, try to create your own software distribution channel, and check how much is it costs.

> try to create your own software distribution channel, and check how much is it costs

Yet Apple don't charge a distribution channel cost if your app is free-at-download. How does that make sense? The backend costs to them are the same. In fact they're likely to be higher for free apps due to the many magnitudes more downloads versus subscription apps.

Apple want to have it both ways: the thriving ecosystem of free apps that promotes the platform AND their cut of subscription apps. Legislation that said that all app publishers should pay a flat fee per download would seem the fairest way forward.

Are they the same? They have to run and maintain payment and subscription services, and I'm sure there's additional overhead dealing with payment problems/chargebacks/etc.

They don't need any of that for free things.

I think it's fair TBH. If Apple thinks it's okay asking for (rather enforcing) a 30% cut to offer the user the convenience of paying via IAP rather than enter a credit card number, then it should be okay to charge the user 30% extra for that convenience as well.

> it's okay asking for ... a 30% cut to offer the user the convenience of paying via IAP rather than enter a credit card number

I do agree with you that it is ok (and arguably "fair") for Apple to charge a 30% fee for the convenience of IAPs. However, the real debate here is that some developers don't want IAPs, so should Apple be allowed to force them to add them?

Like the current HEY example, the developers aren't even taking money in the app, or allowing sign-ups in the app. You must be an already existing customer to use the app. But Apple is strong-arming them to add this functionality and to use these APIs that Apple gets a cut through. Should Apple be allowed to force them to add an feature to sign up and pay in the app (a function that was never planned or intended by the developers) just so that Apple can get their cut.

In OP's post he was strong-armed the same way. He had no need for any IAPs at all. He didn't even let users sign up in the app. In fact, the title of his app included the phrase "Existing users only". Yet Apple forced him to add functionality to enable IAP in the app to sign up new users, when his app is literally titled and designed around existing users and not new users. I would argue that this triggers the Anti-trust alarm bells.

Sure if you want to take advantage of the convenience that IAP provides, then let Apple charge whatever they want. If the amount is too high then developers would stop using it because it wouldn't match the value that Apple provides by their convenience. But what if I don't need in-app-purchases. Should developers be forced to add them when the app isn't even designed to use/need them? What if a developer doesn't need the convenience of IAPs and wants to take a credit card themselves? Shouldn't they be allowed to? The only argument that Apple makes in this fight is "We own the platform that ~50% of American smartphones, and if you want to participate in that market then you need to share the wealth you generate". Again, it sounds an awful lot like a monopoly.

Another example is Kindle and Audible. Apple won't let users buy Kindle or Audible books through the iOS App even though Amazon already has those credit cards associated with its' users' accounts. Kindle could enable one-click purchases (or even force you to type in a credit card every time), but Apple won't let them sell any books at all through the iOS app, citing the same rules as above.

I think the reasoning behind IAPs is not that IAP is provided as a convenience service to developers, but that IAPs represent value to the iOS users.

If you're using iOS and searching through the app store and then download an app, being able to sign up and pay via the app is useful to you. If you download an app and it doesn't do anything, and you can't sign up or pay via the app then that's a bad experience.

The problem with this argument is it's a lot weaker when Apple also forces you to pay a massive tax when enabling this. I think the argument would be a lot stronger if they forced IAP compatibility, but didn't take a cut and just charged a reasonable up front fee to list on the app store.

I'd argue even an up front fee is unnecessary though. I'm happy with Apple curating the app store to prevent spam and low quality applications, I'm happy with them forcing standards like IAP, but I'm not happy with them controlling the store and then rent seeking.

Apple should make money from making and selling incredible products. That's why people love them.

They do charge an upfront fee, it’s $100 per year for a developer to be allowed to publish an app, regardless of if the app is free or paid or uses IAP.

I think that's reasonable. The profit sharing is not.

$100 a year is nothing considering just the time it takes to review an app.

Apple is the one that insists on reviewing each app so it's the one that should pay for it.

Right because the alternative has worked real well - letting any random app on the store. I specifically don’t download any random crap on my computer but I do on my iOS devices. You can’t even trust known companies like DropBox and Zoom. They have both done shady things on the Mac.

I’m sure you also think that physical good stores should bare all of the cost and allow companies to sell things for free without a markup...

Surrendering freedom and giving power to unelected people, be they monarchs, dictators or CEOs, has never worked well.

> I?m sure you also think that physical good stores should bare all of the cost and allow companies to sell things for free without a markup...

I'm sure you know that's a strawman.

Well we can talk theory or we can hobby history. How well has the open ecosystem on computers worked for the average consumer? Viruses, malware, ransomware, adware dozens of toolbars on their browser, programs randomly uploading their contacts, etc.

I know plenty of people who won’t download random apps on their computer but will on their mobile devices. Because they have had bad experiences before.

Nobody wants to force people to download apps from untrustworthy sources or to ban app stores.

> it should be okay to charge the user 30% extra for that convenience as well

Maybe, but that's a pointless stance. The practical consequence is that a product is likely priced to maximize (num units sold x profit per unit), and the higher price (143% of what was planned), will lead to a (probably steep) drop in the size of the target audience. FWIW, on a macro level economists worry about analogous problems for a ~1% percent increase in sales tax, so Apple's 30% cut is definitely a huge negative impact.

BTW, this is a great example of an ultimatum game that Apple is playing with developers. It is possible that developers collectively taking the (short-term) "irrational" step of pushing Apple's margin on to users (and being very vocal and explicit about this as a "penalty") might catalyze the users to pressurize Apple about the margins.

That's not what is abusive. It's fine to charge that markup, it's not fine to force all transactions (even ones that should have been off-platform), to have that markup.

It sounds like Apple is requiring IAP integration. I think that's what DHH is upset about.

Sure, but I don't see any major downsides in having to add IAP and getting the same subscription fees from people who use it as everyone else. I'd say giving users more options is always good.

One major downside is that once you implement IAP in a cross platform proudct, you then have a different class of subscriptions occurring and being managed outside your platform. Subscriptions which have to conform to Apple's policies around renewal and cancellation. This introduces business, backend and accounting considerations.

The issue is that you're not allowed to link to the non-IAP option from the app or even tell users that it exists.

If most users are unaware they have the option, it's not really an option.

>Sure, but I don't see any major downsides in having to add IAP

Technical debt, added complexity, additional user support, the overhead of having forked subscriptions in the userbase...

I actually don't agree with DHH here, just pointing out the difference. I think Apple has every right to expect a cut of developer revenue given how much they invest in the iOS platform.

The iOS platform would not be viable without developers.

I think Apple has every right to expect developers to pay to be part of their platform, which they already charge for through an annual fee. Expecting a "cut" of every developer's "revenue", even when the product is a cross platform software product, seems extreme.

Would you be okay if Apple charged more for developer fees? A per app fee? A per app update fee?

Can I pay a one time fee to get a product stocked at any retailer?

> Would you be okay if Apple charged more for developer fees? A per app fee? A per app update fee?

Yes, I would be fine with any of those scenarios.

A $1,000 fee to add your app to the app store would be more preferable to me than a nebulous rule about taking 30% of my gross revenue and having Apple dictate to me what my overall business model needs to look like.

> Can I pay a one time fee to get a product stocked at any retailer?

To compare what is going on here with a traditional retail environment is really an apples and oranges comparison. If Apple wants to take my app, price it and sell it at markup, be my guest.

What they are doing is more like if Best Buy forced Nest to give it 30% of every Nest cloud subscription on Nest devices bought in Best Buy retail outlets. Or if Best Buy forced Apple to give it 30% of iCloud subscription fees for MacBooks sold from within Best Buy retail outlets, only after Apple implemented "Best Buy Payments" into it's MacOS software to ensure those fees were collected.

The 30% cut is a 43% markup. Price your app accordingly. You can even price your subscriptions differently depending on where they subscribe.

Apple tried exactly that - to let booksellers set their own prices and they just mark them up. That’s what the publishers wanted instead of Amazon’s pricing ebooks as a loss leader - devaluing the paperbacks and hardbacks. It was shot down by the justice department.

A while ago the 30% upcharge for iOS users was against the rules, now it's allowed.

It sounds nice but if you're a Spotify or Netflix it lets Apple undercut you very easily

I do think 30% is a bit much these days when the store first opened it was a great deal vs the other options at the time

And you're not allowed to even point users to your website where they could sign up without the 30% tax due to Apple not allowing that.

These anti-competitive practices are just over the top in my opinion, I really wish businesses like this would be broken up.

Currently building a B2B SaaS and going the PWA way.

My understanding is the rules for B2B are different, hence why Basecamp is allowed.

They did say so, but I haven't seen it documented anywhere on Apple.com

What are the downsides of going PWA? Non-native support? Offline usage?

No notifications on ios.

No Bluetooth hardware either

WebBluetooth exists on android, but not on iOS.

I had no idea YouTube had a higher price through IAP until I saw it pointed out today. The price in the app always seemed too expensive so when I noticed the lower price available through the web today I actually signed up.

Worth noting that YouTube appears to be violating Apple's guidelines (3.2.2) by forcing users to pay for functionality that is part of the built-in capabilities of the operating system. (Background play mode)

Does that part of the guidelines apply to video apps? I can’t think of other video apps offhand that allow background play on iOS.

But are there other video apps that charge to enable background play on iOS?

My point is that it may be a violation to allow background playback of video on iOS; my point was not respondent to whether or not other apps may also may be in similar violation by allowing background playback of video, whether or not they’re free or paid.

To your point, there are alternate YouTube players which allow background video playback besides the website and iOS app on iOS, but you have to sideload them. There may be others which do not require sideloading, but none that I’m aware of. I’m not sure but it’s likely against some kind of TOS to use them, but interoperability exemptions for accessibility may apply.

It is not a violation to allow background play of video. No guideline prohibits it. The Plex app allows background play, for example. Apple also provides documentation to developers on how to enable this functionality in their apps. (1)

If it were against policy to enable play of video in the background, then it seems that would be an even more egregious violation by YouTube, as not only do they have the functionality in the app, but they charge users money to access it.

1. https://developer.apple.com/documentation/avfoundation/media...

Thanks for following up on this. It’s good to have this clarity into the guidelines and that other apps implement this functionality in different ways.

I believe you have to charge 43% extra if you want to be whole (70% of 143 is ~100)?

You wouldn't have been getting $100 if you charged $100 without IAP though, because some of that is going to go to your card processing chain; you'd mostly probably get more than $91 on a $100 charge though.

That depends a lot on how you get paid. Those high CC fees don't exist in Europe, at least not with Visa and MasterCard. There you also have the option to use direct debit, which is much more common for a User than a CC (CCs aren't nearly as wide-spread), with (typically) <50ct fees per transaction.

That's still quite a lot more than $70.

Ahh yes, that is a good point.

Yes, thank you for the correction.

I will say this: I am very, very glad my New York Times subscription was through Apple's IAP - because I could end the subscription easily. Had I paid NYT directly, I would have had to be on the phone with them.

This doesn't justify 30%. I actually think it's fine for Apple to take a cut. Just not 30%.

If you pay with PayPal, you can save the 30% and also cancel (via PayPal) without talking to the NYT.

It's a nice part of the modern ecosystems, but I'm not sure the slight convenience of centralizing my subscription options would save me that much.

If the fee is for Apple to curate the ecosystem and verify apps are safe, this looks an awful lot like they're using it to drive up revenue instead.

There's evidence too that these practices are done hastily too, when you use IAP, but the app expects you to create a secondary account as well.

Sliding scale microtransaction growing pains, I suppose. Things were nicer when apps were inexpensive commodities. People aren't able to run business analysis like this and it makes the market opaque which is good... for Apple.

(Meta: figures)

Is it the dominate platform? It's certainly a very popular one, but dominate makes me think of Windows Vs Mac in the 90s. 90%+ market share type stuff.

Android, while not managed by a single manufacturer, is a unified platform and competitor to iOS.

I edited my comment since being dominant or not is not really relevant to the App Store control point.