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An analogy for this in the real world would be tips for waiters. As a foreigner, I'm aghast at the tipping culture in the US but more importantly, I fail to und

An analogy for this in the real world would be tips for waiters. As a foreigner, I'm aghast at the tipping culture in the US but more importantly, I fail to understand why tips are calculated on a percentage basis. It is no more effort to bring me out a $60 steak than it is to bring me a $5 coffee. So why should I tip $12 for the steak and $1 for the coffee? To Apple's point, they want a "fixed" tip charge. But then again, Apple charges devs 30% of revenue from their App store when really it's (arguably) no more effort for them to host/monitor a 99-cent app vs. $10 app.

smm2000 9y ago
Throughput, expectation of service and number of tables/waiter are very different for coffeeshop/casual diner and place that sells $60 steak. In casual restaurant you can expect one waiter per 8 tables compared to 4 tables/waiter in fine dining place. People easily take 2x time to eat the same amount of food in fine dining place compared to something cheaper. In fine dining place waiters are better trained/educated (ever tried to ask for wine recommendation at Denny's?) and dress nicer. Higher tips per person are totally expected in fine dining place purely from economic perspective.
- dheelus 9y ago
  Agreed and my analogy is imperfect at best. However, assuming I am eating at a fine-dining establishment, why should tips be percentage calculated? Shouldn't the tip amount be the same regardless of whether I order the expensive items on the menu or the (relatively) cheaper ones? Which is basically what Apple's argument boils down to. FWIW, I don't really have a dog in this race (except as an AAPL stockholder I want the stock to do well). If any judgement mandates that the license fee be charged on the cost of the chip and not the device, then I'd like to see that be extended to the App Store ToS as well.
  - firethief 9y ago
    Proportional tipping is much better at aligning the waiters' interests with the restaurant's than a flat tipping model would be; better customers get better service.
    - hacking_again 9y ago
      In my experience, customers that are friendly and treat the staff like equals get better service.
    - wolco 9y ago
      Wouldn't tipping some amount before give better service than tipping after? What if tipping was related to the number of services and/or difficulity of each service?
- Domenic_S 9y ago
  If I go to Denny's and order a coffee, the waitress pours the coffee and stops by every so often to refill it. They get a $1 tip. If I go to that same Denny's and order 4 Grand Slams, the waitress waits on the cooks, and then makes one trip to my table. They get a much higher tip for less work.
MBCook 9y ago
Qualcomm agreed to only charge 50¢ per item (FRAND licensing) but is complaining Apple isn’t paying 20%. They’re violating an agreement. In the App Store Apple offered a deal and sticks to it. You may not need like it but they’re doing exactly what they agreed to.
- dheelus 9y ago
  Can you please point out where in the referenced article there is a mention of QCOM changing the terms of the deal? I seem to have missed it. Thanks.
- newusertoday 9y ago
  So why is apple suing in 2017? why didn't they sued in 2007 at time of launch of iphone? Issue is way more complex in this fight. 1. Qc has more than 130k patents,licensee gets blanket protection for all.(one can argue about bundling though) 2. Qc,ericcson,nokia and other patent holders have cross licensing agreements with each other.This is to avoid negotiating individual contracts with every patent holder in a standard.
  - ballenf 9y ago
    The article explicitly says Apple waited until they could get chips from another source, Intel. Their general counsel explicitly said they would have sued sooner, but were at Qualcomm's mercy and feared retaliation. Maybe that's revisionist history and seems unlikely to be so clearcut, but that's their story.
    - tooltalk 9y ago
      Intel Infineon has been around quite a while. Apple's lawsuit comes only after Apple as the article correctly notes conspired with Samsung to force the Korean regulators to go after Qualcomm. There are other backdrops, such as the SCOTUS's recent decision not to award damage on entire device willy-nilly (see Samsung vs Apple).
      - 9y ago
threeseed 9y ago
Don't people understand the App Store model ? You aren't paying for their effort in hosting the app. It's a fixed cost and the App Store runs largely on the back of the iTunes Store platform. You are paying Apple for being a distribution channel i.e. channel to market. And it's incredibly common for those to be based on a percentage rather than fixed amount. Apple does spends a significant amount of money (far more than your 30%) on giving developers the perfect market to sell to. Every customer has a credit card, is on the latest OS, is willing to spend, is unable to pirate etc.
- ballenf 9y ago
  And don't forget that Apple doesn't get a cent of any non-IAP monetization of the app of which advertising is primary. Off topic here, but I find it interesting that Apple cracks down on various other workarounds like in app "tipping", but doesn't touch ads. Would be interesting to see what the effective % apple tax is, if all ad revenue was factored in to the gross.

smm2000 9y ago

Throughput, expectation of service and number of tables/waiter are very different for coffeeshop/casual diner and place that sells $60 steak. In casual restaurant you can expect one waiter per 8 tables compared to 4 tables/waiter in fine dining place. People easily take 2x time to eat the same amount of food in fine dining place compared to something cheaper. In fine dining place waiters are better trained/educated (ever tried to ask for wine recommendation at Denny's?) and dress nicer. Higher tips per person are totally expected in fine dining place purely from economic perspective.

dheelus 9y ago
Agreed and my analogy is imperfect at best. However, assuming I am eating at a fine-dining establishment, why should tips be percentage calculated? Shouldn't the tip amount be the same regardless of whether I order the expensive items on the menu or the (relatively) cheaper ones? Which is basically what Apple's argument boils down to. FWIW, I don't really have a dog in this race (except as an AAPL stockholder I want the stock to do well). If any judgement mandates that the license fee be charged on the cost of the chip and not the device, then I'd like to see that be extended to the App Store ToS as well.
- firethief 9y ago
  Proportional tipping is much better at aligning the waiters' interests with the restaurant's than a flat tipping model would be; better customers get better service.
  - hacking_again 9y ago
    In my experience, customers that are friendly and treat the staff like equals get better service.
  - wolco 9y ago
    Wouldn't tipping some amount before give better service than tipping after? What if tipping was related to the number of services and/or difficulity of each service?
Domenic_S 9y ago
If I go to Denny's and order a coffee, the waitress pours the coffee and stops by every so often to refill it. They get a $1 tip. If I go to that same Denny's and order 4 Grand Slams, the waitress waits on the cooks, and then makes one trip to my table. They get a much higher tip for less work.

MBCook 9y ago

Qualcomm agreed to only charge 50¢ per item (FRAND licensing) but is complaining Apple isn’t paying 20%. They’re violating an agreement. In the App Store Apple offered a deal and sticks to it. You may not need like it but they’re doing exactly what they agreed to.

dheelus 9y ago
Can you please point out where in the referenced article there is a mention of QCOM changing the terms of the deal? I seem to have missed it. Thanks.
newusertoday 9y ago
So why is apple suing in 2017? why didn't they sued in 2007 at time of launch of iphone? Issue is way more complex in this fight. 1. Qc has more than 130k patents,licensee gets blanket protection for all.(one can argue about bundling though) 2. Qc,ericcson,nokia and other patent holders have cross licensing agreements with each other.This is to avoid negotiating individual contracts with every patent holder in a standard.
- ballenf 9y ago
  The article explicitly says Apple waited until they could get chips from another source, Intel. Their general counsel explicitly said they would have sued sooner, but were at Qualcomm's mercy and feared retaliation. Maybe that's revisionist history and seems unlikely to be so clearcut, but that's their story.
  - tooltalk 9y ago
    Intel Infineon has been around quite a while. Apple's lawsuit comes only after Apple as the article correctly notes conspired with Samsung to force the Korean regulators to go after Qualcomm. There are other backdrops, such as the SCOTUS's recent decision not to award damage on entire device willy-nilly (see Samsung vs Apple).
    - 9y ago

threeseed 9y ago

Don't people understand the App Store model ? You aren't paying for their effort in hosting the app. It's a fixed cost and the App Store runs largely on the back of the iTunes Store platform. You are paying Apple for being a distribution channel i.e. channel to market. And it's incredibly common for those to be based on a percentage rather than fixed amount. Apple does spends a significant amount of money (far more than your 30%) on giving developers the perfect market to sell to. Every customer has a credit card, is on the latest OS, is willing to spend, is unable to pirate etc.

ballenf 9y ago
And don't forget that Apple doesn't get a cent of any non-IAP monetization of the app of which advertising is primary. Off topic here, but I find it interesting that Apple cracks down on various other workarounds like in app "tipping", but doesn't touch ads. Would be interesting to see what the effective % apple tax is, if all ad revenue was factored in to the gross.