Mike Peterson
Apple's annual Worldwide Developers Conference costs the company about $50 million a year to put on, Apple Fellow Phil Schiller testified on Monday.
Schiller, a long-time Apple executive and App Store chief, said that WWDC's costs are not charged to the App Store in his Epic Games v. Apple trial testimony. Prior to COVID-19, Schiller did say that Apple charged developers $1,500 per ticket to attend.
The Apple Fellow also said that the Cupertino tech giant is working on building a developer facility at its Apple Park campus so that developers can build applications while receiving support from Apple engineers. Apple's facilities division is building the project, so it — like WWDC — won't be directly charged against App Store operations.
At another point during his testimony Monday, Schiller noted that Apple currently has 5,000 people working on Apple refunds. He also noted that Apple has a mechanism letting developers know when a refund has been issued so they can stop providing a product or service.
Schiller also defended Apple's developer agreements. He said that the agreements apply equally to all developers so larger companies can't negotiate better deals. There is, however, a program that developers can apply to that will net them additional tools like Apple Wallet integration and TestFlight support.
The Apple executive also said that the $99 a year fee for developers was an effort to remove barriers in a previous developer program, which was upwards of $3,500. Schiller said that the $99 fee is a flat rate and is waived for nonprofit, educational, and government institutions. He added that it's also an important commitment to ensure quality apps.
"It's important enough that you will spend $99," Schiller said. At the same time he asked of those who don't want pay, "Are you really serious about making a quality app on the store?"
Deviating from app development details, Schiller said that the App Store generated some $400 billion worth of physical purchases in 2019 alone. Apple does not take a cut of those purchases because it cannot guarantee that the goods will arrive, Schiller said.
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8 Comments
What the WWDC and future Apple Park plan has to do with Epic?
Can someone please elaborate “ App Store generated some $400 billion worth of physical purchases in 2019 alone”? I don’t quite get it. Is it like Amazon and eBay sales on IOS?
Part of Epic's argument that Apple's 30% margin is unreasonable is that Apple is making an enormous profit from the App Store. Apple is explaining that because of the way they account for things the profit calculation for the App Store involves a large number of overhead items that don't necessarily get allocated (or apportioned) directly to a P&L statement.
In other words, Apple is stating that the App Store is not as profitable as outside observers claim it is and therefore a 30% "commission" is perfectly reasonable.
AppleInsider
said:
That's a curious position from Mr Schiller. Does this mean that if they could guarantee arrival they'd look to take a cut?
I guess that's not as far-fetched as it seems - to guarantee arrival they'd be in charge of shipping to the customer, and covering that cost is reasonable. I somehow doubt it would be a flat 30% fee, though.