Their Businesses Went Virtual. Then Apple Wanted a Cut. (nytimes.com) 84
After Airbnb and ClassPass began selling virtual classes because of the pandemic, Apple tried to collect its commission on the sales. From a report: ClassPass built its business on helping people book exercise classes at local gyms. So when the pandemic forced gyms across the United States to close, the company shifted to virtual classes. Then ClassPass received a concerning message from Apple. Because the classes it sold on its iPhone app were now virtual, Apple said it was entitled to 30 percent of the sales, up from no fee previously, according to a person close to ClassPass who spoke on the condition of anonymity for fear of upsetting Apple. The iPhone maker said it was merely enforcing a decade-old rule. Airbnb experienced similar demands from Apple after it began an "online experiences" business that offered virtual cooking classes, meditation sessions and drag-queen shows, augmenting the in-person experiences it started selling in 2016, according to two people familiar with the issues.
Both Airbnb and ClassPass have discussed Apple's demands with House lawmakers' offices that are investigating how Apple wields its control over its App Store as part of a yearlong antitrust inquiry into the biggest tech companies, according to three people who spoke on the condition of anonymity to discuss private conversations. Those lawmakers are set to grill Tim Cook, Apple's chief executive, and the chief executives of Amazon, Facebook and Google in a high-profile hearing on Wednesday. Apple's disputes with the smaller companies point to the control the world's largest tech companies have had over the shift to online life brought on by the pandemic. While much of the rest of the economy is struggling, the pandemic has further entrenched their businesses.
Both Airbnb and ClassPass have discussed Apple's demands with House lawmakers' offices that are investigating how Apple wields its control over its App Store as part of a yearlong antitrust inquiry into the biggest tech companies, according to three people who spoke on the condition of anonymity to discuss private conversations. Those lawmakers are set to grill Tim Cook, Apple's chief executive, and the chief executives of Amazon, Facebook and Google in a high-profile hearing on Wednesday. Apple's disputes with the smaller companies point to the control the world's largest tech companies have had over the shift to online life brought on by the pandemic. While much of the rest of the economy is struggling, the pandemic has further entrenched their businesses.
You want the gated community, pay HOA Fees (Score:1, Redundant)
Now I think Apple is getting greedy. They are making a lot of money off of the paid Apps, and Ad Revenue on most of the free apps. But being that most of these apps is a Web Browser linked inside a custom UI, Apple is getting really greedy on every company trying to make money off every app that runs on their platform.
20% is a big chunk to already take out of the cost of the App.
However, unless App makers decide to say no to the Apple store, and just make Web Apps of their services designed for mobile d
History & Weirdness (Score:3)
When the iPhone first came out, Apple famously didn't allow ANY third party apps on it. Job's reasoning was that HTML5 was good enough that web apps would be used. After a couple years of complaining, Apple introduced the iOS SDK and allowed 3rd party apps.
The irony is, now that people are complaining about Apple cutting into app store profits, it's even more feasible than back then to make an app pure HTML. Nearly all of the hardware is exposed to HTML now - cameras, accelerometers, location, etc... along
Re:History & Weirdness (Score:5, Insightful)
The big issue, is developers seem to have some sort of bias against Web Application development.
Ever Sense HTML3 HTML is no longer a tool for academics sharing documents with hyperlinks, but more of an application Thin-client protocol.
The modern HTML5 Web Application has little disadvantages over building a platform specific app, especially for the bulk of the CRUD based applications that people use all the time.
I have been a fan of Web Based Applications for a long time. Because the biggest problem I have found professionally was always the problem of deployment and system upgrades. Building a clean HTML code I have found my code can run for decades without updates, while the users browsers, and PCs adding new devices like phones and the like will not break the application from running. While those people with VB6 Apps, are breaking and needing to be rewritten. While I will usually just update some CSS on the back end to give it a more modern look.
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It's a very polarizing language. For a number of developers coding in this language is an exercise in masochism. So they stay away from it and go do more pleasant things.
Now if we can get out of this painful legacy dependency and something like WebAssemby gains some maturity (or Dart etc...) so we can code web apps in something more pleasant this attitude may change.
All the cool kids build apps (Score:2)
Every business knows you gotta have an app. To order pizza, use a bank, whatever. Apps are cool. Web pages are not.
That said, I do not see why Apple could not charge web sites for using HTML 5 features on their iphones. The iphones belong to Apple, after all.
If I were Apple, I would have refused to implement HTML5 for security reasons (think of the children). And made every web page a bit clunky to ensure that people still built apps.
Apple stuffed it, IMHO (Here is me criticizing a trillion dollar comp
Re: All the cool kids build apps (Score:2)
"If I were Apple, I would have refused to implement HTML5 for security reasons (think of the children). And made every web page a bit clunky to ensure that people still built apps.
Apple stuffed it, IMHO (Here is me criticizing a trillion dollar company...). They should never have let Android exist. License IOS at minimal cost to everyone, charging extra for premium features."
Sieg Heil. and Anti Trust. If you want to end up far more reviled than M$, and have the world's governments breathing fire down your n
Re: All the cool kids build apps (Score:2)
>Every business knows you gotta have an >app. To order pizza, use a bank, >whatever. Apps are cool. Web pages are not
A lot of dumb shit is 'cool'. Those stupid
moronic plastic baubles kids in the 1980s
covered their bodies with was 'cool'. The
Tide pods eating by this generation is/was 'cool'. Paying $5 to some guy *who is on the outermost margins of society, and literally has nothing* to beat up another guy in the same situation, and filming it is 'cool'.
'Cool' seems to be an indicator of what should
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That's because a lot of web application developers don't understand or care about the standards, because following standards isn't fashionable anymore.
In the days of IE, web developers were screaming at the top of their lungs about the importance of standards compliance and graceful degradation -- and all that fuss was over margins being misaligned by a couple of pixels. Today, nobody gives a fuck about standards and hard-codes for the latest version of Chrome. I use a fork of Firefox, rather than the gen
Re: History & Weirdness (Score:2)
This feels like a throw back to the 80s and early 90s when you needed an "app" to do anything beyond basic text browsing. These "apps" usually came in the form of MUDs that were graphical. We should've been moving away from this in regards to the modern web, but it seems that not only are we going backwards, but beyond as well.
I should not need an "app" for every little thing that a web browser is perfectly capable of doing.
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I don't remember that at all. I remember downloading applications onto my pc and syncing them over to my palm and then blackberry. The software ecosystems on pre-apple smart devices was very cottage. The funny bit is this part of computing history is better preserved than the early App Store and Android equivalent. Hobbyists still hosts these applications for download. Good luck finding finding APKs from 2009.
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Your sig is flawed. You have to have an account to post AC now.
Also, the polarization of contemporary political discourse has led to another valid reason to be an AC. Posting certain opinions under my normal user ID could result in me attracting extremists and stalkers.
I don't want lunatics chasing me around every story calling me a nazi/communist incel/snowflake etc etc, so sometimes I post AC so that I can have my say without getting involved in a protracted, vicious war of words. I have neither the time
Re: You want the gated community, pay HOA Fees (Score:2)
That was easy. No locks, or certificates, or walled prisons to deal with.
You could even download and install directly on PalmOS and Windows Mobile if your device (such as the Trio) had a cellular data connection.
Nowadays, it's increasingly hard to avoid the fuhrer in the middle who wants to control and micromanage everything, and demand a cut from app developers on top of that.
How long until 'side loading' (a term used to manipulate people into thinking getting apos from another source is always shady and b
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But back then, most of those apps were overpriced crappy apps. So if they charged 50% then the app maker will charge double for it. For Apple it is difficult for them to Sell it on the Apple Store for $10.00 while it is $6.00 on the Google Play. Because Apple is charging them more.
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Capitalism is bad mm'kay.
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This is all wrong.
Stores never took 80% of sales.
Also the 30% does not pay for "free app" hosting, it goes into their coffers as nearly pure profit.
If apple chooses also to create apps to drive out 3rd party developers that is part of their general strategy.
The TRUE villain behind the pandemic (Score:5, Funny)
Clearly it's not Bill Gates that profits the most from the pandemic, but Apple. Apple is and was the main competitor to Microsoft, so obviously the conspiracy theory about Gates was planted by Tim Cook as a false flag operation.
And I feel a little sick realizing there are probably people out there who already believe this to be the case.
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Just put a piece of cloth over your face, and keep your distance away from strangers.
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On a site full of some of the dumbest ideas imaginable
All you have to say is "On a site with a comments section."
Re: The TRUE villain behind the pandemic (Score:2)
>All you have to say is "On a site with a comments section
Yikes! We must shut it down at once! Because "Woke Uber Alles"! Feeewwingz! Terrorism! Think of the Children! Puppies and rainbows!
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>All you have to say is "On a site with a comments section
Yikes! We must shut it down at once! Because "Woke Uber Alles"! Feeewwingz! Terrorism! Think of the Children! Puppies and rainbows!
I didn't say anything should be shut down. Just that there's nothing particularly 'dumb' about Slashdot's comments. On apolitical stories that are otherwise news for nerds, they're often great.
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and you'll never guess... (Score:4, Informative)
what shitty clickbait headlines msmash can come up with next!
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and you'll never guess... what shitty clickbait headlines msmash can come up with next!
This one isn't a msmash; it's the actual headline from the New York Times article. The media is full of illiterate utter morons, from top to bottom.
While I'm not generally in favor of the death penalty, people that write "XXX. Then, YYY"-style headlines should be first against the wall when the revolution comes.
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This one isn't a msmash; it's the actual headline from the New York Times article.
That's not a defense. Slashdot historically makes its own headlines, so choosing to point to others just when it's convenient doesn't cut it. At best msmash probably thought "Oh I don't have to make a worse and more bullshit headline today, someone else already did my job for me"
Unless I'm misunderstanding, not truly virtual? (Score:3)
As someone else noted, Apple is making its bed with this draconian penny pinching, and they will get to lie in it when everybody just makes mobile friendly web apps for everything important instead of native apps that have to pay the Apple tax.
Re:Unless I'm misunderstanding, not truly virtual? (Score:5, Interesting)
They should do it anyhow, tax or no tax, for the following reasons:
* One version across all mobile platforms, or if it has multiple versions they're based on screen size and such rather than OS
* The client is always running the latest version. This greatly reduces problems tracking down bugs, because at least you know which version of the software is acting up.
* Instant bug fixes, no waiting for them to be pushed out to clients.
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Re: Unless I'm misunderstanding, not truly virtual (Score:2)
Heh. Due to lockdown, a service provider I use requested all clients to download a booking app, noting how a small footprint the app has. But it was quite slow in loading and used more bandwidth than what made sense for that app... Turns out it was a (inexpertly) wrapped web app. Thankfully, after registering, it supplied a URL, so now I use the web page directly and have uninstalled the app. User experience is better. Maybe they'll catch on with the PWA bandwaggon some time... In general I'm a fan of web a
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Not sure why you think the involvement of humans makes a difference. Apple charges when people sell services via apps on their App Store. They feel entitled to charge because the app store provides a ready made distribution and payment system, which devs would otherwise have to build for themselves. Obviously Apple also provides SDKs and other tooling to build nice apps too. Devs don't need to use any of that, but I don't see why Apple can't charge for what it provides.
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There is Google Play Store, Nokia and China and a bunch of others all have their own. If you're in the business of app distribution it's getting really hard to see which app store you're not listed on.
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Apple allows it as a legitimate way around the App Store rules and regulations. You can even put icons (bookmarks) on the launcher screen so you can have webapps appear as regular apps too. It's all still supported ever since the first release of iOS.
Apple added a bun
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Discovery, I'd imagine. If you can't find it in the app store, it doesn't exist.
I hate headlines like this (Score:4, Insightful)
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So no value to Apple's easy access to users? (Score:1, Offtopic)
It continues to surprise me that people complain about Apple taking a cut - for things that leverage the vast username Apple has built up, combined with the super easy path to collecting payment they provide.
I don't actually think 30% is high, at all, even if only for the fact that anyone buying whatever it is you are selling does not have to create an account or fill out CC details. I don't think people appreciate how much of a gating factor even just the billing address forms are to people completing a p
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It's not just access to Apple's billions of customers. It's access to the customer base who is most willing to pay for stuff. The reason Android developers have the largest customer base yet a teeny slice of the revenue pie is because Android users don't want to pay for stuff - or cannot afford to. If you want access to the clientele of the "Mercedes of smartphones" then pay the damned fee and stop your griping. Obviously Apple has customers worth paying for.
Re:So no value to Apple's easy access to users? (Score:4, Insightful)
"Obviously Apple has customers worth paying for."
Apple doesn't OWN those customers. What they are doing is a clear violation of antitrust law. Only the Republican leadership's resistance to holding businesses accountable for their actions (because they don't want the rules to apply to their pet businesses) prevents prosecution.
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Democrats have to be bought. Republicans don't have to be corrupted, they're already corrupt.
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I don't actually think 30% is high, at all
Actual average profit margin on goods and services: 10-15%. If Apple takes 30%, then that puts most businesses in the red unless they drastically raise prices.
So why not???? (Score:1)
If Apple takes 30%, then that puts most businesses in the red unless they drastically raise prices.
Yes, AND????
Other companies have done exactly that. They have higher prices for buying though Apple, than buying direct. So where's the problem?
I as a customer, still prefer to buy through Apple - especially for subscriptions, because I know I can control the subscription super easily, and drop at any time.
If I buy through some company website, invariably it is a huge hassle to cancel. Not to mention, I wo
30% covers operation of store, payment proc, etc (Score:2)
I don't actually think 30% is high, at all
Actual average profit margin on goods and services: 10-15%. If Apple takes 30%, ...
The fee and the profit margin are two different things. You know how those businesses make a profit margin of 10-15%, they charge a fee greater than 10-15%.
From that 30% Apple fee you have to subtract all the expenses for developing, maintaining and operating the App Store, and for hosting and payment processing for all the third parties, etc. Only after subtraction all such expenses do you get to the profit margin.
... then that puts most businesses in the red unless they drastically raise prices.
Uh, no. A profit margin is **profit**, so its not in the red. Other businesses need do no
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30% is insanely high, and these businesses' margins are low to begin with.
The *best* enterprise software salespeople in the world get 10-12% max, and that's with a human-intensive, traditional sales process including actual travel, many man-hours of labor, etc. Apple's shit is 100% automated with no human intervention saving stuffing numbers into a website, plus they pay an effective tax rate of near 0% due to all of their offshore tax shenanigans (versus your typical small business that takes it in the as
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30% is insanely high
As my message indicated, it's not high at all when you look at drop off rates for people actually taking shopping carts to completion. Then on top of that, all the other factors...
The *best* enterprise software salespeople in the world get 10-12% max
Exactly, and there you are not measuring in the vast infrastructure that makes the sales technically possible.
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You're completely forgetting the hundreds of staff that are used to check each one of those applications put on the store. There is some automation for sure, but people still have to spend time to check the apps, even the free ones. The paid apps are compensating a lot for the lack of commission on all the free ones. For this reason, I don't mind the 30% fee on app prices.
When it comes to subscriptions and in-app purchases though, that is fully aut
Re:So no value to Apple's easy access to users? (Score:4, Insightful)
But they are not "levering the username Apple has built up, combined with the super easy path to collecting payment they provide."
In fact they are doing the opposite. They are trying to avoid using the apple payment system. But they are not allowed to do that.
And as a developer, all I can say is that using Apples payment solution(Which is required) is extra work when you have a multi platform application, because you can use one payment system for all non apple, and then you have to use an other payment solution for iOS. Extra work which is only needed because apple don't allow other payment solutions then their own. Extra work for nothing
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Disproportionate Value (Score:5, Insightful)
The problem isn't that Apple deserves no cut, but that their pricing model doesn't match reality. Apple has legitimate costs from running the App Store that it needs to cover, like credit card fees, security reviews, bandwidth, developers to maintain the store, etc. And there is nothing wrong with it earning a little profit for the effort. Also for users, there is significant value in being able to manage subscriptions in one place with standard policies to avoid all the dark-patterns that often accompany recurring charges. So there is value here and Apple deserves to be paid for it.
When most of the sales were 99 cent songs or apps, a 30% cut made sense. That was not unrealistic given their costs, especially with how high CC fees can be for small purchases, and not out of line with retail overheads.
But when you start talking about applying that to services that are simply delivered through the app, it goes off the wheels. For example, there is no way that the services Apple is providing account for 30% of the value a Netflix subscription - think of all the work that went into making the content, let alone the massive infrastructure that Netflix maintains to distribute it and tell me that Apple's contribution is anything in comparison. Same for other services like the Bloomberg Terminal, and also more expensive one-time purchase apps, like $100 medical references. The value that Apple provides to a $100 app really isn't that much different than the value they provide to $1 app, but they collect 100 times as much for the former.
Apple rightfully has an exemption that Netflix qualifies for, but these exemptions are arbitrarily drawn and arbitrarily applied, resulting in many other business not qualifying them. The reality is that it is completely unfair for Apple to claim a percentage of services, when it's actual costs and delivered value are closer to constant per app (apart from CC fees). They need to stop this game of trying to define exceptions to their unfair pricing model, and instead just change their pricing model. Something like 30% of the first dollar, then 3% of the amount thereafter would easily cover their costs and be more fair to everyone involved.
What I am saying is - not disproportionate, at all (Score:1)
For example, there is no way that the services Apple is providing account for 30% of the value a Netflix subscription
There very much is. The ONLY reason I subscribe to HBO is because I can do so through Apple, where I can rely on being able to cancel easily, use a CC already set up, and also be able to use Apple devices to watch it. Even if APple's cut was 50%, HBO would still be getting more than they would otherwise because of the expansion of the number of people willing to subscribe through Apple syst
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Remind me what cut Apple is getting for all of the Google apps, Facebook, Twitter, or that random app you love that some friend of yours made and posted.
Their rates are set as they are because it is consistent and applies to everyone, whether you are Netfix or your neighbor down the street. Level playing field for all.
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Apple's costs for things like the Facebook app, Google app, etc. have to be close to nothing. They pay for hosting the app and bandwidth when users download the app, then what? Storage is cheap. Bandwidth is cheap. I'm sure Apple would rather eat that cost rather than lose popular free apps on their platform which would result in even more users fleeing from their walled garden. Netflix obviously got their exemption for similar reasons.
Besides, I'm sure the yearly $99 they collect from iOS developers m
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So what you're saying is that devices with locked-in software stores you're required to use should be treated like a utility? I agree. They've become a cornerstone of the economy, the way a company needs electricity and Internet service to run their business.
Regulate it, establish what their costs look like, allow them a market average profit of 10%, call it a day.
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If you find a mortgage via bankrate.com, they should get 30% of your mortgage payment?
If you choose a cell phone service based on clicking an affiliate ad link, the affiliate should get 30% of your monthly cell phone payments?
The 30% isn't some standard assessment for what Apple's contribution is to every transaction is worth. It's a shortcut, used to avoid having to go through the complex process of c [howstuffworks.com]
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So if you find a job through a headhunter service, they should be entitled to 30% of your salary?
If they manage ongoing aspects of my work, possibly. In fact were you not aware that headhunting agencies often get a huge fee?
Are YOU saying contracting firms should get 0% of the salary of contractors?
When this disconnect between percentage cut and actual value happens
It is only happening in your head. In practice, if the value were disproportionate people would not pay it. Some choose not to, but many do..
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I don't actually think 30% is high
I'm not saying that it should be 0%. But take the 30% argument and apply it to say a highway. Every time something you bought at the grocery store came via a highway, the owner of the highway gets 30% of the cut. Now someone might get into the "government build" or "taxes paid" etc, etc. And that's just less an argument for the 30% rate. 30% is a massive amount for what amounts to being the delivery boy and nothing more. I wouldn't pay my State a 30% cut for me buying a few cheese slices, even if the
Maffia Style (Score:2)
Oh, to be a middleman... (Score:3)
...and just collect rents on your position in the system.
Very similar, to inheriting a British estate (and a keen title, if possible) and just collect rents on what your forbears built.
Funny, I thought that "personal computing", sorry, thought that "the Internet", would eliminate "middlemen" and directly connect buyer and seller. Turns out that just making the original introduction between buyer and seller means you get to collect rent on their whole relationship, to the end of Time.
Well, people get tired of rent collectors eventually. In 1789, they chopped 30,000 heads off in France, just to get a fresh start with new middlemen. Here's to hoping we avoid that solution!
"Open Systems" was never about avoiding the $50 to buy the platform; it was about avoiding the *control* of that platform for endless further rent-seeking.
Terrible headline. Here's why that matters. (Score:2)
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Re: Terrible headline. Here's why that matters. (Score:2)
"Don't be too outraged, this is just another pathetic shit hole that's not really what it's claimed to be."
At least they didn't shut down the comments section because of "feelings", like so many other sites are doing.
Time to break out the antitrust hammer (Score:2)
And force Apple and Google to allow rival app stores on their devices.
New definition of anonymous (Score:2)
...according to a person close to ClassPass who spoke on the condition of anonymity for fear of upsetting Apple...
Yeah, no way Apple would guess it was somebody who worked for ClassPass.
If they wanted to retaliate, they would have no idea who to retaliate against. I wonder what retaliation would look like? A 31% cut?