Jul 11, 2011

Is Apple's App Store Greedy?

Apple has won praise for the ease of use of their app store for iPhone, iPod Touch, and iPad. They have extended this functionality to the Mac by creating a similar app store for OSX. While this is a great way for smaller developers to have their software discovered by consumers, it also seems a bit greedy, since Apple charges 30% of the sales cost to the developer for maintaining the app store. Recently, publishers complained that the 30% charge on subscription sales was exhorbitant, (say, for a magazine app like Wired or Time) so Apple backed down. Is this pricing just a sign of Apple's greed or are they pushing the software distribution model in ways they never had with the iTunes music store?


Well ill get straight to the point one of my all time favorite games on the iphone is "Lets Golf" and the other day i noticed they released "Lets Golf 3" straight away i saw that is was free and i thought well thats a bit weird because the other 2 versions had great gameplay and graphics and was a really well put together game and would probably cost quite a bit to devolop.


So i downloaded it anyway only to find that its turned into one of those games where you cant do much with it without making lots of in-app purchases ala "Tapzoo" (i think it worked to $1 to play 10 holes).


So my question is do you think mobile app devolopers are doing this because they cant cover devolopment costs by offering the game at a one off price after apple take there cut?


Or do you see this as a measure to combat privacy caused by jailbreaking? Either way its very annoying to see alot of games and apps heading down this road what are your thoughts.





As to apps only and not subscriptions . . .


THe answer is simple - not simple to do, but uncomplicated to divine:  Developers, independents and companies, need to run the numbers, so to speak.  Compare Apple's 30% vs what it would cost the developer to sell their product using the usually channels.  The trick is that the cost is not simply money but also time and effort.


It may be that the developer is going the shareware route and content with the sales it generates and that might indeed make Apple's 30% look expensive.  And it may be that Apple's 30% compares very favorably for a developer that boxes their product and spends the time, money and effort in advertising.  Both scenarios have to also consider the market Apple opens them up to.  These are simply most likely scenarios - each developer has to do their own homework.  And whatever route the developers chooses does not lock them in to it.  Some do use Apple and continue to also sell on their own.   (I wish people would, in some way, post actual comparative numbers.  Someone with those numbers could write an article MANY people would be interested in.)


And that is the bottom line: each company has to decide for themselves, has to do the homework.  The system is not closed - the usual selling routes/alternatives are still there if it turns out that 30% is too much.   The blanket statement that Apples charges too much is only really, truly helpful to bloggers who get paid by the eyeballs/responses.  ;-)  



Well, it's Apple's platform. It didn't exist until they created it, so developers have to play by their rules. If a developer isn't comfortable then they could develop for Android or some other mobile operating system and simply skip iOS altogether.

I doubt many will do that, however. The iOS ecosystem has proven quite lucrative for many developers, so it makes sense for them to continue developing for it.


Last quarter, Apple doubled their profits by selling 80% more equipment. That suggests that Apple is receiving a substantial profit. Whether this is greedy or not is subjective; objectively, they are holding on to a considerably larger margin than most companies.






Maybe the DOJ needs to investigate Apple regarding their monopoly over iApp distribution. But it's usually a disaster when the lawyers get involved.


Apple's servers handling the sales and downloads of iApps costs money to operate. And if you look at the average price of an app ($1.55) and Apple's charge to defray the marketing, sales, and downloading of the app ($.22), it actually seems pretty reasonable.



I think the problem that subscription content has is that it is no longer a profitable business for many content providers. That's why the Daily has been kind of a bust. Many of us have been reading news and celebrity blogs for 10 years; why would we all of a sudden start PAYING for content? I wouldn't want to be a magazine publisher nowadays, that's for certain.



As my daughter would say, "Duh."


Apple has always overpriced their products; now that they're hawking iPad apps and have ZERO competition for sales of iPad apps, they can treat developers as shoddily as they do their retail customers. When a computer vendor like HP would have to sell 7x as many pc's to make the same amount of profit as Apple, that's a sign of a serious incongruency in the marketplace. The only force that could turn this around is if HP or RIM or Android can develop tablets that are a serious competitor to the iPad, encouraging top-name developers to have a real choice over which platforms that they focus their develop efforts upon.

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