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Comment by janoc | Hacker News Reader

The thing is, if Apple alienates developers enough/makes them go bankrupt, the only applications you will be able to use would be the first party Apple ones. That won't be a very enjoyable thing, would be?

That's the entire problem. If a shopping mall was charging every store 30% of their revenue (not profit, revenue!), it would be very quickly going broke and empty. Yet Apple (and to a lesser degree Google, Facebook and a few others) is getting away with this - exactly because unlike the shopping mall, the developers don't have a choice. It is either play by Apple rules - or be excluded from a very sizeable part of the mobile market.

When Microsoft was playing dirty and abusing its market dominance to put a squeeze on companies trying to ship other than Microsoft's software, they got hammered in court pretty bad. The anti-monopoly/abuse of dominant market position laws are there for a reason, even if you, as a consumer, don't see it (yet).

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>That's the entire problem. If a shopping mall was charging every store 30% of their revenue (not profit, revenue!), it would be very quickly going broke and empty.

If the same were true for Apple, they would reduce the 30% fee to reverse the trend. The fact that the app ecosystem continues to be rich is a signal that either:

1) most developers are ok with this price to access Apple's "marketplace" of users, and/or

2) developers are irrational - you could always instead focus on Google's platform, which has more users.

Revenue or profits is not a good indicator of market share at all, as then parent's BMW argument comes into play: just because you want BMW over Honda, because the owners of the former have more disposable income, does not make BMW a monopoly.

>When Microsoft was playing dirty and abusing its market dominance...

Microsoft's market dominance at the time is MULTIPLES higher than what Apple owns of the mobile OS market.

You're discussing mobile apps as if they exist in a robust free market, but it's actually a platform duopoly covering a nearly essential service. As long as Google doesn't decide to compete on price there is very little incentive for Apple to lower prices.

> The fact that the app ecosystem continues to be rich is a signal that either

How do you know it couldn't be vastly better? I know I would be extremely hesitant to develop an iPhone app given Apple's behavior, and would bet many others feel the same.

The whole point of antitrust law is that the normal mechanisms of the free market cannot correct the situation in whole or in part as a result of the anti-competitive activities.

> The thing is, if Apple alienates developers enough/makes them go bankrupt, the only applications you will be able to use would be the first party Apple ones. That won't be a very enjoyable thing, would be?

I doubt this is a popular opinion, but I'd rather use an iPhone right now with no third-party apps than an Android phone. I do use a few third-party apps on my iPhone, and I would miss them, but it wouldn't be enough to switch to Android.

> If a shopping mall was charging every store 30% of their revenue (not profit, revenue!), it would be very quickly going broke and empty. Yet Apple (and to a lesser degree Google, Facebook and a few others) is getting away with this - exactly because unlike the shopping mall, the developers don't have a choice. It is either play by Apple rules - or be excluded from a very sizeable part of the mobile market.

Would your opinion change if this shopping mall was one of many shopping areas in a large region, but its customers were vastly more likely to spend money, while the other shopping areas attracted mostly customers who walked around but didn't purchase much? Isn't that the analogy with Android, which is a very obvious alternative for both smartphone customers and developers? The only rebuttal I'm seeing is from developers complaining that Android users don't like to spend money on apps.

If that shiny cool mall makes your business unviable, either because they charge extortionist fees or because they impose so many restrictions that you can't make the ends meet (or simply ban you outright because you compete with something they want to get into), then it is completely irrelevant that the customers that come to shop there are rich and willing to spend money. You are still going bankrupt.

And we are getting to this point. The amount of BS an app developer on the Apple platform has to jump through to do anything is beyond ridiculous (yes, I did try to develop for iDevices professionally) - and that is before even this stuff with the 30% transaction cuts.

The time when those $10-$20/apiece apps could actually pay your salary is long past unless you happen to be the one of the very few that has hit a jackpot with an extremely popular app. But Apple keeps piling up new requirements, restrictions and overhead on developers, jacking up various fees - and if you don't like it, they just ban you outright.

At some point people decide they had enough and cut their loses. There are better and easier ways to make money than with iPhone app development.

> If a shopping mall was charging every store 30% of their revenue (not profit, revenue!)

In software sold on an app store, gross margin (before the app store's cut) is a lot closer to revenue than for physical goods sold in a physical store. There are no distribution costs or costs of goods borne by the vendor.

And that is relevant exactly how?

The app cost has to cover the development and maintenance costs, marketing, any overhead and expenses (like bills, electricity, those expensive Apple computers), etc.

That's the majority of your costs, not some imaginary distribution costs that you don't have because you aren't shipping a physical box. Oh and taxes too, which come out of the revenue too. And if I remember right, you are taxed on the value of the sold goods, before the 30% Apple cut (so you pay tax from that too, even though you never see the money).

I try to use first party apps because they’re usually better. When I can, I stick to the browser app - which doesn’t have a 30%/15% commission. If I can’t AND I need to pay, I’ll pay 30%/15% extra if I need to.

The thing is, you're not paying 30%/15% extra - if I recall correctly, that is against the terms of the App Store. Developers/companies can't charge a markup to make up for the bit Apple skims off the top - so instead of, say, Spotify getting all of my $10 from an IAP Premium subscription, they get $7. If I sign up for their premium service on their website, however, they get all $10.

Not true, for instance YouTube Premium charges more for subscriptions through the App Store than if you subscribe on YouTube.com

YouTube has negotiated a deal that allows this, as did Amazon Video and a few others. Only huge companies can do this, which further makes the argument that what Apple is doing is abusive.

This is not true. There is no rule that states you must offer the same price when signing up if your service is multi platform. The rules only state you can’t discourage In-App purchase. I use several services where I signed up on the website because it was substantially cheaper than in-app.

That basically just means that non Apple users are subsidizing the cost of Apple users, just like cash users are subsidizing credit card users [0].

[0] http://blogs.reuters.com/felix-salmon/2010/08/28/how-credit-...

3) There's no choice to target iOS user.

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