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Comment by mrcwinn | Hacker News Reader

The heart of Apple's hypocrisy is this: they claim their 30% is necessary to support the developer ecosystem and fund its operations. But of course if that were true, they could easily charge a high enough platform membership fee directly to developers. Instead they opt for a structural tax to cover what are mostly completely opaque and secret operational costs. They're opaque and secret for obvious reasons: those expenses come nowhere close to the ~$30 billion in App Store commission Apple generates every year.

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As described in the ruling, Apple hired a consulting group to estimate how much value developers get from the iphone platform, which found that

(1) Apple’s platform technology is worth up to 30% of a developer’s revenue. (2) Apple’s developer tools and services are worth approximately 3%–16%. (3) Apple’s distribution services are worth approximately 4%–14%. (4) Apple’s discovery services are worth approximately 5%–14%.

Then Apple claimed this study was how they came up with the 27%, but the Judge basically said nah you guys came up with that number before the study, and you even know it would be a non-starter for almost all developers.

Hire a consulting firm to tell you exactly what you want to hear, then say "see the experts said it, not us". Classic.

The CYA industry for you. Something goes wrong, blame the consultants.

> Apple’s developer tools and services are worth approximately 3%–16%

That must be a joke. Xcode is so bad, compared to Android Studio, it’s not even funny. As iOS dev I have to constantly apologize to my Android team members, that, no, Xcode can’t do this and that, and, no, we can’t do X in the build pipeline. And I‘m generally 10-20% slower than them because the tooling is just terrible and flaky.

BTW there was a promising IntelliJ option for Apple development, but Apple made life so hard for them that they had to give up. It was called „AppCode“ and some people are still sad that it doesn’t exist anymore.

It made me laugh, if you pretend to be worth 30% of revenue (an insane markup), you better really invest in those developer tools to show it off because the sad state of xcode really isn't showing that.

I don't know where this money is going but certainly not in the developer tooling because it's absolutely terrible

If Apple were worth 30% of revenue, then they'd have no problem allowing competing app stores on their devices, because they support their rate with their value.

The fact that they're deadset against competition should tell the courts all they need to know about how competitively supportable the 30% is.

I thought Apple's argument was that the 30% pays for iOS itself, not that the 30% pays for the App Store. Under that theory there's no reason to allow other app stores.

this would be a silly argument - surely the customers buying the devices should be paying directly for the operating system?

They used to do that back when the iPhone first came out. I don’t think anybody liked that better, and having people hang around on older iOS versions was (and still is) bad for security.

iPhones never had paid iOS upgrades. iPod touch did, but that's because Apple was worried free updates would violate an accounting rule. Specifically, the iPhone was considered subscription revenue while the iPod touch was considered purchase revenue. And after an accounting scandal[0] GAAP had been changed so that you couldn't say you sold, say, a bunch of stuff that hadn't actually been finished yet, and then finish it later with, say, a software update.

This is, of course, how basically every tech company works nowadays[1], because Apple lobbied to have that accounting rule removed.

None of this has anything to do with "App Store pays for iOS". That's an excuse Apple came up with after Epic Games sued them, there's no point in time I can point to where iOS is just the bundled OS vs. "paid for with app sales". The reality is, everything pays for everything, because Apple only sells fully bundled experiences. Their opposition to sideloading or third-party iOS app stores is only somewhat related to security[2], and more related to the fact that they don't want anyone dictating to them how the customer experience is, even if those changes improve the experience.

Well, that, and the fact that they make bank off App Store apps.

[0] I'm not sure if it was Enron or Worldcom

[1] Looking at you, Tesla FSD

[2] If it was, they'd be locking down macOS

Steam takes a 30% cut, but it's actually apparently worth it for discovery and low-friction sales alone, since developers still sell on Steam when the PC is an open platform with competing storefronts with lower cuts.

Steam also reduces their cut down to 25/20% at $10m/$50m in sales, whereas Apple reduces it to 15% only for devs under $1m/yr. A small number of games/apps make the vast majority of revenue so Steam's average cut is likely considerably lower in practice.

> if you pretend to be worth 30% of revenue (an insane markup)

Back in 2008, if you were an indie dev then their 30% ask was more than reasonable because the cost-of-doing-business on other platforms (like Windows Mobile) was much higher due to the lack of any central App Store; for example, you'd often need to partner with a company like Digital River, and pay more for marketing/advertising and overcome the significant friction involved in convincing punters to register/buy from your website, download the app *.cab files to their PC, install the app onto your device, and hope no-one uploads a copy to a filesharing network because this was before the days when an OS itself would employ DRM to enforce a license for third-party software.

...then one day Apple comes along and says: "We can manage all of that for you, for far less than what you'd pay for e-commerce and digital distribution, and our customers have lots of disposable income".

Ostensibly, competition should have come from the Android and (lol) Windows App Stores: "surely if Android's Play Store offers devs better rates then devs will simply not target iOS anymore and Apple will reduce their % to stay competitive" - but Apple's secret-sauce of a markedly more affluent customer base with already saved credit-card details meant that Android apps leant more on ad-supported apps while more iOS apps could charge an up-front amount, not have ads, and result in iOS devs still making far more money on Apple's platform.

--------

There exists an argument that Apple should not be forced to open-up the iOS platform because Apple is selling a closed platform on the merits of it being a closed platform, and Apple's customers want a closed platform (even if they don't realize it) because having a closed platform looks like the only way to enforce a minimum standard of quality and to keep malware out precisely because normal-human-users (i.e. our collective mothers) will install malware because the installation instructions for "Facebook_Gold_App1_100%_Real_honest.app" tell them to disable system protections.

> because having a closed platform looks like the only way to enforce a minimum standard of quality and to keep malware out precisely because normal-human-users (i.e. our collective mothers) will install malware because the installation instructions

Well no, the most secure platform in 2025 is still the web. You can't get as much data in a web browser as you can in a mobile app and the sandboxing is tighter.

And I may mention that the majority of the appstore revenue comes from casino like games, not really something I would give it to my family.

And sure, I'm opened to the idea that the appstore was innovative in 2008, unfortunately for Apple, we're now in 2025 and it clearly isn't anymore.

> Back in 2008, if you were an indie dev then their 30% ask was more than reasonable because the cost-of-doing-business on other platforms (like Windows Mobile) was much higher due to the lack of any central App Store

The first iPhone indie devs were Mac indie devs who already knew Objective-C and Cocoa and Xcode and paid 0% to Apple on the Mac.

At the time, the Verizon/Qualcomm BREW platform had absurd levels of revenue sharing: Up to 90% (!!!) went to the carrier unless you were big enough to negotiate a specific deal.

The 30% that Apple announced was a game changer.

2010: "Man, charging people money to install software on a feature-phone they bought is kinda fucked up. Both companies are in the wrong for doing that."

2025: "You don't appreciate how lower publishing fees foster competition, except when there's no fees at all, because that's too competitive for the OEM."

The first thing the consulting group would have asked Apple was "what do you want this number to be?".

That's the point of hiring consulting groups.

The funny thing is that the companies that stand to benefit the most from this and that move the most money (Netflix, Spotify, Fortnite) need Apple's platform, marketing, and distribution the least.

Indeed. I’d add a fourth category: the medium-to-long tail of ad-infested casino games for children. None of those apps are successful because of the App Store. People don’t generally start at the App Store and go looking for games like this. They are all installed from CPI ads in other ad-infested apps or on websites.

Apple is exactly like a mobster demanding a cut for “protection” — except they’ve designed and controlled the system so well that your business just cannot exist in the first place until your automatic extortion payment system is in place.

They don't. Nobody heard about Netflix and Spotify from randomly browsing App Store(Do people even browse app store feeds to see what to download?). Almost every users of them would likely have searched for it.

Maybe I should have said "_don't_ need Apple's platform, marketing, and distribution" rather than "need Apple's platform, marketing, and distribution the _least_", but I think we agree.

what discovery?

For "discovery" people would have to regularly check the App Store app and read the "today" page. Maybe perhaps Spotify or Netflix will appear there once a year among 15000 stories about games.

Or you mean search? If people search for Spotify/Netflix, they already know about it. And right now Apple will helpfully cover half of the screen with an ad for Gmail if you search for Spotify (and will hide all other Spotify apps like Spotify Kids and Spotify for Creators six screens down)

You don't pay consulting agencies to put you in legal jeopardy. The judge is right.

This is obscene lmao.

if you take the high end for all of these points, Apple is claiming 74% of the revenue is thanks to them.

Also, there's a certain level of 'hand-waving' here where if you're developing for iOS you're almost forced to have Apple hardware in the first place to run+test (hell, even Android can be dev'd from almost anything...)

They don’t make that claim. That’s the service they are selling and the margin they choose. The royalty is similar to software retailer margins going back a long time. Steam charges a similar rate.

It’s pretty trivial to bypass. Just don’t charge for your software, and use the app to access paid resources purchased outside the platform. My company distributes a few dozen apps to thousands of employees, Apple gets $0, because they utilize an existing subscription or license unconnected to Apple.

There are many caveats on this. For example, Apple's terms clearly state that developers must use Apple’s in-app purchase (IAP) system for digital goods or services. So you're restricted to only subscription based pricing. No upgrade pricing. No microtransactions.

Additionally Apple remains the arbiter of what kind of content and apps may be listed. Until recently they were blocking all emulators and cloud gaming apps. They used to block all crypto apps. They still selectively block gambling apps. They still block torrenting and adult apps.

Additionally, Apple is famous for arbitrary and selectively enforced rules. Many developers have their updates rejected for any and no reason after an automated system rejects them for specious reasons.

Additionally, developers are blocked from linking out. They can't up-sell, which is a critical component of a SaaS business model. Nothing in the app can tell users where to subscribe or how to upgrade or change their credit card details. This one alone kills most SaaS applications unless they use Apple's IAPs.

Isn't the point of this case that even free apps can't even advertise their direct payment systems?

The problem is less the actual % itself and the fact that it's bundled in with so many things you can't pick or substitute. You can't avoid the app store and you can't avoid the Apple developer tools because they force you to use both of them. So then charging money for something you don't have an alternative to is the issue.

Steam might charge a similar rate but you aren't forced to use them. You can deliver games to PC gamers in a number of ways and many large games opt to not be on Steam.

> Just don’t charge for your software, and use the app to access paid resources purchased outside the platform.

That introduces insane friction and you lose a ton of customers

But game developers can sell steam keys directly or cia other resellers and avoid the steam commision entirely. So Valve is goving them a fee service and only chargeing a commision when valve themselves generate the sell.

Yeah, until Apple asks you "politely" to move your subscription to IAP.

This made sense for an app that was sold on the store.

It didn't make sense to me for media from an external subscription or store account was taxed by apple (like netflix or kindle).

Were they transparent, what would inhibit developers from bargaining against the costs and benefits shown? Sometimes that also outweighs the benefits of transparency.

You just can't show anything to anyone without kicking a wasp's nest.

I am not defending Apple, if anything, I am pro-Android here, but I understand the pickle they'd be in, were they be transparent with the cost structure.

Well, yeah. It would have shown that their commissions are nothing but rent-seeking.

Exactly my point!

This would kick the wasp's nest of "they (Apple) don't need this much money to operate, they can do well with 10% profit!"

Which is very hard to admit, that profit margins are arbitrary when you, indeed, dominate the market.

Apple doesn't want (nor need) to give anyone a handle to anyone to make them accountable. It is not a charity.

(Again, I'm not defending Apple, but I do defend corporate liberties, in general.)

When a company builds the moat too high (i.e. restrictions on external sub signups) it becomes monopolistic.

Apple is honestly worse than Microsoft in so many ways as far as restrictions (nowadays, anyway) and yet it's taken this long even to get here.

(To be clear, I am not a fan of Google's actions in the mobile space either...)

Mobile space

Ad space

Search space

And more!

Are you defending their corporate liberty to withhold information or to lie about the information being withheld?

It isn't about transparency.

It is about illegal anticompetitive behavior.

Apple didn't charge tax on all app store purchases to protect themselves, it was done out of greed and malice.

You're assuming that Apple is acting in good faith. An actual, literal judge has decided the evidence shows that Apple was not acting in good faith, and in fact were behaving illegally. This isn't a "both sides" argument, Apple is definitively in the wrong.

> what would inhibit developers from bargaining against the costs and benefits shown?

Another word for that is "competing". And yeah, exactly.

The math of a one time fee is different than a percentage. Not sure what you are getting at by presenting a business model that doesn’t make sense as an argument

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