Comment by ben_w | Hacker News Reader

Comment by ben_w | Hacker News Reader

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> The OS APIs that most apps use are already paid-for by the user when they buy the device.

That argument would assume no cost for upgrades.

I remember having to buy new operating systems.

That said, looking at the state of recent OS upgrades, I think I'd have been happy if the only changes over the last, oh, decade or so, had been purely security updates. But these too are not free.

> Apple wants to double-dip and charge developers for the value that the users already have by virtue of owning their iDevices with all the necessary iOS paraphernalia in them.

Yes, obviously they want to make as much money as possible, and this is at odds with consumer interests.

That said, I have the impression that for many users, the benefit is the app ecosystem, while for many developers the benefit is the users. Endless marketing cycles of new-shiny-API for one, and new-shiny-UI for the other.

That said, power-law distribution, so "the app ecosystem" is probably mostly Meta, Google, Amazon, as specific names, then becoming somewhat vague with "whatever work mandated of Slack or MS teams", "their bank", "three or four supermarkets", and "a taxi firm who may or may not be Uber".

>Yes, obviously they want to make as much money as possible, and this is at odds with consumer interests.

It's not at odds with consumer interests at all. It's at odds with developer interests.

It would actually cost consumers more if Apple couldn't make any money from developers directly because they'd try to make it up by charging more for Apple products.

Developers might prefer to shift the burden to consumers's wallets instead of their own, but overall this model is beneficial for everyone involved. It is also better for the environment because directly making money from developers incentivizes them to support old hardware for as long as possible.

> because they'd try to make it up by charging more for Apple products. > Developers might prefer to shift the burden to consumers's wallets

I vigorously disagree with this. It sounds very confused about economics, specifically prices.

Apple, as every market actor does, charges the absolute maximum price the market will bear for their products and not a penny less. They cannot "make up" any money that comes from unrelated parties (such as their Google payola for search, or their casino games for children IAP revenue) by raising product prices. If they could raise their product prices and have that be profit-positive, they would have done it yesterday.

They could raise prices on phones to make up for a hypothetical "free iCloud+," because the same consumers are the other party in both those transactions so presumably many people would see that the more expensive phone justifies free iCloud services.

Apple doesn't set its prices by saying "OK, we need exactly 83 billion dollars in net income this year, so given that our products cost us 233 billion dollars to make and we have 54 billion dollars in expenses, we need 383 billion in revenue, so now let's set prices of each product to target this."

That $83 billion in net income is just the number they are able to make last year with the prices being what the market would bear. Trying to increase prices to hold it there when a downfall in other revenue happens would depress sales.

>Apple, as every market actor does, charges the absolute maximum price the market will bear for their products and not a penny less.

That price is much lower than it otherwise would be if the only revenue Apple could generate came from hardware. The opposite incentive exists today, where it actually benefits Apple to sell cheaper razors to make more money from the razor blades.

Only if consumers would pay it, which isn’t something we can really know.

> That price is much lower than it otherwise would be if the only revenue Apple could generate came from hardware.

And that narrative is based on what exactly?

Apple's profit margin is 25% by the way.

> It would actually cost consumers more if Apple couldn't make any money from developers directly because they'd try to make it up by charging more for Apple products.

iPhone sales pay for the entirety of Apple's R&D. 10 times over.

You work for $8000 a year?

I fail to understand your question.

Apple sells 240+ million iPhones a year. Apple's profit margin is an unheard-of 25%.

iPhone customers pay for everything.

That's just not how that works, how much consumers will pay is a binding constraint. Apple isn't subsiding their phone with developer fees and distributing their below marginal cost. Apple is almost certainly charging well above its marginal costs and is already charging the revenue maximising price, it's not willingly leaving money on the table.

Not entirely how you've made formed this connection but respectively it sounds like you've confused several things here.

They are obviously not charging the maximum price because they’ve raised the price significantly when the iPhone X came out and suffered no harm. Apple sets prices based on a 30% raw profit margin and ignores the market except as it constrains their raw material and manufacturing costs. They use that 30% to pay there other costs, such as iOS development and R&D and investing in manufacturing partners.

The iPhone X, like all models, is a different model than all the others; the maximum price for one model is not going to be the maximum price for another.

> Apple sets prices based on a 30% raw profit margin and ignores the market except as it constrains their raw material and manufacturing costs.

Literally impossible ahead of time, as some of their costs are fixed rather than marginal. If you spend, as they did last year, ~$34.5bn on R&D, and you make a thing that costs $1000 to make and then you price it at $1300, but the market looks at what it is and what it costs and says "nah" so only 1 million people buy it that year, then what you're actually making isn't a 30% profit, it is a loss >110x your revenue.

We don't know exactly how much R&D was spent on the AVP, nor the exact sales, but the market reaction to the price is something you should have in mind. No matter what its unit economics were, Apple probably made a loss overall.

I'd like to see Windows 2000 as a base taken by Anthropic and beefed up with security stuff.

I'm kinda tempted to do that to classic MacOS. But only kinda, because copyright and trademarks are things, and I don't want to risk incurring the wrath of any legal team, let alone a trillion dollar corporation's legal team.

Maybe ReactOS can be a good base for this actually becoming a reality!

I wonder if they already use LLMs in development. However, and maybe I'm misremembering, but they were doing clean room development so it may not even be possible (because of copyrighted stuff leaking through LLMs).

Woods for the trees- Great idea!

>I remember having to buy new operating systems.

The total cost of supporting the hardware via the OS is easily baked in to the exorbitant hardware cost, or failing that, could easily be baked in.

And you can tell this is the case because they do eventually drop support for old phones. Its not like they give you forever security updates because you buy apps.

So why does this not apply to macOS?

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