Comment by mikestew
4 years ago
The 30% cut was considered very good at the time.
No, it wasn't. I'm not going to dig up links, but one could pop a web site storefront and Fastspring for payment processing (as one example of a company I used) for less than 10% (Fastspring would take something like 6-7%, IIRC). Discovery has always sucked on Apple's store, so no value-add there. In fact, I'd argue that the only value-add one gets out of Apple's store is access to their closed garden.
And "50-90%"? Is that in reference to putting software in physical boxes and on CompUSA shelves? Because no mobile publisher charged 90% before Apple's store came along.
IIRC 50% (60%) was the rate for the app distributor I used for selling my PalmOS app. It was digital download, too.
For the Apple case: access to the walled garden is the majority of the benefit. But still, setting up payments, customer service, chargebacks, fees, etc., is nice to have taken care of. 30% nice? Who knows. But more than just the raw payment processor overhead, surely.
AFAIK physical boxes are way above 50%.
There were a couple of stores that were more expensive.
But there's 2 reasons the comparisons aren't valid:
1) The revolution Apple brought to mobile phones was making them personal computers. So the relevant comparison really should be with personal computers and I doubt any of them had stores that took as much of a cut.
2) More relevant, the vast majority of such app stores which charged 40-50% were optional marketplaces. A customer didn't need to go through them to install an app on their phone (I believe Palm was like this. I'm pretty sure the likes of WinMo allowed many different ways to install apps). So if a marketplace was charging 40-70% it was entirely for the fact that they were bringing a customer to you. If you were able to acquire a customer by yourself, you didn't need to pay anyone any cut.
The big problem with Apple's 30% cut has always been that they charge you that amount just for having a user, even if you did all the work to get that user to use and pay for your app. Outside of the maybe 3% credit card fees, Apple provides 0 value.
One may argue (as many Apple folks do) that they charge for the frameworks, etc., but that argument is absolutely backwards. Apple creates the frameworks and APIs because they need the apps, not because the apps need them. If Apple was to get rid of its 3rd party APIs and frameworks, so there were no 3rd party apps, it's not the app developers who would suffer because all those users would migrate to Android. It's the iDevices and Apple that would basically disappear.
In fact, App developers would be thrilled because now they only need to support 1 Operating system.
1) That’s extremely revisionist thinking, the original iPhone didn’t allow any third party apps.
The iPhone was never sold as a computer it was very much just a better UI on a traditional cellphone.
2) Again no, most cellphones at the time where extremely locked down flip phones. Hell, selling ringtones used to be a thing because of how locked down phones where back in the day. Look up what kind of a cut musicians got of that fad.
My phone can’t run an IDE or compile code, can’t run solid works, can’t be shared with multiple people, can’t render CGI, can’t mine BTC, and can’t run office, etc.
If this is a personal computer, solely because it runs a browser, then the goalposts have shifted dramatically.
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I remember considering 1-2% to be fair, for the payment processing. Publishers were an old-fashioned thing and not even considered for the comparison.