Apple doesn’t get it
I doubt few of my readers have missed that Apple just released the iPhone SDK. How many read through the fine print?
Bottom line is: If you want to sell apps for the iPhone you gotta give Apple 30%. Thirty percent!?
Why?!
Apple is making ridiculous money off selling the iPhone. The more apps the iPhone gets, the more iPhone’s they will sell, the more money they will make.
In Swedish we have an expression for this. “Dumsnål”, literally “stupid greedy”. You get greedy about some detail so that you end up loosing money on the bigger picture. The reason Windows dominated over Mac back in the days was partly because Windows had more and better apps. Is Steve doing the same mistake again?
March 7th, 2008 at 3:35 am
I highly doubt you would make this statement if you would know the value of being listed in a imperative application directory and that installation + payment for your application can be made in 4 taps or less by every person with an iphone on the planet. Usually companys blow 50% of their budget on advertising and come no where near this. Its utopia.
March 7th, 2008 at 4:25 am
According to msmobiles.com, Windows Mobile developers who distribute through Handango get to keep 30%-40%. Sounds like Apple left some money on the table.
http://msmobiles.com/news.php/7177.html
March 7th, 2008 at 4:29 am
You have no idea what the professional software developer’s costs are for software marketing and distribution. I read one story, which was claimed to be typical for small developers, that said the author was lucky to get 30%, not 70%. You should be more careful to have some knowledge of subject before coming to erroneous conclusions. If your software is free Apple will market it and distribute it for free. You can’t get a better offer than that anywhere!
March 7th, 2008 at 4:42 am
As if Best Buy and Comp USA never made any money from selling software …riiiiight. So what’s the deal?
Let’s see. No credit card fees, no marketing fees, no administrative fees, no hosting fees, no packaging costs, no distribution fees, immediate access to millions of potential customers -in fact, all 100% of them, and best of all, developers set the price. All a developer has to do is submit his app, then sit back, and wait for the check to come in once a month.
I can see some folks not getting it, but it ain’t Apple. And it ain’t the thousands of developers drooling to get their hands on the SDK.
March 7th, 2008 at 5:15 am
In English we have an expression, too… “Penny wise, pound foolish”. You are losing sleep over 30 percent when that pittance is getting you access to Every Single iPhone in the World, all at once. No worry about download bandwidth, maintaining a website, processing credit cards, etc. In America, we call that a bargain. I know, as I built a very successful business on digital downloads (in the tabletop adventure gaming field) using a similar scheme — and I didn’t have the power of the Apple name and the user-friendly environment of iTunes behind it. I’m not a programmer, but if I was I’d jump into this with both feet, and my $99 would already be in Apple’s hands. Small developers will be making money hand over fist (another English expression) if they can deliver good iPhone apps with this deal — and they can spend most of their time on the development, not the sales. What in Heaven’s name are you thinking?!?!
March 7th, 2008 at 5:17 am
It’s idioters like you that don’t get it. For 30% of the profits on the price the developer set they get a check mailed to them each month. Not credit card processing. No fulffillment. No inventory. No marketing. Are you aware of how successful song featured on iTunes are?
The majority of Apple developers are solo operations or less than five person organization. The provide independent coder the luxury of doing what they love to do. Code. No marketing or distribution worries. So get your pompus head out of your ignorant ass and open your mind.
Blackmamba
March 7th, 2008 at 5:21 am
Did you read through what The Steve said? To pay for hosting/bandwidth/ marketing costs. That stuff not free you know. What kind of a business man would absorb such costs that it would eat a serious chunk of his profits. Not a very good one. What would be the point? For the love of it?
You failed to mention that the developers that are offering free software they’ll be charged nothing.
March 7th, 2008 at 5:25 am
It’s idioters like you that don’t get it. For 30% of the profits on the price the developer sets they get a check mailed to them each month. No credit card processing. No fulffillment. No inventory. No marketing. Are you aware of how success rate for songs featured on iTunes? Nothing worth having is free. Apple spends millions are R&D. Should they simply give the technology away? Apple is a for profit company not a welfare operation.
The majority of Apple developers are very small “business people”. Apple providse the independent coder the luxury of doing what they love to do. Code. No marketing or distribution worries. So get your pompus head out of your ignorant ass and open your mind.
Blackmamba
March 7th, 2008 at 5:31 am
It’s the same model as console development, although I don’t know if percentages are similar (probably less % but a lot more up-front cost). Plus it’s not like you don’t get anything for that 30%. You get to relieve yourself of payment processing and distribution support on your own. Ask any independent software developer how much of their day they spend on registration code support, payment processing (chargebacks, etc.), and I bet the 30% to not worry about it sounds pretty good to them.
While it would be cooler if it was free or cheap, it feels to me like it’s pretty close to reasonable. Maybe a little heavy, but I certainly don’t think it’s over the top greedy.
March 7th, 2008 at 5:32 am
It doesn’t seem *that* outrageous to me. Apple’s providing credit-card processing, app hosting, and an extrordinarily high-traffic front end that will advertise your app for you. You write the app, test it, and upload it, and they’ll send you money eventually.
Frankly, I’d be amazed if this isn’t a net *positive* for small developers, compared to a do-it-themselves solution (not that they have the option this time around). Heck, just using Apple’s payment processing will probably pay more than 30% for most developers–I remember reading something on DaringFireball about one of the mid-sized Mac developers making small changes to their checkout process, and every page that they removed from the process boosted sales 30-50%. If that’s even half-true, then one-click sales via iTunes will *easily* sell 30% more copies, even without the extra traffic.
Then add in time savings from not needing a download server (or even a basic website!), not needing any sort of CC proccessing infrastructure, and not needing to provide install support for users, and it really doesn’t sound like that bad of a deal. Yeah, 10-15% would be better, but 30% is more or less the same deal that they’re giving musicians.
March 7th, 2008 at 6:06 am
No. Steve is not repeating the same mistake. Cheers.
March 7th, 2008 at 6:10 am
[…] are some that don’t like the 30% tax, and Russell Beattie has some thoughts too: I was right about the sandbox, though there’s a […]
March 7th, 2008 at 6:26 am
[Bottom line is: If you want to sell apps for the iPhone you gotta give Apple 30%. Thirty percent!?
Why?!]
You missed the presentation, didn’t you?
I don’t want to be the guy that says, ‘you’re the Supreme Dumbass’. But…
FFS, are you incapable of understanding what was put forth, RIGHT BEFORE YOUR FSCKING EYES?
Even a gold medalist at the Special Olympics could understand the well laid out proposal. Apple’s 30% is nearly 90% cost — to THEM.
Their 30%, is like iTunes sales. The cost of doing iPhone/Touch business.
Wakey-wakey, dumbass!
Stop being an AppleHater. make some FSCKING money.
March 7th, 2008 at 6:37 am
Here, I did the work for you.
http://blogs.cnet.com/8301-13509_1-9888217-20.html?part=rss&tag=feed&subj=TheMacalope:AnAppleblog
http://daringfireball.net/2008/03/iphone_sdk_impressions_and_questions
March 7th, 2008 at 6:50 am
Maybe YOU should read the fine print - Apple covers a lot of cost for this 30%. Web build out of a store front - hosting - bandwidth - certification of the program - credit card fees. 30% is also what Apple keeps from record labels. Free Apps are free to distribute. Maybe you should ask developers what it cost to distribute a program, and having your program on a store that will be seen by every iPhone user is worth something also.
So before YOU go telling people top read the fine print maybe YOU should read it YOURSELF! of course you most likely did read it and knew what you where writing was untrue and just wanted hits for your blog.
March 7th, 2008 at 7:06 am
Just curious:
If you sold software on Amazon, instead of iTunes, what percent does Amazon get?
If you sold software through Best Buy, instead of iTunes, what percent does Best Buy get?
If you sold software through the Apple Store, instead of iTunes, what percent does Apple get?
Sorry, I just realized that you are in Sweden. What is the usual markup on retail in Sweden? I wonder what the markup is on Saabs and Volvos in the USA.
March 7th, 2008 at 7:54 am
First thing, watch the event at Apple.com to know what you are talking about.
March 7th, 2008 at 8:27 am
1. Apple hosts the application for you. You don’t even have to have a web server. Actually, since Apple doesn’t handle your support, it might be even better if you don’t.
2. Apple charges you zip for marketing. Apple is your MacHeist (no one even knows exactly what those guys charge).
3. No credit card fees.
4. Your app gets a storefront with traffic you could only dream of. Think of the impulse buys you’ll get. Leo “I’m Downloading It Right Now!” Laporte alone could probably make this worth your while.
5. Potential access to iFund, which appears to be something like venture capital funding for iPhone applications. Steve Jobs is your pimp daddy!
March 7th, 2008 at 8:30 am
Name me one store in the world that doesn’t take it’s share of the profits.
In many stores you would be lucky to GET about 30%.
March 7th, 2008 at 8:57 am
That’s 30% for distribution, payment processing, update management…. It’s not 30% for just using the SDK.
Just for comparison…
http://www.boygeniusreport.com/2008/02/16/handango-revises-cda-says-screw-you-to-developers/
That’s Handango asking for 50%
March 7th, 2008 at 8:58 am
I bet music groups would love to get 70% of sales. Let me think… no order processing, no packaging, no servers disks or other infrastructure to deliver product, no installation hassles, automatic update service AND Apple will promote all products and especially the best sellers… I suspect that the return is far better than CompUSA, Best Buy, and just about any traditional brick and mortar storefront around. But of course things might be a bit different in Sweden.
March 7th, 2008 at 9:23 am
Apple doesn’t get it…
Apparently: “If you want to sell apps for the iPhone you gotta give Apple 30%”….
March 7th, 2008 at 9:52 am
So write apps for Windows
March 7th, 2008 at 11:38 am
30% is a very reasonable commission considering the following facts.
1) The iPhone SDK is completely free to anyone that wants to make an app.
2) You don’t need to spend any money purchasing an iPhone to create an app, you can use the free iphone simulator.
3) You don’t need to spend any money on marketing you application.
4) You don’t need to spend any money hosting and distributing your application.
If you were making an application for any other platform you would need to purchasing an SDK, the platform it runs on. You’d need to market it yourself, distribute it yourself, get license agreements written up. You’d probably need investment to do all of that. With iPhone apps you wont need any.
I imagine a lot of developers will be excited at the prospect of making money from their application that can now have a global reach with minimal effort.
March 7th, 2008 at 1:45 pm
[…] are some that don’t like the 30% tax, and Russell Beattie has some thoughts too: I was right about the sandbox, though there’s a […]
March 7th, 2008 at 2:06 pm
So, take it or leave it. Apple is saving you the hastle of doing your own 1) distribution 2) promotion.
March 7th, 2008 at 2:41 pm
If you don’t like it, then do something else. Winners win, Winers and Losers lose.
March 7th, 2008 at 2:53 pm
Uh, Apple is hosting the apps and that costs money. They take care of the credit card purchases also.
You think this is free????????
March 7th, 2008 at 3:38 pm
Don’t forget the anual $99 ….!
March 7th, 2008 at 3:39 pm
[…] Some people think this smacks of greed but I’d counter that it smacks of reality. If you’ve spent a lot of time working in software but not in the retail side then you have probably very little experience of the costs. We are agreed that Apple is a publicly traded corporation and therefore needs to turn a profit. We’re going to have to agree that the App Store will be a hot trick for software distribution. […]
March 7th, 2008 at 4:25 pm
Maybe because they offer you
- marketing (it’s the official iTunes store that every end user will go to first)
- hosting
- secure payment
+ more important: everyone that trusts the iTunes store will be able to pay; try doing that with your own website - I’ aint giving my credit card details to any ol’ site’
+ yeah: Credit Card processing, or any other payment type costs money and effort as well;
- ease of use: user go to iTunes App store, buy the app - done. If you’d offer the app on your website… the whole process gets five times more complicated, having to download the thing, payment, etc.
And hey… if you don’t like that… just make the app free……
March 7th, 2008 at 7:18 pm
better and more apps on windows? really? you only pay apple 30 percent if you want them to host your apps for download as well as process payments. doesn’t sound like such a bad deal to me. i’d just raise the price 30 p
March 7th, 2008 at 11:44 pm
Um - as a smalltime software developer, 30% is a great commission. They handle the credit-card transactions, distributions, hosting costs, provide an auto-update feature, and above all have a low barrier for entry to get in.
If I were working for a large software firm that already had that stuff, it would be a different story. However, this is great for the small-time player.
And remember - if I’m making it free, there’s zero costs.
Have you looked at other ways of distributing software through commercial vendors? Let’s just say that if there’s a 30% figure involved, it’s on your side, not theirs…
March 8th, 2008 at 3:15 am
Yeah, but look what they’re getting for that 30% and I quote tidbits here:
“…processing, bandwidth, hosting, and marketing; in the traditional book world, for instance, the split between publishers and bookstores is often 50:50. Many ecommerce providers charge 10 to 15 percent for less than Apple will be providing via the App Store’s directory and interface”
So it’s not all bad.
March 8th, 2008 at 3:18 am
Oh, and Handago takes 40%…
March 8th, 2008 at 8:03 pm
They take care of all of the accounting, collection, upgrade distribution, and provide a unified portal. No bandwidth costs, no merchant accounts, no worries about “the google effect” / SEO, and on.
Now, I do agree that you should be able to chose *NOT* to use them, but as it stands, it isn’t a bad deal.
“Retail? Maybe 50%. Amazon Advantage? 55%. Typical book publisher? 90%. Record industry? (Is there a number higher than 100%?)”
http://phonedifferent.com/2008/03/about_that_7030_split.html
March 8th, 2008 at 11:06 pm
So just because they make a lot of money on the iPhone the should host the apps for free? Do not make any sense.
No more than any other mobile app dist out there. Get real.
March 9th, 2008 at 2:19 pm
So you expect Apple to pay for hosting, VISA and the balance of the expenses any developer wishing to sell his product would pay? Here’s the catch. People use on iPhone at a time. Apple can’t sell the same person an iPhone every month! A software developer can sell a different software every month and sell updates. The price is all up to the developer. Considering most talented developer I know (and no I did not say business men) end up keeping their software to themselves because they dread the whole marketing, selling, billing bit, such folks love the opportunity to do what they love and let Apple do the “dirty work”. 30% sounds pretty sweet to them. Just my 2 cents worth.
March 9th, 2008 at 4:09 pm
well, to tell the truth i was surprised too, by this percent. But then i considered few facts, taken exactly from the windows mess of applications:
1. AppStore is not only a way to reach the users, it’s a filter service from porn, dialers, virus, trojan, and malicious app. So it’s a service to protect your iPhone, from the chaos which is dominating in windows. This is an advantage for your application too, not to be flood by thousands of useless applications and even clones of your same app.
2. Apple will earn money from your app, yes, but you will earn money by Apple too. They publish your App in the most visible place where you can be to sell your application. Have you ever tried to find an application in snap-files or other app portals, it’s a mess! So you will get visibility, and your app will ‘marked’ and approved by Apple, it’s really a marketing bootstrap.
I think 30% is stil a bit high, but i would accept 20% for example, because i can advantage seeling my apps in this way.
March 10th, 2008 at 12:09 am
Wow, what an onslaught!
Actually, thinking things through my main annoyance is that this seems to be the *only* way to get an app on to the iPhone. Stevey wants complete control of what gets on it and even worse, what does NOT get on it. He could’ve adopted the model of normal personal computers: The user gets to decide what they want to install and how they get hold of it. Instead he chose to go down the closed route which already permeates the corrupt mobile industry.
Personally I believe an open approach is better not only for the customer but also for the vendor. At least in the long term. I guess only the future will tell how this plays out.
March 13th, 2008 at 4:16 pm
[…] : Seems like I jumped the gun a little. Such are the risks of blogging I guess. If you look at the comment thread to the post I referenced I would have to say that Apple’s position is fairly reasonable. 30% for hosting apps, credit […]