There are lots of conflicting opinions on this. Personally I think its fine that apple provides payment processing but not fine that it forces developers to use their payment processor. A more fair system would allow the developer to present the devs own choice as well as the apple payments and allow the developer to explain there is a 30% charge on using apples payment processor.
Part of the problem is that the in-app purchase cut isn't just for payments infra, it also includes the rest of the infrastructure and value prop for the app store(s), which is otherwise only $100/year, which is nothing for huge companies. The problem is they also force users to use the official app store. tbf this is all less true on Android. I feel like a competitive market would have decoupled these costs.
Yeah I think its fair that Apple charges whatever they want for whatever service they provide. They can charge for the App Store, they can charge for the dev tools and SDK.
But that everything they charge money for, they _must_ allow alternatives to exist. If they want to charge a large fee for getting on the App Store, they must allow alternative app stores. The problem is not that they charge money, but that they use their massive user lock in to force people to pay for these services to exist in the market.
But… this is not true just about anywhere. I can’t go to. Ford dealership and buy a new Chevy or go to Kroger and buy Costco brand. Or when I go to some stores they don’t allow me to use American Express.
And yes you do have choices. There are plenty of other phone manufacturers out there. Can I install Ford UI on my Tesla? Do you think those companies won’t make you use their own payment processing once apps become prolific in car UIs? Can I hail Uber with the Lyft app? Why are they locking me in to only using Lyft on the Lyft app? Can I buy PlayStation games on Xbox?
If you’re against all of it fine, but let’s not pretend Apple is doing anything out of the ordinary here.
The problem is not the exact thing Apple is doing, but the scale they are doing it at. If Ford and Chevy owned every single commercial plot of land on the country and if you wanted to start up a new brand, you are told you just have to buy your own unpopulated island, start a civilization, convince people to move over, and then you can open a new store selling your own product. That would be where Apple and Google sit right now.
Are we talking about phones or operating systems? Apple has decent market share of course but there are other companies out there. You can buy a Pixel, or any number of other phones.
And even so, many of these “issues” are not problems on Android right? You can use 3rd-party app stores and so forth right?
I’d also suggest.. why does the scale issue matter? I prefer that Apple enforces Apple Pay. I prefer that Apple enforced Sign In with Apple. That’s why I buy an iPhone. If those things bothered me I’d buy something else.
It’s totally out of the ordinary. Apple sells about half the smartphones in the US. There are many other options for manufacturers but they all essentially share one other operating system. This big of a market with this little competition and this much vertical integration would normally be an obvious example of a monopoly. None of your examples come close.
But why does Apple have 50% market share? It’s because of these exact things that I as a user prefer. And on top of that, while 50% is obviously a great position, the other half is Android. And then if you compare based on phones there are still tons of options. If customers hated things like privacy warning labels or sign-in with apple they’d buy other phones. But they don’t. So it seems pretty clear to me the best product is winning.
You may stick with Apple because you like all of these policy decisions. Many stick with Apple because changing is so difficult. You lose iMessage, have to move your pictures out of iCloud, and repurchase your accumulated app library. The mere existence of another phone option doesn't necessarily make it viable. This level of lock-in is by design.
It was always like that, and on Android too. This isn't even lock-in, you have to move your files after buying new SSD, or relocate your documents after installing a new OS. It is a lock-in in the same way `apt-get install coreutils` is, because you can't just move to Windows and expect the same workflow.
Yes. Switching from Android is difficult as well. But, I disagree it's always been like this. When I buy software directly from the developer/publisher, I often can get a license that works on both Windows and macOS (or can get a dual license for a nominal fee). It wasn't really until mobile app stores took off that I needed to repurchase software if I went to another platform. And repurchasing that software would not be cheap. It's an actual cost of changing platforms.
I switch between Windows, Linux, and macOS with regularity and while there are platform-specific services, the mobile platform is considerably more walled off. Mobile storage stagnated for years while the apps and any captured media became larger, really pressuring you to use their cloud services in a way I've never had with a desktop. I can store data on a NAS and access it pretty easily with any of the desktop platforms. I'm not sure how someone is supposed to be able to be able to migrate off iCloud when moving to Android without involving a non-mobile computer. It doesn't appear to be anywhere as easy as copying files from one SSD to another or using AirDrop/SMB/NFS.
The iMessage thing is another layer to this. You may not want to call that lock-in, but there have been extensive threads about this topic recently [0][1]. The Epic lawsuit surfaced some emails that strongly suggest Apple views iMessage as a way to lock customers in [2].
Regardless, the original point is switching platforms isn't going to happen without a fair bit of cost and likely some social upheaval. Switching platforms is technically an option, but it's not a realistic one for many. I don't think it follows that if someone has stuck with the same platform for several years that they tacitly agree with all the policy decisions made by that platform.
This doesn't mean anything when so many things are coupled in to one product. I buy iphones because they have the best hardware and get updated for a long time. I don't buy iphones because they force one payment processor.
That is a very different argument than the one I replied to. It’s one thing to say this situation is ordinary, another to say that you’re fine with it.
Remember that there's nothing at all illegal about having a monopoly. If you have such a superior product to everyone else then it's the expected market outcome.
What's illegal is anti-competitive use of monopoly market position.
Since it is a two sided platform, not a single product ("phone and apps"), and as Apple is constraining the payment downstream market, and causing harm to the consumer (30% markup), there is a case.
Some textbook rulings will apply, since Apple exces admit that if they do no constrain downstream, no one will use their 30% markup product. So consumers could be better off by definition
although Apple will argue that they will charge more to downstream producers directly, but this is also difficult to argue (they can do this anyway and extract rents from consumers and producers at the same time).
If you have a monopolistic platform market on which you also produce, it seems rather hard not to get sued
You'd be wrong about going to a Ford dealership and buying whatever you want in most states. They are independent operators that again, have a high amount of independence from the manufacturer. They will gladly but your old car and sell it on their used lot.
This is why we talk about Tesla direct sales all the time. Because we are moving car sales to the apple model.
> I can’t go to. Ford dealership and buy a new Chevy or go to Kroger and buy Costco brand
Bad analogy. A better analogy would be if a customer already purchased a ford car, and then tried to fix the car with a 3rd party repair person.
There are literal laws about this, for cars, that require ford to provide manuals, to 3rd parties, and require ford to sell replacement parts for 3rd parties to repair cars from.
The problem is that, effectively, it is customers making the decision to buy Apple products, but developers who have pay to get access to them. This split means the incentives don’t get to the people in power, and the mechanism breaks down.
It’s exactly the same dynamic as in net neutrality.
Developers have to pay Nintendo a lot to get access to customers with a SNES, Wii, Switch, etc as well, which is the OP's point - if someone makes a good product that gains a lot of market share (iOS, Nintendo Switch, Tesla, etc) that doesn't mean a bunch of 3p companies are entitled to access to those customers.
I think the same thing should apply, but it's just not as harmful to society currently, because it's just one platform among many, many others, and it's just for games. Whatever the proper regulation is to counter this, it might very well apply to pure gaming platforms as well, making it so that anyone is allowed to make, market and sell games on them, no matter how small.
> Developers have to pay Nintendo a lot to get access to customers with a SNES, Wii, Switch, etc as well, which is the OP's point
The different here is that Nintendo is not a 3 trillion dollar company, that owns 50% of a massively important market in the US.
Yes, anti-competitive practices are allowed if you aren't a huge company.
Literally it is the law, that if you become a big enough company, and have enough market power, then certain actions become illegal, that were not illegal if you weren't as powerful of a company.
> that doesn't mean a bunch of 3p companies are entitled to access to those customers.
It actually literally does mean that they are entitled to that.
For the same reason that 3rd party web browsers, were entitled access to windows users (and before you say it, yes I am aware that windows had a larger control of the market than apple, and it is not literally the same in every single exact way, but the same principle still applies, just in a smaller amount)
Payment processing trivially invalidates your premise: I can walk into a Ford dealership and buy any vehicle using any source of cash-like funds I'd like -- I don't have to use Ford's preferred lender.
Is that true? They aren’t required to sell you a car. I think they could require you to use their preferred lender as a condition of selling the car to you.
App store would be there even if they could charge no money for developers and have 0% cut - it's a prerequisite for the iPhone and they are making huge margins just in the devices, this argument that without allowing anti-competitive behaviour there would be no investment in the appstore is nonsense precisely becaus it's a first party integration.
For example I have no problem if a third party store forced one payment option only, but only allowing one store and one payment option is just milking your market position/rent seeking.
> For example I have no problem if a third party store forced one payment option only, but only allowing one store and one payment option is just milking your market position/rent seeking.
See that’s _exactly_ the problem I have. I don’t want to use your shitty payments system that’s likely less secure than anything Apple is doing. Allowing a single payment source that’s not Apple would directly harm consumers from a security and privacy perspective.
I am an exception. I use phone as a phone and offline GPS. Do not even have data plan. So yes anything that can make a call will do. Productivity: for me it is all on PC / servers.
I might reconsider my attitude when / if I can have phone as a generic computing device where I can download and install whatever I need without much hassles and where I can distribute my applications without needing to sacrifice a virgin first.
iOS safety measures do not rely on the App Store. The whole sandboxing and permissions model is there to protect one app from accessing things it shouldn't.
imo the value prop of the App store can be entirely propped up by the $100/year developer subscriptions. They don't even need a profit cut. The app store infra is a joke. You could probably fund it with under $1m/yr
iOS has allowed side loading for half a decade now. Companies that find $100 prohibitive have a free path that’s nearly identical to Android side loading.
iOS most certainly does not have real sideloading. You can if you recompile the app with your own key every 7 days. Or you can use testflight with some very serious restrictions like not being able to monetize at all.
Sideloading on iOS is nothing like sideloading on Android, you have to compile the app from source with your personal key and even then it's only valid on the device for 7 days.
There is tooling to manage self-signed certs beyond the seven day window. Unrelated but I find it weird that “you have to compile the app” is a bad thing now.
There are ways to go past 7 days but all come with even more downsides to both the end user and company trying to get users to sideload. "You have to compile the app" is extremely related if you're a company wanting users to install your app, especially since that requires more than just knowledge to be able to do.
To ask you the inverse question, in what way is any of this "nearly identical" to Android sideloading which allows indefinite sideloading via any delivery method, including installation of 3rd party stores, with no more than a click on an approval prompt from the user?
Optimizing for people who want to side load ~and~ cannot click the build button in Xcode seems wild to me. (No disrespect!)
It’s identical though in that <when one side loads> one is <completely disconnect from the ecosystem of the device manufacturer>.
Re: side loading binaries/APKs on my actual phone that’s logged into my actual bank account? Hard pass. There’s a time and place for lax security. This is what air gapping is for.
> Optimizing for people who want to side load ~and~ cannot click the build button in Xcode seems wild to me. (No disrespec
When you personally limit sideloading to be "I compile the app and manage a personal security chain to keep it active" it may seem wild, that's not what the vast majority of Android sideloading/3rd party stores is though. Xcode, beyond requiring installation, requires a macOS install to run it on. There are other ways to compile iOS apps, each even less accessible to users or distribution by companies. And again: the obvious statement that the vast majority of revenue generating apps on the App Store are not open source.
Even amongst the Android tech nerds 3rd party stores like F-Droid are popular because users don't want to compile their open source apps constantly... and there are even less requirements around compiling Android apps than iOS apps!
> It’s identical though in that <when one side loads> one is <completely disconnect from the ecosystem of the device manufacturer>.
Not true, sideloading apps on Android means loading them from a different source not disconnecting them from Google services or the Android ecosystem as a whole. It of course allows for that if it's what you're after but it's not limited in such a scope.
> Re: side loading binaries/APKs on my actual phone that’s logged into my actual bank account? Hard pass. There’s a time and place for lax security. This is what air gapping is for.
On Android sideloading is being able to pick which app sources you trust, even if that means "not Google". That could mean "I compiled it myself on an air gapped computer" to you, "I loaded it from a 3rd party store" to another, and "I downloaded it from the developers site" to a third. Which you personally choose is irrelevant as each user gets to pick their allowed sources so it can fit any user's need.
There are several methods for doing it but they are all crippled in ways that make it impossible to actually use the system for anything but QA testing and development.
You can install any app you compiled with your own key and it lasts for 7 days before requiring it to be recompiled.
AltServer can do it but in my experience the Windows version of AltServer is extremely unreliable. AltStore never really auto-renewed properly for me until I put AltServer on an old MacBook Air. Furthermore, the fact that this process needs a second device to bootstrap provisioning at all[0] might be a non-starter for some. Take a week-long vacation? Well, now all your sideloaded apps stop working.
A far bigger limitation for me is the three-app provisioning limit. There isn't any way to work around it[1], and if you do want to do serious sideloading you almost certainly will need to upgrade to a paid developer account.
[0] Specifically iOS only allows app provisioning over USB or Wi-Fi, not locally. Locally installed software cannot actually communicate with the remote debugging daemon. You can work around this with network extensions, but you don't get to use them in dev-signed apps unless you have a paid dev account that's been approved by Apple to use them.
For the record, that isn't to make sideloading harder; that's because Facebook went and shipped a spyware VPN with their enterprise cert.
[1] Personal experience time: Even when jailbroken, and with AltDaemon and Immortal installed, AltStore still bumps up against the three-app limit.
A charge for payment processing should be closer to what Visa or Mastercard charges, something more in line with the cost for providing the service. They charge on the order of 1.5% to 3.5%, depending. 30% is extortionate.
The majority of those percentages is the various gimmick bonus programs that convince people they are beating the system and getting back more than they pay. In Europe, the cap for credit cards is at 0.3% and that's still making a ton of money.
If it were, many companies would come in at 0.01% and bank on all the customers that immediately switch payment systems. Or maybe there is a bunch of overhead and investment involved in doing such (personnel, equipment, fraud systems, etc), so no competitor charges a price that would mean break-even or losing money. If a company really doesn't want to use a payment processor, they're free to go back to tab-based/credit-based accounting and hope that everyone pays in cash or everyone pays with ACH.
On that note, I hope FedNOW works well enough to become an alternate PoS payment method[0].
It absolutely has impact in the cost of the transaction. Even if we forget the fact that US credit card customers are bribed with percentage based cash back, card processors are both providing a form of insurance, and giving both merchants and customers cashflow easing loans. If I pay my credit card in full every time, I am, in practice, paying days later than when the merchant received my payment: I think the issuing bank is dealing with that part, and is not charging the customer for it. Many a transaction processor also ends up paying merchants faster than their bank gives them the money too: Their agreements with the merchants are often a little too friendly, and they have to secure loans for a day or two: There are entire teams out there dedicated to avoiding cash flow problems on the first of the month, when so many subscriptions come in, and a lot of money changes hands.
We also have the insurance component: Say some famous musician and a few influencers decide to launch a new music festival, get a lot of money paid to their festival-making company, and then, due to mismanagement, fail to have a working music festival. Most of the people that paid with credit cards will ask for refunds, and will get them, even if the festival company goes bankrupt. Some of those people managing transactions hold the bag, and end up losing millions in refunds. There's also a wide gamut of fraudulent operations that will try to extract money from the system, either by posing as merchants, or as customers. Some of that fraud is also eaten by the companies that handle the transaction.
So while fees could go down in a world with little fraud (and they do, as companies that are large enough, and have sufficient controls, end up negotiating serious discounts), it makes sense for fees to have a flat base and a percentage base, even if the entire system between you and your customer was just attempting to break even. The right percent though, barring the most fraudulent of environments, has nothing to do with a 30% cut.
The merchants lose when there's fraud/chargebacks, not Visa. Visa forwards that cost to the original merchant. That incentivizes them to be more vigilant about fraud protection, e.g. having to put your zip code in at the gas station.
And the banks that issue the cards are the ones that pay points/get interest, not Visa. Visa simply processes the transactions. If you noticed, your "Visa" card has a bank issuer, like the Capital One Quicksilver card (which uses Visa network)
The cost of running a transaction network has nothing to do with credit card points, insurance, chargebacks. Those are all handled by other parties.
I'm not making a statement on what the right or wrong rate is, but in the case of credit cards there's also a level of risk involved with fraud, which does scale with the size of purchase. Debit cards have less risk and thus have a lower, if not totally fixed-rate, fee.
For chargeback-able transactions and transactions that are reversible due to fraud, it seems intuitive that the expected value of loss would be a function of the size of the transaction.
As someone who sells software in the App Store I tend to agree with you although I'll add that for the majority of us it's 15% not 30% and they do handle a fair bit more than just the payment processing.
At this point, I think the way this will all end up (and would be fair) is for Apple’s payment system to remain, but you can choose to use another one. Apple’s take will probably fall in line (otherwise no one would use it).
I also kind of like the idea that something like that happens, except games all caps must use Apple‘s system and pay the 30%. That’s not as fair, but might be workable.
If I had my way over all of this? Do you know what I really want?
No consumable in-app purchases. Period. Outlawed.
One of my favorite things about the early iPhone was the incredible games that you could get. Now there’s almost none of them, the developers of practically abandoned the platform. The only ways to make money are ads and consumable in app purchases which are just complete scams. Like $1000 buckets of Smurfberries.
That’ll never happen. But I wish it would, because it would bring back the great games.
Check out GameClub, for those old great games. They buy the rights from developers that don’t want to continue, then do the maintenance for newer versions of iOS and Android.
But I think we should be able to agree that demanding 30% of nearly everything and completely banning any sort of alternatives is extremely overbearing and ends up taking a lot of money out of the pockets of people struggling to get by.
Developers would be interested in taking 30% and not interested in even trying Apple appstore, which btw sets product quality level guidelines. As a result, user experience will suffer. Those who prefer apple as it is will seek apple-level quality but wouldn't find one, because apple format is now equal to a regular one, and there is no superapple. Apple instead implicitly suggests to just charge apple users more in IAPs and for apps, when a charge is related to some electronic type of value. Whatever price developers see fit, there is no practical limit.
What you are basically trying to do is visiting a vip club (user-value wise) and then making it open to every crap dj out there, because otherwise it's "unfair". Why don't you just go to a regular one then? It is the same as this vip would turn into in a heartbeat. And where should other members who liked it go after that?
good example, that would certainly force them to have more competitive rates. Probably a premium, but still under competition. With how they control the app store though, how could it ever be a fair competition, there's always the risk of being unfairly treated?
We need to throw it back on the user. Apple uses this line of reasoning all the time. They justify their tracker blocking stuff on "the user clicked a button saying they wanted this". So for Apple to justify their fee they need to be able to convince the user that clicking the Apple payment option was worth the 30% fee while allowing other processors on the same playing field.
Users might be ok with some extra fee for conveniences like trust and the ability to easily unsubscribe. Let the user pick and let Apple compete for those sales.
Consumers buy the phones that are advertised to support features (e.g. LIDAR) and iMessage. They pay for the OS development.
Granted the SDKs would probably be much less comprehensive if there were no 3rd party apps but Apple advertises how their hardware can be used incl. by 3rd party apps and providing the libraries to access that hardware is expected by users (even if they don't think about this, most people expect Snapchat to access the camera).
Bandwidth/Hosting is covered under the $100/yr but if it wasn't, they could easily charge devs for tiers of downloads. Most of the support I'd bet is on the consumer side which wouldn't apply if there were other payment processors.
