> As lousy as this is, the consumer experience is dramatically improved.

I also am a (generally) happy iPhone user. That being said, I don't think this is a strong argument in support of Apple's monopoly on the App Store.

Make it the default so that non-techy users have no difficulties, but other methods for loading/installing apps should be allowed. If Apple's experience truly is that much better for the consumer, then let it win on its merits.

I disagree about the value of the ecosystem but that's just personal taste. From an economic perspective, Apple is raking in cash and it only investing part of it back into feature development. They're 30% in-app purchase rent could just be 15 or 20% and they'd still be able to easily fund their UX teams. They're not charging what they need to operate, they're charging as much as the market can bare. And the market can bear a lot because users allow it.

What company doesn’t charge what the market will bare and has a goal to just break even?

Any company that wants to stay competitive. The entire point of this post is that iOS app makers are deliberately hurting their customer experience because their monopolist platform is charging unreasonable fees.

Unreasonable compared to what? Physical store markup? Other digital marketplaces like Google Play, Kindle? Spotify? Steam? If App makers in general are hurting and they are all paying the same 30% cut, wouldn’t the market have 43% markup?

You also act as if money on the store is coming from small Indy developers and not big corporations and mostly play to win games. Especially since the former big money makers have stopped allowing in app subscriptions.

So much this. I use an iPhone because of the ecosystem. Apple Pay is massive part of that and that's because of the easy to manage subscriptions.

The biggest issue is how big apples cut is. 30% is a lot for a company that is so impossibly wealthy.

Except that the developer gets 30% less money. I mean come on, it's effectively a commission on the transaction, and I think that such an high commission on the transaction would be illegal in most countries. But Apple is not a bank and can probably get around this (but isn't effecitvely acting like a bank in this situation? I wish that the EU investigates this behaviour)

>As lousy as this is, the consumer experience is dramatically improved.

Is that worth paying $43 extra per year on a HEY subscription?

Probably could be a lot less than $43/mo if Basecamp didn't feel the need to spend 7 figures on a domain.

They're not filling some massive need; it's yet another email service. If they can't justify it at $142 a year how do they justify it at $99 a year? You reap what you sow.

Not to me, but that's my choice to make. I just won't use it.

Unfortunately Apple's intention is that you would not hear about an alternative way to pay for the subscription and that the alternative way is cheaper.

I mean if you partnered with Target to sell your shampoo I think they would be rightfully pissed if the bottles you sent them to put down said something like "Buy it on our website instead for 30% cheaper!"

I imagine that if a consumer sees a product at Target, they have an idea that the product might be cheaper somewhere else. However, do consumers have an idea that if they seen an in-app purchase that the exact same thing might actually be on sale somewhere else and that it has a different price?

If the app says that "One year HEY subscription" is $142 and the app is from HEY itself, what reason is there to believe that it's not just the plain old price of HEY?

Harry's razors are sold at Target, and they do a subscription service for razor blades.

I think this point is worth highlighting. Although I'm not at all on Apple's side here, they are offering something of value. What galls is that they're demanding 15-30% of all revenue for it. Payment processing simply isn't that costly, and I doubt the app store is that expensive either.

They're not charging for the payment processing though. They're charging a premium because you're using their platform/store as part of your sales funnel. They know that being able to sell your stuff on iOS devices is worth a lot of money and that you'll make more money after the 30% cut than if you didn't sell in the store at all.

Apple knows that customer acquisition is extremely expensive outside the store and is charging accordingly.

They are charging (at least partially) for payment processing.

So do you think any retailer tries to just break even?

But Hey.com's iOS app would not force you to use their service. That's the point. Giving the end-user the choice.

Some prefer IaP, like you, so won't sign up to Hey, others don't and may actually have already paid for the service on desktop.

I do too. But, a better middle-ground needs to be found which services both consumers and developers. It could literally be as simple as something closer to a 90/10 split.

There wouldn't be uproar if it was 10%. Everything else is perfectly reasonable but taking a 30% cut is extreme.

Paying 10% of your revenue for them to usurp your customer relationship seems like a bad deal to me.

For developers I think a possible strategy would be to sell two products; standard edition and iOS optimized. Charge +30% for the iOS version since Apple users are (supposedly) willing to pay more.

Charging iPhone users more was actually one of the suggestions Phil Schiller made. I'm pretty sure Spotify charges more for people who subscribe from within the iPhone app. They made a lot of noise a year or two ago about this and ended up with this approach.

Personally, I'm very skeptical of subscription options since many companies are bad actors; making it difficult to cancel or throwing adds and promotions at you.

A lot has to do with how it is framed. I think Apple would have less pushback if they charged 50% and told developers, we're providing the devices, the user base, the app store, the promotion, the dev tools, the payment processing, you're providing the app. We each need each other so let's split revenue 50/50. Seems it would be tougher to argue that, than 70/30 which is an arbitrary declaration.

Why though? Apple is well-aware of their worth in your sales funnel and know that customer acquisition outside of their store/devices is a lot more expensive.

Nobody would be complaining if you Apple's user-base wasn't so juicy that your best option is forking over 30%. If it was easy to acquire customers outside the store it wouldn't even be an issue.

Forking over 30% isn't the best option. It's the only option.

If Apple had unlisted apps that didn't show up in the store listings and required a click through from your website to get to the app's store page, I bet some developers would opt for that if it meant they didn't have to pay the 30% tax.

Right, but the value isn't that you're listed in the app store, the value is that you can collect payment on-device. The store isn't the retail space, the whole device it.

You could not release an app in their store and ignore their existence entirely. But that's ridiculous and you can't afford to do that because their user-base is so valuable. And so Apple charges a premium because they know that.

No, the other option is to not fork over 30%. If your app is so good that Apple needs you more than you need Apple, they’ll come to the table.

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Please review https://news.ycombinator.com/newsguidelines.html and stick to the rules from now on.

I only repeat the argument so I get to hear a bunch of people’s takes on it. Once you’re deep in a thread it’s pretty much only you and the person you’re replying to.

I don’t think the App Store is the source of customer acquisition. I think being able to sell on iOS devices is the source of customer acquisition. Being able to upsell a user to your premium service right there on the device is the valuable thing that costs a premium.

This is a really ambiguous, unusual, and (in my opinion) inappropriate use of the term "customer acquisition".

The App Store is a marketplace that connects people developing for a platform (iOS) to customers using devices compatible with that platform. It is also the only marketplace that does this. In this way, it is best thought of as a (monopolistic) distribution channel.

But why is the “App Store” the distribution channel and not the device itself? I mean Apple would be within their right to just not allow 3rd party apps at all on their devices so why is it weird that they take a cut from anyone who wants to set up a booth on their land?

Like it feels wrong to punish a company for not closing their platform like consoles do to any only working with a few select partners.