Google one-ups Apple with 5 percent payment fee | Hacker News Reader

Google one-ups Apple with 5 percent payment fee

venturebeat.com

60 pointsevo_931 comments

When people talk about Apple's 30% cut, and when competitors try to undercut Apple, I always wonder whether 30% is justified. It seems like a lot, but think about what Apple is bringing to the table: not just the infrastructure and staff behind the App Store and the App review process, but the mountains of money they've spent marketing and developing the iPhone and iPad. How do you account for that? There wouldn't be an App Store without those products, and there wouldn't be those products without Apple.

And on a more practical note, at the end of the day, percents can be what they may, but what I care about is the total money I get for my app. Dollars pay bills and buy food, not percents =D.

For something which has no relation with any service Apple provides.

Call when they do that on Android Market, then we'll talk. Apple does not yet have a store for web pages.

Yeah, I'd love to see some competition with the Mac App Store but I guess that with the impending Chrome OS that just won't happen.

OS X has its own app store now, so this can be compared to Chrome OS webstore.

I'd disagree. People consider web-apps (of which the most popular are Facebook, GMail, etc) to be free... Google is competing with the web, not against native binary App Stores.

I think most people understand that the Mac App Store competes with other native-software online stores as well as with brick & mortar stores... the business model of payment for native binaries is well understood.

Google isn't offering exclusive native access to a platform and isn't hosting content... they're simply offering payment processing and a storefront. 5% is nice, but can't be compared legitimately with Apple's 30% cut.

Technically, Apple takes a 0% cut for web applications delivered through Safari to iOS devices. You can easily bookmark them with a shortcut icon on your home screen.

So, I would say the title is misleading. 5% does seem like a fair cut for handling payment processing and storefront, but it's not like Apple is charging anything for access to a web app. They're just not providing a storefront to do it with.

It does host the .crx extension files which can be pretty huge for games that work offline, which represents most games on the webstore.

Does anyone else think it would have been brilliant for the Android ecosystem if they could have beat Apple's 30% cut with the Android Market?

Only if you're working from the theory that a lower cut would've translated to lower prices, and users aren't buying Android software because prices are too high.

As users generally don't even think about, let alone make buying decisions about, who's getting what cut of the $2 price of a video game or the $7 price of some ebook, I don't think it would have mattered.

You don't think Google taking a lower cut on the Market wouldn't incentivize more of the successful iOS developers to take Android more seriously? You don't think anyone would say, "hmm, if I develop this for Android, they are only taking 10% rather than 30%, maybe I should give it a shot."

With higher quality apps on the Market, Android owners might be more willing to fork over money for them.

This was my thought. Currently, as an indie dev, I see absolutely no reason to focus on Android rather than iOS. If anything there are a number of reasons not to (inconsistent OS versions, screen sizes, etc). A chance to up my per app revenue would definitely be a plus in the android column.

> "You don't think Google taking a lower cut on the Market wouldn't incentivize more of the successful iOS developers to take Android more seriously"

Not really. I think the teams that were going to branch out largely did and still do. And from the results we keep hearing, I don't think a smaller cut is going to change any minds of those who decided against it.

As to more good for-pay apps leading to more purchasing, I don't know that would necessarily follow. Particularly not after the Angry Birds experience seemed to suggest direct sales weren't even that great for a game at the level of a cultural phenomenon.

If Android Market lowered its cut to 15-20%, iFlowReader could live again on Android tablets. I consider it very shortsighted of Google to not try to compete with Apple on this point.

What experience would that be? To my knowledge, Rovio still has not released a paid version of Angry Birds although it has been planned since February at least.

I seem to be misremembering. I thought there were two versions at launch, with the paid version going away quickly in favor of ad-driven.

It exists. On the Amazon Appstore for Americans only. So no good to me, but maybe useful for you.

Bigger slice of a smaller pie.

The challenge on Android is that Google needs to split revenue with carriers. I agree 5% will be sweet for android developers.

Others have noted that this is not an exact analogue to the App Store. Nevertheless, the thing that strikes me about this is that a lower percentage is not that interesting.

If Apple need to lower their cut to keep developers on board, they can. They have "economies of scale" when it comes to developer mindshare just as they have economies of scale when buying screens and RAM. They'd rather not, of course, but they can.

Far more interesting is when the price crosses the Rubicon to free, as Google has done with Android. A business model that doesn't rely on charging money is disruptive. Can Apple go all the way to free? Maybe not.

Considering Apple makes an order of magnitude more money on the devices than the software, I bet Apple could even do better than free if they saw the need.

However, it goes against their core philosophy and company strengths. Apple will only go there if they are pressed to do so.

Is that true? I was under the impression that that's changing. But I could see that, it would take a lot of paid apps to compare to the margins on hardware sales.

Twice, Apple has said publicly that they are running the store at "just above break even."

From last year: http://www.appleinsider.com/articles/10/01/26/app_store_wild...

and February: http://www.macobserver.com/tmo/article/apple_app_store_runs_...

Google doesn't host your content on the Chrome app store.

They can, if you choose to implement it that way:

http://code.google.com/chrome/extensions/apps.html

And Apple does? Apple hosts and distributes your apps, yes, but you still need to have additional content/features (global high scores, etc) hosted somewhere else. How is this different from Chrome App Store? If you build a true packaged app, Google's App Store will host it, won't they?

Also Apple charges $99/year for hosting (they don't call it hosting fee, but if you stop paying, they'll stop hosting your app).

No they don't. If you don't renew your ADC membership Apple won't pull your apps from the store.

That is false. If you let your iOS dev credentials lapse, Apple will indeed remove your apps from the store. I saw it happen to a guy I know. He wrote one game, it didn't sell at all, he didn't renew, so his app dropped out of the store.

This is probably an important distinction when you're comparing it to the App Store. However, Wikipedia says that Google's 30% cut on the Android Market goes to the carriers. Do the carriers provide the infrastructure for the Market or does Google just not mind paying for the expense?

Yes it does, see this comment http://news.ycombinator.com/item?id=2538255

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