[Mikho]

The real problems of the Apple Tax — it ruins value-chain.

For every value created a customer receives there is value captured by a company paid by this customer. Let say a company creates a service valued as 1X by customer and customer pays 1X for that. This balance guarantees accessibility and interest among many customers.

Apple tax demands for a customer to pay 1.43X for the same value of 1X (0.43 = 30% of 1.43). It means that the balance is ruined, and customers do not get enough value for what they pay. In value they still get 1X despite paying for 1.43X. Hence, a company gets significantly less customers and at the same time it’s unable to benefit from additional 0.43X customers paid. Drop in the revenue is significant. That makes business unsustainable.

So, what a company could do? It could provide more value by letting go own margin in favor of only Apple benefitting from the service or it could increase marketing expenses to attract more users. But then again that additional marketing budget eats into a company’s margin. And again, makes it uneconomical.

Maybe it used to be acceptable to pay the Apple Tax in 2008 when it was enough to just create a simple non-cloud app like calculator, submit to AppStore, and forget about it. In those days there were no expenses to actually run the service. Now the core of mobile services happen outside Apple ecosystem and an iPhone is a mere access point and interface to them. Nothing more. It’s a mere mobile browser for 3rd party services.

Wonder how many great businesses weren’t realized due to Apple making them uneconomical.