Hacker News Reader

Comment by Bekwnn | Hacker News Reader

Additionally, Unreal Engine 4 charges only 5% gross on revenue exceeding 3,000 USD per quarter. Epic's CEO tweeted about these markets taking 30% where other transaction facilitators only take 2-5%.

https://mobile.twitter.com/TimSweeneyEpic/status/89831654549...

It feels like in tech there are a ton of leech-like companies attempting to leverage their way into middleman positions and then rest on their laurels while dictating terms to the supply side as they hold the customer side hostage. I'm not a fan of it, and I'm glad that in the past few years there seems to be a growing awareness of it.

Tim Sweeney and Epic have been hugely supportive to other developers and I wish other companies tried to offer as much value and support to the developers that their business rests upon.

View on HN

Calling Apple a transaction facilitator is a ludicrous way to try to downplay what they actually do. They aren’t just a transaction processer, that’s the cheapest and easiest part of their job. They also host petabytes of apps in hundreds of geographically dispersed and localized app stores, and covers all bandwidth for distributing and updating those apps. And unlike google Apple actually reviews every release of every app by hand, keeping huge amounts of malware off customer devices, and maintaining the high level of confidence developers need to get customers to buy apps.

Now Apple doesn’t need 30%, but they’d lose huge amounts of money at 5%. A more reasonable guess at App Store break-even is that it requires at least 10%.

Apple made $11 billion from apps in 2017. I doubt they spent more than $1B on app distribution. You d have to add research costs to go up to 10%.

I guarantee they spent more.

The host over 2 million apps, in hundreds of geographic locations. With updates, they are distributing billions of releases and updates a year. And some of those apps exceed a gigabyte in size.

Outside of raw bandwidth and storage costs, someone has to run those tens of thousands of servers across the world, and manage development of the distribution software.

Then you need sales and marketing personnel to build and run the App Store, and hundreds of similar staffs to build and manage the hundreds of international stores in dozens of different languages.

Then you need software development teams to build and maintain the - payment processing, including server infrastructure, the iOS, Mac SDKs, the APIs, etc - software distribution and updating infrastructure, from tools to manage thousands of servers, as well as track and report, and more Mac/iOS SDKs and sever APIs. - The App Store itself, with custom app pages, search, advertising, Mobil app versions, web versions, account management, support, etc. - App Submission infrastructure, including XCode, Swift, Automated App Analysis tools, Bitcode, the Bitcode server infrastructure, crash reporting, TestFlight test distributions and infrastructure, developer accounts including security profile generation/management, ItunesConnect account management including sales and legal reporting along with App distribution interface and controls.

And then there is - Sales and marketing costs, advertising, developer co-marketing - Customer support

And finally, developer support. Apple likely has at least a thousand people working in developer support, mostly on app submissions. And they are all in Cupertino, meaning Apple is spending well over $100M a year just on payroll costs for that department alone.

$1B? I’d be surprised if it’s less than triple that. They likely spend close to half a billion on App Store/Developer advertising alone.

You wouldnt count ios development as a cost that apple pays for developers, its the price they pay to lure developers. Just like MS develops windows APIs for free. Developers work for apple, not vice versa, the question is if apple is paying them enough.

App ecosystems or platforms were since decades free for developers, because platforms need developers more than viceversa. Apple’s case is unique, and it comes from their preexisting culture of a cultish, high-paying customer base. It is unfortunate that google and ms. copied their model, i think android app distribution should be free. At this point, i dont think they even did it for the money, but more for appearing to be ‘serious’ in their offering. It was a marketing decision.

If it had been free from the start , companies wouldnt have invested so much on building increasingly higher walled gardens. Apps would be on the web, and some third party would have done a better job of organizing and reviewing them.

I doubt app stores are a big cost as you say. It is pretty obvious from their quality that these companies just dont care about them. They use them to lock in developers.

>And they are all in Cupertino

Do you have a source for that? I'm 99.9% sure this isn't true. I've had apps rejected where the screenshots had non-english characters in the status bar, and rejections because the app had no daily content because they were testing at like 3:00 am our time and we publish our daily content around 10:00 am.

And Apple forces you into this exchange. You can't ask them to simply host a product page like Amazon and leave everything else to you, the app developer.

There's many good UX reasons why Apple does this, but you can't seriously think that they're charging app developers anything reasonably close to the cost Apple incurs because they have literally no incentive to do that; they have a monopoly on iPhone users (much as Google does de facto for Android users).

> They also host petabytes of apps in hundreds of geographically dispersed and localized app stores

So they run a CDN. In the US and Europe, Fastly charges [0] a maximum of $0.12/GB. A messaging app like Threema is 41MB and costs 3CHF (~3USD) where I am. That's ~$0.005 for distribution of a $3 app.

For a 4GB app (the largest Apple supports), you're paying $0.48 but you're also usually charging on the order of $20 for the app, so this is ~2.5%.

Actual bandwidth costs much less. You can buy decent transit for 0.17c/Mbps/month [1] ($0.0005/GB if you max the pipe).

> and covers all bandwidth for distributing and updating those apps

Let's say incremental updates cost 5% (~2MB) each time and you send them once a month for 10 years. That's 240MB of extra download, for a total bandwidth of 281MB/user. That's $0.0372/user for a $3 app, just over 1%.

> And unlike google Apple actually reviews every release of every app by hand, keeping huge amounts of malware off customer devices

That primarily benefits Apple. Apple's policies also cost entire classes of apps _100%_ of their revenue, since Apple prohibits them completely.

[0]: https://www.fastly.com/pricing [1]: https://www.ixreach.com/services/promotions/global-10g-trans...

First, You made a good run at the per user costs, but whiffed on how many users there are. Apple supports billions of downloads per year.

More importantly, Apple isn’t a mere payment processer, and it certainly isn’t a mere CDN.

Then entire storefront, updated constantly with new marketing programs in hundreds of country specific stores, and in dozens of languages. Then there is the technological infrastructure behind it, from XCode to TestFlight, to crash reporting, to all the payment systems, etc, etc.

And overall developers benefit greatly from App Store review.The average iOS user downloads more apps and spends far more on the App Store in a great part because of the greater safety and security of iOS apps.

Reply on news.ycombinator.com