back to article Apple 'greed' tax spreads beyond music, movies, magazines

Apple's recently enacted "give us 30 per cent of your subscription revenue" dictum is metastasizing beyond online magazines, newspapers, music services, and video apps, ensnaring at least one software-as-a-service app as well. Steve Jobs' App Store police have rejected the iOS version of Readability – an online service that …


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  1. Ian Davies

    So let's see...

    Readbility are pissed because Apple want a 30% cut of their revenue, and say it makes their business model impracticable. Their business model being... to take a 30% cut of the subscription fee people pay to read the content served up by Readability...?

    1. Adam T

      Point being?

      That's their busines model.

      Apple's business model appears to be gravitating towards take as much as you can get.

      The problem here isn't just the fee, it's the fact that they won't let you create an app which accesses a subscription service, without offering the subscription through In-App purchasing.

      Which is sort of a faux pas, since it's not really an "offer" if you're also not allowed to tell the person using the app that they can also sign up on their website. You may not link to an external subscription link from within your app, and you may not offer an external subscription for a rate cheaper than the iPhone In-App purchasing subscription: so say goodbye to any marketing promotions with, say, anyone other than Apple.

      1. makemineamac

        Of course they won't....

        Apple, in case you hadn't noticed, bases everything they make on what the end-user experience will be. This new process refines that experience, and keeps it consistent. I don't want to go to some extraneously anonymous website while on my iPad or iPhone to make a purchase. I want to do it through my account, as that is where I am "shopping". Get it?

        And as far as their rule about not letting you offer it in the App store if you are offering it cheaper elsewhere, they are doing that because developers would simply find a way to direct customers to their website to make these purchases intended to be consumed on the iPad or iPhone, to circumvent the process. Brilliant actually.

        1. Anonymous Coward

          Mr 'makemineamac'

          aka 'makemineanextralargekoolade'.

          Wow. Just wow...

    2. mafoo


      delicious irony.

    3. Paul M 1


      This reply is really to all the Apple apologists who, deliberately or not are completely ignoring the point.

      Nobody is complaining if Apple want to charge 30% for subscriptions via the App Store. It is the fact that Apple insist that you *must* use the App Store and that you *cannot* make it cheaper anywhere else.

      Please tell me how that can possibly be good for consumers or any business other than Apple.

      1. hexx

        how is this

        different to any standard rules in the business? for example amazon market place? exactly the same rules

      2. sT0rNG b4R3 duRiD
        Jobs Horns

        Apple insist that you *must* use the App Store and that you *cannot* make it cheaper anywhere else

        ^ This.

        I once said I was platform agnostic. For example, I would and currently do use a mac. Nevertheless, I have so far refused to buy an iPhone because of Jobsian restrictions.

        This new move by Apple however is seriously making me reconsider my current use of macintoshes.

        Stevo, don't be such a greedy shit. I mean... to what end?

        1. Sean Baggaley 1

          @sT0rNG b4R3 duRID:

          "Apple insist that you *must* use the App Store and that you *cannot* make it cheaper anywhere else"

          Your post would make sense if the line you'd quoted were actually true. It isn't. Apple's rules only demand that you must *ALSO* support the App Store method of payment, not JUST your own web-store one. You also cannot undercut the App Store pricing on your own site. Which makes sense given that Apple are taking care of the bandwidth and hosting issues for you with the App Store itself. (They're already fronting up those costs for freebie apps as it is. Good luck trying to get Digital River to do likewise. Even C|NET's charges for hosting now!)

          Note that this means Readability merely have to support the same price through their website as they charge through the App Store method. This is nowhere near the end of the world that Readability are complaining about. They could simply bump up their prices via BOTH methods. Or they could reduce their *existing* 30% slice. (Oh, I'm sorry, did you miss that part? Readability has *EXACTLY THE SAME PRICING MODEL AS APPLE!* Hypocrites, much?)

          That some of Readability's source code ended up in Safari is irrelevant. Apple aren't breaking any rules by including it. That's kind of the *point* of those licenses, after all. Whining about someone using your *freely available and licensed work* on the grounds that you disagree with some of their *other* policies is just hypocritical. Either you *willingly* gave your code to the wider software development community (of which Apple is certainly a member, what with having given away plenty of their own code in the form of WebKit and Darwin), or you didn't. Which is it?

          Of course, Readability could always jump ship to Android. Apple won't care.

          1. Gorbachov


            He said:

            "Apple insist that you *must* use the App Store and that you *cannot* make it cheaper anywhere else"

            And then you said:

            "Apple's rules only demand that you must *ALSO* support the App Store method of payment, not JUST your own web-store one. You also cannot undercut the App Store pricing on your own site."

            Methinks you just confirmed what he said using different words. And did you just now say that they could 'reduce' their profit so as to make up the loss on the Apple tax? If their profit is 30% and they need to pay a 30% tax....ummm....they get nothing?

            And please don't bash people with webkit and darwin. Webkit is cool but considering the quality of the browsers that use it Apple is the least responsible for it's success and darwin is flop as a FOSS project, pretty much nobody uses it besides Apple.

            1. Shakje


              while I'm not sure how much I actually support the idea of taking 30% of subscription services, I have to say there's a lot of fuss about nothing here.

              1) It is a GOOD thing for consumers to have one point of access for buying things and makes it a safer shopping experience. You could say that you only buy things off of websites you trust, but I think there is a legitimate concern with that, which should be blatantly clear to anyone involved in IT.

              2) If it's too much for you then don't bother. If you can't support that 30% then write your app for something else, if it's good enough it'll still sell. The main problem seems to be that they want the visibility of the app store but don't want to have to pay 30% of their income to Apple. If their profits don't support it they need to either raise the price or stop. Whining about it probably won't change Apple's mind.

              3) Complaining about Apple using source that they released for free seems a bit rich. Considering it would be completely different departments anyway...well.

              1. wraith404
                Jobs Horns

                Consumers shouldn't turn a blind eye

                No fangirl, I'll complain to the justice department and support anti trust action to force allowing an alternate market. This is stupid, if microsoft forced you to buy all software for windows from best buy this would be a no brainer.

              2. Ammaross Danan


                "The main problem seems to be that they want the visibility of the app store but don't want to have to pay 30% of their income to Apple."

                No, they don't want the visibility of the App Store. The problem is that they MUST use the app store in order to distribute their app the first place. So no, no App Store envy. Unless Apple allows other methods to get apps on their devices? Don't mention Jailbreaking, because then you'd just be proving a point.

                "If you can't support that 30% then write your app for something else"

                Yes, they likely will just jump the sinking ship and go with Android. However, the problem we face isn't just having to pay the Tax. It's a monopoly. In dealing with foreign and domestic products, countries place import taxes and such on foreign goods to ensure domestic (read: Apple) products sell better/make money as opposed to "cheaper" foreign (read: competitor) products. You must consider Apple now has a music store, book store, and newspaper. It's rumored that they'll have a music subscription service. Do all of these services have to inflate the prices or lose profit margin due to the tax? Nope. So, get The Daily for $5/mo or get New York Times for $6.50/mo. The Store-Brand Principle would show people will buy the cheaper "similar" alternative when presented with both. This 30% hike is a way to drive higher sales to their home-brew services, but also gouge a cut off people that still use the alternatives. Apple is using their market control to gain more revenue. Sound like monopolistic practices? Yeah, I thought so too.

              3. Adam T
                Thumb Down

                Because iTunes is so much more secure than anyone else's payment system

                Shakje spake:

                "1) It is a GOOD thing for consumers to have one point of access for buying things and makes it a safer shopping experience. You could say that you only buy things off of websites you trust, but I think there is a legitimate concern with that, which should be blatantly clear to anyone involved in IT."

                You miss the stories about buying stolen iTunes accounts, or the mother who's kid spunked over a grand on In-App purchases?

                Philosophical discussion on the ignorance of naive mothers and chinese hackers aside, the fact is when it comes down to it, people should be allowed to CHOOSE who holds their personal details. And there's a certain savvy that anyone here should know about not putting all your eggs (or Apples) into the same basket.

          2. Paul M 1


            Sean Baggaley...

            You are one of the most prolific of Apple apologists on the Reg comments board but you do at least normally make a coherent, if somewhat puzzling case for Apple's behaviour. So please answer my original question...

            The statement quoted *is* true. If you want to sell a subscription that works with an iOS app, you must use the App Store and you cannot make it cheaper anywhere else. That does not mean you are *only* allowed to use the App Store since if that were the case the second part of that sentence would be redundant , wouldn't it? Just to be absolutely clear, let's rephrase it as "you must enable the App Store subscription function" instead so there's absolutely no "confusion".

            Please tell me how such an arrangement can be to the benefit of anyone other than Apple.

          3. Anonymous Coward
            Anonymous Coward

            I don't think so

            'You also cannot undercut the App Store pricing on your own site. Which makes sense given that Apple are taking care of the bandwidth and hosting issues for you with the App Store itself.'

            Actually after the initial purchase there is absolutely no need for you to touch Apple's servers when downloading other content. The hosting cost of the app should have been absorbed in the initial purchase cost.

            Apple are making the likes of RyanAir and with their 'booking charges' and 'credit card fees' look reasonable.

    4. Anonymous Coward
      Jobs Horns

      Readability Offer Something - Apple Don't

      For their 30%, Readability's app is taking the subscription and changing the content (stripping the ads)

      Apple is providing nothing - Readability already has a proven subscription system, they don't need Apple's, but Apple is forcing them to make it the only obvious method of payment..

      Imagine if the government put a £30 toll on every motorway, then removed *ALL* roadsigns that didn't send you down the motorway. Towns are also banned from erecting their own signs pointing down the "A" roads. Many people would drive down the motorway without knowing the alternatives. Yes, you could go out and by a SatNav to find the alternative routes, but why should you when there are proven simple signs.

      I am Apple of Borg. You will be assimilated.

      1. hexx

        FFS - no title required

        you don't need to pay for this 'serivce' it's not even a service, it's simple button (online version) which strips ads and menus and so on. so it's not pure service at all. 'reader' link in safari does the same (it's built on these guys' work) so yeah, they're asking fiver per month for a button (which any web developer can create).

      2. dssf

        Your analogy...

        Is very apropos. I used to harp and rail about how evil msoft was/is/was, but now apple is trying to be rotten to the CORE...

        But, what i think this is really about is apple may be running out of steam in cranking out fondlephones and wants to bolster the uuber chic design lab with money squeezed out of every isomething. Imagine if automobile manufacturers decided they wanted/needed more than just the dealership's payup and any warranty kickbacks...imagine if Honda or GM or Toyota schemed (separately or in collusion) to REQUIRE dealerships to go away, and for consumers to permanently tie their vehicle purchase, gas, and carpooling/car-sharing expenses directly to the dealer.

        If ifondledevices reach a saturation point, then the revenue stream will dwindle. So, apple are squeezing money out of a fondleturnip.

    5. makemineamac

      You are so right...

      Making margin on product you sell in a store is a normal part of business, and 30% is not quite the sweet spot, but it's where it should be.

      In addition to that, I don't want to share my info with Readability or anyone else. I prefer Apple asking me whether I want to share that information, and indeed, processing my purchases.

      These guys are as short sighted as can be, and they will soon realize that someone else will find a way to effectively monetize what they were doing.

      1. RegisterThis


        You are a pretty anti-social individual ...!

        The net effect of this is that publishers take a 30% cut in revenues ... or raise the prices 30% to cover this. Now I doubt many publishers can do the former given the cellar pricing of digital content, which leaves only the latter / RAISE prices for everybody by 30%.

        So what you are really supporting is paying 30% more for ALL YOUR purchases through Apple AND that EVERYBODY ELSE must pay 30% more elsewhere too? All so you can entrust your details only to your beloved Apple who will never do anything wrong with them? Excuse me if don't see why everybody else should be paying more just so Apple's sheeple can live in an only Apple world! The very definition of arrogance for a company who has at best 16% of the entire internet connected market globally!

        1. Anonymous Coward
          Thumb Up

          Actually ...

          ... If you were to pass on the costs of this to the consumer, the price increase would be 43%.

          1/*(1-0.3) = 1.42857 ~ 43%.

        2. makemineamac

          Antisocial? Really?

          Mr. Registerthis:

          How often do you go to a store and pay for your purchases at another location?

          If you went to a Tesco, and were told you had to go down the street to pay for your purchases, would that make sense to you? Would it?

          Didn't think so.

          1. RegisterThis

            @makemineamac Re: "Antisocial? Really? "

            ok ... sorry ... not antisocial ... just dumb ... or at best obtuse!

            For your sake I truly hope that Apple get's their way, that you get to pay for everything at Apple (since you only want to shop there) ... and that you can afford to pay 30% more for everything.

            And don't whinge when it gets expensive and you go shopping for the same content elsewhere only to find it costs 30% more too ... because you wanted this!

  2. Anonymous Coward
    Thumb Down

    All take, no give ...

    That's what Apple has become. Wasn't always that way. Who would have thunk it? I notice, however, there *is* a backlash starting.

    Fuck them, their app store and the horse they rode in on.

    They're power-crazed, greedy bastards happy to take and make profitable use of other people's stuff for free, sell it at vastly inflated prices and make out they're innovative.

    Microsoft pales in comparison.

    Neither of them will be anything but historical footnotes in twenty years time.

    1. ThomH

      The backlash started in 2003

      The difference is that Apple have now made it impossible for others to defend them convincingly. The new charge on subscription services means that the costs of being in the ecosystem now outweigh the benefits for many major companies that you've heard of.

      If competition regulators are able to do anything here (which seems unlikely) then it could be the first time they've intervened effectively to save a company's business model.

    2. dssf


      "Fuck them, their app store and the horse they rode in on."

      Reminds me of "Caligula" and "Equus"... Munge those two movies with Apple and all sorts of vivid and lurid imagery arise... Calappgula and Equustore come to mind...

  3. Anonymous Coward
    Anonymous Coward

    Deeply ironic

    As John Gruber points out, isn't there something deeply ironic about someone who takes a 30% cut from the revenue he generates from the creators of that content complaining about someone taking a 30% cut from the revenue they generate from the content he provides (which isn't his to begin with)? Why yes, yes there is.

    1. Anonymous Coward
      Anonymous Coward

      seems fair enough to me...

      ...they have a service that gives consumers an ad-free reading experience and replace advertising revenue with subscription revenue for the content creators - in principle it makes sense but I wouldn't pass comment on the fairness of the split because I have no idea how much a view of an ad pays these days, nor how much it costs to run an operation like Readability.

      I'm sure that there are plenty app developers and consumers that like the convenience of the app store model - it has a lot to recommend it if you trust Apple - but there seem to be a lot of cases where consumers and developers are poorly served by it, particularly where it disrupts a business model based around a price point and margin (for developers) or increased cost to consumers because Apple insist on a process where paying their margin is largely unavoidable.

  4. Anonymous Coward
    Anonymous Coward

    Jobsian Greed

    Oh, is it not amazing how things have changed? Apple has always been many things to the media, but never "greedy". What company isn't greedy? That is their purpose for existence, right? Oh, but Apple has never gored publisher's ox before now? How about the music business? Greedy bastards all, I'd say. It is their "causis belli" as it twere Stack up another one for Apple for now. Ubuntu is starting to look better and better, isn't it?

    1. penguin slapper

      Ah yes, Ubuntu.

      Owned by Canonical - who recently asked for 75% of the take on an Online Music Store that's offered via Banshee.

      If you form a company/corporation you become subject to fiduciary requirements that require that decency, morality and reason be sacrificed in the name of as much profit now as possible, at the cost of all other considerations. Failure to pursue said fiduciary duty leaves one open to legal action and the loss of employment.

      This is why the only time Corporations will ever change their behaviour is when the law is changed.

  5. Anonymous Coward
    Anonymous Coward

    Stinking filthy pot calling the kettle black

    Let's recap:

    Readability takes 30% of subscription money for themselves for running a script that skims (removing the original source of income) other websites without their approval. The other 70% are kept in a savings pool until those websites decide to register for this service they never asked for (so they might never sign up, there's no notice being given apart from client logs)

    Apple takes 30% of the subscription money for themselves for handling payments and offering the whole App store environment. The other 70% are guaranteed to quickly move go to to the company providing the service.

    Who's really being the most greedy in this scenario?

    1. ElReg!comments!Pierre

      Haha, no.

      "Readability takes 30% of subscription money for themselves for running a script that skims other websites"

      Well, Readability is ALSO offered as a free, run-yourself "scriptlet" (yuck, scriptlet. Perhaps the ugliest neologism ever).

      Only, guess what? They cannot peddle that to the iHappy crowd, as it is *shock* *horror* interpreted code.

      So they have to run the script themselves, which means server space and bandwidth and computer power. That costs money (plus, they DO send money to the content providers, don't they?).

      So yes, they charge for something that you could have for free. But that's because Apple's stance makes it impossible to have the free Readability in the first place.

  6. Anonymous Coward
    Anonymous Coward

    I sat in a meeting today

    and watched a multi million pound turnover UK company can its almost complete iOS apps thanks to this clause.

    Its not the first one this week either.

    1. Anonymous Coward

      I, too, sat in a meeting today

      and watched a multi million pound turnover UK company drool over all the new subscribers they are going to be able to reach thanks to this clause.

      Its not the first one this week either.

      We can all make up stories to justify our prejudices.

      1. Anonymous Coward
        Anonymous Coward

        fundamental difference is

        I did sit in the meeting today and listen to the client can the project.

        You seem like many of the other know nothing no it alls to equate ownership of an idevice to be the portal to purchase all other goods as if those brands had no presence before Apple came along with iPhones.

        Bottom line is that when your the largest in your sector you dont need an app with IAP, your clients want your products anyway, they have many other ways to pay which dont add 30% to your cost base plus the cost of app development.

    2. Ian Davies

      A question

      How, I wonder, did the "multi million pound turnover UK company" make its profit in the first place?

      I'm guessing it *wasn't* by having the chops to create a seamless and frictionless content marketplace and payment system, but then letting people set up shop in it without collecting a fee to pay for all the time and effort and innovation that went into one of the smoothest online buying experiences *anywhere* and which just about everyone is attempting to copy because they know it works and that customers like it.

      1. Relwal

        Jury is still out.

        The jury is still out with In-App-Purchase as a content market. Customers were pretty much luke warm with the newspapers and magazine apps (Conde Nast, Sports Illustrated etc.) which presaged the new subscription content rules.

      2. Anonymous Coward
        Anonymous Coward

        An answer

        That would be by being the market leader in what they do.

        By having the "chops" to grow and develop a product portfolio and service level regarded as the highest in there sector.

        And by adopting technology along the way to make the service as smooth as possible.

        Its probably also down to having the business sense not to waste money on projects that will lose money with every purchase.

      3. Pen-y-gors
        Thumb Down

        yeah, but 30%???

        It's perfectly reasonable for Apple to want to charge a fee for using their 'wonderful' on-line payment system. But 30%? Do Paypal charge 30% to process a payment? No. Do Visa/mastercard etc charge 30%? No. Do some businesses on tight margins add a small surcharge for people to pay by card? yes? So, if Apple were charging say, 1.5%, minimum 25p, and allowed apps to charge more via the App Store (to cover the Jobs tax) than via other means, then I don't think anyone would complain.

        But 30%? And no way to recoup it? Come on - that's a hell of a 'fee' for using a 'smooth' checkout system!

        1. ThomH


          It's not just that, it's the obligatory equal pricing, so you've no way to pass Apple's 30% on to the consumer. It's a cost that businesses must be able to swallow if they want to play inside Apple's ecosystem. They now have to exclude themselves from the biggest selling mobile OS (yes, I'm counting iPod Touches and I do know that Android phones outsell the iPhone) or find a way to supply 30% to Apple while still being competitive with those that have excluded themselves from iOS.

          For someone like Netflix, Spotify, etc consider US$99/year to supply a free iOS app to their subscribers versus US$99/year + 30% of take from anyone that creates or renews their subscription inside the app, with no option but to add that functionality to the app. And it's for subscription services, so you're probably not getting additional revenue from the on-average more affluent iOS customers versus customers in general, and Apple's rules prohibit a different price for iOS customers.

          Likely outcomes are (i) dump iOS; (ii) introduce a higher subscription rate for all mobile customers. And the latter just adds weight to any consideration of the former further down the line.

          On the flip side there are people, like my own company, with no previous subscription infrastructure in place and aspirations. This is great news for us, but for the industry as a whole it's likely to turn iOS into amateur hour. So even we're seriously considering whether to do anything.

          1. The Indomitable Gall


            "Likely outcomes are (i) dump iOS; (ii) introduce a higher subscription rate for all mobile customers. And the latter just adds weight to any consideration of the former further down the line."

            Or (iii) introduce a "premium package" with near valueless "bonuses", and offer the basic subscription to Android phones, but only the premium for the iPhone.

            1. RegisterThis

              Aargh ... no ... spare me ...!

              "premium package" only for iOS?

              Can you bear to imagine the smug fabois then ... "I have access to exclusive content so I am now even more superior" ... la la lala la ...

              ... but at least the joke will be on them ... 30% more for probably cosmetic and minor content / packaging change :-) Multiplied by multiple content taxes ... suckers!

              But then they are ADDICTS so probably won't mind as long as their iDevice feeds their sense of identity and superiority ... ho hum!

    3. Anonymous Coward
      Thumb Down

      This is almost as believable

      as the guy who told me about the Lib Dem voting, Prius driving llama that would have played drums for Oasis had it not got into a fight with the Gallagher brothers!

  7. Anonymous Coward
    Jobs Halo

    A Letter From Steve Jobs


    While I fully understand your position on this matter, there is one detail that you have overlooked. This is my sandbox. If you don't like that, take your toys and leave. You'll be back, since I have the biggest sandbox in the park.

    - Steve

    Sent from my iPad

    1. JarekG

      since I have the biggest sandbox in the park.

      ...for bigger one is being build as we speak.

      --ex iCrap user

      Sent from my Xperia

    2. bex

      Apple will be taken down

      Once the regulators get their teeth into this the shit will fry. If microsoft have to be forced to play fair so will Apple

    3. Anonymous Coward

      Oh really?

      Those that never drank the Cool Aid piss in your sandbox.

  8. Anonymous Coward

    I actually wish for Apple/Jobs to stay on course.

    I hope that Jobs will not be swayed and fire off his usual "go fuck off" ... err... "not that much of a problem" emails. Why? Because this is bound to cause a massive stampede of developers and publishers pulling off the iOS platform, dooming the iThingys into oblivion.

    Once this happens, the users will follow suit, especially those planning to buy an iPad2 will probably hold off on that decision. Or the iPhone 5. By the time Apple reacts to the stampede, it will be already too late. Hopefully, this would lead to a post-Jobs Apple policy.

    1. John Molloy

      Too much wishful thinking...

      I love all these AC's posting their opinions anonymously.

      At the moment the only place you can make money selling apps is through Apple's App Store. Developers go to where the paying customers are and that is iOS. Apple have 100's of millions of customers who are prepared to pay money to buy applications. The competition not so much.

      "Because this is bound to cause a massive stampede of developers and publishers pulling off the iOS platform, dooming the iThingys into oblivion."

      Not going to happen.

      1. JarekG


        "Apple have 100's of millions of customers who are prepared to pay money to buy applications. The competition not so much."

        Just wait till all of the phone contracts will not be that much.

        The only reason they have so many is case most people have 2-3 year contract before they can drop the iGarbage and get real device.

        1. Anonymous Coward
          Anonymous Coward


          The majority of the people I know with an iPhone or iPad are perfectly happy with it. I expect some current iWhatsit users will move to andriod or Win7 next time round but many more will probably stay with Apple.

          You may not like Apple / iPhone / iPad or whatever but the stats strongly suggest you are not holding the unanimously held viewpoint here.

          Haters gonna hate I suppose, and I am sure Steve jobs really cares about your vitching. I'll go ask him.............................

          No apparently he passed your thoughts all around Cupertino for feedback and it seems the general consensus is that "not a single fuck was given that day".

          1. Gorbachov

            Stats? What stats?

            Android already has a bigger market share:



            Sooo....32% for android and 16% for IOS on the phones and soon there will be a much bigger market for the fondleslabs. The main difference is that the profit from Android doesn't go directly to Google or any single company. There's also the problem with fragmentation but that will pass if Google slows the release cycle as is expected.

            If I was a business looking for a big phone app market my bucks would go on the Android side.

          2. JarekG


            "not a single fuck was given that day". - of course not. Now is time to wake-up, turn around in your bad and say prayers to St. Jobs and go to work.

            There are people waiting on hold to have someone answer their question about iCrap device and you are wasting valuable time surfing the you go to work St. Jobs need your service.


            Kiss your moma on your way to work...after all she did provide you with a basement to worship and pray to St. Jobs.


            I know people with iCrap devices to, so no you are not special.

            Send from my Xperia X1 (look it up boy).

        2. Anonymous Coward

          re: Well

          "The only reason they have so many is case most people have 2-3 year contract before they can drop the iGarbage and get real device."

          Last September it was calculated that nearly 38% of iOS Devices were iPod Touches - back then Apple claimed that 120 million iOS devices had been activated. Personally, I would say that's a significant amount of devices that aren't tied into a contract. Throw in iPads (nearly 15 million sold by the end of the last year) then there are even more - sure people can get iPads on contracts, but how many are that?

          More importantly, you're overlooking customer satisfcation suverys - iPhone *always* do well. I'm not going to claim that these are 100% accurate, but there's an awful lot of people happy with what they get from Apple. Such surveys also show that a lot of iPhone owners are intending to stick with the platform.

          I know it's tempting for you to think how many people are going to catch up with you and 'see the light' and cast away their Apple devices, but you're allowing the sparks of the axe you're grinding to blind you.

          I'm not saying that the iPhone is the best product out there but it's one that is good enough for many consumers, who don't see the need to switch.

      2. nsld

        Your missing the point

        Its not about app purchases, its about a business with a subscription model who offers its clients an app for convenience.

        Take health clubs for example, you need to subscribe to be able to use what is essentially a private app, thats a customer the business already has, why should that business be forced to use a payment channel that is not value for money (1 pence per month for a direct debit versus 30% of what might be a £100 sub!) when the app isnt there to bring new business.

        Many companies have to provide apps for the convenience of clients who use Apple and have a neutured web browsing experience.

        Apple need Apps to sell its products, but the Apps from major brand names will dry up if they are forced to use a payment channel (and thats all it is) with a huge cost on its back.

        Its no different to ryan air claiming the card charge pays for the web booking service etc etc.

        The salesforce App is the same, you only use it once your a customer of sales force, can you see SF surrendering 30% of the sub just to make a convenient app for its customers who choose to use Apple?

    2. The Fuzzy Wotnot

      Get in the real world!

      Sadly you keep dreaming my friend!

      The iPad will sell shed loads because the sheeple will buy it, will love it, cradle it, fondle it and take it to bed! Some silly spat over 30% at the app store means next to bugger all to the average iPhone user.

      If I told all this ongoing 30% gubbins to the three people I know who have iPhones, I know only one of them will give a monkey's, the others will shrug and carry on playing Angry Birds.

      Joe Public doesn't care about this shite, they care about shiny goodies and fun stuff, making phone calls, updating their FaceBook page on the go and texting the Wife/Husband that "the train will pulling in their home station in 5 mins" messages. Only we geeks care enough to bother ranting at each other about this stuff.

  9. Anonymous Coward

    People vote with your feet...

    ... If you think apple should automatically get a 30% cut of anything delivered to the platform then be a sheep and continue buying apple products. Dont complain to the rest of us when apple disconnect there idevices from the electricity grid as they arent getting there 30%. As for me I have an iphone that I am saddled with for another 18 months but unless I get the cash to get a new android mobile in the meantime or apple change this ridiculous policy I will be getting an android device next. In the meantime I am currently in the market for a tablet and apple can shove it I wont be getting an ipad.

    Apple have no right to assume they deserve a cut for everything sold on the platform. People have already paid for the platform, I dont see intel asking microsoft and EA for a cut when I buy a game. If apple are trying to claim that the app store costs too much to run, remember people buy an idevice to get access to that store. Asking the devs to either pay a set fee for carrying there app to cover costs isnt unreasonable or asking that for example that spotify or amazon charge for the app so that apple can take a slice of that to cover costs isnt unreasonable.

    All I can say is if you dont agree with apple's policy vote with your feet otherwise you are just making sure that apple bring out further unacceptable dictats.

    1. Arctic fox

      The small print in your iLease old chap.

      Where its says "you are only renting your iPhone from us, it remains our property not yours".

    2. a_been

      No you fail

      "I dont see intel asking microsoft and EA for a cut when I buy a game."

      But I do see Microsoft asking EA for a cut of every EA game you buy on the Xbox, oh but there not Apple so everythings hunky dory.

      1. Dante

        No YOU fail

        Microsoft don't stop EA from charging less on different platforms or only allow customers to purchase EA games through Microsoft.

  10. Anonymous Coward

    People have voted with their wallets...

    ...and they really, really like the iTunes Store.

    Have we all turned communist all of a sudden?

    Apple wanting a 30% cut of revenue derived in their store is absolutely no different to any other store's margin (except, maybe, it's less). Whether you buy a book from a bookstore, clothes from a department store or groceries from you are paying a HELL of a lot more margin to those stores than 30%.

    Also, why so much targeting of Apple around their model? If people want to see even tougher supplier contracts, try Amazon - where they both set the price for sale AND the margin % (based on the SRP). Why no grinding of teeth about that on The Reg?

    1. Anonymous Coward
      Anonymous Coward

      Re: People have voted with their wallets

      Err no. People really like shiny things, particularly if their friends have got them and a lot of them buy into the hype that it's the latest, greatest, magical, revolutionary thing that will change their lives. iTunes and the associated store are the chains that are put around your neck if you want a new iShinyShit because there is no choice in the matter - if you spend your money on an iPad it's the App Store or you've bought a very pretty paperweight.

      There's always a hidden cost to pay with Apple gear on top of the hardware, whether it's in freedom of usage of 'your' device or companies who want to play in the Apple garden having to deal with some form of extortionate fee somewhere in their supply chain. The cost isn't always financial but you can be sure it's making or saving a lot of money for Apple at the end of the day.

      The part where they've played the game brilliantly is by making sure that either the consumers are never the ones who pay that price, or that they never realise that someone is paying it. The people buying the equipment don't know or care what Apple are doing behind the scenes and the only way that will change is when the repercussions of Apple's greed starts affecting the user experience.

      I suspect that either a lot of iOS apps are going to start to develop some mysterious bugs affecting their in-App billing in the near future or a lot of organisations developing for the platform are going to be making a mass exodus to other distribution channels. I know which one I'm hoping to see.

    2. DavCrav


      "Apple wanting a 30% cut of revenue derived in their store is absolutely no different to any other store's margin (except, maybe, it's less). Whether you buy a book from a bookstore, clothes from a department store or groceries from you are paying a HELL of a lot more margin to those stores than 30%."

      Jesus Christ, were you born this much of a moron, or did you have training? I must admit, I've had a bit to drink, but even drink-addled I can see that you have no idea about anything. There is a difference between Tesco, who buys stuff from a supplier and sells it in a shop, and Apple, that dictates the only way a product can be sold to their customers.

      At least think before you open your keyboard. Come on...

      1. DavCrav

        OK, the day after...

        "At least think before you open your keyboard. Come on.."

        Hmm. Seems I had had a bit to drink last night. It's a fun game the next day: come onto the Register and find out what invective you posted while drunk the previous night.

    3. Anonymous Coward
      Anonymous Coward

      So how come

      Google only charges 10%?

      1. Anonymous Coward
        Anonymous Coward

        @ Google only charges 10%

        But they charge it for absolutely everything, including subs made outside their system (i.e. the dev/publisher pays no matter what, regardless of how the person subscribed) whereas Apple don't charge for anything made outside their system - if the sub was made on the publisher's own website or through their own systems, Apple gets nothing. It's a bit of an Apples and Oranges comparison, but makes for a sucker's headline (Google [seemingly] charge less).

    4. gribbler

      30% margins?

      I'm not sure where you got this idea:

      Whether you buy a book from a bookstore, clothes from a department store or groceries from you are paying a HELL of a lot more margin to those stores than 30%

      But I think most grocery stores would like to know how they can get margins that high. In the world of commodity products (or fast moving consumer goods - FMCG) a 30% margin is exceptionally high.

      The question is, are iOs apps commodities? Increasingly so. I can buy the same apps on Android (and maybe soon on WP7). As Apple loses its market share and their apps become ubiquitous commodities they can't justify the high margins. So it seems to me that this strategy is too late, 2 years ago developers would pay anything to be on iOs, now there are more shops out there and the owners are happy to take smaller margins.

  11. Anonymous Coward

    @ AC22nd February 2011 01:27

    I dont think anyone cares about sales directly through itunes or the app store. We take issue at apple's latest dictact that they want 30% of the revenue generated by any app. ie they want 30% of the revenue generated by kindle, and 30% of the spotify subscription. This is totally bogus, by the logic of some of you it would be totally alright for o2 to expect a 30% cut as they sold the phone to me in the first place.

  12. Anonymous Coward
    Anonymous Coward


    @DavCrav Yes, we can tell you've been drinking: a post insulting someone, then making a statement with no evidence to support why it is "different" that Tesco/Amazon want a margin and Apple want a margin. Nice one.

    If the subscription is being delivered via Apple's infrastructure then it's up to them if they want to charge a margin. If it's not via their infrastructure, then not.

    Google charges 10%. Oh, and all that revenue they make from ads - remember they are an ad company - that's how they make money, or is making money illegal these days because it upsets the opentards?

    1. Snake Plissken


      "If the subscription is being delivered via Apple's infrastructure then it's up to them if they want to charge a margin. If it's not via their infrastructure, then not."

      AIUI, and I might be wrong, if the content subscription is not being delivered via the infrastructure but the initial purchase was, Apple still want their 30%. And I'm not allowed to work outside of the App Store on generating new revenue (via sales, promotional discounts etc).

      So Apple take their 30% of my app sale, and 30% of my revenue and dictate my business model.

    2. Burch
      Jobs Horns

      ...and if you don't want it to be delivered via Apple's infrastructure...

      ...your app will be banned altogether. That enough evidence for you?

    3. Anonymous Coward
      Anonymous Coward


      Don't Apple make money from Ads or do I have th iAds thing wrong?

      Forcing devs and content providers to use Apples infrastructure for margins is different to Tesco/Amazon.

    4. DavCrav

      Yep, I had been drinking

      It takes getting drunk for me to get worked up enough to have a right go at someone on a forum. What's your reason?

      Just kidding. (Oh, and I'm not an opentard, whatever that is. Actually, since I'm not drunk, I don't care enough to contin

    5. Bob Terwilliger

      For the hard of thinking

      Apple can charge what they like in their store - accepted.

      The major issue is that Apple are trying to fix prices OUTSIDE their store by stating that prices in the safe and secure Apple garden must be the same as on the big bad internet.

      Surely, that is indefensible for even the most blinkered iStroturfer?

      If you want to buy from the quick and easy Apple method *you*, the end user should pay the 30% Apple tax and genuflect in their direction for saving you from the "stress" of buying direct.

    6. Tim Almond

      Completely Different

      Yes, Google charges 10% to use One Pass. The difference is that if you don't like One Pass, you don't have to use it to be in their store, nor does it affect pricing elsewhere. It's up to you. Likewise, you can use AdMob in your applications, or you can choose someone else's.

      No-one is objecting to Apple offering a subscription system. For a lot of small developers, it's great because it's cheaper than what it would cost to build their own. But where Google is offering a service and making money, Apple is acting like a protection racket.

      Personally, I hope that a lot of companies quit iOS over this and Apple are left with a phone with a ropey store full of fart applications. I like the idea that companies that try to treat people well survive, and strongarm bullies go to the wall.

  13. Fuzz

    gambling apps?

    I haven't seen a mention of apps for online bookies. These sell a service via an app, is Apple also going to ask for 30% from everyone who puts a tenner on Man U to win 3-1?

    I have no problem at all with Apple taking 30% for these transactions, if that's what they want to charge then no problem. However I don't understand how they can make rules that state that a developer isn't allowed to sell the same content outside of the store for less money. It's an abuse of their position in the market. I know Apple only have a small percentage of the smartphone market but they have 100% of the iOS app store market.

    Of course there is an answer for most of these cases, stop writing these stupid apps. So many of them are just small device friendly interfaces into online content. If that's what you're writing then you don't need an app, just write a small device version of your website. That way you can write one version and target all small devices.

  14. Forget It

    New mantra for Google


  15. Not That Andrew
    Jobs Horns

    Fanbois to the rescue!

    Who needs astroturfers when you've got fanbois?

    1. Arctic fox

      iFanbois do it for free?

      There's both a t-shirt and a very near-the-knuckle joke in there somewhere!

  16. Matware

    Apple, now in black hats

    This is a despicable act on Apple's behalf. They have set up a Hydraulic Empire or protection racket and are just beginning to show how they can squeeze the poor farmers.

    First of all, to the people who are saying that Apple is just charging rent for store space..

    1. This would be fair if I could rent space in another store. aka myIstore;

    2. This would be fair if they were charging a flat rate. eg. 10c per transaction;

    3. This would be fair if I could choose to use another API. eg. google, paypal, etc;

    4. This would be fair if it weren't retroactive;

    5. This would be fair if I had any way to negotiate or deal with Apple;

    6. This would be fair if I had any self determination, choice, or power.


    If Microsoft had taken 30% every time you ran your credit card through a web site on a Windows PC, people would be baying for blood.


    If Google only returned search results that were displaying ads or paying for ads, cars would be burning in the streets.


    Even eBay, which could so easily pull something like this off hesitates to act in such a despicable manner, knowing that there would be a vicious backlash from the people who made them what they are.


    If any of these organisations were be able to engineer a situation where this is possible they know they would be in court so fast their heads would spin. I also suspect they have more respect for their customers than Apple does.


    I remember watching westerns and gangster movies as a kid, and seeing how it ended for the black hat... So good work Apple, I suspect the little guys are now out looking to hire the Magnificent Seven and you have just cast yourselves as the black hats.

    1. Arctic fox
      Thumb Up


      "If Microsoft had taken 30% every time you ran your credit card through a web site on a Windows PC, people would be baying for blood."

      Imagine it? The "I-cannot-spell-Microsoft-without-using-a-dollar-sign" brigade would be howling fit to be tied. They wouldn't just flame the article concerned, it would be a question of towering inferno!

  17. This post has been deleted by its author

    1. TheFifth

      Supermarkets are a BAD analogy

      First let me say I think Apple's 30% ask is WAY too high, so I'm in no way supporting them.

      However, please stop using Tesco as an analogy for a company that does not make demands on its suppliers.

      You say: "I do have a BIG problem with how Apple has started to dictate the economic policies of it's software suppliers. Note to DavCav and the like - this is what Tesco and other retailers generally don't do."

      Tesco (and most other supermarkets) do exactly this. They have been investigated and fined for maintaing their profit margins whilst squeezing suppliers' prices down in order to create a price war with other supermarkets (particularly Asda). Ask any farmer who supplies Tesco.

      Tesco know that if you're a small farmer and they are your main customer, they can basically pay you what they like, generally way below market value.

      So yes, Apple are being greedy, but please stop holding Tesco up as a shining example of fair play. They've done more to damage the UK high street than any other retailer.

    2. Anonymous Coward
      Anonymous Coward

      The title is required, and must contain letters and/or digits.

      And nobody cares, that must be the most annoying thing for all the Apple is doomed, all the developers will leave mob.

  18. M Gale

    Tesco and Amazon.

    If I don't like them, there's always Aldi or Good luck shopping around for alternatives on your iToy, whether consumer or producer.

    No, rooting the thing does not count, any more than me ram-raiding the local Tesco.

    Now it would be nice for the Android Market to let me buy using vouchers or PAYG credit, especially after Google's bone-headed decisions on Maestro and now Solo debit cards, but this is not quite in the same league as forcing devs to pay to register, pay to publish and NOW pay Apple a tax for every subscribing customer. Ohwell, the Droids have a plenty big market now. I'd say they've achieved critical mass. Plenty of users there for any pissed-off iSomething devs to become ex-iSomething devs.

    Sent from my Commtiva N700, which allows me to install apps from non-approved sources.

  19. Matware


    "Google charges 10%. Oh, and all that revenue they make from ads - remember they are an ad company - that's how they make money, or is making money illegal these days because it upsets the opentards?"


    Google gets 10% of the Ad Revenue, not 10% of every dollar that comes to your web site from any means possible., shows Google ads, they also allow subscriptions, Google doesn't see any of this money as they were in no way involved in making it! If they were to provide a unified subscription gateway, and newscientist were to use it as a way to streamline their customer management, well that would be a fee for a service, but Google wouldn't ram it down all their customers throats and threaten to ban them from search results if they didn't use it now would they. Becasue if they did, that would be a sign that they were bat shit insane megalomaniacs.

  20. jai

    does not apply to SaaS apps

  21. Anonymous Coward
    Anonymous Coward

    Been waiting for this

    Apple have finally shot the goose that lays their golden eggs - by which I mean the media luvvies, or to be more exact their owners.

    Normally all you get is gushing reviews from half-witted luvvies. Not now. Not now that the media barons are noticing that Apple wants THEIR money :D

    Telegraph backlash :

    Independent :

    Hell even the Grauniad which has done nothing except spew out "We love Apple" articles for the best part of a decade is in on it :

    Nobody knows what Murdoch thinks unless they're inside the paywall but I'll be very surprised if he has any intention of giving Apple one penny for what he considers to be HIS content.

    Apple are fucked. It'll no doubt be a slow process but they have now made themselves some serious enemies in the media.

    What they have completely forgotten - or more likely become too arrogant to bother with - is that its the mainstream media who are required to make Apple "cool".

    If the MSM don't keep pumping out articles showing the luvvies using the "latest & greatest" then people won't keep buying it. Already people under 20 view the iPhone as "seriously uncool" - few if any of the schoolkids around here want an iPhone as "everyone has them" so the future market is already looking wobbly. 30-something metrosexuals are the Apple market and that's a rapidly shrinking demographic these days.

    The ridiculous stock bubble that Apple has deliberately inflated is going to pop big time now that Jobs is probably gone for good. Personality cults rarely last once the cult leader is gone.

  22. Anonymous Coward

    My 2c worth on Appple...

    1. I found that the INABILITY to throttle the amount of downloads from the itues store to ONE at a time, instead of a minimum of 4 or 5 or something, to cause the downloads to consistently drop and crash.

    I found that GETTING in contract with anyone, through all the corporate stonewalling and send the customer to the forums instead of tech support, and to then get the "fucking dumbarses" in these depts to put in the ability to throttle one's download to one at a time, to be one of the typical "huge huge long range bullshit trips"...

    I learned to hate the people in Apple then and there.

    2. I wanted to get a 1TB (or 500G?) external hard drive - a few years back.

    The apple store wanted $750, for an apple external HDD.

    The plain old PC shop wanted $120 for the drive and $35 for the external case to put the drive in.

    I don't really understand ALL of the issues as much as I might try, but I do understand corporate moron bullshit, bad customer service and economics.

    Considering what I can do with plain PC hardware and Linux - apple can go fuck themselves.

  23. jai

    stop scaremongering

    You see what you've gone and done now?

    The article is inaccurate and wrong and as a result you've raised the blood pressures of all those 'droidtards above.

    You're killing your readship y'know, slowly by slowly, day by day.

    (Actually, I've no problem with that - the world would be a nicer place with less bile-spitting Android fanatics and more happy Apple enthusiasts, but this method is surely going to take too long to bear appreciable results)

    For what it's worth, not that anyone will read this, SaaS apps aren't included in the 30% subscription tax

    1. ElReg!comments!Pierre

      "SaaS apps aren't included in the 30% subscription tax"

      Except that they are, as shown by this article. Readablility for iThings is exactly that: SaaS. And it does seem to be included in the 30% racket, indeed.

      Wild interpretations and wishful thinking on a mac fansite can't negate hard facts, or can they? Oh, it's Apple-related, of course they can.

  24. Anonymous Coward

    legal stand point

    Whats the legal standpoint in forcing a change of terms, on a app that is already available on the store????

    Since this change has happened is this enforceable on apps that joined agreeing on the old TOC.

    Is this for apps that are created and added from now on?

    As far as the legality of forcing an app to comply with extra charges after the event is this enforceable? Due to the fact that these extra content providers are now asked to carry an extra burden of the 30% that it may not now be able to sustain due the pricing that was initially setup when the app and extra content was submitted.

    Would be interesting to see if they could back date terms and conditions to an app that already exists.

  25. yella

    Who will be seen as the bad boy, apple or the dev.

    Just imagine what would happen if angry birds decided that the iPhone platform wasnt worth it anymore, and it suddenly became a WP7 and Android only supported game.

    Would the cst be shouting at apple or would they be shouting at the developer.

  26. Anonymous Coward
    Anonymous Coward

    Blood pressure

    Seems to me like a transient market failure. For most goods there are glitzy shops which take a big cut, and less glitzy ones that take a smaller cut. Vendors and purchasers have a choice.

    The problem here is that the alternatives aren't so great just now, but Apple exploiting their unique position is likely to accelerate development of viable alternatives.

    The interesting question is whether regulators should step in just as they do with traditional shops via the planning process and competition laws, and if the law should be changed. My guess is that adjusting the rules on access to hardware and such like could be economically beneficial - more people working more productively, businesses more willing to invest etc. But I don't see that happening any time soon, and maybe the market will sort it all out in the meantime. Hey ho.

    Certainly, as a business, having a major route to market controlled by a somewhat capricious organization, makes us pretty wary about investing much in app development.

  27. Anonymous Coward
    Dead Vulture

    Goodbye lovely Spotify ...

    ... I'll miss you! :P

    Actually, I've moved from an iPhone to an Android, so I guess I wont. ;)

  28. Robbie
    Thumb Down

    As an ex-Fanboy...

    ...My feeling is that should Apple's complete control of the iOS platform be a success -- and it will be, because most don't give a toss, they just want new shiny as conveniently as possible -- then the App Store is next.

    It may not be OS X Lion, it may be a couple of incarnations along, but rest assured: Steve has his eye on ensuring that all our purchasing goes through Him and He will only be satisfied when all Apple devices are locked down tighter than a lead-lined coffin. Convenient for the user? Sure. Restrictive? Absolutely.

  29. Lewis Mettler

    What happens when Apple takes 30%?

    What happens when Apple takes 30%?

    It increases the cost for all subscribers by 42.85%.

    Do the math yourself. Take a $100 subscription directly from a vendor. If the vendor has to cover a 30% from Apple or anyone else for that matter, the retail price has to go up by 42.85% at $142.85 in order to keep the net the same to the service provider. 30% of $142.50 is $42.50 leaving $100 for the provider.

    What if it is 10% as Google has claimed?

    Still bad enough at $111.11.

    So at their own web site they can take a subscription for $100. Through Apple they have to charge $142.85. Or, at Google perhaps $111.11.

    But, what if you do not have an Apple device. No iPhone? No iPad?

    You still pay the highest price of $142.50.


    Because Apple mandates that you either leave the Apple marketplace alone and do not sell there, or you charge the same high price as through iTunes. Even if on your own web site taking a subscription to a non-Apple device owner. Apple insists upon it.

    This all assumes you need to maintain your net take per subsciption.

    But, don't you get more net for your own sales? Yes, you do. To clear $100 on Apple you have to set up your own subscriptions for $142.50 as well. So you actually net $142.50 there. Great, right?

    No. You may have just priced yourself out of your own market.

    If you assume that you decided upon a $100 subscription based upon its perceived value to customers, being force to charge $142.50 is going to lose customers. Maybe all of them. If $142.50 was doable, you could have picked that price without Apple's help.

    So what if you can not charge $142.50? Maybe your stuff is not worth that price?

    Assuming your decision of $100 is correct. You have to eat the $30 take that Apple insists upon. That means you get $70.

    And perhaps your cost per subscription is more than $70?

    Will you still sell and only take $70?

    You might. If your marginal costs for each additional subscription is less than $70, you might take less than $70 and hope to make up the difference through other channels. Sometimes that works. But, if you want the same net revenues you have to charge more than $100 in other channels. If you can do with less revenue, you can stick to the $100 price on your own web site or other markets.

    Of course Apple insists that you have to stick above or even with the iTunes price or you are blocked from Apple customers. It is your choice in other words. Give us the power to control your retail prices in all channels or do without the customers restricted by Apple. Restricted by which apps they can get. And restricted by which subscriptions they can sign up for through iTunes.

    And it is not the wholesale cost that is being controlled in all markets by Apple. It is the retail price paid by consumers. Not even the suggested retail price. It is the actual retail price. Apple insists upon no other channel being able to offer price competition facing the individual consumer.

    But, what if your other marginal costs for each additional subscription is greater than 70% of the retail subscription price? Well, then you can not sell through iTunes and Apple has precluded you from their market. Then Apple customers only see products Apple is selling or products and services from vendors willing to give Apple the power to control their retail prices in all channels whether or not those channels have anything to do with Apple or Apple devices. You must agree to not compete with iTunes on price.

    Every company in any field of business would like to preclude anyone and everyone from competing on price, right? That is a given. And any practice along that line is almost always illegal. And it does not take monopoly power in order to preclude others from competing on price. Apple thinks it can do that simply by restricting access to Apple customers. Agree to Apple's price controls or don't do business at all with Apple customers.

    The Apple policy is designed to do one of two things.

    Either raise the price for all consumers of a given product so that it can take 30% without doing anything for it; or, block competing products or services from the Apple marketplace. The second helps build and maintain a monopoly. The first makes the retail price so high that Apple can take a 30% cut without providing value.

    Apple thinks that giving access to customers that once bought an Apple device as “giving value” for that 30%. But, it is not. Or, they think they can preclude potential competitors to Apple products by insisting up the 30% cut and watching those competitors leave without doing business. But, that is just precluding competition by increasing the costs for a competitor. And that is illegal.

    So what is the affect of the Apple 30% cut?

    It either restricts access to competitive products and services for Apple customers or it increases the cost for ALL consumers whether or not they are an Apple customer or whether or not they use an Apple device (i.e. phone or tablet).

    Media subscriptions are normally not device specific. Sometimes it might take a specific application on a given platform. But, generally not. Apple demands that it control the retail price facing consumers on all channels so that it does not face price competition. And without price competition it can allow the retail price to rise high enough to cover that 30% cut they demand. Can't raise your price, then do without Apple customers.

    Apple insists upon getting the 30% cut or it will preclude you from Apple customers.

    And what happens if you buy an Android device?

    Same high price regardless of Google's suggested 10% cut. After all, Apple insists on controlling the retail price facing consumers not a wholesale price. If Apple only controlled the wholesale price, a lower markup or cut such as that from Google would allow a lower price to face the consumer. And Apple must prevent that. Either that or Apple customers will find out they are being overcharged. So Apple customers have to be kept ignorant.

    This is an antitrust move on Apple's part. And they know it. They think it works because they can exclude those vendors that do not give up their own ability to control prices for various channels. And if all consumers see the same high price, Apple can take 30% of the action without doing anything at all.

    Now I do not really suggest that Apple is doing nothing. They do process the payment. That is maybe worth 3%. 5% at most. And listing a product in a catalog or list is worth something. But, Apple does not do anything that retail sellers normally do. No advertising to benefit the service provider. No inventory. No shelf space. No promotion. They do not even write the simple app to allow one click sales. The media provider has to do all of that. Apple only accepts the listing if you will provided the seller gives up the price control for its products in all other channels. It can decide what the price is. But, the service provider is unable to distinguish between channels based upon efficiency or any other factor. Apple dictates it such that no other channel can offer price competition.

    This will result in higher prices for all consumers. And it will result in reduced choice for Apple customers and high prices for them as well. Simply put, only higher prices makes room for the 30% take by Apple. And if you do not give up your rights, you do without Apple customers and Apple has exclusive access to those customers stupid enough to buy their phone or tablet from Apple.

    Apple customers are being screwed here. But, if service providers do not avoid the Apple customers, costs go up for everyone as if everyone was taking a 30% cut while not adding any value to the service. No value to the service provider. And no value to the customer.

    But, what about Google's 10% deal?

    The amount that Google may charge is only relevant if a service provider is willing to forgo Apple sales. Otherwise, even the price on Android markets must be at least as expensive as on Apple. And that is true even though Google may charge less for handling the transaction.

    Some subscriptions will be available via the web or via Android apps, but the price can only be low if the service provider agrees to be excluded from iTunes. If you are listed on iTunes, the price has to be just as high everywhere and for everyone.

    Nothing here benefits consumers. Consumers are either restricted from certain choices or the price is controlled high by Apple.

    How does this compare to the practice by Apple to take 30% of the application sales?

    For one, applications for Apple devices are only relevant when bought for the Apple devices. Although Apple precludes other markets for such apps. That too precludes other markets from competing. Price wise or otherwise. Plus many of the applications are free. 30% of nothing is still nothing. There may be some costs for the seller but those costs are either absorbed or covered by other means. Plus for other devices there are other markets. And Apple does not restrict those products or services in any way. At least not yet.

  30. andolly53
    Jobs Horns

    Only one word required!!!

    Cydia !!!!

  31. NBCanuck

    Driving prices up

    So Readability had a business model with a $5 monthly subscription with 70% to the content provider, and they kept 30%. That meets the agreement they have with the content providers and satisfies their revenue model.

    They want to be at the App Store so if Apple takes 30% then both Readability and the content providers income is reduced by 30%, or Readability decides to give up all income....not likely. To make up the difference they would have to increase the price to $7.14 ($5 / .7). That would allow them to give Apple it's 30% and maintain both its and its providers current revenue.

    So if they want to sell the same service/content on their own web site they could still charge $5 and have the desired revenue, but no, Apple forces them to increase their price there as well.

    Just as when you by a product in the retail market, some stores will have a competitive price advantage due to the efficiencies of their distribution channels, so should online shopping. If someone needs to charge more to satisfy the increase costs of selling through the App store it SHOULD NOT impact a company from distributing through other channels and pricing according to their distribution costs.

    I think Apple makes great products, but Apple/Jobs has spent so much time fighting to get to the top they be changing their philosophy of just building better products. Now they are becoming controlling and are more Big Brother than Microsoft/IBM and the PC makers were of old. I'm a lifetime PC user (Windows, Linux) and Apple has good stuff, but I will never buy under the current model.

  32. Anonymous Coward

    Fuck Apple

    Vote with your wallets and by a Blackberry or Android.

  33. William Boyle

    Why are we surprised?

    Why are we surprised at the behavior of the controlling entity of a monopoly? This is a classic "whatever the traffic will bear" scenario. Apple is in this for raw profit, and they are going to tap into whatever is flowing though their pipes as much as they possibly can. The only problem from my perspective about this is that they do not allow ANY competition so that ALL applications and services that want to present themselves to Apple device owners effectivelyl have to go though the Apple Store.

  34. DRendar
    Jobs Horns

    An Idea

    An Idea,

    Couldn't subscription services offer 2 levels of subscription through their sites - One providing access from everywhere iDevices (e.g. through their website, or from Android, Blackberry, Meego etc etc.) and a second allowing access also from iDevices, which is 43% more expensive.

    They also put an apology on the website stating the reason for the 2-tired pricing model, and politely (and quite rightly) blaming apple for it.

    This second priced option is the only option available through the In App Subscription service

    In addition they can have an 'Upgrade' option to add iDevice access to the standard subscription.

    If everyone did this then everyone would see what a bunch of thieving control freak bastards Apple really are.

    1. DRendar


      One providing access from everywhere EXCEPT iDevices

      Where's my edit button?

  35. gribbler
    Thumb Up

    a chance for distinctive apps?

    So how about you just sell a slightly different app on iOs? example:

    News site subscription service for fancy iOs app costs $6.99 with Apple's 30% cut.

    Same subscription service for web only or for Android, WP7 etc costs $5 (because you don't have to give a cut to Apple) BUT it's not the same product because this particular subscription service is blue and is called [insert name] Extra++ (or some other slight name variant) and has some extra shiny bits on it.

    Hey presto, price your app however you like in any market 'cos it's not the same as the product in the App Store!

    1. Rob Dobs

      sounds clever but..

      They do manually review all of these apps.

      Anything Apple finds breaking their desired outcome can be rejected.

      Will companies that are dependent on a revenue stream from the itunes store risk this?

      I doubt it...

      This won't kill Apple, but we can only hope it wakes up a few more of the I-tards out there as to how unfriendly of a company Apple is to its own customers and business partners.

      If just a few brave apps start using the marketing line "works on Everything but Apple" it will start making Apple the odd one out.

      Apple has cast their lot, and in my opinion its a permanently loosing one, though it will take years to really hit Job's desk. What Apple doesn't understand is you can't work on a Toll Road model when there are other free roads available. Yes some people are currently locked into apple, but HP, Google, MS and others all have competing products without the same issues, and soon (if not already) will have more GOOD apps than apple can offer.

      Adobe Flash is one good example of Apple is not in the game. Sure they have competing options, but when iphone users surf to a web site and it doesn't work, all the apple BS will melt away and Apple will be left with too many users who cannot do what they want with their device.

  36. N000dles
    Jobs Horns


    I'd be more than happy to let Apple continue with their self destruction if they allowed users to download their apps from another marketplace. I can't see how restricting users to only using the Apple Apps store and then forcing them to pay what I see is too much money for such little work is not falling foul of trading practices laws.

    If their Apps Store offers such great value that it deserves to take 30% then why would they need to block any other software loaded onto the OWNERS handsets? The old excuse of enhancing the overall "experience" of these devices by controlling what you do with it is treading a fine line with corporate greed nowadays.

  37. Andy Watt

    Isn't this the American Way?

    I thought this kind of corporate chicanery was standard practise - become the "best" (note - I'm using that in quotes to define "sell a lot of high priced tech which can consume media of all kinds"), then when you know you've got the lions' share of that market, start monetizing as much as you can.

    Everybody on here seems to be living in a hippy dreamworld - why should Apple suddenly start wearing sandals and chilling out? The iPad still has a head start - make hay while the sun shines.

    Do you protest like this when petrol stations close to each other monitor each others prices and keep them maxed out? I doubt it.

    BTW, although I'm an iFondleDevice user, I don't do in-app purchases as I'm Gen Xer and don't really believe in them. One day the whole frickin cloud's gonna dump torrential and we'll all be soooo screwed...

  38. Tim


    Capitalism always, but always, forces change when there is tension in the market. iOS has succeeded because there was tension between consumers who wanted easy-to-use multifunction phones and device manufacturers who were unable to provide it. Apple stepped in and resolved the tension, making a pile of money in the process.

    iOS and the App Store ecosystem has worked well so far because there is little tension. Developers get apps to market without building a payment system, consumers buy them from one place, and apple takes a cut of first-sale revenue. Everyone more-or-less wins and the net effect is lots of people on iOS devices and lots of developers writing programs for them. They appear on tables in business meetings, in yummy mummy's handbags and schoolkids' satchels.

    Now, with Apple demanding 30% of subscription revenue, there is new tension. It is not commercially viable for Salesforce to give up nearly a third of their subscription revenue to get an app on an iPad, just as it would be silly for a health club (suggested earlier) to do the same so that their clients can schedule training sessions from the bus. Without that key corporate SaaS app the businesswoman may be a bit less likely to buy herself an iPad to use at work and won't work as hard to make the case for her employer to kit out the sales team with iOS kit. If the policy stays the same then Apple will sell fewer iOS devices. It is inevitable.

    This new tension creates an opportunity: for a competitor, in the long term and for Apple in the short term - if they listen and change. That subscription clause •will• change, but not because of pressure from enterprise SaaS, not from moaning gyms and especially not from little developers. It'll be because Apple see that they're on to a losing proposition. Many things are true about Apple, but they are not short-termists.

    My guess? There will be some sort of primary service clause which removes the obligation to share subscription revenue when the majority of the value of the subscribed service is delivered outside of the iOS sphere.

  39. CarlC
    Thumb Down

    Oh well

    I will confess now I am typing this on my iPad, however, I am that rare beast who is a disappointed iPad owner. As a developer (multi platform, multi language, Inc robotics) I find the iOS platforms too restrictive. I was planning on keeping my iPad and just using it as I do today. I do mail, browse a little on it, and the odd app like the new BBC iplayer but now I have to seriously reconsider. I was planning on moving back to Android (I still have a HTC android phone, and an early tablet - archos 5it) but was expecting to leave this for at least year. Now I think it is time to move away from iOS. Roll on Honeycomb.

    The main reason for my change of mind? I do not like the restrictive practices Apple are going in for, so to follow the advice of a number of Apple apologists I shall vote with my feet. iPad going on eBay now.

  40. Psycho Flump


    I'm an iPhone 3GS owner who was thinking about upgrading to the next iPhone version later in the year. I know I'd have more freedom if I went down the Android route but for me the iPhone was a better fit. Since Apple's latest restrictive practice I'm reconsidering upgrading. My big three apps with subscriptions that I'm concerned about are Remember the Milk, Dropbox and Spotify. If Spotify disappears I'll be annoyed but if either of the other two go then I'll be off too. I've spent some time looking into Android versions of all the apps I have on my main iPhone page and I've been pleasantly surprised by how easy it's been to find alternatives. I'll be sad to give up my iPhone because ATM it works for me but if the apps I use disappear I'll have no choice but to follow.

  41. davtom

    Ahh, the iPhone...

    There was an app for that<TM>

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