Obviously the comparison is slightly Apples to oranges, as physical retailers have massive overheads/COGS that Apple don’t incur for the App Store.
Many developers don't want to have apple be their gatekeeper for apps. They should be able to have alternatives. Apple's rent seeking behaviour is to take platform development in the cost of the device and again to distribute apps without any alternative.
On the other hand, if Apple's model allows them to better compete with others and create a superior product that people want ... well then, it's ridiculous to mandate they should do business a different way.
their business business model allows them to compete because they're rent seeking by grazing off developers and apps that dont want or need their app store, payment processor, etc.
Wow who knew rent seeking was massively profitable, huge surprise!
I will accept the argument that apple’s gatekeeping is ridiculous, a lot of that is the bizarre prudishness of the US, but saying that apple should not be compensated at a rate that is generally below the market - the majority of apps on the AppStore are freemium from which apple makes nothing, the remainder are mostly only paying a 15% commission. This is vs 30% or so on game consoles, 30% on steam, etc.
Isn't that because Apple doesn't allow for third party repos/stores/etc?
If that changes after all (I'm personally hoping it does), then it would make sense that the new alternative store(s) would have their own overheads (development, running costs, etc) and would have their own fees.
That seems sensible, yeah?
Sure. And who cares? That has nothing at all to do with the App Store fees. :)
> When setting your wholesale price, first multiply your cost of goods by two. This will ensure your wholesale profit margin is at least 50%. Profit margin is the gross profit a retailer earns when an item is sold. Apparel retail brands typically aim for a 30% to 50% wholesale profit margin, while direct-to-consumer retailers aim for a profit margin of 55% to 65%. (A margin is sometimes also referred to as “markup percentage.”)
So 50% is about normal for retail goods. Yes yes. They have physical merchandise they need to manage. Apple has engineers they need to pay to do their virtual distribution. Maybe 30% is excessive. Certainly that they're the only store and hold a monopoly on the things they allow people to do on their platform is probably fueling that margin to be higher than it should. However, if we look at Steam[2] and other console manufacturers, we see similar 30% markups. Maybe everyone is just copying Apple's lead here as "customers will swallow this". Or maybe Apple figured out a good virtual store distribution model and this is the markup needed for a sustainable thriving business.
[1] https://www.shopify.com/retail/product-pricing-for-wholesale... [2] https://www.ign.com/articles/2019/10/07/report-steams-30-cut...
1) the majority of apps don’t pay apple a cent because they make their money off selling user information
2) of those that remain most likely aren’t reaching the income point where it stops being 15%
3) 30% matches the payments of every other store, except those stores that don’t pay for any of the platform development. It’s super easy to charge next to nothing when you don’t have to pay actual engineers to make actual products.
Every app in Apple’s App Stores makes them a minimum of 99USD/year, the cost of an Apple Developer account.
* Google, who makes money by harvesting information from every android user; or
* Samsung, etc who don't pay the cost of developing a platform
* Steam, GoG, etc who literally only operate a store front, yet still take 30% cuts. They don't even have significant proportion of free games - and the games that they do have are frequently > $50 so their per-sale absolute revenue is insane.
* The various console platforms, because somehow consoles are magically different from everyone else
* Microsoft (ignoring consoles) who charges for their OS, and despite that seems hell bent on putting ads into the OS
Also basically all Apple’s direct competitors both in the PC and smartphone businesses operate on paltry margins in comparison to Apple. They usually sell a mix of low/high margin products though, e.g. most premium Dell or Lenovo laptops are priced at similar levels to Macbooks (of course their real price might significantly lower due to infinitely better customizability and reparability options). And almost none of them have significant additional revenue streams (not to a degree comparable to Apple). Yet they are still in business.
Apple would be able not to only to survive but to still thrive if they significantly cut their margins and the app store tax. Of course it would not be fair or sensible to expect any company to leave free money on the table. This is why we get ads in Windows, seem like most users dont’t really mind them too much (to be fair I’m not sure I have actually seen one, maybe it’s a windows edition and/or country thing.
I think 30% has been ridiculously high although I don’t know what a fairer margin is. For what it’s worth Apple has managed to maintain a 30% profit margin (not just sales) on the hardware they sell which is unheard of in the consumer electronics industry (everyone else is struggling to just barely make money in phones and mostly losing while others are taking a much more modest cut in other categories). Partly it’s branding. Partly it’s savvy business practices. Partly it’s immoral business practices.