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Apple allows “free apps” that are entirely ad-supported, never giving Apple a dime (aside from $99/year), yet they are consuming infrastructure: hosting pages,

Apple allows “free apps” that are entirely ad-supported, never giving Apple a dime (aside from $99/year), yet they are consuming infrastructure: hosting pages, downloads, reviewer time, etc. Why isn’t Apple concerned about any of those costs? Simple: they make overwhelmingly most of their App Store money from the handful of developers that offer purchases. This also leads to perverse outcomes like Apple dragging its feet on scams that make them heaps of money. Developers are literally subsidizing other developers, and it’s not necessarily the richest ones helping the poorest ones. Someone trying to make money on a $0.99 app is sacrificing more to Apple than Facebook does with their free app. That’s why I find all these percentage and payment discussions weird: income is so insanely distributed that a lot of this literally does not apply to more than 80% of the stuff on the store. There are fundamental issues that need to be resolved too.

tobias3 5y ago
That's a good point. They are taxing paid apps and not taxing ad-supported apps. Which incentivizes the ad-model and therefore reduces the number of paid apps. This has been the case since the beginning with mobile app stores so who knows how the distribution of paid vs ad-supported apps would be if this wasn't the case.
- dwaite 5y ago
  On the flip side, Apple is incentivized to encourage paid apps and subscription based apps in order to collect revenue. Purely advertising-driven apps just cost them hosting and support. Historically they have not offered enough options here, such forbidding time-limited trials and not providing specific guidance for companies who wish to sell paid upgrades to new major versions. Apple's (arguably workable) solution here was entirely based on subscriptions. That said, the ease of use of subscriptions and the high variability of billing amounts/periods has caused them to be the preferred mechanism for App Store scams.
nexuist 5y ago
> Apple allows “free apps” that are entirely ad-supported, never giving Apple a dime (aside from $99/year), yet they are consuming infrastructure Because Apple doesn't give them a choice! Android developers can host their own apps, set up their own CDNs and downloading/updating infrastracture, pay journalists to review their apps etc. This is like tying someone up in your basement and telling them to be grateful that they don't have to pay rent.
anaisbetts 5y ago
Ok, that's fine. If I can _choose_ to use Apple's services, in exchange for their cut, then that's a trade that I can evaluate as a business. Instead if I want to develop for iOS I am _forced_ to use these services, and pay the cost. That's the Problem.
- kmlx 5y ago
  i don’t get why you are forced to do this. the app for my phone network just opens a webview where i pay for stuff. then i close the webview and the funds just show up in the app. do they also pay 30% to apple?
  - anaisbetts 5y ago
    Because if you do this, and you do not have an explicit exception (carriers being one of them), your app will be removed from the store
    - kmlx 5y ago
      ah, so the carriers are exempted, interesting, thanks. so i guess the other route is what most companies do: webapp…
  - yurishimo 5y ago
    If they are following apple's rules, yes, that is what they want. If they catch you trying to skirt it, your app gets pulled from the store until you "fix" it.
  - Spivak 5y ago
    No, the 30% commission is for digital goods (i.e. goods to be consumed on the phone -- game "coins", ebooks, music, movies, comics, app features). The things that Apple takes a cut for is actually pretty small in the grand scheme of commerce.
  - daveidol 5y ago
    This is only allowed for "non-digital" goods - otherwise if you distribute in the App Store. Hell, you can't even link to or mention that it would be possible to pay anywhere else.
AndriyKunitsyn 5y ago
Uhm, the $99/year thing is actually substantial. It is not competitive at all. I'm pretty sure if Apple let people just download IPA files (like they do with APKs on Android), lots of developers would choose that over the walled garden.
- fr2null 5y ago
  $99/year is literally nothing for most companies. Furthermore, Android has competing app stores, yet by far the biggest one is still the Play Store. Lots of developers (and users) did not and would not chose other distribution methods.
  - joseloyaio 5y ago
    That's a lot. That's basically a $9/month SaaS. They are not subsidized at all. I've seen cheaper subscription services that also come with support, hosting and services.
    - dwaite 5y ago
      Apple developer accounts come with support, hosting and services.
    - charcircuit 5y ago
      It's less than a day's worth of wages for a software engineer and provides you a potential audience of millions of users.
      - AndriyKunitsyn 5y ago
        "A potential audience of millions of users" means less than it implies. If I just put my work online, have I got the audience of billions of Internet users? Probably yes, but it doesn't mean much - I still need to tell people about my work somehow so they would be interested in it. If we think about how App Store can actually actively help us in promoting an app, without specifically buying ad in the App Store - which doesn't cost $99/year, it costs much more - it's not exactly appealing. Epic's CEO showed how bad the App Store search is in finding apps that users specifically search for: https://twitter.com/timsweeneyepic/status/1019852527007944704 https://twitter.com/timsweeneyepic/status/101985252700794470... And why wouldn't it be bad? Iphone users don't have any better.
spywaregorilla 5y ago
> Apple allows “free apps” that are entirely ad-supported, never giving Apple a dime (aside from $99/year) This is a hilarious quote, especially with the way you highlighted "never giving apple a dime"
Infinitesimus 5y ago
I suspect as Apple ramps up their second attempt to make profits from Ads, you will eventually be required to include Apple's in-app ad solution if you include any third party (FB/G/etc). See what happened with "Sign In with Apple". It's the logical move for them as they move into being a more service-oriented business and leverage all the devices they have in the world.
- dwaite 5y ago
  > I suspect as Apple ramps up their second attempt to make profits from Ads, you will eventually be required to include Apple's in-app ad solution if you include any third party (FB/G/etc). See what happened with "Sign In with Apple". Google Chrome has been restricted from removing support for third party cookies (long gone in competing browsers) because they are also an advertising provider, and such a move has been deemed anticompetitive.[1] Going more heavily into advertising would give more ammunition to defang anti-tracking protections being built into the platform with technical measures, as well as remove the ability to delist apps which work around those measures (ignoring user preference.) They could pull off a mandate for SIWA because their competitors couldn't muster strong arguments it was costing them revenue. Such a mandate would be way harder too use some new in-app ad solution for impressions instead of third party solutions. In-app ads, especially in games, are really scammy these days. Apple's solution wasn't to try to create a competing ad network, but to create a subscription game service that mandated all games be without DLC, IAP, or ads. 1: https://www.ft.com/content/b42db1db-8cfd-4247-90f5-3c6f934b5b3d https://www.ft.com/content/b42db1db-8cfd-4247-90f5-3c6f934b5...
Kwpolska 5y ago
> never giving Apple a dime (aside from $99/year), yet they are consuming infrastructure: hosting pages, downloads, reviewer time, etc Pretty sure $99/year is more than a dime. It should be more than enough to pay for hosting the app. As for reviews, app developers don’t need those, so if Apple wants to review apps, they should also be the ones paying for it.
- makecheck 5y ago
  It’s the only income they receive in that case, and it is fixed, whereas their costs are variable (e.g. whether some app is downloaded thousands of times or dozens; whether apps decide to post video previews or not; they receive the same money but incur different costs on infrastructure). App Review alone takes hours per update and is done many times a year for apps. Even if a single Apple employee is involved, and even if they are paid something pathetic like $5 an hour, that $99 will be eaten up quickly from reviews alone. My point is that it doesn’t add up; Apple likes to claim all these “costs” for “running” the App Store but there are gaping holes in their accounting unless you consider that not all developers are really equal here.
Orphis 5y ago
Do you really think the hardware costs THAT much too? Users are already paying a premium for the privilege of buying an iOS device. And Apple knows that usually it will add some pressure on friends and family to have devices in the same family. Everything related to the app store is already paid for, the bandwidth is cheap, maintaining the service is cheap enough and covered by the device premium AND the developer subscription. Whether the apps are free or paid for (with a big cut for Apple), the company is already making money. The tax on top of everything is just a way to make a lot of money and favor Apple services when compared to competitors in the same segment.

tobias3 5y ago

That's a good point. They are taxing paid apps and not taxing ad-supported apps. Which incentivizes the ad-model and therefore reduces the number of paid apps. This has been the case since the beginning with mobile app stores so who knows how the distribution of paid vs ad-supported apps would be if this wasn't the case.

dwaite 5y ago
On the flip side, Apple is incentivized to encourage paid apps and subscription based apps in order to collect revenue. Purely advertising-driven apps just cost them hosting and support. Historically they have not offered enough options here, such forbidding time-limited trials and not providing specific guidance for companies who wish to sell paid upgrades to new major versions. Apple's (arguably workable) solution here was entirely based on subscriptions. That said, the ease of use of subscriptions and the high variability of billing amounts/periods has caused them to be the preferred mechanism for App Store scams.

nexuist 5y ago

> Apple allows “free apps” that are entirely ad-supported, never giving Apple a dime (aside from $99/year), yet they are consuming infrastructure Because Apple doesn't give them a choice! Android developers can host their own apps, set up their own CDNs and downloading/updating infrastracture, pay journalists to review their apps etc. This is like tying someone up in your basement and telling them to be grateful that they don't have to pay rent.

anaisbetts 5y ago

Ok, that's fine. If I can _choose_ to use Apple's services, in exchange for their cut, then that's a trade that I can evaluate as a business. Instead if I want to develop for iOS I am _forced_ to use these services, and pay the cost. That's the Problem.

kmlx 5y ago
i don’t get why you are forced to do this. the app for my phone network just opens a webview where i pay for stuff. then i close the webview and the funds just show up in the app. do they also pay 30% to apple?
- anaisbetts 5y ago
  Because if you do this, and you do not have an explicit exception (carriers being one of them), your app will be removed from the store
  - kmlx 5y ago
    ah, so the carriers are exempted, interesting, thanks. so i guess the other route is what most companies do: webapp…
- yurishimo 5y ago
  If they are following apple's rules, yes, that is what they want. If they catch you trying to skirt it, your app gets pulled from the store until you "fix" it.
- Spivak 5y ago
  No, the 30% commission is for digital goods (i.e. goods to be consumed on the phone -- game "coins", ebooks, music, movies, comics, app features). The things that Apple takes a cut for is actually pretty small in the grand scheme of commerce.
- daveidol 5y ago
  This is only allowed for "non-digital" goods - otherwise if you distribute in the App Store. Hell, you can't even link to or mention that it would be possible to pay anywhere else.

AndriyKunitsyn 5y ago

Uhm, the $99/year thing is actually substantial. It is not competitive at all. I'm pretty sure if Apple let people just download IPA files (like they do with APKs on Android), lots of developers would choose that over the walled garden.

fr2null 5y ago
$99/year is literally nothing for most companies. Furthermore, Android has competing app stores, yet by far the biggest one is still the Play Store. Lots of developers (and users) did not and would not chose other distribution methods.
- joseloyaio 5y ago
  That's a lot. That's basically a $9/month SaaS. They are not subsidized at all. I've seen cheaper subscription services that also come with support, hosting and services.
  - dwaite 5y ago
    Apple developer accounts come with support, hosting and services.
  - charcircuit 5y ago
    It's less than a day's worth of wages for a software engineer and provides you a potential audience of millions of users.
    - AndriyKunitsyn 5y ago
      "A potential audience of millions of users" means less than it implies. If I just put my work online, have I got the audience of billions of Internet users? Probably yes, but it doesn't mean much - I still need to tell people about my work somehow so they would be interested in it. If we think about how App Store can actually actively help us in promoting an app, without specifically buying ad in the App Store - which doesn't cost $99/year, it costs much more - it's not exactly appealing. Epic's CEO showed how bad the App Store search is in finding apps that users specifically search for: https://twitter.com/timsweeneyepic/status/1019852527007944704 https://twitter.com/timsweeneyepic/status/101985252700794470... And why wouldn't it be bad? Iphone users don't have any better.

spywaregorilla 5y ago

> Apple allows “free apps” that are entirely ad-supported, never giving Apple a dime (aside from $99/year) This is a hilarious quote, especially with the way you highlighted "never giving apple a dime"

Infinitesimus 5y ago

I suspect as Apple ramps up their second attempt to make profits from Ads, you will eventually be required to include Apple's in-app ad solution if you include any third party (FB/G/etc). See what happened with "Sign In with Apple". It's the logical move for them as they move into being a more service-oriented business and leverage all the devices they have in the world.

dwaite 5y ago
> I suspect as Apple ramps up their second attempt to make profits from Ads, you will eventually be required to include Apple's in-app ad solution if you include any third party (FB/G/etc). See what happened with "Sign In with Apple". Google Chrome has been restricted from removing support for third party cookies (long gone in competing browsers) because they are also an advertising provider, and such a move has been deemed anticompetitive.[1] Going more heavily into advertising would give more ammunition to defang anti-tracking protections being built into the platform with technical measures, as well as remove the ability to delist apps which work around those measures (ignoring user preference.) They could pull off a mandate for SIWA because their competitors couldn't muster strong arguments it was costing them revenue. Such a mandate would be way harder too use some new in-app ad solution for impressions instead of third party solutions. In-app ads, especially in games, are really scammy these days. Apple's solution wasn't to try to create a competing ad network, but to create a subscription game service that mandated all games be without DLC, IAP, or ads. 1: https://www.ft.com/content/b42db1db-8cfd-4247-90f5-3c6f934b5b3d https://www.ft.com/content/b42db1db-8cfd-4247-90f5-3c6f934b5...

Kwpolska 5y ago

> never giving Apple a dime (aside from $99/year), yet they are consuming infrastructure: hosting pages, downloads, reviewer time, etc Pretty sure $99/year is more than a dime. It should be more than enough to pay for hosting the app. As for reviews, app developers don’t need those, so if Apple wants to review apps, they should also be the ones paying for it.

makecheck 5y ago
It’s the only income they receive in that case, and it is fixed, whereas their costs are variable (e.g. whether some app is downloaded thousands of times or dozens; whether apps decide to post video previews or not; they receive the same money but incur different costs on infrastructure). App Review alone takes hours per update and is done many times a year for apps. Even if a single Apple employee is involved, and even if they are paid something pathetic like $5 an hour, that $99 will be eaten up quickly from reviews alone. My point is that it doesn’t add up; Apple likes to claim all these “costs” for “running” the App Store but there are gaping holes in their accounting unless you consider that not all developers are really equal here.

Orphis 5y ago

Do you really think the hardware costs THAT much too? Users are already paying a premium for the privilege of buying an iOS device. And Apple knows that usually it will add some pressure on friends and family to have devices in the same family. Everything related to the app store is already paid for, the bandwidth is cheap, maintaining the service is cheap enough and covered by the device premium AND the developer subscription. Whether the apps are free or paid for (with a big cut for Apple), the company is already making money. The tax on top of everything is just a way to make a lot of money and favor Apple services when compared to competitors in the same segment.