Amazon notices Apple, Google cutting app store commission rates, follows suit Amazon this week said it would reduce its Appstore commission rate for less successful developers, following recent similar moves by Apple and Google, and is sweetening its deal by offering AWS credits to support apps' backend services. "Starting in Q4, for developers that earned less than $1m in revenue in the previous …
Owe the Taxman £100 and you have a problem,
Owe the Taxman £100M and the taxman has a problem.
Even more true today than ever.
Bezos is so rich that he could buy many of the world's countries from the change in his pocket.
Good luck ever getting him to pay his fair share of corporate tax. He's too big to pay.
The weird part is that with market-based prices, it would be the reverse — large players would logically have to pay far less than small players, due to economies of scale. The money skimmed by Apple has nothing to do with the cost of running the App store; it is self-evidently a (progressive) tax on those who want to make money in the walled garden. The messages it sends is clear: "we have control of the users, and if you want to make money from those users, we want our share".
> The weird part is that with market-based prices, it would be the reverse — large players would logically have to pay far less than small players, due to economies of scale.
There's no real economies of scale though. Whether a customer buys and downloads a $5 app from no-name indie, or an equivalent $5 app from a big-name brand, the amount of resources required for Apple to deliver and service those apps is the same.
Any price discrimination between apps or app developers by an app store is just a case of "because we can".
While the app store commissions probably are be excessive, the comparison to credit cards is not exactly 'apples to apples'. Credit cards potentially generate 2 revenue streams: fees to the vendor and interest charges to the card holders. Depending on one's credit worthiness the interest rates can be in the same range as the app store commissions. App stores only have 1 revenue stream, a commission on each sale through the store. I have not looked at what the realistic costs are of running an app store is but it does cost someone money to run. Thus the commission is not pure profit only mostly profit.
Since Apple gets paid immediately by the card issuer, I'd say a fairer comparison would be with debit cards than credit cards. In that case, a flat fee of say 20c per transaction should cover it.
Apple wants to protect the users by certifying apps as well. Fine: let the developer pay an up-front fee for each app they want certified, or let them opt to spread the cost over the sales of the app.
Developers already pay an annual flat $100 fee, which must be to certify apps because that's all the free apps ever pay and they need just as much certification as anything else.
The app store cut is on top of that, so must purely be because mumble, mumble, payment processing, mumble mumble. Look! Over there! A brushed aluminium blimp with rounded corners!
Credit and debit cards have the additional cost of "bad debt", where some bills/overdrafts are never repaid, and fraud and other situations where the card issuer is held jointly and severally liable for consumer losses.
Those two costs don't really exist in App Store Land. There is never debt - Apple always owe money to the developer - and the financial risk of fraud and non-delivery is passed on to the developer instead, as the app store simply reverses the transaction and pretends it never happened.
The developer never gets the money, Apple are happy.
I understand the reasons for battle taking place around app stores percentage fees, given the lack of competition and effective price fixing going on between the two sole players.
However, I think the root of the problem is in a lack of a stable hardware base for competitor phone OS to develop. Changing phone OS is a tricky business that is impossible on or could brick many phones - and that is by design to keep the OS market closed. Google pays Samsung billions a year to supposedly to put Chrome on the system - but in fact it is to keep the system closed.
I just got a new phone with Google Andoid 11 and so far I am convinced it is not even up to level of a dog. The file system is abstracted away - a dumbing down of MS proportions. Skipping over prompted installation of new features resulted in the same prompt on every boot - until I installed them and then uninstalled by hand. There is longer a one tough way to get bullet list of running apps and a close all button to close them all. The phone makes noises and talks in the middle of the night (I have no social media installed, not even a SIM card yet, so it's just useless native android notifications). Turning off the screen doesn't turn off the screen completely - time and charge are displayed at short intervals thus wasting power.
There must be a niche market of people who want a good phone that is seen but not (involutarily) heard, who don't care much about social media, who need a tool they control as they want, and who find pestering condecencion themed UI to be worse the neutral.
It's time for a change, and I think fair access to installing OS at the hardware level ought to be the primary goal - and that would eventually lead to a drop in Google/Apple/Amazon app store fees anyway.
A menu of installable browser options (such as the EU requires) is pretty meaningless to me. What I really want is the ability to risk-of-bricking-free install any OS I want to. (Even better - phones with multi boot).
(Apple makes their own phones so there might not be a good enough court case for allowing alternative OS there. However, the competition would eventually lower Apple app store fees.)
...because even the threat of possible competition is causing them to reduce their rates.
Therefore, they must have been earning excess monopoly profits up to this point.
If it genuinely was the cost of doing business they couldn't make these cuts.
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