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0 pointspwinnski5y ago0 comments

The vast majority of apps in the store are free, which leaves Apple footing the enormous bill for providing the apps.

The original idea, which worked for a few years, was that 30% of the for-fee apps helped cover the costs of the free apps. For the first few years, Apple operated their App Store at a loss, and aimed for break-even.

I think subscriptions is ultimately what broke that model.

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12 comments · 5 top-level

ksec5y ago· 2 in thread

>The vast majority of apps in the store are free, which leaves Apple footing the enormous bill for providing the apps.

Enormous bill of what?

And lets not forget, and needs to be repeated every time this is mentioned, people are paying $99 dollar a year just to submit these "free" apps.

olyjohn5y ago

And lets also not forget, the majority of the people paying that fee probably will never publish an app to the store.

zuppy5y ago

and let’s not forget about the huge markup on iPhones themselves, this should cover whatever their owner ever downloads.

suprfsat5y ago· 2 in thread

The App Store drives trillions of dollars in sales of iPhones. That's your break-even.

singhrac5y ago

Trillions is a bit of an exaggeration, but not much. The iPhone is somewhere around 150-200bn of revenue a year.

dane-pgp5y ago

Actually, as the parent comment didn't say "per year", and the App Store was opened in 2008, "trillions" (as an aggregate) doesn't seem like an exaggeration at all.

gamblor9565y ago· 2 in thread

leaves Apple footing the enormous bill for providing the apps.

The enormous bill of having to pay for a dozen hard drives! Oh no! That would drive the world's most valuable company into bankruptcy! If they can't charge everyone 30% they'll go out of business sometime in 10,000 years when they run out of their 11-figure cash pile!

Apple's costs for hosting app's is already covered by the $99/year they make developers pay. They have no justification for 30% on all transactions beyond base rent-seeking.

sokoloff5y ago

It's not rent-seeking when you create a new thing that people value and charge for that thing.

gamblor9565y ago

I'm okay with Apple charging a fee for hosting apps...and they do, via the annual developer fee.

The problem is with Apple forcing developers to do other things unrelated to the hosting of apps, such as giving up 30% of unrelated transactions (like events, etc) that would have occurred even in the absence of the app. And indeed, that is at the heart of the EU and US antitrust investigations.

klmadfejno5y ago· 1 in thread

Anyone have an idea of what the size of that bill actually is?

I'm not convinced at all that it's noteworthy for one of the most profitable companies in the world.

pwinnskiOP5y ago

I can appreciate that many people have no real concept of cost at scale, but Apple currently handles 100,000 submissions per week[0], which doesn't happen for free.

The question isn't whether Apple can afford to run an App Store. They clearly can. In fact, they currently profit from the operation, and are proud of the fact, which I think is a huge part of the problem.

What I said was that Apple initially ran the App Store at a loss and hoped to break even. That was true in 2008 when the App Store first opened, and it remained true during Steve Jobs' life, so at least 2011.

Some time after that, they stopped operating at break-even, and started profiting from it. I'm not sure when exactly that was.

[0] https://appleinsider.com/articles/20/09/24/app-store-rejecte...

vbezhenar5y ago

Let me host my app on my own servers, I'll pay the bills.

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