Think Apple has already seen the writing on the wall - both S. Korea & the US are now probably going to push back against the IAP restrictions, and they can / should do a couple of things, which might actually increase revenue.
1. Cut down the IAP commission to 15% for everyone.
2. Cut down the commission to 5% for those who pay for a Business Account, say at $5,000 a year.
The thing is no customer wants to use any company's half-assed bug-riddled purchase or subscription system. Every iOS and macOS user will prefer to use the Apple system. All Apple has to do is to make the rates competitive enough, that after considering building their own purchases system, factoring in sales tax and VAT, most developers will happily just opt for Apple's system if the rates make sense. Many people are putting up with 30% already — bringing the rates down to something reasonable with an upgrade path to put them on par with payment processors like Stripe (with VAT and Billing and Radar) or Paddle will just increase revenues for them.
The moment they drop rates and ease restrictions apps that are not being built because of these rules will get built, and these apps will gladly pay the market rate of 5% to 10% for a full service payments system.
> The thing is no customer wants to use any company's half-assed bug-riddled purchase or subscription system. Every iOS and macOS user will prefer to use the Apple system.
The first sentence is true but incomplete, making the second wrong. For example, the Amazon app is highly likely to have people using their existing Amazon payment method. Companies like Stripe are going to offer their own SDKs just like they do for web payments. Apple’s offerings are quite polished so I don’t think they’ll fall out of favor but it’s going to reduce their profit margin and I’m sure the number of people who will use alternatives is much greater than zero.
> The thing is no customer wants to use any company's half-assed bug-riddled purchase or subscription system. Every iOS and macOS user will prefer to use the Apple system.
the apple developer ecosystem (with regards to subscriptions and app purchases) in my experience has been quite awful for a multi trillion dollar company. really bad API docs, really poor experience around understanding what is even happening in their black box. i'm honestly astonished at how "unfinished" the whole experience feels. something like Stripe is on another level
I'm not sure if you ever used StoreKit or their subscription API... its so full of holes and poor documentation and poor implementation that it's a nightmare to work with (particularly subscriptions). Don't believe me? There's a YC startup raising millions of dollars dedicated to solving the subscription implementation problems Apple has created...
If you could choose between 30% of a billion dollars, or 15% of twenty billion, which would you pick?
There are externalities to each choice, of course, but the correct answer is, actually, the obvious one. Apple is not in the right on this one, from any perspective. If they care about their users and developers: they'd drop the commission. If they cared about their revenue and investors: they'd drop the commission.
Fortnite's protest should have been the wake-up call for the people dead asleep at the wheel of their App Store division. Epic very likely would have stayed on the App Store indefinitely at 15%; the issue has metastasized, and now Tim Sweeny has taken the stance of "alternate payment frameworks or nothing", but I'd bet every dollar I've got that if Fortnite's IAPs were at 15% before they left, they'd still be on the App Store. Everything is about money at the end of the day; Apple doubled-down, so now Epic had to double-down.
Imagine a commission so reasonable that Netflix could sell its subscriptions there; that Amazon could sell books; that Fortnite could (maybe) return, and the next triple-A gaming hit that hadn't even considered mobile because of the commissions. That's the money Apple is leaving on the table. These companies WANT their products to be easy to buy; nothing makes that easier than App Store IAPs. There's a number that could work for everyone, but Apple comes to every negotiating table with their fingers plugged in their ears yelling "nah nah nah I can't hear you 30%"
Apple's App Store policies throughout the 2010s will go down in history as the biggest blunder big tech has ever made. I am absolutely certain of this. They're throwing away an empire that could last a hundred years, because they think they're invincible. Tim Cook literally said, under oath, "we don't know how profitable the App Store is". They've publicized proudly about how they employ five hundred whole people to do hundreds of thousands of App Reviews. This is not malice or greed; its complete and total incompetence. Why are investors not OUTRAGED at Apple's leadership?!
One of App Store's biggest draw for any developer is that they are compliant with VAT/GST of multiple countries. With Europe's MOSS now gone, I can't imagine individual app developers hiring an EU rep just so they can comply with EU VAT legally. And that's just EU. You can't even easily comply with Indian GST without incorporating a subsidiary there. Now Canada is also in the mix. And those are just 3 regions. US Sales Tax is another money pit, with proper compliance costing hundreds of dollars per month for each state you develop nexus in.
Add to that the fact that App Store purchases are riddled with fake cards and usually draw a much higher MDR from merchant accounts. If people are rejoicing that they can just hook up their Stripe and world will be rainbows, they are in for a shut down email pretty soon.
It's not just that. As a developer I wouldn't want Apple to know who my paying customers are. Right now, there is no option. With this hopefully there will be more options.
> most developers will happily just opt for Apple's system if the rates make sense
The _buyer_ experience with Apple's IAP is mostly good, but I would argue that the developer experience is downright horrible. Working with subscriptions and IAP receipts is clunky. You can only use one of about 100 SKUs, which makes it difficult to offer discounts and customized pricing at the higher price tiers, where the gaps between amounts are quite large. Until recently, it wasn't even possible for developers to issue refunds!
Even if Stripe charged 30%, I would choose them every time over Apple's IAP.
Trying to hang onto systems where your customers resent paying you is not where you want to be. You bring up an interesting proposal, fundamentally Apple needs to create a system where developers WANT to pay the fees because of the value they get in using the system and services. And all those connected credit cards and customer identities definitely have value.
> 1. Cut down the IAP commission to 15% for everyone. 2. Cut down the commission to 5% for those who pay for a Business Account, say at $5,000 a year.
Payment processors and their networks are infinitely more complex and resource intensive than a mobile app distribution store, and their commissions tend to only be between 1% and 3% per transaction.
For the hypothetical case that there will ever be Steam on iOS I'd rather pay through the Steam account I had already setup on the PC rather than through the Apple payment system. Same for 'cross-platform' subscriptions like Spotify.
People will prefer to use Apple's system if the cost is close enough to the same. The larger/more trusted the brand making the app is, or the higher the cost difference, the more likely the user will be to go to the trouble of going off platform to make the purchase.
Most of the revenue Apple makes is from top apps and top brands, which is why they had no problem cutting the rates to 15% for the little guys already, the little guys are a tiny slice of the overall pie.
There is no way this will overall increase Apple's revenue, especially as companies concentrate on building solid 'Apple fee avoidance' funnels. Not to mention that many pay-for apps will very likely convert to free to download and then push the user to pay for the app externally to the app store as a 'one time lifetime subscription'.
This is going to cause a massive revenue loss for Apple if it stands.
> Every iOS and macOS user will prefer to use the Apple system.
Speak for yourself. I am from India, and we already have much better payment systems then Apple's:
1. All our debit / credit card are chip-based.
2. No card transaction can happen without the PIN. Some online transactions require both a PIN and a password.
3. For any online transactions, the payment processors often support the following options to pay - using debit / credit card, directly from our bank account (Net Banking with 2FA), Unified Payments Interface (UPI) ( https://www.npci.org.in/what-we-do/upi/product-overview ) which is another online digital payment mode that even allows for easy peer to peer payment between parties and umpteen online / mobile digital wallets.
4. Best of all, using any of these payment modes won't allow Apple any access to my financial data.
(And naturally Apple supports none of these popular modes in India because otherwise Apple would come under closer scrutiny from indian regulators.)
As far as App Store commissions are considered, from a developer's perspective Apple can go screw themselves if they want anything more than what competing payment processors charge. (Like Epic, I am disappointed that consumer rights weren't considered at all - ultimately it is us owners / users of Apple devices that pay these 30%-50% or whatever commission!)
> The moment they drop rates and ease restrictions apps that are not being built because of these rules will get built, and these apps will gladly pay the market rate of 5% to 10% for a full service payments system.
I have an app like that that's already done and in the app store. We would love to take advantage of Apple Pay for subscriptions, but the 30% tax means we literally can't. We'd have to jack our prices so much that the cost becomes prohibitive, and if we take the 30% hit ourselves we'd basically be giving things away for free.
If the cost would drop to somewhere in the 5-15% range it's a whole new ballgame.
EDIT: For anyone who's wondering – we basically use the same strategy as Netflix et al, the app is useless unless you already have an account and in order to get one you have to sign up elsewhere. We don't have links or information on how to sign up, you have to just magically end up on our site or have an account added through one of our partners.
As iOS and macOS user, I always subscribe directly through the app developer if they allow this. I stopped trusting Apple subscriptions when I called them asking to reimburse the subscription I forgot to cancel (just a few days later) and they said “no”. I never encountered any internet service declining this kind of requests.
> The thing is no customer wants to use any company's half-assed bug-riddled purchase or subscription system.
Apple only takes credit card in most countries. This makes sense in countries where credit cards are the norm, but not in countries where credit cards are not the norm and far from ubiquitous.
OTOH, external payment providers (eg: stripe) often integrate with local payment mechanism.
In my case, local payment mechanisms are far simpler, easier, and secure. Using a credit card requires me moving money into my Wise account before I can pay anything, adding so many extra steps. Not to mention that I have to remember to transfer money every month before subscriptions get charged.
Plus, the whole online payment system with credit cards is utterly unsafe: share your "secret number" with all merchants and pray none of them leak it or overcharge you.
Given the option, I think most customers would absolutely rather use the company's system, if the company offered lower prices for buying through them. Of course, that assumes both systems would be on offer - but if there's market pressure for companies to offer Apple as an option, that may be enough.
> "they can / should do a couple of things, which might actually increase revenue."
cutting prices that drastically will most certainly not increase revenue. in a competitive market, pricing is near/at the price elasticity equilibrium. in a monopoly situation, pricing is much beyond that point, in the company's favor. you're suggesting they move prices in the opposite direction, which would most certainly impact revenue negatively. note that these are not nascent, high growth markets where the growth rate can overwhelm the price elasticity dynamics.
the court should be mandating broad, open, and honest competition, not dictating prices, which is will practically always get wrong in some way. price is a signal for how competitive a market is, not a lever to drive competition.
The thing is that it is still worse than an open system. Why pay the bridge bandit? There is some infrastructure and that is fine, but I hate to see the tendency in tech to insert themselves as middle man. OS that don't do that are superior targets.
Another option is for Apple to offer their digital store as a service to larger players for a lower % fee. Akin to MVNO (Mobile Virtual Network Operators) and equally on some levels comparable in a way that building that type of network in the first place is costly and in Apples case, it is battle proven software back-end as well as front.
> no customer wants to use any company's half-assed bug-riddled purchase or subscription system
They have this brilliant Apple Pay workflow that's almost completely unused in IAP — it bothered me that we couldn't just use Apple Pay to purchase a Spotify subscription directly in-app. Perhaps soon we'll see this.
> The thing is no customer wants to use any company's half-assed bug-riddled purchase or subscription system.
I have been paying for things online for decades now and never once have I used Apple's payment system. I assure you, plenty of us will use payments not provided by the fruit company.
As a user my dream is that Apple actually puts in the effort and makes the changes to convince these companies to use IAP. My nightmare is that they don't and everyone drops IAP for a wilderness of credit card web forms.
I'm really happy to see this moving forward, but I loathe the potential future landscape. Every fortune 500 is going to immediately pivot to their own IAP options which will make my life harder compared to Apple Pay.
I'm hoping with this movement, tools like Stripe/Paddle will develop some better IAP flows to make it as easy as possible. Adding my card information to 50 different in-app wallets does not sound appealing to me, despite the win for consumers and developers.
I guess what I'm trying to say, is that it's unfortunate we have to make a tradeoff at all.
Hopefully, this move will put downward pressure on Apple's payment infrastructure that incentivizes devs to keep using Apple payments because it's the same fee structure as whatever 3rd party they might move towards.
I've been saying this for years now: this is why Apple should've ushered in lower commissions on larger publishers themselves because otherwise a court, a regulatory authority or a legislature was ultimately going to do it for them.
And you're almost always better off making that change yourself.
Big publishers have their own payment processing pipelines. Apple's is just extra overhead. Smaller publishers still (IMHO) can see a lot of benefit from Apple's 30% cut. It's those large publishers who are most likely to challenge your rules in court or lobby against you.
If the very largest publishers were paying 10% as a Preferred Partner instead of 30%, they would be a lot less willing to challenge the status quo when they might lose that privilege.
We've already have ridiculous workarounds for Apple's policies here like how you can bypass it to buy directly from Amazon through the app for physical goods. The carve out for digital goods is and was always a tortured post facto justification.
Where once the 30% cut funded the App Store (when it was small). It's clearly transitioned to being a massive profit center and Apple executives couldn't see past the short term revenue to see the writing on the wall. Woops.
Personally, I am surprised at all the anti-competitive actions Apple has been able to get away with over the years:
Bundling the OS with hardware
Enforcing an App store
Dictating/Castrating Browser on mobile
And the list goes on.
I'm not saying this as a ding on Apple products, because I genuinely appreciate them, but I think at the same time Apple has resorted to creating roadblocks rather than innovating.
I believe people are over conflating the "friction" involved with using an outside payment system (such as Stripe or PayPal). Apple ID's already allow you to attach your PayPal account as primary funding...this is just giving developers that direct choice now.
PayPal, you confirm checkout total, login to paypal, confirm subscription or price. Done.
Stripe, you can use their standard checkout page, autofill your card info, or just use Apple Pay to confirm the subscription/item, pay. Done.
What's changed is just giving developers that flexibility. Ultimately saving them money, they can hire more devs, and make their products hopefully cheaper (and better).
Most consumers will still have no idea that their checkout is not happening with Apple, and it's happening elsewhere (aside from PayPal Checkout being obvious with their checkout/login flow).
Apple could absolutely adapt their native subscriptions SDK to support the status of a third-party app, though I doubt they ever would. They tried to do this with streaming services (HBO, Netflix, etc.), but they shut this down recently
This is somewhat surprising to me. I thought Epic had a reasonable chance of getting an eventual win on some points, or in getting enough attention that regulators stepped in. I also thought Apple had a pretty decent chance of winning.
But I did not think that Epic had a particularly strong chance of getting an injunction like this.
I hope that the takeaway people take from this is "it's tricky to guess what a judge will do during a contentious case", and not, "the judge was always obviously going to issue this injunction." I still personally think knowing what I know now, if I went back to the start of this case I still wouldn't be able to confidently predict this injunction.
But maybe other people are better at reading court signals than I am.
> “The court cannot ultimately conclude that apple is a monopolist under either federal or state antitrust laws,” she writes in the ruling. “Nonetheless, the trial did show that apple is engaging in anti-competitive conduct under California’s competition laws.”
It's nice to see that you don't have to be a monopolist to be legally barred from anti-competitive behaviour. I hope this puts a permanent stop to all the thread on HN arguing one way or another whether Apple is a monopoly.
So, Apple was in the wrong about forcing app devs to use their payment processor (and taking a 30% cut at the time - 15% or 30% now), and they have to change that.
But Epic was also in the wrong when they tried to go around this rule, and they have to pay 30% on every transaction they made after their update in which they used direct payment?
But if Epic didn't try to go around the rule and loudly complain, there would be no judicial case, and no ruling forcing Apple to change?
I just want to say I follow a lot of court case within the Tech Industry mostly Apple, Samsung, Qualcomm, Intel. And Judge Yvonne Gonzalez Rogers is the only Judge that seems to have clear, well reasoned verdict in all of her cases. Compared to many others cases where the Judge were clearly biases from the very beginning.
The other thing that really irritate the heck of me from Apple's PR, are their insistence of mentioning how App Store has provided jobs in each country. Creating X amount of Jobs. Below is the statement from Apple on this verdict
>Today the Court has affirmed what we've known all along: the App Store is not in violation of antitrust law. As the Court recognized 'success is not illegal.' Apple faces rigorous competition in every segment in which we do business, and we believe customers and developers choose us because our products and services are the best in the world. We remain committed to ensuring the App Store is a safe and trusted marketplace that supports a thriving developer community and more than 2.1 million U.S. jobs, and where rules apply equally to everyone.
One thing that's bugged/occurred to me. People keep acting like Apple will no longer get to charge 30% to developers for in-app purchases, but it seems like they may still be entitled to their 30% and even in this ruling Epic still owes that 30% -- Developers will be able to use alternate payment providers, but may still owe a commission to Apple? Tim Cook alluded to this in his original testimony, and the judge doesn't seem to have had an issue with it, and she ordered Epic to pay the 30%.
In other words, only the anti-steering violated California law, but otherwise, she validated that Apple's business model is reasonable under the law and supported the commission structure, it seems.
That seems like a whole can of worms. How will Apple know what to bill developers for apple sourced transactions? Do they need to build new reporting APIs? Within the next 90 days? Is it the honor system? Will developers raise rates on their sites to cover Apple's commission? Will this all have been moot? What if a developer doesn't pay? Can they be removed? Does apple send them to collections? What does that do to developer relations? Or does Apple abandon commission for external sales they alluded to needing to collect.
Edit to add Tim Cook quote from Epic trial [0]:
“IAP helps Apple efficiently collect a commission” — for payment processing, but also customer service and the use of Apple’s intellectual property. Without in-app purchases, “we would have to come up with another system to invoice developers, which I think would be a mess.”
Reading this, I cannot help but imagine someone at Apple thinking to themselves "I wish we had granted Epic an exemption like we did with Netflix".
The court proceedings and the documents that they were required to disclose were surely bad for PR and now it looks like they won't even keep the monetary benefits.
I've read the doc like 10 times. I think there are two key takeaways.
First, Apple can't stop companies like Epic from including links to other payment tools. Practically speaking, that means things like Kindle can now have a "Purchase on Amazon.com" button (which it currently does not have in order to avoid the 30% cut).
Second, the App Store itself is a-okay. Apple does not need to allow side loading or a second App Store.
Analysis from me: it's a win for Apple. They get to keep their App Store, which would be tremendously bad for them if they were forced to allow alternatives. There will be revenue loss from in-app purchases that are done via external links now, but Apple's own mechanisms are likely to continue being the easiest and most seamless, so that revenue stream will hardly go to $0.
Epic's statement (via Tim Sweeney): Today’s ruling isn't a win for developers or for consumers. Epic is fighting for fair competition among in-app payment methods and app stores for a billion consumers. Fortnite will return to the iOS App Store when and where Epic can offer in-app payment in fair competition with Apple in-app payment, passing along the savings to consumers.
Apple's statement: Today the Court has affirmed what we've known all along: the App Store is not in violation of antitrust law. As the Court recognized 'success is not illegal.' Apple faces rigorous competition in every segment in which we do business, and we believe customers and developers choose us because or products and services are the best in the world. We remain committed to ensuring the App Store is a safe and trusted marketplace that supports a thriving developer community and more than 2.1 million U.S. jobs, and where the rules apply equally to everyone.
Tim Sweeney, Epic’s chief executive, said on Twitter that he was not satisfied with the ruling because it did not go far enough in allowing companies to complete in-app transactions with their own payment systems, versus having to direct customers to outside websites. He said Fortnite would not return to the App Store until such rules were in place.
“Today’s ruling isn’t a win for developers or for consumers,” he said. “We will fight on.”
> Epic Games has announced that it plans to appeal the judge’s decision from today’s Epic v. Apple case. Although today’s ruling says that Apple must relax rules around In-App Purchase and allow apps to link out to third-party payment systems, the judge ruled in Apple’s favor on all other counts.
> For instance, Apple was not shown to have a monopoly nor must be compelled to allow third-party app stores or alternative third-party payment systems inside the app itself, as Epic had hoped. In a statement, Apple described the decision as a “huge win for Apple”.
Hopefully this will eventually lead to a day where users once again have full control over their devices. Android is a bit better, even if alternate app stores don't have the same system privileges as Google Play, but Apple devices are wholly authoritarian in what you can run on a device you supposedly own.
> permanently restrained and enjoined from prohibiting developers from including in their apps and their metadata buttons, external links, or other calls to action that direct customers to purchasing mechanisms, in addition to In-App Purchasing and (ii) communicating with customers through points of contact obtained voluntarily from customers through account registration within the app.
This sounds like the same agreement Apple came to a few weeks ago [0]. They can’t bar developers from linking to external payment methods, but doesn’t require them to allow other forms of in app payment.
Wow, this is huge! We'll see how this holds up, but definitely seems like a turning point.
The effect of this order seems to be Apple can't prevent apps from telling customers about alternative in-app purchasing methods, which is a central issue of the case at hand in Epic vs Apple.
I'm going to put this comment on every Apple vs Epic thread from now on, regardless of how many internet points I lose.
Instead of trying to ruin Apples ecosystem, Epic should try and develop their own.
If Valve can make the Steam Deck, Epic can make a Fortnite Phone.
Epic could then choose to make the phone as open or locked down as they like. They could have their own app store policies, and they could allow any payment platforms they like.
It could be an Android fork, or they could have a look at what is going on in the Linux phone community.
Would it be a success in the market place? I just think that depends on Epics choices it makes along the way. But I do know that millions of kids would rather have a cool gaming phone rather than an old fashioned iPhone.
[+] [-] sudhirj|4 years ago|reply
1. Cut down the IAP commission to 15% for everyone. 2. Cut down the commission to 5% for those who pay for a Business Account, say at $5,000 a year.
The thing is no customer wants to use any company's half-assed bug-riddled purchase or subscription system. Every iOS and macOS user will prefer to use the Apple system. All Apple has to do is to make the rates competitive enough, that after considering building their own purchases system, factoring in sales tax and VAT, most developers will happily just opt for Apple's system if the rates make sense. Many people are putting up with 30% already — bringing the rates down to something reasonable with an upgrade path to put them on par with payment processors like Stripe (with VAT and Billing and Radar) or Paddle will just increase revenues for them.
The moment they drop rates and ease restrictions apps that are not being built because of these rules will get built, and these apps will gladly pay the market rate of 5% to 10% for a full service payments system.
[+] [-] acdha|4 years ago|reply
The first sentence is true but incomplete, making the second wrong. For example, the Amazon app is highly likely to have people using their existing Amazon payment method. Companies like Stripe are going to offer their own SDKs just like they do for web payments. Apple’s offerings are quite polished so I don’t think they’ll fall out of favor but it’s going to reduce their profit margin and I’m sure the number of people who will use alternatives is much greater than zero.
[+] [-] volkk|4 years ago|reply
the apple developer ecosystem (with regards to subscriptions and app purchases) in my experience has been quite awful for a multi trillion dollar company. really bad API docs, really poor experience around understanding what is even happening in their black box. i'm honestly astonished at how "unfinished" the whole experience feels. something like Stripe is on another level
[+] [-] baldajan|4 years ago|reply
[+] [-] 015a|4 years ago|reply
There are externalities to each choice, of course, but the correct answer is, actually, the obvious one. Apple is not in the right on this one, from any perspective. If they care about their users and developers: they'd drop the commission. If they cared about their revenue and investors: they'd drop the commission.
Fortnite's protest should have been the wake-up call for the people dead asleep at the wheel of their App Store division. Epic very likely would have stayed on the App Store indefinitely at 15%; the issue has metastasized, and now Tim Sweeny has taken the stance of "alternate payment frameworks or nothing", but I'd bet every dollar I've got that if Fortnite's IAPs were at 15% before they left, they'd still be on the App Store. Everything is about money at the end of the day; Apple doubled-down, so now Epic had to double-down.
Imagine a commission so reasonable that Netflix could sell its subscriptions there; that Amazon could sell books; that Fortnite could (maybe) return, and the next triple-A gaming hit that hadn't even considered mobile because of the commissions. That's the money Apple is leaving on the table. These companies WANT their products to be easy to buy; nothing makes that easier than App Store IAPs. There's a number that could work for everyone, but Apple comes to every negotiating table with their fingers plugged in their ears yelling "nah nah nah I can't hear you 30%"
Apple's App Store policies throughout the 2010s will go down in history as the biggest blunder big tech has ever made. I am absolutely certain of this. They're throwing away an empire that could last a hundred years, because they think they're invincible. Tim Cook literally said, under oath, "we don't know how profitable the App Store is". They've publicized proudly about how they employ five hundred whole people to do hundreds of thousands of App Reviews. This is not malice or greed; its complete and total incompetence. Why are investors not OUTRAGED at Apple's leadership?!
[+] [-] arihant|4 years ago|reply
Add to that the fact that App Store purchases are riddled with fake cards and usually draw a much higher MDR from merchant accounts. If people are rejoicing that they can just hook up their Stripe and world will be rainbows, they are in for a shut down email pretty soon.
[+] [-] nutanc|4 years ago|reply
[+] [-] falafel_muncher|4 years ago|reply
The _buyer_ experience with Apple's IAP is mostly good, but I would argue that the developer experience is downright horrible. Working with subscriptions and IAP receipts is clunky. You can only use one of about 100 SKUs, which makes it difficult to offer discounts and customized pricing at the higher price tiers, where the gaps between amounts are quite large. Until recently, it wasn't even possible for developers to issue refunds!
Even if Stripe charged 30%, I would choose them every time over Apple's IAP.
[+] [-] mertd|4 years ago|reply
[+] [-] BackBlast|4 years ago|reply
[+] [-] heavyset_go|4 years ago|reply
Payment processors and their networks are infinitely more complex and resource intensive than a mobile app distribution store, and their commissions tend to only be between 1% and 3% per transaction.
[+] [-] flohofwoe|4 years ago|reply
[+] [-] jwlake|4 years ago|reply
[+] [-] ltbarcly3|4 years ago|reply
Most of the revenue Apple makes is from top apps and top brands, which is why they had no problem cutting the rates to 15% for the little guys already, the little guys are a tiny slice of the overall pie.
There is no way this will overall increase Apple's revenue, especially as companies concentrate on building solid 'Apple fee avoidance' funnels. Not to mention that many pay-for apps will very likely convert to free to download and then push the user to pay for the app externally to the app store as a 'one time lifetime subscription'.
This is going to cause a massive revenue loss for Apple if it stands.
[+] [-] webmobdev|4 years ago|reply
Speak for yourself. I am from India, and we already have much better payment systems then Apple's:
1. All our debit / credit card are chip-based.
2. No card transaction can happen without the PIN. Some online transactions require both a PIN and a password.
3. For any online transactions, the payment processors often support the following options to pay - using debit / credit card, directly from our bank account (Net Banking with 2FA), Unified Payments Interface (UPI) ( https://www.npci.org.in/what-we-do/upi/product-overview ) which is another online digital payment mode that even allows for easy peer to peer payment between parties and umpteen online / mobile digital wallets.
4. Best of all, using any of these payment modes won't allow Apple any access to my financial data.
(And naturally Apple supports none of these popular modes in India because otherwise Apple would come under closer scrutiny from indian regulators.)
As far as App Store commissions are considered, from a developer's perspective Apple can go screw themselves if they want anything more than what competing payment processors charge. (Like Epic, I am disappointed that consumer rights weren't considered at all - ultimately it is us owners / users of Apple devices that pay these 30%-50% or whatever commission!)
[+] [-] mstade|4 years ago|reply
I have an app like that that's already done and in the app store. We would love to take advantage of Apple Pay for subscriptions, but the 30% tax means we literally can't. We'd have to jack our prices so much that the cost becomes prohibitive, and if we take the 30% hit ourselves we'd basically be giving things away for free.
If the cost would drop to somewhere in the 5-15% range it's a whole new ballgame.
EDIT: For anyone who's wondering – we basically use the same strategy as Netflix et al, the app is useless unless you already have an account and in order to get one you have to sign up elsewhere. We don't have links or information on how to sign up, you have to just magically end up on our site or have an account added through one of our partners.
[+] [-] xkr|4 years ago|reply
[+] [-] WhyNotHugo|4 years ago|reply
Apple only takes credit card in most countries. This makes sense in countries where credit cards are the norm, but not in countries where credit cards are not the norm and far from ubiquitous.
OTOH, external payment providers (eg: stripe) often integrate with local payment mechanism.
In my case, local payment mechanisms are far simpler, easier, and secure. Using a credit card requires me moving money into my Wise account before I can pay anything, adding so many extra steps. Not to mention that I have to remember to transfer money every month before subscriptions get charged.
Plus, the whole online payment system with credit cards is utterly unsafe: share your "secret number" with all merchants and pray none of them leak it or overcharge you.
[+] [-] MillenialMan|4 years ago|reply
[+] [-] clairity|4 years ago|reply
cutting prices that drastically will most certainly not increase revenue. in a competitive market, pricing is near/at the price elasticity equilibrium. in a monopoly situation, pricing is much beyond that point, in the company's favor. you're suggesting they move prices in the opposite direction, which would most certainly impact revenue negatively. note that these are not nascent, high growth markets where the growth rate can overwhelm the price elasticity dynamics.
the court should be mandating broad, open, and honest competition, not dictating prices, which is will practically always get wrong in some way. price is a signal for how competitive a market is, not a lever to drive competition.
[+] [-] criddell|4 years ago|reply
I’m much more likely to subscribe to something via the Apple store than I am through any in-app service.
[+] [-] raxxorrax|4 years ago|reply
[+] [-] unknown|4 years ago|reply
[deleted]
[+] [-] Zenst|4 years ago|reply
[+] [-] whckt|4 years ago|reply
They have this brilliant Apple Pay workflow that's almost completely unused in IAP — it bothered me that we couldn't just use Apple Pay to purchase a Spotify subscription directly in-app. Perhaps soon we'll see this.
[+] [-] mdoms|4 years ago|reply
I have been paying for things online for decades now and never once have I used Apple's payment system. I assure you, plenty of us will use payments not provided by the fruit company.
[+] [-] sharkjacobs|4 years ago|reply
[+] [-] ElFitz|4 years ago|reply
And to have to just through countless hoops to unsubscribe.
Looking at you, annoyingly hard to unsubscribe from, New-York Times.
[+] [-] anothernewdude|4 years ago|reply
Including Apple's
[+] [-] EamonnMR|4 years ago|reply
[+] [-] themihai|4 years ago|reply
[+] [-] yurishimo|4 years ago|reply
I'm hoping with this movement, tools like Stripe/Paddle will develop some better IAP flows to make it as easy as possible. Adding my card information to 50 different in-app wallets does not sound appealing to me, despite the win for consumers and developers.
I guess what I'm trying to say, is that it's unfortunate we have to make a tradeoff at all.
Hopefully, this move will put downward pressure on Apple's payment infrastructure that incentivizes devs to keep using Apple payments because it's the same fee structure as whatever 3rd party they might move towards.
[+] [-] cletus|4 years ago|reply
And you're almost always better off making that change yourself.
Big publishers have their own payment processing pipelines. Apple's is just extra overhead. Smaller publishers still (IMHO) can see a lot of benefit from Apple's 30% cut. It's those large publishers who are most likely to challenge your rules in court or lobby against you.
If the very largest publishers were paying 10% as a Preferred Partner instead of 30%, they would be a lot less willing to challenge the status quo when they might lose that privilege.
We've already have ridiculous workarounds for Apple's policies here like how you can bypass it to buy directly from Amazon through the app for physical goods. The carve out for digital goods is and was always a tortured post facto justification.
Where once the 30% cut funded the App Store (when it was small). It's clearly transitioned to being a massive profit center and Apple executives couldn't see past the short term revenue to see the writing on the wall. Woops.
[+] [-] OrvalWintermute|4 years ago|reply
Bundling the OS with hardware
Enforcing an App store
Dictating/Castrating Browser on mobile
And the list goes on.
I'm not saying this as a ding on Apple products, because I genuinely appreciate them, but I think at the same time Apple has resorted to creating roadblocks rather than innovating.
[+] [-] testfrequency|4 years ago|reply
PayPal, you confirm checkout total, login to paypal, confirm subscription or price. Done.
Stripe, you can use their standard checkout page, autofill your card info, or just use Apple Pay to confirm the subscription/item, pay. Done.
What's changed is just giving developers that flexibility. Ultimately saving them money, they can hire more devs, and make their products hopefully cheaper (and better).
Most consumers will still have no idea that their checkout is not happening with Apple, and it's happening elsewhere (aside from PayPal Checkout being obvious with their checkout/login flow).
Apple could absolutely adapt their native subscriptions SDK to support the status of a third-party app, though I doubt they ever would. They tried to do this with streaming services (HBO, Netflix, etc.), but they shut this down recently
[+] [-] danShumway|4 years ago|reply
But I did not think that Epic had a particularly strong chance of getting an injunction like this.
I hope that the takeaway people take from this is "it's tricky to guess what a judge will do during a contentious case", and not, "the judge was always obviously going to issue this injunction." I still personally think knowing what I know now, if I went back to the start of this case I still wouldn't be able to confidently predict this injunction.
But maybe other people are better at reading court signals than I am.
[+] [-] smnrchrds|4 years ago|reply
It's nice to see that you don't have to be a monopolist to be legally barred from anti-competitive behaviour. I hope this puts a permanent stop to all the thread on HN arguing one way or another whether Apple is a monopoly.
[+] [-] Rels|4 years ago|reply
So, Apple was in the wrong about forcing app devs to use their payment processor (and taking a 30% cut at the time - 15% or 30% now), and they have to change that.
But Epic was also in the wrong when they tried to go around this rule, and they have to pay 30% on every transaction they made after their update in which they used direct payment?
But if Epic didn't try to go around the rule and loudly complain, there would be no judicial case, and no ruling forcing Apple to change?
This is weird to me.
[+] [-] ksec|4 years ago|reply
The other thing that really irritate the heck of me from Apple's PR, are their insistence of mentioning how App Store has provided jobs in each country. Creating X amount of Jobs. Below is the statement from Apple on this verdict
>Today the Court has affirmed what we've known all along: the App Store is not in violation of antitrust law. As the Court recognized 'success is not illegal.' Apple faces rigorous competition in every segment in which we do business, and we believe customers and developers choose us because our products and services are the best in the world. We remain committed to ensuring the App Store is a safe and trusted marketplace that supports a thriving developer community and more than 2.1 million U.S. jobs, and where rules apply equally to everyone.
[+] [-] skygazer|4 years ago|reply
In other words, only the anti-steering violated California law, but otherwise, she validated that Apple's business model is reasonable under the law and supported the commission structure, it seems.
That seems like a whole can of worms. How will Apple know what to bill developers for apple sourced transactions? Do they need to build new reporting APIs? Within the next 90 days? Is it the honor system? Will developers raise rates on their sites to cover Apple's commission? Will this all have been moot? What if a developer doesn't pay? Can they be removed? Does apple send them to collections? What does that do to developer relations? Or does Apple abandon commission for external sales they alluded to needing to collect.
Edit to add Tim Cook quote from Epic trial [0]: “IAP helps Apple efficiently collect a commission” — for payment processing, but also customer service and the use of Apple’s intellectual property. Without in-app purchases, “we would have to come up with another system to invoice developers, which I think would be a mess.”
[0] https://www.theverge.com/2021/5/22/22448139/tim-cook-epic-fo...
[+] [-] fxtentacle|4 years ago|reply
The court proceedings and the documents that they were required to disclose were surely bad for PR and now it looks like they won't even keep the monetary benefits.
[+] [-] thehappypm|4 years ago|reply
First, Apple can't stop companies like Epic from including links to other payment tools. Practically speaking, that means things like Kindle can now have a "Purchase on Amazon.com" button (which it currently does not have in order to avoid the 30% cut).
Second, the App Store itself is a-okay. Apple does not need to allow side loading or a second App Store.
Analysis from me: it's a win for Apple. They get to keep their App Store, which would be tremendously bad for them if they were forced to allow alternatives. There will be revenue loss from in-app purchases that are done via external links now, but Apple's own mechanisms are likely to continue being the easiest and most seamless, so that revenue stream will hardly go to $0.
[+] [-] granzymes|4 years ago|reply
Apple's statement: Today the Court has affirmed what we've known all along: the App Store is not in violation of antitrust law. As the Court recognized 'success is not illegal.' Apple faces rigorous competition in every segment in which we do business, and we believe customers and developers choose us because or products and services are the best in the world. We remain committed to ensuring the App Store is a safe and trusted marketplace that supports a thriving developer community and more than 2.1 million U.S. jobs, and where the rules apply equally to everyone.
[+] [-] etchalon|4 years ago|reply
But the text of the order seems to be about anti-steering, i.e. Apple can't tell developers they can't link out to other payment options on the web.
[+] [-] gordon_freeman|4 years ago|reply
Tim Sweeney, Epic’s chief executive, said on Twitter that he was not satisfied with the ruling because it did not go far enough in allowing companies to complete in-app transactions with their own payment systems, versus having to direct customers to outside websites. He said Fortnite would not return to the App Store until such rules were in place.
“Today’s ruling isn’t a win for developers or for consumers,” he said. “We will fight on.”
[1] https://www.nytimes.com/2021/09/10/technology/epic-apple-app...
[+] [-] syspec|4 years ago|reply
> Epic Games has announced that it plans to appeal the judge’s decision from today’s Epic v. Apple case. Although today’s ruling says that Apple must relax rules around In-App Purchase and allow apps to link out to third-party payment systems, the judge ruled in Apple’s favor on all other counts.
> For instance, Apple was not shown to have a monopoly nor must be compelled to allow third-party app stores or alternative third-party payment systems inside the app itself, as Epic had hoped. In a statement, Apple described the decision as a “huge win for Apple”.
[+] [-] jjordan|4 years ago|reply
[+] [-] fotta|4 years ago|reply
This sounds like the same agreement Apple came to a few weeks ago [0]. They can’t bar developers from linking to external payment methods, but doesn’t require them to allow other forms of in app payment.
[0] https://www.apple.com/newsroom/2021/08/apple-us-developers-a...
[+] [-] carlosdp|4 years ago|reply
The effect of this order seems to be Apple can't prevent apps from telling customers about alternative in-app purchasing methods, which is a central issue of the case at hand in Epic vs Apple.
[+] [-] jay_kyburz|4 years ago|reply
Instead of trying to ruin Apples ecosystem, Epic should try and develop their own.
If Valve can make the Steam Deck, Epic can make a Fortnite Phone.
Epic could then choose to make the phone as open or locked down as they like. They could have their own app store policies, and they could allow any payment platforms they like.
It could be an Android fork, or they could have a look at what is going on in the Linux phone community.
Would it be a success in the market place? I just think that depends on Epics choices it makes along the way. But I do know that millions of kids would rather have a cool gaming phone rather than an old fashioned iPhone.