Apple makes a cut: they charge developers a not insignificant yearly fee of 99 USD per seat, they sell iOS devices and services at great profit, they happily earn 15-30% from in-app purchases and subscriptions wherever developers choose to use those features, they earn 30% on any apps that choose to be paid, and they reserve the right to set a minimum price if free apps inconvenience them. (But free apps very much do not inconvenience them, ever, and this idea that they do and Apple of all companies is doing all this from the goodness of their hearts is a disease).
The only reason Apple needs more of a cut here is because their shareholders would probably sue them if they stopped.
(I’m not a fan of the flat 30% charge, but developer program fees are not a challenge for any group with a revenue stream if any kind.)
Apple has 20 million registered developers.
[Edit: And let's say a third of them pay that fee, which is admittedly probably a stretch. The finer details are not my point here other than to say here's a bunch of money that comes in no matter what]
I don't care what those developers are making: that's serious income right there. If Apple think they are entitled to more, that's their problem, but don't act like they're making any kind of sacrifice here, and for fuck's sake people need to stop trying to convince themselves that Apple are their friends.
There is no per seat / per developer / per engineer fee. "A developer" in this context means an individual person, not an entire organisation.
An organisation pays $99/yr to publish on the App Store. That covers all their developers, whether they have one or a hundred.
In addition to that, you don’t have to pay anything to be a registered developer. It’s free to register as a developer. You pay the fee to publish on the App Store.
Apple having "20 million registered developers" doesn’t translate into the vast sum of money you seem to think it does. The income comes from the number of organisations publishing on the App Store, which is surely far lower than 20 million considering there’s an order of magnitude fewer apps in the App Store than that and publishers can publish many more than a single app with their account.
For a popular income generating app, the $99 will make an insignificant impact on the marginal cost. But the vast vast majority of apps are not in that category, and the $99 does have an impact.
I often wonder how they count those developers numbers if it was not paid Apple Developer programme.
It’s not about Apple being anyone’s friends. It’s about being logical.
Except for parts of the world where that's closer to a week or months worth of pay...
Source: am developer in a country you describe
They straight up won't allow you to do this.... I've tried before, and got a call from the Apple Reviewer to say that they won't allow anything like this to be published.
A subscription on the web is 4.99 and the same subscription via the official twitch iOS app is 5.99.
1. Searching, Opening the web page in Safari.
2. Signing-in.
3. Updating personal details.
4. Updating credit card details.
5. Making the payment.
Instead of clicking a button to save $1?
P.S. I would.
Most people are not rational about money, me included.
That seems significant for even the most lazy person.
This is where a credit card becomes useful, any credit card company worth its salt will seize charges to you immediately. I wouldn't even ever use a debit card online, it's far too risky.
3.1.3b
>your general communications about other purchasing methods must not discourage use of in-app purchase
It's vague (probably intentionally) but having a higher price in the app is certainly discouraging compared to the "normal" way.
I have a B2B app in the app-store which only has a login-screen on the app - so hopefully that won't attract Apple's attention, but if they do I was thinking about making our service-fee an Apple Pay ("real-life") purchase with lower fees where we'd mail the customer a brick with an activation code printed on... tempting...
Credit card networks have charges, and they used to tell businesses “you’re not allowed to pass this fee on to your customers”. I don’t know if they try to maintain this rule elsewhere, but this was confirmed to be illegal at some point in Australia (I dunno, maybe 10–15 years ago? I can’t immediately find a reference to the decision), so some businesses will say things like “1.5% surcharge for using Visa/Mastercard” (per https://www.accc.gov.au/consumers/prices-surcharges-receipts..., the surcharge isn’t supposed to exceed the merchant’s actual costs; in practice I suspect it regularly does on small businesses, so that they can state a simple percentage rather than calculate more precise figures that vary by payment type).
If Apple tried to tell an Australian business “you may not pass the 30% fee on to your users”, I expect that business could appeal to… I don’t actually know who it would be, maybe the ACCC?
B2B apps are exempt from the the IAP requirements.
It's an important question to SaaS products that want to pivot to B2C or launch a B2C view of a B2B product.
Take Office 365 for example, originally it was B2B for the first few years then Microsoft made it available to everyone. Similarly, would you consider Adobe Creative Cloud a B2B service or B2C?
I’m sure Best Buy wouldn’t want you to advertise in Best Buy that you can find the product cheaper on Amazon.
I've heard from other iOS devs in a similar bind that Apple forbids you from doing anything to recover the 30% cut they take.
You either just have to eat it, or make your prices 30% higher everywhere.
Almost certainly, they allow Spotify and the NYT because iOS customers and potential customers would object too much if they were removed from the store.
A well as the 30% tax making all apps worse in quality by removing money from development, the unpredictableness and unfairness destroys many businesses before they even start.
Yes and the 30% cut is moving money from poor Epic’s pockets so they can’t sell virtual coins for dance moves. Most money on the App Store comes from whales playing pay to win games like Candy Crush.
You have no proof - not in the rules that are published or anywhere else.
You can simply go to the App Store and go to NYT website to show that you are wrong.
11.13 Apps can read or play approved content (magazines, newspapers, books, audio, music, video) that is sold outside of the app, for which Apple will not receive any portion of the revenues, provided that the same content is also offered in the app using IAP at the same price or less than it is offered outside the app. This applies to both purchased content and subscriptions.
The same-price rule was revoked in 2011 after legal challenges from newspapers & magazines. It was replaced with a rule that doesn't allow linking to any websites within the app.
https://www.macrumors.com/2011/06/09/apple-reverses-course-o...
As of 2020, rule 3.1.3(a) also does not allow you to recommend in any public business communications using payment methods other than Apple:
"you agree not to directly or indirectly target iOS users to use a purchasing method other than in-app purchase, and your general communications about other purchasing methods are not designed to discourage use of in-app purchase."
Let’s do a thought experiment. Try selling something in a Best Buy and asking them will they allow you to publicize in Best Buy that you can get a lower price if you buy from their website. How do you think that will work out?
https://www.investopedia.com/terms/m/manufacturers-suggested...
I fail to see how the MSRP is relevant.
The question was quite simple. Can I sell an item in Best Buy or GameStop and advertise in their store that a customer can get it cheaper online?
Your entire line of reasoning seems ridiculous to me, but even granting most of your premise, the wholesale price would be the price companies sell their software at with bulk discounts (purchasing 100+ seats instead of 1). What ancestors are referring to are the single unit sales price set by a company absent outside pricing interference by Apple, which is absolutely the MSRP equivalent.
Words Mean Things.
A “tax” is a government imposed fee.
A wholesale price is the price that a manufacturer sells a product to a retailer. Every retailer has a markup from the price that they get a product from a consumer. Do you think retailers don’t make a profit from the goods they sell in their store?
When did the MSRP not include a margin for the reseller? Why would a retailer sell a product without any margin?
You realize that everything you buy from a store has “pricing interference” from the retailer don’t you?
Have fun with all your posts on this story.
Are cars all sold at the same price everywhere? TVs? Computers?
It's possible I've conflated that with not being able to call out the charge difference (e.g. by using the words "Apple Tax" on the payment page), and not being able to link to other payment methods (e.g. on web), which massively devalue any benefit from charging more.
I agree that Epic are in it to line already rich pockets, and extra money wouldn't improve their service. There are lots of smaller developers where an extra ~42% revenue would make a huge difference, and charging more doesn't work as the customer is price sensitive.
Can a game retailer sell something at GameStop while advertising they can get at a lower price online in GameStop?
Where exactly are these indy developers? The time of most indy developers making it big on mobile left the train a decade ago. They have been drowned out by the makers of Candy Crush and Clash of Clans.
We already saw the race to the bottom after mobile became popular. Do you really think the bottom just wouldn’t get lower?
I remember back in 2008, when the mobile gold rush started and indy developers of popular apps were publishing how much they were making. I was making more working in corporate America writing field service apps for ruggedized Windows CE devices
Controversy #1: some apps are allowed to be in the store and not have in app subscriptions but aren’t allowed to say how you subscribe - Netflix and Spotify come under the “reader apps” exemption and Hey didn’t.
Controversy #2: Epic isn’t allowed to have in app purchases that bypass the App Store.
Non Controversy #1: there is no rule against having different prices in an outside of the store. This has nothing to do with “reader apps”.
All of the loss of fake internet points doesn’t make a provable fact incorrect.
Go to App Store and look at NYT price. Then go to the website, the price is different.
Spotify can stay in the AppStore, presumably without having to offer an IAP, whereas apparently WordPress cannot, including for self-hosted blogs?
That's what I am getting at here.
Apple is as pure and holy as the driven snow, they are most ethical company in existence.. They do not really care about money at all, they are just looking out for their users...
If you don't know that, it is not allowed to sell for more in iOS than in your site, and the app will get banned for attempting that, forget about displaying 30% apple tax to the users explicitly.
Edit: Heard from somewhere, likely not fully correct.
I don't think this is true, although you've said it so emphatically that a lot of people are going to believe it without any supporting evidence! Can you help us out with some?
App store guidelines: Nothing about the need for uniform app pricing across platforms.[1]
App price: Examples of apps with higher prices on iOS than elsewhere.[2]
Subscription: Spotify and others charged more to offset Apple's 30% cut ($12.99 instead of $9.99 to subscribe in-app) for years.[3]
IAP: Epic charged more for IAPs on iOS than elsewhere.[4]
[1] https://developer.apple.com/app-store/review/guidelines/#pay...
[2] https://discussions.apple.com/thread/8031795
[3] https://finance.yahoo.com/news/spotify-apple-app-store-16463...
[4] https://www.reddit.com/r/FortNiteBR/comments/85d3uc/the_app_...
>You must not directly or indirectly target iOS users to use a purchasing method other than in-app purchase, and your general communications about other purchasing methods must not discourage use of in-app purchase.
Which essentially can counteract the uniformity, depending on how insane the reviewer is. Paying more for IAP is obviously discouraging.
Already linked it: https://developer.apple.com/app-store/review/guidelines
Here's another easy disproof: YouTube Premium costs £11.99 on the YouTube website, and £15.99 IAP on the iOS app store right now.
The section you quote is entirely related to communication within the app. It is Apple saying that there is no option to either directly or indirectly push users towards your own payment methods with text or calls to action in your app.
Your argument seems to be that Apple would consider Spotify pricing at $12.99 within the app as somehow "indirectly" pushing users towards other payment options elsewhere when they have $9.99 on their website. Is that right?
Don't you think that offering no means to subscribe in-app -- which means all new users have to seek out the subscription option on Spotify's website -- is a more aggressive way of pushing users out of the app than offering a $12.99 subscription in-app and a $9.99 option on the website?
But in any case: Spotify for years did charge $12.99 in its app and $9.99 on the web. There are multiple[1] instances[2] of[3] users[4] being confused by this and complaining on Spotify's community support pages.
Spotify's anti-trust website[5] -- where they note anything and everything Apple has done to put what they feel to be unfair pressure on them regarding pricing and IAP options -- has this to say about the situation:
> So, we give IAP a try. That means we are now charged Apple's 30% tax and sadly have to increase our price for our fans
> Our users will finally be able to buy a Premium subscription directly through our iOS app. But it also means we have to raise our prices to €12.99 a month. And you guys were rightly not very happy about this
They go on to say:
> We opt out of Apple's payment system and the artificially uncompetitive price we had to charge for using it
> Because we turn off IAP, it means you can no longer upgrade to Premium through the App Store
So to be clear: there was no policy change in 2016 when Spotify disabled IAPs. They did it under their own steam.
YouTube and others persist with charging more for IAPs. Epic did it right up until they implemented their own IAP system and got booted off.
There are many, many good reasons to dislike Apple regarding the app store. You are doing gymnastics to invent a totally new one.
If you want to keep discussing this and don't want to look silly, my suggestion is that you offer direct corroboration of your claim. Try looking for a news article about a developer being told they cannot charge more on iOS than they do on their website, or an announcement of a policy change from Apple.
[1] https://community.spotify.com/t5/Accounts/12-99-iphone-charg...
[2] https://community.spotify.com/t5/Accounts/Charged-12-99-not-...
[3] https://community.spotify.com/t5/Accounts/Why-am-I-charged-1...
[4] https://community.spotify.com/t5/Accounts/Been-Paying-12-99-...
It does.
>Here's another easy disproof: YouTube Premium costs £11.99 on the YouTube website, and £15.99 IAP on the iOS app store right now.
If you are Google, you get a free pass. It's simple. Look at the recent Wordpress desaster or Hey. Apple doesn't allow showing that you can subscribe somewhere else, in no app, unless you are maybe Google.
>The section you quote is entirely related to communication within the app. It is Apple saying that there is no option to either directly or indirectly push users towards your own payment methods with text or calls to action in your app.
This includes links or any other hint that there might be such a thing.
>Your argument seems to be that Apple would consider Spotify pricing at $12.99 within the app as somehow "indirectly" pushing users towards other payment options elsewhere when they have $9.99 on their website. Is that right?
This entirely depends on the insanity of the reviewer. If that person thinks that it's pushing, then it gets denied.
>But in any case: Spotify for years did charge $12.99 in its app and $9.99 on the web. There are multiple[1] instances[2] of[3] users[4] being confused by this and complaining on Spotify's community support pages.
And they get the blame for it, since they can't label that as "Apple tax" or similar. That's why users are confused. Because Apple plays the dictator there. "must not discourage". Also your links show no official response from Spotify on this matter. These are forum posts, from users ("community legend") with no affiliation to Spotify.
>There are many, many good reasons to dislike Apple regarding the app store. You are doing gymnastics to invent a totally new one.
Not really. Apple doesn't want other payment options, they prove it time and time again. They don't like you showing your users that those exist, time and time again. So yes, you need to charge similar prices, or else you get in trouble.
> Schiller says that there are a number of decisions about how to charge customers that Basecamp could have made to make the app acceptable under current rules. He lists several, including charging different prices in the app and on the web, and offering a free version with additional functions.
Oh dear. If I was discussing this with someone who actually demonstrates a capacity to incorporate new evidence into their world view I would expect you to acknowledge this and admit that you're wrong. As it is, I look forward to seeing your gymnastics continue!
In any case, you seem to be losing track of your own argument. Here's your original point:
> [Developers cannot charge more on the web than for IAP because of an excerpt from the guidelines] which essentially can counteract the uniformity, depending on how insane the reviewer is. Paying more for IAP is obviously discouraging.
What you are saying: "Apple's guidelines reserve the right to reject your app if you have differential pricing between IAP and your website, by saying that you cannot "directly or indirectly" drive people out of your app and to another payment source. This is at the whim of the reviewer."
Hopefully so far you think I'm being fair.
It was then pointed out to you that this wording is designed to prevent links and other messaging to indicate that services are cheaper elsewhere. Apple is happy for you to charge more for IAPs, but not to say* you do so.
You then used Spotify to support your argument:
> Take Spotify. You can't pay for that in the app. If they could charge more, they would. But they aren't allowed, so they discontinued IAP alltogether.
Then it was pointed out to you that Spotify discontinued IAP of their own volition, not because Apple told them they could not charge more for IAP. YouTube and other services also charge more for subscriptions on iOS than on the web.
Now that your claim has been demonstrated to be false, you're changing your argument from "Look, if Spotify could do it they would do it" to "Well of COURSE these big companies get a free pass from Apple, it's the little guys getting screwed!"
Funny that two replies ago your argument leaned on Spotify entirely, and now you want them to be ignored ;)
> Look at the recent Wordpress desaster or Hey. Apple doesn't allow showing that you can subscribe somewhere else, in no app, unless you are maybe Google.
Neither HEY nor WordPress was charging more online than in the app store. HEY is actually yet another example of you being totally wrong and contorting yourself. Look at this[2] letter from the CEO of HEY.
Relevant excerpts:
> And some people say “Why not just have a special price in-app that’s 30% more than your usual price? Just pass the Apple tax on to customers?” Because that’s not the point.
> And Phil Schiller’s suggestion[3] that we should raise prices on iOS customers to make up for Apple’s added margin is antitrust gold.
As above, Apple's Senior VP Marketing who is in charge of the app store publicly suggested that HEY should charge more for IAP than on the web. Sigh.
> This includes links or any other hint that there might be such a thing.
Yes. And it doesn't stop anyone from charging differential pricing.
> This entirely depends on the insanity of the reviewer. If that person thinks that it's pushing, then it gets denied.
{Citation Needed.} You have offered nothing to support this view.
> And they get the blame for it, since they can't label that as "Apple tax" or similar. That's why users are confused. Because Apple plays the dictator there. "must not discourage". Also your links show no official response from Spotify on this matter. These are forum posts, from users ("community legend") with no affiliation to Spotify.
Nice moving of the goalposts ;)
Looking forward to the next hilarious instalment :)
[1] https://techcrunch.com/2020/06/18/interview-apples-schiller-...
[3] https://techcrunch.com/2020/06/18/interview-apples-schiller-...
You presented forum posts from random users as if they were from Spotify. ;)
>Neither HEY nor WordPress was charging more online than in the app store. HEY is actually yet another example of you being totally wrong and contorting yourself. Look at this[2] letter from the CEO of HEY.
Wordpress didn't charge anything, it was to control Wordpress instances via their XML-API. Apple just thought "hey they link to some site to which you can buy stuff, lets force them to IAP". This right there is insanity.
>{Citation Needed.} You have offered nothing to support this view.
Your own Spotify link. Spotify getting rejected for app changes. This is insanity.
Also, the whole Epic case. Even if they would have just showed a "pay less here <link>". Insanity.
You said: if Spotify could charge more, they would.
Spotify said: we did charge more, and then we decided to stop doing it.
Keep backflipping dude!
> Wordpress didn't charge anything, it was to control Wordpress instances via their XML-API. Apple just thought "hey they link to some site to which you can buy stuff, lets force them to IAP". This right there is insanity.
Literally nothing to do with our discussion which is about your bogus assertion that apps are forbidden from differential pricing.
> Your own Spotify link.
Unless you're illiterate (increasingly possible!), my Spotify link indicates that Spotify chose to stop differential pricing.
Classic example of cognitive dissonance: ignoring Phil Schiller, the guy who is literally in charge of the app store, telling you that you are wrong ;)
Oh dear mate.
Yes, because they couldn't charge more. People wouldn't accept it, so they blamed Spotify instead of Apple, because they weren't allowed to. Of course they can't do differential pricing if they aren't allowed to show that.
>Literally nothing to do with our discussion which is about your bogus assertion that apps are forbidden from differential pricing.
Well it is. In reverse of course, because Apple thought that they'd lose revenue.
>Classic example of cognitive dissonance: ignoring Phil Schiller, the guy who is literally in charge of the app store, telling you that you are wrong ;)
Also the guy who is responsible for that. Hey, Wordpress, Spotify, Netflix, Microft. They are all "wrong". He is the leader of the insane asylum.
Forza Street on iOS - 125 Gold: £4.99, 255 Gold: £9.99
Forza Street on Windows 10 - 125 Gold: £3.99, 255 Gold: £7.99
Both connect to the same account.
> If you don't know that, it is not allowed to sell for more in iOS than in your site, and the app will get banned for attempting that
He seems to believe that Apple explicitly bans apps from charging more for iOS subscriptions / IAPs than they do elsewhere (e.g. purchasing the subscription on their website), but I can find no evidence to support this, and a lot of evidence to the contrary.
I.e. you are not allowed to be transparent with pricing.
Just add a transparent reporting about how your prices came to be and they will not let you do so.
Pricing $5.99 in-app and $5 outside is a good strategy. It’s a nudge to get users to buy outside the app and save 15%, but if not they’re effectively splitting the Apple tax.
Nothing in the guidelines about this at all: https://developer.apple.com/app-store/review/guidelines/#pay...
Fraud happens with any payment provider including Apple.
You don't have to pay extra for shopping cart infrastructure if you use Stripe or similar
IIRC, PayPal has offered 2.9% for over a decade
And with fraud on Apple, you are never affected directly. For example, a chargeback on Stripe costs you $20, unless you win. If you are doing any sort of volume, that is not only expensive, but time consuming — you have to defend your case. You never touch any of that with Apple. At the very least, you need a developer to both build and “run” your store and all of its associated infrastructure.
So for low dollar amount charges, like a $1.00 app purchase, the transaction fee can be > 30% (e.g. 2.9% + $0.30 on Stripe).
And for that stripe fee you still have to have your own store, download infrastructure, and website to sell it on. A website that you also have to build, maintain, and market. And you have to deal with chargebacks and customer support during the buying process.
At 1.2$ you already earn more then the Apple Store.
$ 1.0 Apple: 0.7 Stripe: 0.671
$ 1.1 Apple: 0.77 Stripe: 0.7681
$ 1.2 Apple: 0.84 Stripe: 0.8652
Anyway even at 0.99 price tag (I think Apple doesn't allow 1$) it only 4.5% less, on a million unit sold the difference would be about 31,710 dollars (693,000 VS 661,290).
What’s the markup of a product sold in a brick and mortar shop? It’s a whole lot more than 30%.
I think it's primarily "discouraged" by, just, you know the market and basic economics. Think such a statement through: if a business could simply increase pricing 43% without losing anything, they'd just do it. Like, everywhere. There'd be no reason to leave tons of money on the table on any platform at all. But of course in reality raising prices at some point tends to depress sales more than what is gained from the rise, so maximizing revenue means finding the sweet spot of $/unit * unit# = total revenue. And buyers only react to the price they are charged, not the developer's margin. So presumably in general developers have already optimized their pricing, which means there is only limited room to increase it before it's not worth it. Obviously it's somewhat more complex than pricing 101, in reality user populations are not fully randomized samples of the general population. iOS users overall may be somewhat less price sensitive for example, many apps are not completely elastic or substitutable goods, and users who've bought into a given platform face barriers to leaving it. So there is some room for some devs to raise prices a bit, and of course they can't sell at a loss.
But most can't simply raise prices by nearly half without losing customers to competitors, or for that matter losing customers to their own free offerings (which themselves they deem necessary).
Absolutely, but imho it shouldn't be a percentage, but a flat fee. It's not like Apple does more work for more expensive apps.
They get paid by the phone owner and force themselves to be a middleman.
I work on an app that is forced to use the App Store. It would be far easier for us if we could self-host and users could download the app with a click on our website. The submission process is annoying. A hot fix on iOS can take days just waiting for approval.
You can offer purchases elsewhere at a cheaper price, you just can't push people toward that within the app, or even link directly to a website for it.
VAT: value-added tax
This is about control of the platform and Apple is fighting to set and enforce the rules on their platform as they see fit - just like how Wordpress controls how you can distribute changes to their code (to enforce the GPL).
It at least they do for some goods.
Through they do have a rule that anything which discourages buying in Apple is forbidden.
And what that means is very open for interpretation.
What we know is that normally you get in trouble if you are transparent about your pricing.
Edit: Fixed phone autocorrect moving up words.
Well! Let's be clear, you mean "Apple Ireland" gets that cash?
https://en.wikipedia.org/wiki/EU_illegal_state_aid_case_agai...
