Bit confusing to me when Apple charge on iOS apps and don’t

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Considering the current investigations into the iOS App Store rules and policies, I do find it somewhat confusing when Apple would charge and not.

In their “App Store – Principals and Practices” document (https://www.apple.com/ios/app-store/principles-practices/) they give examples of types of app categories and some example named apps, but to me even some of these don’t always make-sense.

FREE: an example app is “Wikipedia”, which is well-known for doing regular donation-drives. When such a drive occurs within the iOS app, can you choose to pay via any payment method, or only via Apple Pay, and if the latter do they take a 30% cut of the donation? (Similarly, how does it work for charity apps where you can make donations?)

FREE WITH ADVERTISING: it appears from the wording Apple make no revenue on these apps at-all. But don’t apps on iOS have to use Apple’s ad platform to serve ads, and so they would make revenue that way from them, just like Google does with adverts in many Android apps?

READER: confusing. Apple say that developers “receive all of the revenue they generate from bringing the customer to their app” which I guess is shorthand for “if they sign-up outside the app, we’ll let them sign in” but isn’t part of Spotify’s argument they don’t actually allow this for them, yet for things like Netflix and Amazon Prime they do? I’m also not sure how you “read” music or “read” a movie (unless you get a songsheet or transcript, or use subtitles 😉 ).

FREE WITH SUBSCRIPTION: worth noting the wording says “after the first year, the developer earns 85% for all successive years THAT THE USER REMAINS A SUBSCRIBER, and Apple collects a 15% commission”. So if someone ends their subscription, then starts it up again later-on, would they be classed as a new subscription so it goes-back to 30% again for one year?

CROSS PLATFORM: these are basically the apps that Apple just let you sign into with an external account and don’t force the developer to promote signing-up inside the app and only showing Apple Pay as the only payment option. But this category in itself is confusing: why are Word and Dropbox given as examples of apps which are cross-platform, yet Spotify, Skype and Netflix aren’t? Netflix is available on Android, Windows, macOS, games-consoles and some Smart TVs; Spotify the same, but it also offers a web-version; Skype also has an official Linux client. So, how are any of these not “cross-platform” when apparently Microsoft Word is (despite not being on any games-console, Linux (as an official-port, anyway) or any Smart TV)?

Comments (24)

24 responses to “Bit confusing to me when Apple charge on iOS apps and don’t”

  1. Avatar

    jimchamplin

    1) I’ve never seen Wikipedia run their donation drive in the app.


    2) >shrug<


    3) Reader is just a name.


    4) Distinction without a difference.


    The truth is that it comes down to whether an app competes with an Apple service. THAT is the problem. If they don’t compete, Apple is fine with being buddies and helping out. If it competes with one of their services, well...

    • Avatar

      dftf

      In reply to jimchamplin:

      Wikipedia frequently run donation-drives on the website; maybe if you've never seen one in iOS it's because Apple won't allow it in a free-app (or the 30% cut would apply?)


      I agree with your last point, as that's one Spotify have raised: Apple undercut them with Apple Music by around $2 a month, and to make the same amount they'd have to charge more. But I do wonder if they could get-around this by arguing in court "we're available on many different platforms, so why can we not ask Apple to classify us in the CROSS-PLATFORM category, not the READER one". Then they would be allowed to visibly offer other payment methods in-app, and Apple wouldn't take a cut.


      Could be an interesting line to argue.

      • Avatar

        lvthunder

        In reply to dftf:

        A donation to Wikipedia is a donation not a purchase that gives you something in the app. That's the difference. If you use the Amazon app and buy a physical good you use Amazon's payment system since it's not a purchase that stays in the app. Something like buying a Spotify subscription changes the features available in the app and there is no physical goods involved so Apple takes a piece of it.


        If Apple allowed subscriptions and in app purchases to be free like some want every app will do the bare minimum and either have an in app purchase or a subscription to do anything useful and it would cost Apple money to run the app store.

    • Avatar

      curtisspendlove

      In reply to jimchamplin:

      The truth is that it comes down to whether an app competes with an Apple service.


      This is actually a part of the whole situation I don’t like. The “double-dipping” part is a problem.


      It is certainly an unfair advantage, for instance, for Apple to charge Spotify 30%/15% and also have a competing Music Service.


      I’m intrigued how Apple Arcade would fare against Epic Games Store (if Apple were forced to support competing app stores), for instance.


      Another example is taking the 30%/15% and also offering paid App Store ads. (Sweeney mentioned this over the weekend during his PR campaign. I actually agree with him on several of the anti-compete items.)


      Honestly, I’m *really* intrigued what the market split would be between Apple Arcade, Epic Games Store and Steam Games Store on iOS and Android.


      Even of Epic wins this. They aren’t the only other game in town.

  2. Avatar

    curtisspendlove

    In reply to lvthunder:

    I don’t disagree. But the “them too” defense isn’t likely to win in court. It will just take everyone else along with them.

  3. Avatar

    dftf

    In reply to lezmaka:

    According to the Wikipedia article on the Unreal Engine, Epic offer two choices: (1) a 5% cut for use of the engine, only payable once the game or product using it gains a revenue of above $1million, and you can choose your own publisher or (2) use the Epic Store as the publisher and pay no-fee at-all.

  4. Avatar

    dftf

    In reply to lvthunder:

    "Something like buying a Spotify subscription changes the features available in the app and there is no physical goods involved so Apple takes a piece of it."


    If you purchase an Office365 subscription, that also changes the available features in the Word, Excel and PowerPoint apps. For example, in Word you cannot do any of the following unless the account you sign-in with has a valid O365 subscription: (1) choose a custom colour for text or object fills or borders; (2) use the "Ink Editor"; (3) change the page orientation from Portrait to Landscape (yes, really!); (4) change the page to use columns; (5) add any sort of breaks; (6) use the "Track Changes" feature.


    And yet it is possible to sign into one of the apps with an existing subscription and Apple take no-cut (I *think* if you purchase an Office365 subscription in-app though then Apple may take a cut) but I'm sure Paul has covered this previously with screenshots showing Word, Excel and PowerPoint are allowed to clearly show on the main screen you can purchase it outside the app, but apps like Spotify have to hide this information on a Help page, and the main screen can only make it appear like Apple Pay is the only method.

  5. Avatar

    jimchamplin

    In reply to lvthunder:

    What they're already doing is anti-competition.

  6. Avatar

    curtisspendlove

    In reply to lvthunder:

    If Apple wanted to destroy Spotify they would include Apple Music with iOS for free. They have the cash to do it. Now that would be anti-competitive.


    Sure. There is also the whole definition issue for anti-competitive vs hyper-competitive.


    I’m not saying Apple can’t do what they are doing. I’m saying in an ideal world they shouldn’t. They should compete in a level playing field by offering a superior product.


    I know that isn’t how modern business works. But it is a strike against them that the other guys use continually.


    Edit: on a personal note I like Apple Music and would choose it over Spotify. The only reason I don’t use them right now is because I’m paying for YouTube Red / YouTube Music for families because not everyone in my family has Apple devices (and I hate ... literally hate... ads with a the passion of a thousand fiery suns...I just have Hulu and extra five or six bucks a month last night half way through the first ad break in SG-1).

    • Avatar

      Paul Thurrott

      I love that there are degrees of evil that you're OK with. If Apple just gave away Apple Music, it would lose billions on the service each year. There's a huge cost associated with music licensing. If this wasn't subsidized, these music services would cost $15 a month by now for an individual account. And Spotify could finally show a profit.
  7. Avatar

    madthinus

    In reply to lvthunder:

    The Sony and Microsoft stores on console is small and niche and you have choices to distribute and support your game in many other places. iOS and Android are defacto general purpose computing platforms that is consisting of billions of devices. These platforms have grown to this size and as of consequence of their respective size, Apple and Google have an outsized control and influence on this market. Unlike a free market, they can and have made the rules that devoid of free market principals and because of it they have raised the cost of transacting to much higher the cost of doing so elsewhere. That is the argument.

    • Avatar

      dftf

      In reply to madthinus:

      The markets are clearly different in size: the highest-selling game on PS4, according to Wikipedia, is Grand Theft Auto 5 with 20 million copies; same on Xbox One, though only around 8.7 million copies there. Those figures are TINY compared with mobile-app install rates.


      Looking on Google Play (as I don't have an Apple device, and the website version doesn't freely give you the same level of stats): Microsoft OneDrive and Dropbox both have over a billion downloads; AVG Anti-Virus and Tinder both over 100 million; Google One has 50 million. All feature in-app payments or subscriptions you sign into.


      Now sure, "number of downloads" ≠ "number of active paying customers", and many of those apps often come preinstalled, but I bet for ones like Tinder, OneDrive and Dropbox they each have more paying-customers than 28.7 million (combining the two figures for GTA:V sales)...

  8. Avatar

    curtisspendlove

    The rules are very confusing. And this is an area where I don’t like what Apple is doing.


    Ultimately it is in their best interest for a superb user experience. This is currently not the case. For instance, not being able to buy a Kindle book directly in the Kindle app.


    It’s also pretty disingenuous when they claim to “treat all third party developers equally”. This is obviously not the case.


    Ultimately they are risking a government coming in and telling them what they have to do. You’d think they’d much rather prefer to make the changes under their own terms.


    Pretty crazy. At some point they *will* be forced to change all of this.

    • Avatar

      Truffles

      In reply to curtisspendlove:

      Ultimately they are risking a government coming in and telling them what they have to do. You’d think they’d much rather prefer to make the changes under their own terms.

      Pretty crazy. At some point they *will* be forced to change all of this.


      They're not actually risking government intervention. The only people who are complaining about apple are developers who want free reign on IAPs. Those devs don't make anything that remotely constitutes an essential service deserving of government regulation.


      For that tiny percentage of devs that do sell something that could be described as an essential service (I honestly can't think of any examples) they'll need to come up with an argument about why its impossible to provide that same service via a web page (keeping in mind that a webpage is accessible from an Apple device while at the same time being 100% outside of Apple's app store system). They'll also need to come up with a reason why they shouldn't themselves be regulated because, after all, they're an essential service.


      • Avatar

        curtisspendlove

        In reply to Truffles:

        They're not actually risking government intervention.


        Sure. That is the *logical* view. When have you ever seen politicians be logical.


        And you know the legal branch will get massive pressure to make this a political win ... especially going into the elections.


        Also, non-US countries could make this very uncomfortable for Apple as well.


        Finally, never underestimate the allure of a class-action lawsuit. Those are *very* lucrative for lawyers. And they tend to incite already stirred-up consumers.

    • Avatar

      lvthunder

      In reply to curtisspendlove:

      Then Sony and Microsoft are running the same danger since the stores on the consoles are the same,

  9. Avatar

    illuminated

    If apple would lower their cut to something more reasonable there would be no problems.

    Did they even think that 30% forever was reasonable?

    • Avatar

      Truffles

      In reply to illuminated:

      When people start talking about 'reasonable' prices for discretionary products then they're just haggling over the price rather than the principle. If its just the price then the answer to the problem will always be, "Whatever Apple think developers will pay to gain access to a billion or more of its customers".



      • Avatar

        dftf

        In reply to Truffles:

        I think most people accept that for hosting and maintaining the store, and the iOS code on which the apps run on, it is fair for Apple to take a cut.


        The issue is that 30% seems too-high when compared to brick-and-mortar stores, Apple clearly have less-overheads. They have their servers to host the apps on, the App Store itself, an automated AI that tests submitted apps, and then some human staff to manually review some apps the AI flagged, and to review comments left on the App Store users flagged as "spam" or "offensive". (And the usual electric costs any business would face).


        Compared with a physical store, there's no physical-labour involved (unless you count moving of eyes to review code, typing and moving a mouse; or the occasional server-upgrades or replacement HDD being put into an array!), no physical packing or shipping of products, no cleaning or redecorating of stores, no maintaining a customer car-park, no real issues caused by weather (short of a data-centre flood), and so-on... dropping the percentage would likely please a lot of current developers

        • Avatar

          Greg Green

          In reply to dftf:

          Neil Cybart: "While the App Store is profitable, it ends up representing a small share of Apple's overall gross profit. Based on my estimates for gross App Store revenue (a metric Apple doesn't disclose), App Store's net profit margin is not as high as consensus assumes."


          Cybart has been cited by massive outlets including WIRED, Financial Times, The New York Times, and The Wall Street Journal, and consistently ranks as one of the most accurate Apple analysts in the game. - Imore.com

  10. Avatar

    dftf

    In reply to lvthunder:

    I'm sure part of Spotify's complaint is that certain apps are allowed to advertise on the sign-in page that you can sign-up for a subscription (or do a one-off purchase and get a code to activate the app) outside the app (e.g. Netflix or Amazon Prime) but some apps are not, and this has to only appear on "Help" or "More information" page.

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