Comment by sinnsro 3 days ago
Another outstanding decision vetted by Tim Cook.
In all seriousness, finance people see everything through the lens of margins and money primarily. Since any company's function is to deliver value to its shareholders, if allowed, bean counters will scorch the earth for it.
Ultimately, this is at odds on how Jobs approached things, i.e., money was not the end all be all.
It isn't 'You either die a hero or live long enough to become a villain', it's 'You either die a hero or live long enough for people to realize you are a villain'. While it's ultimately meaningless to speculate on what the dead would do if they were living, Steve Jobs in life did have plenty of belief and made plenty of decisions that are perfectly inline with what we are seeing in 2026 and there is no particular reason to believe he would not just be up there with the worst of them.
Jobs was a greedy bastard like all the other CEOs. The difference is that he also had mostly good taste as far as products go.
At that time 30% was not something you would consider high in contrast to the situation before the advent of app stores.
This is outrageously wrong. Back in 2011, the pricing model for "an app in your pocket" was 99 cents. The universal pricing model of apps was a one-time fee and the pricing range was that of an mp3 roughly. 30% of that is a lot. App sales worked only in volume.
If you sold software over the internet, you had PayPal, which had a flat fee of $0.35 + 1.7% or so and if your shareware was $30, the transaction fee essentially was ~$1. Stripe had roughly the same fee when they launched. You had more traditional credit card merchants and when I inquired one in Germany back in 2010, it was more or less in the same ballpark (~10%).
In Europe, you could also just get money wired, which cost you something like 0-10 cents.
30% for payment processing were always extremely high.
Edit: The only thing where you had no other options was when you tried to sell stuff on the internet for $1, because the flat fee part of credit card processors would eat up all of that. Apple indeed helped here a little bit, because it was always 30% and no fixed part.
I was thinking about something comparable, where there is a digital storefront, payment processing, security, delivering, installing on all my devices and so on...
Steam comes to mind. They take 30% (and I think 5% for credit card or whatever).
So I do not think that "outrageously wrong" is characterizing my remarks adequately.
Steam is fundamentally different in very important ways.
Your phone is general purpose, steam is focused on a narrow band of market
The iOS store adds nothing but cost to the purchasing process, with hilariously terrible discoverability and sorting, steam makes navigating and discoverability breezy and easy
Your phone is arguably not an optional part of your life, whereas nobody ever missed an important call because they weren't on steam
Steam does not take any money from apps or companies for transactions it was not involved in. Here, and in other cases, the costs of doing business with apple extend to people who have no relationship with apple at all
It's not a "processing fee". It's an distribution/access/market fee for the captive audience that Apple has spent tens of billions developing and supporting.
If you think you can make any money selling software on the internet and paying nothing other than $0.35 + 1.7%, think again.
Processing fees were way less than 30% before the App Store. And considering how overrun the App Store now is with junk apps there is basically no service Apple provides other than taking money.
Tim Cook is usually good at politics, which doesn't seem to be the case here. Nobody other some CNBC guests really gets too upset when they take 30% from tinder, music or mobile gaming companies. And those types of apps run by unpopular large companies make up the majority of App Store revenue.
However, newspapers and content creators are popular in a way that carries political weight. It'd be wise for Apple exempt these categories and write off the few hundred million in forgone revenue as a political expense.
For example allowing the NYT or Joe Rogan to have nice paid apps with no fees would be a much more effective use of money than the same amount in political donations.
Apple doesn't do partner exceptions (one of the complaints Epic had about working with them is that Apple wouldn't negotiate lower rates with companies, unlike the game consoles.)
They do have carve outs in the agreement, such as the 'reader' exception. Newspapers I believe also fall under the 'reader' exception.
I have suspected for a while that the 15%-after-the-first-year subscription rate drop was a carve out targeted specifically at trying to retain Netflix IAP. However, Netflix was able to operate without IAP because of the "reader" exception.
Apple's 30% tax was introduced under Steve Jobs and there were no small business exemptions back then. Jobs died in 2011. It's time to stop extrapolating what Jobs would be doing 15 years later in 2026 if he were still around. Could be the same, could be better, could be worse.