Comment by blahgeek
10 hours ago
> Apple could take just 7% cut and still make 20% profits.
We can say this to any company, "$X could reduce price by $Y and still make $Z profits", but it doesn't really make any sense. Making profits is what makes a company a company instead of a non-profit organization.
It does make sense to highlight, because this kind of statistic is a very strong indicator that the market is not competitive. This is not a normal kind of profit margin and basically everyone except for Apple would benefit from them lowering the margins.
In normal markets there are competitors who force each other to keep reasonable profit margins and to improve their product as opposed to milking other people's hard work at the expense of the consumer.
Might not be competitive but it’s totally voluntary. No one needs app, it’s not food or shelter, so clearly consumers are willing and able to pay this.
The consumer is willing to pay the price based on the perceived value from the App Store
The relevant market here is the creators not the consumers. As a creator you have no choice but to accept whatever fees Apple, Google, Steam etc set. Or whatever rates Spotify pays you per stream. The fact you "could" host your own website is irrelevant when the reality is nobody will visit it.
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What is also totally voluntary is our decision to let Apple exist as an entitiy, to give them a government enforced monopoly over certain things, to make it illegal to break their technical protections of their monopoly etc.
> No one needs app, it’s not food or shelter
"No one needs app" is not the same as "No one has biological mandatory need to have an app"
High profit margins are a sign of market failure.
"Competition is for losers"
Not so much a failure. Rather, there is no intent for there to be a market here at all. A market relies on offerings being reproducible. Intellectual property laws are designed specifically to prevent reproduction.
Agreed, but this is about to be a special case if it's not already. We're contending with compulsory digital IDs and cashless economies that must be used on authorized devices, and Apple is one of the two makers. While it's certainly not necessary to use Patreon, not having it or something like it is an actual barrier to individual trade. I don't think I can get behind a schema that means Apple can take whatever portion it wants from a transaction initiated on a device that it creates and that is otherwise fairly necessary for day-to-day life in the developed world.
Makes me think of the concept of involution in Chinese business and how they understand all of this very differently, and how difficult it is to compete because of that.
For anyone else wondering https://en.wikipedia.org/wiki/Neijuan
it sounds like it does make sense because if they are making $Z profits then they are still making profits and are not non-profit.
there could also be cases where cutting back to $Z profits might be preferable in case not doing so were to prompt legislation causing someone to be forcibly cut to $Z-1 or even $0 profits from a particular profit source.
Which it has been my observation that when someone is saying "X could reduce price by $Y and still make $Z profits" it often coincides with saying therefore company X should be legislated on this particular profit source.
Note: $X didn't make much rhetorical sense.
>there could also be cases where cutting back to $Z profits might be preferable in case not doing so were to prompt legislation causing someone to be forcibly cut to $Z-1 or even $0 profits from a particular profit source.
Not in an environment where regulatory capture costs so much less than any change legislation could bring. The remedy in almost every recent monopoly case has been remarkably nothing. Politicians don’t actually want change, they want the threat of legislation so that industries bring truckloads of money to line their pockets.
When parts of a market become dominated by one or few companies operating in a limited choice environment, consumers can't just opt to not use both Apple and Play store. You need to choose one in practice.
At this point the regulators should investigate what the barriers are to new entrants and if it's too costly and nobody has managed to cut in the last few years, establishing some rules is probably a good thing. This happens as industries mature and become critical, it happened in transportation (most bus, train companies), energy, water supply, trash, etc, depending on the country and market conditions.
Barrier to entry is simple: both Google and Apple heavily discourage "sideloading" or make it practically impossible.
Google is moving in that direction.
“Growth is what makes a cell a cell.”
Until it turns into cancer because of unrestrained growth.
Like it or not capitalism is a part of an ecosystem. We’ve been “educated” to believe that unrestrained growth in profits is what makes capitalism work, and yet day after day there are fresh examples of how our experience as consumers has gotten worse under capitalism because of the idea that profits should forever be growing.
"Why wait until tomorrow to get one golden egg when I can kill the goose today and get all the golden eggs?"
I think it's a little known fact that societies don't exist for the benefit of companies. It's actually the other way around.
It makes sense that regulators can step in without destroying a company.