This program does not 'reduce apple's cut to 15%'. Under some circumstances, Apple will reduce your cut to 15% for a given year. But if those circumstances cease to apply your cut jumps back up to 30% for that year AND the next year. For products that you buy once and use forever, this can mean that a small business has a great "launch", earning over the threshold for that one year, then stops earning much the following year but still has to pay 30% for both of those years. This might look like '$1 million per year' in income, but what it actually means amortized across two years is '$500k/year before apple's 30% cut', which once you consider taxes and the cost of employee benefits (insurance, etc) is about enough to pay 3-5 salaries.

Note that Apple could have designed it not to work this way - they didn't, they chose this more complex system because they're greedy and want 30%. This program really only benefits lifestyle businesses and businesses with like 1-6 employees. A more "honest" program would be "15% on your first million dollars per year" which would achieve the goal of helping small businesses and be simple.

Also note if your income is largely being passed on to third parties (processing transactions for charities or individual small businesses), this eats into both your margins and the profits of the companies you're passing the revenue on to. The only solution for that is for every customer to create their own developer account and upload bespoke apps for themselves - something Apple prohibits under current policies.

Good info, thanks!

I think something like 15% default and 5% for small companies would be much better for the services they provide.

App Store compared to Play Store regarding discovering apps is still much worse in my opinion.

I think it’s one of the biggest gripes I have after I switched to iPhone.

Without robust* competition, how can you put a value on the services they provide? They wrote an entire, very successful, platform, upon which someone's business depends. They employ an army of engineers that are probably more highly skilled than the average app developer to keep this going. They've even done the hard work of attracting almost all the consumers who spend money freely to their platform.

Auction houses such as Christie's take up to 25% for a similar service (connecting sellers with affluent buyers), although one that's probably far easier to replicate.

*robust meaning low switching costs, but it's hard to imagine how one could have low switching costs on smart phone platforms

> Auction houses such as Christie's take up to 25% for a similar service (connecting sellers with affluent buyers), although one that's probably far easier to replicate.

When you want to place an item up for auction, there are more auction houses to use than only Christie's. That might be why their price fixing scandal was discovered in 2000.

I understand all that and if I wouldn't like the core of the concept, I wouldn't have switched to the Apple ecosystem.

But they also get money if the software for their hardware is easy to find and browsing the App Store is a fun experience instead of getting the same "few" apps. (No wonder apps like AppRaven exist.)

If the App Store was a different company unrelated to the hardware, I think it would be a different story. But since it's all tied together, it's like their own Sales platform.

Imagine also having to buy a $1,000+ ticket to be able to bid in a Christie's auction.