Phil Schiller recounts concerns over App Store fees for external purchases in hearing

When I first heard about Apple getting a cut from sales outside of the AppStore I thought it was wrong and would come back to bite Apple in the ***. 30% to offset the cost of running the store was fine. But once someone loads the app I never agreed with Apple claiming a cut of sales from other people’s stores. That always struck me as abusive.

DAalseth said:

When I first heard about Apple getting a cut from sales outside of the AppStore I thought it was wrong and would come back to bite Apple in the ***. 30% to offset the cost of running the store was fine. But once someone loads the app I never agreed with Apple claiming a cut of sales from other people’s stores. That always struck me as abusive.

30% was never to run the store it was a platform access fee that included hosting so they had control of a kill switch for badly behaved apps. 

Game engines do the some thing. It is hardly new to charge for distribution of a company’s IP by third parties 

DAalseth said:

When I first heard about Apple getting a cut from sales outside of the AppStore I thought it was wrong and would come back to bite Apple in the ***. 30% to offset the cost of running the store was fine. But once someone loads the app I never agreed with Apple claiming a cut of sales from other people’s stores. That always struck me as abusive.

The commission (30%) for purchases made outside the Apple App Store, by way of  an app that was free from the Apple App Store, only applies to digital goods purchases that ends up being downloaded into the Apple devices using iOS, iPadOS, tvOS , MacOS or WatchOS. Why should developers get a free ride to profit from Apple IP? The commission do not apply to purchases made through any app where the goods are delivered by other means. If one purchased a physical CD using the Amazon app, no commission. If one purchased the digital downloaded version using the  Amazon app, then Apple charged a commission. Which is why Amazon do not allow the purchase of digital downloaded goods (music, movies, books, software, etc.) using the Amazon App.

The commission is not just for using the Apple App Store to sell your apps and/or for payment processing. The commission also includes the charge for using Apple IP to profit from. This includes using Apple IP to develop the apps that runs on Apple devices. An Apple Developer account only cost $99 / year (for individual). But Xcode and Swift are free.

If developers like Sweeney don't want to pay Apple a commission, then he shouldn't be charging Epic game players for the virtual bucks used to buy virtual items that have over a 90% profit margin, when playing games by Epic Games using a free app from the Apple App Store. Problem solve.

Or Sweeney can email the purchasers of VBucks a code where the purchasers can enter the code in their account to get their VBucks. But Sweeney would rather have the VBucks credited to their purchaser account immediately, using an app on the Apple device the player is using to play the game and that requires using Apple IP.

Or Sweeney can only sell VBucks (for iOS) on their own website. Which means the game player would need to log on to the internet using a browser to make the purchase. But this reduces impulse and unintentional in-game buying by the game player. And Epic Games have been known to prey on their users (specially kids) with these type of in-game purchases.

https://www.ftc.gov/business-guidance/blog/2022/12/245-million-ftc-settlement-alleges-fortnite-owner-epic-games-used-digital-dark-patterns-charge

 

davidw said:

DAalseth said:

When I first heard about Apple getting a cut from sales outside of the AppStore I thought it was wrong and would come back to bite Apple in the ***. 30% to offset the cost of running the store was fine. But once someone loads the app I never agreed with Apple claiming a cut of sales from other people’s stores. That always struck me as abusive.

If one purchased the digital downloaded version using the  Amazon app, then Apple charged a commission.

 

And I always thought that was a very bad idea. If I buy a grocery bag from Target, Target doesn’t get a cut if I use it at Fred Meyers. 

Steve Jobs had claimed that Apple would run the App Store at break-even. I don't know if he would have maintained that position over time, given the amount of money that would have left on the table. 

Another Steve Jobs position was that Apple would not do a dividend or share buy backs. He liked maintaining a cash cushion for security and investing in the business. 

Maybe both positions were unsustainable, but it would have been interesting to see how SJ would have handled these things, had he lived.