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Comment by philwelch | Hacker News Reader

The question is, what do you bring to the table? Maybe the App Store runs on AWS and Amazon gives Apple a discount on AWS so Apple reciprocates for Amazon’s apps.

I don’t think their working relationship is all roses or anything—they were feuding a few years back—but agreements like this are negotiated because they leave everyone who agrees to them better off in some way. It could even be as simple as your app being so important that people won’t buy the phone if it can’t run it. Ultimately it doesn’t matter because for a new startup, you’re more focused on creating value from scratch than on optimizing your margins.

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Interestingly you also can't purchase kindle ebooks on Apple devices at all, which I beleive is to skip the apple tax.

Yeah, that’s one of the ways that it’s not all roses between them. Amazon has played hardball with Apple too, sometimes refusing to sell their products.

I alone don't bring much to the table. But multiply it by thousands of developer and that "not much" starts to add up.

Apple should want to encourage a vibrant app ecosystem, no? Who knows how many cool or useful apps just never get made because the developers can't deal with the App Store.

Yeah, if it turns out that a standard rate of 25% would work out better for them than 30%, they should lower the rate to 25%. Is the current app ecosystem not vibrant enough? I think they’re doing fine as it is but it’s very literally not my business :)

Oh come on, the App Store is overflowing with Apps. The amount of options on there is overwhelming. If anything there’s too much competition and too many apps, driving down the prices companies can charge for premium products due to oversupply.

And don’t tell me that’s Apples fault as well, because the 30% on low prices makes businesses unsustainable. Which is it, does the 30% discourage companies from participating, or does the App Store 30% and all enable too much competition for premium apps. It can’t be both.

The Appstore is like big-cable packages: a billion channels, and nothing to watch. 90% of those apps are shovelware and addiction machines, because that’s what the Apple-imposed model effectively incentives.

It’s very likely that breaking up the appstore would change that, and we could get a software market closer to what we see in other segments, free to innovate and generating more winners.

Or it could be that shovelware and addiction machines are exactly the most cost-effective form of phone apps regardless.

Have you seen literally any other software segment? This isn't just the app store, this is also the play store, webpages, windows store apps, playstation games, ...

The most successful apps are the ones that make the most money: skinner box slot machines with a credit card system attached. Your idea that software should have things like "intrinsic quality" or "benefit to the user" is not as important as how much money it makes, and if you put more effort into mechanics or gameplay instead of additional monetization techniques, you're losing out.

Don’t put words in my mouth. Every sector has winners and losers, that’s not the point. The point is that free platforms allow people to ALSO build different stuff and redefine what we use machines for; the appstore does not.

On the desktop, one can invent p2p or a new type of browser or a magic app that makes unicorns out of tcp packets. On the appstore, entire areas of development are forbidden, in order to guarantee a constant stream of cash to Apple and Google.

On the desktop, if you make a life-changing app, you get competition. On the appstore, if you threaten Apple/Google dominance, you get banned.

Appstores make a mockery of the free market; anybody who lived through the 80s/90s “wild west” of computing should see them for the obscene freedom-destroying schemes that they are.

The consumer market has had plenty of chances to buy into open platforms and choose phones with multiple stores and the ability to side load whatever they wanted. Those options have always been there from before the iPhone even. I was side loading apps on to my Palm Tungsten E.

The fact is the App Store offers the best experience and the best apps. Side loading apps outside stores isn’t a viable business beyond very narrow niches, we’ve seen this happen.

App stores offer a scale alternatives just can’t reach, which brings investment and therefore options in the consumer space that open platforms cannot match. We’ve been running the experiment for over a decade now and the results are in.

App,Stores have crated staggeringly huge markets. That has enormous value for developers take that away, and how are customers and developers going to get connected? We’ve seen how that works out. The resulting markets aren’t 10 time smaller, or a 100 times smaller, they’re thousands of times smaller. I was going to say 30% is peanuts. It’s not, but I do think it’s a reasonable price.

> The consumer market has had plenty of chances to buy into open platforms

No, post-iPhone it did not. Android is just an inferior experience in the fundamentals, and that's geared towards the Play Store too anyway. There is no decent alternative on the market that offers a truly open platform - none. And of course by now it's also a chicken-and-egg situation, because the mainstream has been thoroughly locked-in, so even if such a platform appeared, users and developers wouldn't give it a chance.

I should be able to choose my appstore, my browser, my programs, on any platform.

> The fact is the App Store offers the best experience and the best apps

Then Apple and Google should not be afraid of allowing interoperability and replaceability of their appstore and their fundamental apps. You cannot objectively decide what is "best" when alternatives are banned or handicapped.

As somebody who went through the browser wars, I find it really depressing to see the battles that were won then are now being thrown away so carelessly.

There is precisely zero stopping you from distributing through F-Droid or Amazon Apps or another third-party app store, or even sideloading... Except there's no customers. There's no market. The user's took their freedom of choice, and chose app stores, because freedom is scary and the wild west doesn't get stuff done.

On iOS, which is by far the most lucrative market since Apple captured the high end with a superior experience in the fundamentals (the phones are better, the OS is smoother, etc etc), there is no third-party appstore. None. Will people trade UX for freedom? Absolutely, in the same way they eat at McDonalds because it's better value for money. It doesn't mean McDonalds is the be-all of food, or that we should accept all other restaurants will die and allow McDonalds to run a racket whereby nobody can serve a burger in the whole city.

On Android, half the system is geared towards integration with the Play Store. It's like your fridge only had McDonalds-shaped holes and was preconfigured to order McDonalds for you in a flash. If you wanted to cook, you'd need to order a stove somewhere, sometimes you'd have to learn how to install gas pipes too. Are you ever going to learn to cook, in those circumstances? Fuck no, you're going to click a button and order McD.

There is no market because the platform owners actively ensure that would be the case. They looked at the 90s and thought "Microsoft didn't make enough money, they were too liberal". That's just shameful greed.

> captured the high end with a superior experience in the fundamentals (the phones are better, the OS is smoother, etc etc),

And many it is a superior experience because of the restriction to one App Store. Everywhere else seems to have tons of malware.

> Which is it, does the 30% discourage companies from participating, or does the App Store 30% and all enable too much competition for premium apps. It can’t be both.

Why are you phrasing this like a gotcha? "Too much competition" is your argument here, not mine. I think it's the former: the 30% discourages people (not necessarily companies) from participating.

But simultaneously the App Store is overflowing with apps made by solo devs and small teams. I'm sure you can find someone it discourages but en masse sharecropping on Apple's farm for most people seems to be good business.

It's all different markets. There are some apps which cost only $10,000 to develop but there is demand from a billion users at a price of $1. Those markets would still be saturated with apps even if Apple kept 99% of the money.

Then there are apps which cost more to develop but have demand from a smaller number of users. There the 30% can easily be the difference between viability and not.

More than that, it takes 30% of the revenue away from the developer, so even if the app exists, the developer has fewer resources to improve it, so it's not as good. Or then that market can't support as many developers and the customer is deprived of the benefits of competition.

Perhaps that app doesn't deserve to live. If the 30% forces you out you were pretty close to losing money regardless.

If you can't afford to lose basically a third of your income, you were pretty close to losing money?

Developers do like anyone else - they are free to charge 43% more to make up the difference. If you can’t get someone to pay $1.49 instead of $0.99 was your app that innovative?

Or more realistically for that category of app, ask them to pay $14.99 instead of $9.99.

And then 60% as many people pay $1.49 instead of $0.99 just to get you back what Apple took, so now you're down 40% of your original revenue instead of 30%. Not really an improvement, is it? If developers could actually increase overall revenue by raising prices this way they'd have done it regardless.

> If you can’t get someone to pay $1.49 instead of $0.99 was your app that innovative?

Well yes, because you had a large number of people -- enough to keep you in business -- willing to pay $0.99, or to pay $99 but not $149, and now all of the value of your entire business to both you and the customer is destroyed.

So if you had a large number of people, you could support a lower cost. The software and game market survived selling games at retail only getting a 40% cut.

Apple customers are by definition not price sensitive. If they were they wouldn’t be Apple customers.

> So if you had a large number of people, you could support a lower cost.

Everybody already knows that which is why the original price was the expected profit-maximizing price. There is a price which is optimal because above it you lose more customers than you make in unit margins and below it you lose more unit margins than you gain in additional customers. If Apple then takes 30% of that, you can't get any more by changing the price up or down or you'd have already done that from the start.

> The software and game market survived selling games at retail only getting a 40% cut.

Only the ones that did. Others didn't.

> Apple customers are by definition not price sensitive. If they were they wouldn’t be Apple customers.

Then why do any apps in Apple's store cost $1 and not $100 or $100,000? If the customers were actually totally insensitive to price that would surely be more profitable.

Because there are free and cheap alternatives. People are more than willing to pay for subscriptions to streaming services and productivity apps from Microsoft and Adobe.

Even services like Hey that are mostly used on phones are doing well.

"Overflowing" is a relative term. There are something like a billion websites in the world; compared to that, a million iOS apps seems downright paltry.

And if you had the potential to bring in as much business as Amazon, as an individual, you probably get preferential treatment. But those thousands of developers operate under thousands of brands in regards to the App Store, not one brand, like Amazon does. An app like Prime Video brings in millions immediately, enough to guarantee a volume discount, while an individual could just wind up being a drain on Apple’s time and infrastructure for quite some time.

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