Comment by WA

Comment by WA 3 days ago

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.

ndr42 3 days ago

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.

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pksebben 3 days ago

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

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anomaly_ 3 days ago

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.

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WA 3 days ago

Yeah I heard this before, but no, it is mostly a processing fee. The reality is:
- Developers helped to make Apple the platform it is today.
- Apple had their 30% fee when the App Store was MUCH smaller. It's not like that fee came only after they had the audience.
- Apple will do zero marketing for you unless you are already successful.
- Apple doesn't earn money with the most popular free apps, but still hosts them. They could charge by traffic, by downloads, whatever, but they won't.
- Apple will charge you if you make money in the app. They will force you to use their payment processor if you want to make money.
So, it is 100% a processing fee and everything else either came later or isn't congruent with what they actually charge money for.

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- Izkata 3 days ago
  
  Just as an aside, everything here is true of Android as well, and I think the cut was higher (or there were more intermediaries taking a bit as well): I priced an app $1.47 in 2010 so I'd get about $1 on every purchase.
  
  Reply View | 1 reply
  
  WA 3 days ago
  
  True, the Google cut was also 30%, but they didn't make such a fuss about "no links to website" and stuff like that. They didn't even have a review process for a long time.
  
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vjvjvjvjghv 3 days ago

I think you could if apple didn’t force the App Store. Most people discover apps through other web sites, not through the App Store.

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saurik 3 days ago

> you had PayPal, which had a flat fee of $0.35 + 1.7% or so

PayPal also offered a "micropayments" rate (that I used in Cydia), wherein they charged $0.05+5% (which is much better for payments under $12).

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