A lot of developers are attacking Apple from the angle that forcing all apps to be distributed via the AppStore isn’t about quality control, but Apple “just wants a cut”.
Here’s the big fallacy with that line of reasoning. Apple passes on all costs for their software platforms. If money was all that Apple cared about, it doesn’t matter whether end users or developers foot the bill. Apple “wanting a cut” is just another way of saying that Apple wants to equitably allocate the cost of the platform to the users who benefit. This spat isn’t really about the App Developers versus Apple. It’s about App Developers versus end users. Apple is only in the way.
Another problem I have with the developers is that they assume iOS is a free resource that doesn’t cost anybody anything. If you make Android phones that might be a true statement. Google foots the bill for Android since it’s paid for by advertisers. And Windows laptop makers pay a small licensing fee. Windows development is spread out amongst all the various PC makers and Microsoft.
But Apple is a different animal. Unlike everyone else, they wrote their own operating system. This allows them to tailor it to their hardware to gain maximum speed and efficiency. They can also control all the aesthetic aspects of how it looks and works. This level of quality and attention to detail is what attracts iPhone customers willing to pay a premium.
Software platforms may scale much easier than physical distribution but they are still dreadfully expensive. No one outside of Apple really knows how much Apple spends on iOS development and maintenance but if we did, I think the size of the cash outlay would astound most people.
I used to work for a large maker of consumer goods. We used our own custom software platform to handle all of our order entry and general ledger systems. The cost of maintaining that system was over $20 million per year. And comparing this relatively simple system to the gargantuan platform that is iOS is like comparing a matchbox car to a city bus. IOS is so many times more complex than anything that $20 million per year can buy. Nowadays, for every 1,000 programmers you employ, it’s going to cost over $150 million only in salaries plus fringe benefits. I’m sure Apple spends billions on iOS development and maintenance.
Without the level of money spent or attention to detail by Apple, there is no iPhone market. This is what attracts all those high-income customers. If you don’t care about security, privacy, or attention to detail, you buy a cheap Android phone. It’s disingenuous to claim that Apple is rent-seeking.
Organized crime is rent-seeking because they have no skin in the game. When they demand protection money from a local restaurant it’s despicable. The mob doesn’t help pay the monthly rent and they made no investment. But iOS is the house that Apple built. Apple spends billions of dollars per year to attract customers who want a premium experience. And developers want access to this market that is painstakingly cultivated and maintained. Apple made a huge investment in the storefront that developers are demanding free access to.
And I don’t mean to give short shrift to the administrative costs of business involved with selling products and collecting money. In-app purchases are pain in the butt. They are significant and warrant a quick recap. As I mentioned earlier.
Also, John seems to think that in-app purchases are an especially shady area for Apple to charge fees. That is crazy. The services that Apple provides are especially taxed by those in-app purchases. Anything that involves the exchange of money is a huge record keeping job. I’m an accountant so don’t argue with me here. Cash and bank accounts need to be reconciled. Returns need to be processed. Charges can be rejected or reversed. Etc. Fraud with accounts is widespread. Future revenue needs to be forecasted. Resources to handle the record keeping needs to be budgeted. And a host of other issues that no one but an accountant would be interested in. —Perezonomics.com 7/29/20
Up until now, the cost of iOS has been split between both hardware and services. It’s a shared burden by all the parties that are involved. This seems fair to me. But if one party reneges, the burden is necessarily shifted to the other. If Apple doesn’t collect 30% from developers, they need to estimate the lost revenue and add it to the price of iPhones.
The customers who benefit from iOS pick up part of the tab when they purchase their iPhones or iPads. They like having more security and privacy than Android so they are willing to pay a premium.
But now, developers are demanding the option of insourcing the administrative work and getting free access to iOS users. iOS is the glue that holds the whole system together and now the developers are demanding free access. Why? So they can make more money. This will have the direct result of Apple shifting those costs to the hardware buyers. This is what bothers me about the developers.
All businesses have SG&A. Whether you sell on the internet or in a physical store. It’s a false argument to claim that selling on the internet is different. If a developer can’t make enough money from selling on someone else’s platform, then don’t use that platform. Plain and simple. But don’t demand a free ride.
From a money perspective, think about it. It makes no difference to Apple who pays for the cost of the software platform. But Apple doesn’t think it’s fair that developers who make money from the AppStore be allowed to stick the hardware users with the entire bill. I agree with the Apple pundits who opine the lack of understanding on the part of our lawmakers who don’t understand the issues arising in tech today. Because if they did, they’d see through the false anti-trust arguments being made against Apple. These anti-trust claims are hostile to the consumer and only enrich the developers.
Another problem I have with the developers is that they assume iOS is a free resource that doesn’t cost anybody anything. If you make Android phones that might be a true statement. Google foots the bill for Android since it’s paid for by advertisers. And Windows laptop makers pay a small licensing fee. Windows development is spread out amongst all the various PC makers and Microsoft.
But Apple is a different animal. Unlike everyone else, they wrote their own operating system. This allows them to tailor it to their hardware to gain maximum speed and efficiency. They can also control all the aesthetic aspects of how it looks and works. This level of quality and attention to detail is what attracts iPhone customers willing to pay a premium.
Software platforms may scale much easier than physical distribution but they are still dreadfully expensive. No one outside of Apple really knows how much Apple spends on iOS development and maintenance but if we did, I think the size of the cash outlay would astound most people.
I used to work for a large maker of consumer goods. We used our own custom software platform to handle all of our order entry and general ledger systems. The cost of maintaining that system was over $20 million per year. And comparing this relatively simple system to the gargantuan platform that is iOS is like comparing a matchbox car to a city bus. IOS is so many times more complex than anything that $20 million per year can buy. Nowadays, for every 1,000 programmers you employ, it’s going to cost over $150 million only in salaries plus fringe benefits. I’m sure Apple spends billions on iOS development and maintenance.
Without the level of money spent or attention to detail by Apple, there is no iPhone market. This is what attracts all those high-income customers. If you don’t care about security, privacy, or attention to detail, you buy a cheap Android phone. It’s disingenuous to claim that Apple is rent-seeking.
Organized crime is rent-seeking because they have no skin in the game. When they demand protection money from a local restaurant it’s despicable. The mob doesn’t help pay the monthly rent and they made no investment. But iOS is the house that Apple built. Apple spends billions of dollars per year to attract customers who want a premium experience. And developers want access to this market that is painstakingly cultivated and maintained. Apple made a huge investment in the storefront that developers are demanding free access to.
And I don’t mean to give short shrift to the administrative costs of business involved with selling products and collecting money. In-app purchases are pain in the butt. They are significant and warrant a quick recap. As I mentioned earlier.
Also, John seems to think that in-app purchases are an especially shady area for Apple to charge fees. That is crazy. The services that Apple provides are especially taxed by those in-app purchases. Anything that involves the exchange of money is a huge record keeping job. I’m an accountant so don’t argue with me here. Cash and bank accounts need to be reconciled. Returns need to be processed. Charges can be rejected or reversed. Etc. Fraud with accounts is widespread. Future revenue needs to be forecasted. Resources to handle the record keeping needs to be budgeted. And a host of other issues that no one but an accountant would be interested in. —Perezonomics.com 7/29/20
Up until now, the cost of iOS has been split between both hardware and services. It’s a shared burden by all the parties that are involved. This seems fair to me. But if one party reneges, the burden is necessarily shifted to the other. If Apple doesn’t collect 30% from developers, they need to estimate the lost revenue and add it to the price of iPhones.
The customers who benefit from iOS pick up part of the tab when they purchase their iPhones or iPads. They like having more security and privacy than Android so they are willing to pay a premium.
But now, developers are demanding the option of insourcing the administrative work and getting free access to iOS users. iOS is the glue that holds the whole system together and now the developers are demanding free access. Why? So they can make more money. This will have the direct result of Apple shifting those costs to the hardware buyers. This is what bothers me about the developers.
All businesses have SG&A. Whether you sell on the internet or in a physical store. It’s a false argument to claim that selling on the internet is different. If a developer can’t make enough money from selling on someone else’s platform, then don’t use that platform. Plain and simple. But don’t demand a free ride.
From a money perspective, think about it. It makes no difference to Apple who pays for the cost of the software platform. But Apple doesn’t think it’s fair that developers who make money from the AppStore be allowed to stick the hardware users with the entire bill. I agree with the Apple pundits who opine the lack of understanding on the part of our lawmakers who don’t understand the issues arising in tech today. Because if they did, they’d see through the false anti-trust arguments being made against Apple. These anti-trust claims are hostile to the consumer and only enrich the developers.
RSS Feed