I think this essentially means that large developers pay €0.50 * (num apps they publish) * (num devices each app is installed on) per year. There are 2 billion active iOS devices [1], so I think that for the biggest apps like YouTube the fees could be in the hundreds of million USD per year.
4 of the top 5 most downloaded apps of all time [2] are published by Meta (Facebook, Messenger, Instagram, WhatsApp), and I think they will pay this fee for each app?
[1] https://www.macrumors.com/2023/02/02/apple-two-billion-activ...
[2] https://en.wikipedia.org/wiki/App_Store_(Apple)#Of_all_time
I suspect there's a DMA v2 coming, and it's going to be much much harder on them with this behaviour.
EDIT: https://developer.apple.com/support/fee-calculator-for-apps-...
2,000,000 installs is a minimum of $45k in fees, even with $0 USD revenue
this seems obscene
> this seems obscene
This is why I never cared about the 30% take: it was combining all the costs you'd have anyway into one simple number. People just acted like those things were all free just because Apple wasn't explicitly listing them.
Could you optimise your expenses better by splitting them?
Probably.
And that may even be worth forcing the issue from a competitive PoV, because it means some customers will be effectively subsidising others: A weekly updated 2 gigabyte app that's free in the app store gets its bandwidth paid for in part by a 30 Mb app that charges a $10 monthly subscription and gets an update every 3 months.
But even then, companies are expected to make profits. What's the level where it's fine for Apple to say "we want this much extra just for us"? For a lot of people the answer seems to be "zero!" — while this probably would not disincentivise Apple from making iOS given they also profit on the hardware, it would almost certainly disincentivise Google from bothering with any updates to Android.
If Apple features you, then I guess it’s pretty fair to say you’ve paid a marketing expense, but they feature a tiny percent of apps. Most of us get nothing but buried in the app store.
30% is a lot.
Maybe iPhone costs would increase a few percent, probably not.
This is just egregious rent seeking.
I've been wondering for a long time why there are no delta-updates at Apple...
Had they charged 10%, nobody will be complaining.
A first annual install may result from an app’s first-time install, a reinstall, or an update from any iOS app distribution option — including the App Store, an alternative app marketplace, TestFlight, an App Clip, volume purchases through Apple Business Manager and Apple School Manager, and/or a custom app.
However, there's extra mumbo jumbo about "it doesn't count for 12 months after a first install is counted. But the next one after starts a new first annual install."
So it's essentially some kind of twisted Orange County MLM logic.
Are you referring to something specific here? Does Orange County have some stereotyped association with MLM schemes or something? (I'm genuinely asking as that would be hilarious and I'd love to learn more)
I'm from Orange County, California, and it's hardly a center of the MLM universe.
Honestly, if it's the center of anything like that, it's drug and alcohol rehabs.
Also, updates do count.
"A first annual install may result from an app’s first-time install, a reinstall, or an update from any iOS app distribution option — including the App Store, an alternative app marketplace, TestFlight, an App Clip, volume purchases through Apple Business Manager and Apple School Manager, and/or a custom app."
But I agree, as expected, this will go to round two.
Probably not even a new DMA just a court case about malicious compliance. The DMA was written expecting apples reaction
Still that they will reduce the commission fee is quite important on its own.
If this reduces the flood of free ad financed apps and moves the market to a more sustainable model I'm all for it (although I realise this stance is probably controversial)
This I don't understand. What exactly would the court case be about? "You're following the law but we didn't mean it like that?"
If you want them to do things differently, don't you need to either 1. prove that they aren't following the DMA, or 2. change the DMA?
And there is only one possible outcome: Apple will bend to the EU's will, because in the end the European market is too profitable to ignore.
https://developer.apple.com/support/dma-and-apps-in-the-eu#d...
> First annual install. The first time an app is installed by an account in the EU in a 12-month period. After each first annual install, the app may be installed any number of times by the same account for the next 12 months with no additional charge.
Multiple devices with one account or new devices over the course of the 12 months are still a single install.
https://developer.apple.com/support/fee-calculator-for-apps-...
Worse, a game that has 5M installs and only earns $1 per year will still have to pay Apple $2.17M per year.
The bandwidth that everyone is forced to use. The web has shown that decentralizing distribution is not only possible but works well. This is just another way for the worlds most profitable company to continue to rent seek.
Yes the fee is insane.
> this seems obscene
The web browser is right there. You don't have to have an app.
Oh I see: it seems like you only pay the fee if you choose to distribute outside the App Store.
Any apps distributed through third parties pay their own CTF if they meet the threshold.
Threshold doesn’t apply to third party app stores, they start paying per install of their store from the first install.
So third party stores can host free apps without worrying about the CTF for those apps.
Fuck around, find out.
It's obviously malicious compliance that hopefully isn't justifiable.
[0] https://developer.apple.com/support/core-technology-fee/
I don't trust Apple at all with their capricious and arbitrary blocking of apps/updates. It was bad enough when it appeared to be mostly due to incompetence, but after what they did politically (and in concert with Google, Twitter and Facebook) to Parlor that's when any creditability they had for me in curating the app store went out the window. I don't care where you are on the political spectrum, when a company starts to go down that path it's a danger for all of us.
Of course there are costs incurred per install. Previously there were covered by a higher 30% fee on app costs. Now, with opening up the platform to alternative stores, the EU has pushed Apple to a per-install model.
So to me, this seems completely reasonable as a standard iPhone user.
I understand the security and performance of the platform costs more - that is why I use an iPhone not an Android.
I paid $1300+ for my iPhone, I already covered those costs.
How are they covering it on macOS?
Exactly zero, for alternate App Stores.
> New Business Terms for Apps in the EU
Also today, Apple is sharing new business terms available for developers’ apps in the European Union. Developers can choose to adopt these new business terms, or stay on Apple’s existing terms. Developers must adopt the new business terms for EU apps to use the new capabilities for alternative distribution or alternative payment processing.
Even if you sell an App for 2€ that would mean you will lose all the income from it to fees in 4 years if you release at least one update per year that users install? I must be missing something?
Or you mean that software should not be free for other people, but it's okay when it's free for you?
Sounds to me like developers have to pay the per user fee no matter where the app is distributed.
Are you proposing we should go back to charging users for software updates? Personally, I think it makes more sense to take a cut from other people doing business on top of the platform.
It cannot be a valid argument against regulation that your monopoly product supports other nonprofitable parts of your business.
Such constructions are hurting competition and maintaining the status quo. It is very difficult to compete against a product which is priced unsustainably cheap.
They also pull in billions of dollars every year from their 30% cut on gambling/gacha games, and do almost nothing to earn that (those games have to provide their own updater/CDN because the Apple/Google ones aren't good enough, and those games don't meaningfully rely on Apple/Google for things like quality assurance or marketing.) Apple will be fine even if their Europe-specific cut is halved.
Claiming they're going to suffer or be unable to pay employees is simply not supported by any evidence.
This actually affects small devs as well. It's not that hard to hit 1M installs for free or inexpensive apps.
Is there some clause in the contracts that says apps from same source will count as single app, no matter how many times they are uploaded as separate app?
It could easily fall under a fraud or abuse clause. If you decide to play games, Apple would be more than happy to pull their authorization and ban you out of spite. Now none of your apps work.
It's unlikely but they could also pull a google and ban any company who hires you in the future.
How do you provide updates after removing it from the store?
OsmAnd has more than 10 million installs, VLC more than 100 million. Can you imagine the fees? They obviously don't have hundreds of thousands of dollars on hand to pay every month to Apple.
Whether you like it or not, we're heading towards a future where Apple and Google choose who wins and who loses. A good app built on merit will never be able to compete.
It's for everyone, app store or not.
“ iOS apps distributed from the App Store and/or an alternative app marketplace will pay €0.50 for each first annual install per year over a 1 million threshold.”
Those are global numbers. So, when counting EU specific revenue, you can't use that number.
The same should go for 30% appstore fee: make it explicit and add it to the user's bill: "1$ for the developer and your card is also charged separately with 30c Apple tax". That would actual competition for the best platform real.
It’s exactly what many have said Apple should do to get payment for usage of their IP: split it from the commission.
So now you can pay separately for the IP, separately for payment processing and separately for App Store services or a combination of all of the above.
I think Apple is delusional in thinking that the EU will buy into this scheme, but who knows.
I think they're quite aware that they won't
but that will take half a decade, and in the meantime, Apple will have made another couple of hundred billion dollars
If they give in "without a fight" by following the spirit of the law (or even the letter) they will use a lot of income.
Companies are not our friends (not our enemies either) and only form a fleeting alliance if the goal of makeing money aligns with the interest of the user.
On this subject, for this company it doesn't.
Apple is free to argue their hopeless interpretation in court, but in the short term they will not get away with these delaying tactics.
Given that you have to update apps every year to support new iOS versions, this is essentially an annual tax per user.
But I guess Tim Sweeney won in the EU. He gets his new AppStore so he can charge his own commission on gems and fake tokens.
And game streaming seems interesting I guess we will get Xbox streaming gaming on the Apple platform after all.
* Reduced commission: 30% -> 17%
* Payment processing fee: No fee to Apple
*One million free first annual installs.* Membership in the Apple Developer Program includes one million first annual installs per year for free for apps distributed from the App Store and/or alternative marketplaces.
*Fee for each first annual install over one million.* Developers will pay a Core Technology Fee of €0.50 for each first annual install over one million in the past 12 months.
That’s my guess.
However the economics have changed now. It’s no longer practically free to support iOS. So some companies could make a reasonable argument that supporting iOS is too expensive when only a fraction of their customers do in app purchases from Apple hardware. So from Apple’s perspective, they now have more to lose in not making deals. While app developers have more to lose in supporting Apple.
This might just tip the scales into forcing Apple to negotiate on more than just app permissions.
For example, the official EC report on the cost impact of the EU AI Act finds that, for businesses who already have a Quality Management System (QMS), "An enterprise employing 50 persons would pay roughly EUR 159,000-EUR 202,000 for upgrading and maintaining the QMS, and bringing one AI product to market." (Notably, that estimate excludes costs of legal review.)
Around 200000 EUR for one product making use of AI would be seen as a heavy burden on startups and small enterprises in much of the world, but as far as I can tell, it's considered not particularly noteworthy by the EC.
Apple's cost structure announced today probably needs to be assessed in that context. Tech companies doing business in Europe are already used to various additional compliance-related costs of doing business.
Come on now, that is utter nonsense. Apple has simply found a way to make even more money out of what seemed like a bad deal for them. They are not recuperating anything, they are increasing revenue.
That's not at all what I said. These regulations are increasing the cost of business in the EU. I'd much rather have those costs paid by those who democratically (?) decided these regulations that those in other countries who decided otherwise.
edit: Why downvote me for stating a matter of fact?
Fortunately, they aren’t in business anymore. (For unrelated reasons.)