Time to Change the App Store Sales Model
But that is not the app world of 2020. It has become a huge, multifaceted market, with multiple platforms, crossover with the web, and a multitude ways to make money. Very few companies now live solely within Apple’s city walls; they are more like multinationals, with offices in many cities, trading across borders in a global marketplace. Apple’s simplistic feudal system, taxing income alone, feels dated.
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[The] landlord’s success is based on bringing value to the property itself, and my success derives from how well I execute on my business, the restaurant. It would feel wrong if the landlord demanded a cut of the restaurant profits, something they have had no part in.
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To make it in today’s app world, you have to find your own users. A company like Netflix will have benefited very little from being featured by Apple, and that is no doubt why they feel miffed at Apple taking 30% of income they have worked hard for.
He wants a rent-like fee based on download tiers, plus a (smaller) percentage for apps that use Apple’s payment processing.
We’d be a step closer to fairness if apps that monetize outside would also pay for the visibility and distribution. Especially business apps and ad-driven platforms pay nothing but get all the benefits for free.
Developers don’t owe Apple for the iPhone or the toolchain. That’s nuts. Apple earns for that from the devices sales. Building an SDK is a service for the users not the developers. They sell more phones because of apps available and their quality.
And worst of all, while this was happening, App Store functionality, particularly around payments, was being left in the dust by companies like Stripe, Square, Shopify, and even PayPal. While these companies were making it radically easier for developers to accept payments, offer subscriptions, even get loans and manage their finances, Apple’s payment solution took years to even support subscriptions (never mind that that solution is so difficult to use that a startup just raised $15 million to provide basic tracking functionality); in-app purchase still doesn’t support traditional trials or upgrades, the importance of which I’ve been writing about for years.
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The App Store was, at least at the beginning, a wonderful example of this promise; as Jobs noted even the smallest developer could reach every iPhone on earth. Unfortunately, without even a whiff of competition, the App Store has now become a burden for most small developers, who instead of relying on the end-to-end functionality offered by, say, Stripe, have to support at least two payment solutions, the combined functionality of which is limited to the lowest common denominator, i.e. the App Store.
I would be more than happy to pay 30% for sales through the Apple App Stores if they were first class for both customers and developers. But until we get there they have to fix a lot of problems[…]
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The StoreKit framework is deficient. Implementing subscriptions is extremely tedious and unreliable and the customer facing purchase UI only consists of raw modal alerts loosely popping up in any order.
Why are subscription apps and apps with free trials treated as if they were free? This is deeply wrong, confusing, and is leading to a load of problems like unwarranted bad reviews and unfair placement in the charts.
Apple does not offer a path for paid upgrades but at the same time limits the types of apps that are eligible for subscriptions. This severely restricts business opportunities for a lot of apps.
Previously:
- Outlining Complaints About the App Store
- Epic Direct Payment
- Microsoft’s xCloud Unavailable on iOS
- App Store for the Past
Update (2020-08-26): Nick Heer:
Purely as an observer and user, it seems that Apple’s current enforcement of App Store policies has made them the police officers hiding behind the construction site barricade ticketing pedestrians instead of trying to figure out why so many tickets are being written in the first place. Surely it more desirable to think less about what is legally possible and more about what is best.
This is not an argument for Apple to abandon all control over iOS and bend to the demands of every developer. It is only an observation that the attempts at policy circumvention and aggressive enforcement actions are not sustainable for a healthy developer ecosystem. It has been a long time since Apple was a company that prioritized developer needs, but there is a big difference between being standoffish and hostile — and the latter is increasingly an apt way to describe building apps for the iPhone and iPad.
Update (2020-08-27): Mike Piontek:
I’ve spent months working on App Store receipt validation. It’s a mess but I thought I understood it. I’ve watched WWDC videos across multiple years multiple times, I’ve read all the disconnected documentation spread across Apple’s web site, I’ve looked at third-party guides.
Today I’ve discovered I’m either doing something very wrong, the App Store sandbox returns inconsistent data, or maybe both. I’m just so frustrated and angry and defeated.
THIS is the part of the App Store I actually get angry about. The tools are way undercooked, and the documentation only makes you more confused. This stuff should be dead simple to implement at this point.
Update (2020-09-07): Rene Ritchie:
Personally, I’m still debating between two different takes on this.
The first is keeping it at 30% but really delivering on the promise of the App Store for developers and customers alike. A real focus on eliminating scam apps, outdated apps, websites wrapped as apps. Even if it’s only feasible for the top 100 apps in every category. The ones that have the most visibility. Also, no derelict frameworks, no capricious rejections, no accidental terminations, just no BS. Basically, rather than treating developers as second-class suppliers, treating them as first class customers — of App Store services. Making developer sat every bit as much of a bragging point as customer sat.
This is a nice idea, but there have never been structural incentives for this to happen, so it likely won’t. I don’t think Developer Sat is in the corporate DNA. And, absent that, it’s hard to improve in an area that isn’t a direct revenue source and that doesn’t have dog fooding or real competition.
The second is that Apple should just suck it up and drop the rate to 15% for everything, across the board. Not dropping for droppings sake, or even for the optics, but just to get the balance back towards break-even. Apple’s platform obviously provides tremendous value to developers, and apps obviously provide tremendous value to Apple’s platform, so periodic adjustments to maintain that balance is in the best interests of everyone, especially customers.
My guess is that Apple could break even at just 3% to cover credit card processing, as it’s already collecting more than a billion dollars per year in developer program membership fees.
12 Comments RSS · Twitter
Surely there must be hundreds (thousands?) of developers who have their dev kit now. Not a single leak? Very odd.
A leak of what? It’s an iPad Pro 2020 in a Mac mini case, lacking some features that the final ARM Macs will have (such as Thunderbolt), but nonetheless running macOS. It’s not an exciting machine, just like the Intel DTK was a Pentium 4 in a Power Mac G5 case. No “real” Intel Mac ever shipped with a Pentium, and no real ARM Mac will have the A12Z.
Beyond that, there’s been a leak of sorts of what we can expect Rosetta 2 performance to be like: a little over a quarter single-core and a little over a third multi-core overhead compared to native CPU.
Hmm, I guess there'd be more benchmarks leaked? Especially of the new Parallels 16 running Windows 10 -- doesn't everyone want to know if it's usable, or too slow? And benchmarks other things (video editing?) that are supposed to be faster than what the latest Intel Macs can do? Other than a few scores on geekbench, I haven't seen anything and it's been what, 2 months now?
It's true that the dev ARM Macs aren't that great for getting useful information about what real ARM Macs will be like, but I also think it's fair to say that people just don't really care that much about Macs anymore, not in the way they used to.
Siracusa stopped doing is bonkers OS X reviews on Ars five years ago (and even a year or two before that, I'd stopped reading them). Instead of exciting, OS X updates have become kind of scary. Hardware updates, likewise, are more about what Apple screwed up this time, than about useful new features, or beautiful new designs.
It also seems clear that a lot of the people who are excited about new technology in general either left the Mac platform altogether, or are reluctantly staying because they're locked in.
And finally, I think people realize that the switch to ARM is primarily for Apple's benefit, not for theirs. It's just a bit difficult to get excited about a change that will add a few more billions to Apple's cash reserves, while screwing up people's ability to run Parallels.
When Apple switched to PPC processors, and when they switched to Intel chips, people were genuinely excited, and expected these changes to strongly improve the platform for them. But the Mac doesn't feel like a thriving, exciting, growing platform anymore, and I don't think anyone expects this switch to change that.
I have to say, I basically agree with all of that Lukas. It's sad -- the Mac used to be such an exciting platform! Then Jobs died. Maybe it's a coincidence, maybe not. But given that they generally have things in the pipeline 1-2 years before launch, it sure does seem like post-2013 is when OS X and Macs really started the slide downhill.
Hmm, I guess there’d be more benchmarks leaked? Especially of the new Parallels 16 running Windows 10 — doesn’t everyone want to know if it’s usable, or too slow?
Huh? I don’t think there’s been any announcement to that regard. Parallels Desktop 16 is for x86, and runs Windows 10 in virtualization, just as before.
Apple showed a pre-release of a Parallels Desktop version on ARM, but only running Linux. It’s plausible that it’ll run Windows on ARM, too, but no such info at this point. And you seem to be suggesting it emulating x86, which leads to lots of questions, like: does it emulate the OS, or just apps within?
And benchmarks other things (video editing?) that are supposed to be faster than what the latest Intel Macs can do?
Using what apps? Also, why test that on a CPU that will undoubtedly be much slower than the kind of of an actual ARM Mac laptop or desktop you’d use to do video editing?
It’s true that the dev ARM Macs aren’t that great for getting useful information about what real ARM Macs will be like, but I also think it’s fair to say that people just don’t really care that much about Macs anymore, not in the way they used to.
I think there’s truth to that, yes.
But I also don’t recall many leaks for the Pentium 4 DTK.
Siracusa stopped doing is bonkers OS X reviews on Ars five years ago (and even a year or two before that, I’d stopped reading them).
I think he was just ready to move on after a decade and a half of doing them. Nothing much beyond that.
Instead of exciting, OS X updates have become kind of scary.
I can see that, but I also wonder what people want in terms of exciting stuff on the Mac.
It’s not like I don’t have my pet peeves — for example, it would be really nice if, after twenty years, they figured out a more reliable way to handle network shares. Windows could do it back then; why can’t macOS? Why do I have to “mount” a network share at all to read a document? I don’t have to mount a web server to load pages in a browser. I don’t have to do it for network shares in Windows either; the OS handles that transparently (though it sometimes fails in terms of auth). And then as soon as you have the hint of packet loss, Finder beachballs. I could tolerate that in the 10.1 days but now it’s just pathetic.
But, that’s not a big exciting feature like Rendezvous/Bonjour, Exposé, Spotlight.
Hardware updates, likewise, are more about what Apple screwed up this time, than about useful new features, or beautiful new designs.
I wish we could have some iPod mini-style colors. Beyond that, I don’t know about beautiful new designs. I think they’ve kind of honed in on what they regard as the final form? But maybe that was Ive’s thinking, and maybe that’s how he got bored, and started phoning it in, and maybe that means we’ll get some excitement again.
It also seems clear that a lot of the people who are excited about new technology in general either left the Mac platform altogether, or are reluctantly staying because they’re locked in.
Well, that, and/or they’ve aged.
But yes, it kind of pains me to see efforts like the open-source Windows Terminal project and think, “why isn’t this kind of stuff happening on the Mac front? It doesn’t have to, but it sure would be nice”.
And finally, I think people realize that the switch to ARM is primarily for Apple’s benefit, not for theirs. It’s just a bit difficult to get excited about a change that will add a few more billions to Apple’s cash reserves, while screwing up people’s ability to run Parallels.
I don’t think that many people use virtualization or Boot Camp any more. I say that as someone who heavily uses them, and might have to move away from the Mac altogether, or to a multi-computer approach. Sigh.
Is ARM also to Apple’s benefit? Sure. But shipping exactly the kind of CPU they want is also to the customer’s benefit, surely? Hopefully, it means an end to stupid designs where Intel pretends the TDP is one thing, but in practice when you want turbo elastic velocity thermal ultimate boost, you actually need much more thermal headroom, and oh, did we mention we just cut your battery life in half?
When Apple switched to PPC processors, and when they switched to Intel chips, people were genuinely excited
Aaaaaaaactually, I was one of many who was grouchy about it at the time, hoped the rumors were wrong, and kind of stuck in wishful thinking of “well, there were rumors to this effect before; it isn’t true”. But then it was true. And when the first Intel Macs did ship, it was actually quite good. Massive performance boost, and the gained ability to virtualize (rather than emulate) Windows. Plus, recent developments like VT-x that made virtualization much faster.
But it also felt like the end of the PowerPC dream of Apple working with IBM and Motorola against the Intel hegemony. Plus, RISC is better than CISC, right?
And we’re kind of going back to those weird days where, yes, of course, on paper, RISC is faster than CISC.
the Mac used to be such an exciting platform! Then Jobs died. Maybe it’s a coincidence, maybe not.
I think that’s mostly coincidental.
Keep in mind Jobs said (before he wound up at Apple again): “If I were running Apple, I would milk the Macintosh for all it’s worth – and get busy on the next great thing.”
And then he did find the next great thing: the iPod, and then the iPhone. And the iPhone turned out even more massive than he had thought.
So in an alternate reality where Jobs’s health were better, I don’t think he’d be as involved in the Mac as he was in the early 2000s. He might have made some better choices about giving it to the right managers, though. Maybe he would have made a new SVP of Macintosh position and put, say, Phil Schiller in it.
Instead, we have an org where the Mac is just one platform among several, and while that comes with benefits, it also causes all these weird effects like feeling like an afterthought, or being needlessly tied to an annual schedule.
But, again, I don’t think in that universe we would’ve seen a 2020 WWDC where Jobs proudly shows off all the new features in Big Sur.
But given that they generally have things in the pipeline 1-2 years before launch, it sure does seem like post-2013 is when OS X and Macs really started the slide downhill.
What about Lion in 2011? :-) That release sure was… problematic. It introduced some bold stuff (like Auto-Save), but Apple kind of overshot, didn’t explain it well, and then shrugged and moved on. And the quality and performance just wasn’t there.
>I wish we could have some iPod mini-style colors.
>Beyond that, I don’t know about beautiful new designs.
Colors would be nice, but at this point, I also think that Apple's hardware design in general is uninspired and outdated.
The titanium PowerBooks, the iMac, the Power Mac G5, the unibody MacBook Pros, the MacBook Air, these were incredible new devices that made PCs look like outdated garbage in comparison. These were industry-changing devices that were modern and exciting and pretty.
And it wasn't just look, it was also how they worked; the side panel on the Power Mac G5, for example, or the fact that the unibody MacBook Pro had zero keyboard flex. These things didn't just look better than anything on the PC side, they were also more functional.
Nowadays, I look at the kinds of devices Lenovo or HP or Asus or even Dell are putting out, and they put Apple's devices to shame. They look better, but they also work better. They have actual ports, working cooling systems, touchscreens, pen support, amazingly designed hinges that turn them into convertibles, antireflective high-refresh screens, and even the stuff that used to be an issue - battery life, for example - just isn't an issue anymore.
And they cost less than Macs, particularly ARM-based PC laptops.
There's so much Apple could do to improve Macs, but they can't even keep up with PC manufacturers anymore.
I'm not even annoyed about this, I'm just sad.
If that's the final design of their devices, then I'm glad that the PC side of things hasn't gotten that particular memo, and keeps pushing forward.
Back to the original topic:
I'm glad we are talking about the App Store policies. I don't care about why Apple wants it, but subscriptions outside the apps are just terrible user experiences. Terrible. Its consumer hostile. They don't care about the consumer though. Maybe the antitrust actions will finally change that.
Its not a hard problem to solve either. Either take a much smaller percentage (if normal CC fees are 3% take only 5%) or require them to be paid apps ($5 minimum).
Guess I should have read that article first haha. Yes his solution is superior, with payment for downloads. That's great and eliminates all the issues. Just do that Apple.
>There's so much Apple could do to improve Macs, but they can't even keep up with PC manufacturers anymore.
lol - keeping up with what, exactly? And how exactly will PC manufacturers keep up with the ARM version of the MacBook Air when there won't be any CPU remotely capable of matching battery life, performance or thermals?
There will be a keeping up problem but it won't be Apple who is doing the chasing. I can't wait for the new Apple Silicon Mac's - just like IBM with PowerPC, Intel has been holding Apple back. If Intel had kept to their original road maps, iMac's wouldn't sound like hair dryers when put under load. But Intel didn't. I won't be looking back.
And since Apple owns the silicon, what's to say there aren't a few instructions or maybe a core to help with x86 emulation? I don't expect them to give to craps about x86 - but hey, you never know.
> how exactly will PC manufacturers keep up with the ARM version of the MacBook Air when there won't be any CPU remotely capable of matching battery life, performance or thermals?
People will often take a performance hit to use the software they want (or need). I certainly did so when switching to a PowerBook G4 in 2004. If important apps don't get ported to ARM (and/or macOS continues its decline), people will jump ship.
I'm glad that the horrible App Store policies are dominating the conversation these days. But I also find it a bit strange that there has been near zero talk about the transition to ARM. Surely there must be hundreds (thousands?) of developers who have their dev kit now. Not a single leak? Very odd. Is everybody just bored of Apple's new stuff these days?