back to article The iPhone App Store - a classic protection racket

"Listen up, friend. We take care of the community. We all protect each other. You wanna set up shop in this neighborhood, you're gonna need some protection, you know what I'm sayin'? I mean, you got a real nice business here, nice store, nice people. It'd be a shame if something were to happen to it. Fire, robbery, these things …

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Fail and Fail and You

Feel free to show me any other retail channel that lets the supplier/Developer keep 70% of the retail price.

Thats why lots of Developers are on record saying they like the app store, because it makes them more money per sale than any other mobile app market.

Sure, apple *could* increae it in the future, but they also *could* allow direct downlaods at some point - see I can speculate on pointless possibilities too.

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Anonymous Coward

Alternative view:

Just taking a few seconds (less than thirty in fact) to point out some of the more glaring faults in this article:

1. "There is nowhere else to go" - apart from any other phone OS of course. No one forces a developer to deliver to the iPhone.

2. In the Symbian / Windows mobile world you also have a choice - pay even more of a vig to Handandgo or (in fact - as well as) watching forums fill with hacked versions of your application.

3. How does this story sit along side recent stories about developers making $250K from pretty simple iPhone applications? They've obviously benefited from a virtually piracy free marketplace.

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Stop

Protection? What?

What an absurd accusation. I'm no great fan of the App Store but at the end of the day Apple provide the hosting, handle the payments, provide links directly onto every iPhone and its owner's desktop...it's not a bad rate, IMO. Certainly not something which should be compared to the fucking mob.

No, you can't take your business elsewhere, but that's your problem at the end of the day. You want to develop for the iPhone, you have to pay Apple for the privelege. How's that so different from any non-OSS development model? Yeah, OK, they've 'got you by the balls' as it were, but those people making large amounts through the App Store will not react well to a rate increase - and Apple NEEDS those devs.

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Why keep complaining about Apple?

95% of people who write for or comment on The Register don't like Apple and yet stories keep appearing about them and how anyone who buys Apple kit is some mindless idiot who desperately wants to throw their money away for anything that is shiny.

Why not write and comment about stuff you like and that interests you instead? You're far more likely to be enthusiastic, rational and unbiased about it.

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Jobs Horns

Why did they become Apple developers?

I'm sorry but you'd have to be pretty naive not to see something like this coming from a company that thrive on vendor lock-in. Admittedly, they have nice platforms -- but when you make a deal with the devil you expect to get shafted in the end.

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Pirate

Nice metaphor...

...but I got the point after reading less than half of the article. I'd have liked to see this develop into a discussion of if, how and when this ridiculous monopoly might be broken.

As a potential fanboi (three macs, an iPod, iPhone and an Apple TV), I put up with the restrictions on my phone because it does everything I need it to. My Apple TV has already been hacked (bigger hard drive, more codecs) because of the underlying problem with Apple as a company: protectionism.

The Mac is fairly open because in this day and age, if it were closed, nobody would buy it. iPods play MPEG3 tunes because if they didn't, they wouldn't sell. the iPhone and Apple TV are classic Apple in that the company has built in a revenue stream that continues giving (should that be taking?) long after the credit card bill for the original purchase has been paid.

Apple TV is a good piece of kit that has been crippled, it will only play Apple-sourced video, or videos re-encoded into Apple's format. Knowing that Joe Public won't know how to do the latter they rest easy knowing that every Apple TV sold is another addition to the revenue stream. My answer is to crack the box and install additional CODECs, thereby turning it into a proper media player. In the absence of competition, Apple is likely to get away with its stance on Apple TV, it sells to fanbois, people who don't know better and to people like me who are happy to crack it.

The iPhone has been set up in a similar vein, with Apple establishing a revenue stream for which it has to do very little now the phone is out there in the wild. Apple exercises a fairly inconsistent set of criteria in deciding whether somebody's hard graft should be allowed to be sold through the store, and provides no other avenues to distribute to the majority of iPhone users who won't be unlocking their phone - ever.

I'm not a lawyer but I can't help wonder exactly how long they can go on doing this before enough 'little guys' get together to challenge either or both of these restrictions?

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Jobs Halo

70% of a big pie > 100% of a tiny one

I'm all for bashing Apple where it is appropriate to do so (let's face it there are plenty of other aspects of their business & practices that are open to criticism) but in this instance I don't think the App Store is as big an issue as the article makes out.

For one thing whilst the 30% charge has nothing to do with "system upkeep" it isn't a wholly unreasonable price to pay given what you are given access to as a developer. Think about it: you publish an app and it's available at the press of an icon to a worldwide market - instantly. There's no real need for publicity, Google Adwords or any other setup costs. The ease and speed at which apps can be installed via the App Store translates directly to more people trying out your apps on a whim.

A friend of mine who developed an app for the store which I didn't consider particularly ground-breaking is making quite a healthy sum of money from it (I believe it is priced at around £2). When I last spoke to him he told me he had about 120 downloads. Now, imagine publishing an app on a website - first off you have all of the aggro of setting up payment gateways to take payments (which will take their own fees from you), then you have to hope that people will even come across your website to buy it (advertising costs), and that when they do find your app they don't go off looking for a cracked copy somewhere. Does that headache add up to 30% revenue? Quite possibly.

Bottom line - I'd much rather have 70% of a huge pie than 100% of a small one, or more accurately - 70% of a known-to-be-huge pie than 100% of a possibly-tending-towards-zero sized pie.

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Pure speculation.. nothing more... move along now...

Why would Apple raise the percentage split in their favour? All it would end up doing is pushing developers towards developing for Android-based phones.

Ok, at the moment there's only 1 Android phone and the Marketplace is a Ghost Town... but it ain't gonna be that way forever (presumably).

Plus, I haven't heard too many iPhone developers complaining about the money. Some have gone on record to publicly state the ridiculous amounts of dosh they're bringing in, after just a few months of sales...

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Heart

Oh, do give over

As amusingly-written as this piece is, I can't agree with it.

As a developer for mobile devices, I'd say that the the App Store is a fantastic set-up. Sure, developing for Win Mobile or Android may be less restricted, but the App Store delivers one thing they don't - a captive audience. There are so many sites pushing apps for WM that you stand little chance of being seen amongst all the dross. Also, the people who use those devices tend to be the more IT-savvy ones, and it's exactly that sort of user who are less inclined to pay for stuff because they know how to get it for "free". The same will go for Android, I suspect - I don't anticipate Danielle from the typing pool getting all excited over the Gphone.

The iPhone, however much you hate to admit it, is different. First off, people QUEUED for this thing! It's the Wii of the phone world - people who normally don't care about phones suddenly want this one, and nothing else will do. Then you've got the App Store itself - people are already used to buying tracks through iTunes, and now it's a simple step to get them buying apps too. Since the app store is built right in to iTunes, it's such a simple process that anyone can do it; try getting your mum to buy and install an app on WM.

If I put out a WM app for, say, 99p (and I'm talking something that's worth buying, not a "flashlight"), the chances of anyone buying it are minimal - and if they did, the hassle of handling the sale isn't really worth it. The same app on iTunes, though, will sell. I also don't have to worry about anything once I've submitted it - and the 30% cut is well worth it, because I'll take 70% of 99p over 70% of nothing any day.

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Jobs Horns

crApple

Apple must be the worst tie-in company in the world. All this crap about "it just works out of the box" should read "you are now tied-in to bloody expensive hardware & at-a-price support".

Having tried to make the leap to Mac I have made an about turn - Apple kit is not worth the money and you will end up paying a hell lot more TCO. Computers for people who cannot install a set of drivers without logging a support call!

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Dead Vulture

Slow week for fail?

Ted, swear more next week, then we won't notice how badly you're struggling to make any kind of cogent point.

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Dead Vulture

Free apps...

You also fail to mention the fact that if a developer wants the world to use his app for free Apple will quite happily host it, distribute it, heck even advertise it to their huge customer base FOR FREE.

Quite a few companies are making use of this and as a result essentially getting free advertising (Facebook, Ebay etc). Smaller companies can do likewise and many have used this route with the old "Lite" edition being free and customers paying for the "full" version. All seems like a pretty good system to me.

Where else could a private developer knock up an application and have it broadcast to EVERY user of a platform, FOR FREE.

Hardly the work of the mob.

Seriously El Reg, get over the iPhone hatred, we know you like to stir up the comments but at the end of the day its getting more than a little dull and repetitive.

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@Chad H.

I'm a huge supporter of bricks-and-mortar stores, but your argument flies in the face of software sales (especially for smallish markets) in the internet age (last 10-15 years):

In most cases, developers can *choose* whether they want to sell their product direct (thus keeping more of the sales) or to leverage the software-sales equivalent of a shopping mall: online stores that specialise in the sale of software, thus gaining lots more exposure to the target market at the cost of some percentage of sales.

Apple's novel approach is to use the pre-internet age sales model in the internet age, enforced through hardware lock-in.

It will work as long as consumers don't care - and that can be quite a long time.

Or, of course, until someone files suit against apple for anti-competitive behaviour...

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You're Having a Laugh!

Are you f**king joking me? Many other mobile platforms are more expensive to develop and deploy for. Apple take a fraction for handling all of the hosting, credit card processing and distribution.

I'd love to be on the iPhone App Store once I've figured out how to program the bloody thing :-)

70% of retail in my pocket for every sale.... that's really really good compared to other channels. How much do you think the software companies get of most boxed software price?

Stop trying to bash Apple and do some decent investigative journalism. At least compare like to like.

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I gave up reading this article...

... when I realised there wasn't going to be any fucking swearing. It's not Ted Fucking Dziuba without the fucking swearing, fucking is it?

Cockbite.

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Stop

While the sun shines

Come on!

Whilst its good to maintain a healthy level of cynicism and critique of the big computer firms, I think this article goes to far.

If the market can bare Apple taking 30% good luck to them. In the current economic climate they’ll need a little help whilst consumers cut back on re-assuringly expensive laptops and designer desktop computers.

As it has been pointed out the successful developers have also been doing quite well, and show me a consumer that complains when they get a good piece of software for relatively little money.

Its interesting that they can get away with such a high margin though. If you look at consoles they reportedly get less than 10% for each game sold, although I’m not sure if that figure goes up for “hosted” games, e.g. ones on XBOX Live for example.

There are other areas where the app store may more reasonably come in for criticism, e.g. the way some developers have been accused of "drip feeding" small upgrades to milk their consumers ... but these might be growing pains and you can't have a go at Apple for having a good go

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Not really a very good metaphor

Is the mob really the best example of an organisation that levies a percentage tax in return for providing an infrastructure, which has the power to change that percentage unilaterally? I would have thought it was the taxman.

I think the Anonymous Coward above me has it right:

"Seriously El Reg, get over the iPhone hatred, we know you like to stir up the comments but at the end of the day its getting more than a little dull and repetitive."

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Flame

Apple itself needs to be jailbroken.

I should run what ever I want on my phone and have a firewall on it to prevent any third party from messing around my phone remotely.

What I have on my ihone is nobodys business. Not Jobs or Balmer or Bill Gates or the little kids next door have no right to my iphone. I pay to use it and if you touch my data then you deserve to be hurt badly.

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Stop

happy jesus phone owner now that I've jailbroken

My apps dont now come from Apple app store , but the big boss.

He hosts all the apps, and gets a little bit of money from advertisement. System works really well and I would say even better than the app store. My fellow jesus phone owners in the office are quite jealous.

Cutting reliance on the pos that is iTunes is worth it alone, let alone the ability to sync my music over wi-fi when I walk through the front door at home. I could do it via cellular network but Im a pikey on PAYG without a data tariff.

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can see the point but bad analogy

i can see what your tring to get a but your slightly off course here.

Firstly wheres the threat :-

any Proection racket has a threat as you pointed out "nice shop nice people a shame if something were to happen to it " i don't see a threat from apple here a closer analogy would be a highstreet if i own every shop if this street and rent them to you a 30% of your daily income.

then the issue becomes one of survival

if i rent two shops one to joe bloggs news agents and one to tesco's so all the new shops open do great business i'm coining money in. but then the shops get old and people move on. if i increase rent to 50% two things could happen to either shop

first tesco's

they still making money so except the 50% rent as the cost of doing business and carry on

or more likely they give up there lease and move on as a big company they don't need your shop so sod off

second joe blogs

is forced to except as he has no other shops and scraps by on the 50% he keeps. or goes out of business and i lose that rent.

so apple need to make sure they keep everybody happy or they high street will end up empty (i already know some people who have given up they iphone as it's toy and not a phone )

non lets discuss the threat that both apple and google could use (more google as people can develop out side there store).

both have a back door into peoples phone the threat could come into play in googles case in the form of use are app store or any of your apps downloaded we will remove from users phones. now this sounds like a great threat untill users then news agency hear about it then the company in question gets done for unfair business practises.

my question is how is apple with it's our hardware must use are somewhere and visa versa got guilty of unfair business practises but that's a debate for another time

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Anonymous Coward

Whatever.

Ted, usually you're cynicism is refreshing, but this actually reads more like the 'revelation' of one of the freetards you usually mock - an expression of fake shock, and a bunch of 'what ifs'.

It's not exactly news, and it's the model that's long been used in console development - you know, the place where all the games developers fled too, because the home computer market just wasn't a profitable place to be.

Contrary to the line fed us by the freetards, the market seems to show that closed platform development is a lot safer / more profitable than open platform development, even with the ability to chip consoles to play back-ups.

Of course, if you're coming from a desktop software perspective, it's quite a high cut compared to using Kagi or a similar service, but it's nothing compared to most publishing/retail agreements, and I think people are entering into this with their eyes open.

As you say, developers follow the customers. But they also follow the opportunity to make money.

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Jailbreak

Not only can you buy a wonderful WIndows Mobile, S60 or Android phone instead, but also both the original and the 3G iPhone can be jailbroken very easily, allowing developer and customer to bypass the app store completely. But it's clear neither the users nor the developers want this alternative.

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Dead Vulture

*sigh*

I know I shouldn't bite considering this is one of El Reg's poorer efforts at trying to sensationalise a non-issue, but I just can't help myself.

Before the iPhone App Store, mobile developers had to pay sites like Handango or individual cell provider portals anywhere from 40% to 70% for the privilege of being listed (Microsoft charged Windows Mobile developers almost $500 and 50% of sales for example). However, in many cases, the developer had to handle the credit card transaction fees themselves, often the web hosting fees, security certificate signing ($1,000 per app in some cases) and advertising etc. In the end, very few consumers actually used these sites (it was all too hard and unfriendly – ever tried going through the hoops to download and install an app on a Windows Mobile phone?) and developers had to charge large prices to try and get enough income to make it all worthwhile.

http://www.appleinsider.com/articles/08/08/06/inside_iphone_2_0_the_new_iphone_app_store.html

Once their apps were made available, because of the high costs, their apps would often instantly be pirated.

Then there were the problems of having to target thousands of different hardware models and even OSes (Symbian is fragmented into 3 different and incompatible systems for example) and usually end up writing for the lowest common denominator (this is going to be a problem with Android as well).

With the App Store, Apple covers all costs: web hosting, credit card transaction fees, there is no need to spend $10,000 or more setting up with VISA or similar, and Apple’s built-in Fairplay DRM and decent pricing model means their software is just not pirated.

Customers get far cheaper prices than any other mobile app store, are protected from malware, can install each purchased app on up to 5 Macs or PCs (so no need to pirate copies for family members), and developers are making a killing. If a developer wants to put their app up for free and make money on advertising or through other means Apple charges zero, zip, nada, nothing (doesn’t sound like the Mafia to me?).

Because of all these advantages for both developers and customers, both are flocking to the store. App Store purchases over the first 1 month:

$30 million spread over 60 million downloads.

http://valleywag.com/5035431/jobs-iphone-app-sales-hit-30-million-in-a-month

Extrapolate that out to the 200 million apps Apple says were downloaded by Oct 8, we're looking at $100 million dollars income, $70 million of which is going to developers. Not bad for the first 3 months of the App Store's existence.

Apple was experiencing about one million dollars worth of App Store purchases per day during the first month and that figure is of course just growing with more and more iPhone (and iPod Touch) owners coming on board every day.

As a result, Apple has wiped all other mobile app stores off the map as in a whole year the competition combined only managed 150 million downloads.

So I’m sorry, the iTunes App Store is not the Mafia – it is more akin to Robin Hood, robbing from the rich (cell provider walled gardens and Microsoft) and giving to the poor (developers and consumers).

-Mart

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Meanwhile, in the real world...

The steady stream of blinkered, ill-thought-out anti-Apple crap on the Register has become truly tedious. Has anyone at the Reg actually worked in the industry for a living for any period of time?

I write software for a living (on Windows) - I'd be prepared to provide someone with 30% of the list price in return for them practically preventing piracy of my app, handling all of the distribution (including the hosting etc), all the payment processing and (to a degree) advertising. Under the circumstances, I reckon Apple's approach to all this is reasonably fair. My one criticism would be that really the App Store needs some way of 'returning' apps that don't do what they are supposed to do - some kind of trial system perhaps, although the low price of most of the apps does offset this.

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Huh?

What evidence do you have for Apple increasing the "vig" as you so intelligently put it? Please tell.

As a non-geek I am very happy with the status-quo; some security that malware will not be installed on my phone coupled with the remarkable convenience of the App Store. This is just what the vast majority of end users are looking for and I'll wager that most developers are happy with the split too.

Ted, if you need to create a story to sell, surely you can do better than this.

Regards,

Richard.

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Anonymous Coward

Stange analogy

I think it would go like this....

Welcome to the neighborhood. As you know I developed this area. It didn't even exist before I arrived. Here's the deal. You can choose to set up shop yourself way out in the 'burbs where the roads ain't even built yet. Pay for your own sucky little store front, run your own site. Do all the accounting. Be nowhere near where all the big boys operate. Have clients wondering why they should take a chance at giving you their credit card number. Question the quality of what you sell. But you get to keep all the dough for yourself and probably spend half or more on trying to advertise against companies way bigger than you....

OR

Give me 30% of the revenue, you pick the price. I ain't gonna force a price on you and if it's free... i'll pick up the tab on all the costs of marketing and distribution. BTW, did I mention that I set up the store front for you and It'll be as nice as any other player no matter how big. You can ride on my reputation for service, quality, accessibility and user-friendliness. Add to that you get instant access to a huge world-wide market instead of just the boonies. Oh and as for "should we trust this guy with our CC number", hey! I already got their number and they've shopped with me billions of times without a hitch and now they think you are me... how's that for building customer trust in your business!

Yah it sucks that to do business in my neighborhood you gotta go through me but hey... life could be worse... you could've spent as much money developing on another platform, get charged a larger cut by Handango and reach fewer clients. Oh! did I mention I already sold over 200,000,000 apps in just 90 days! :-)

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An iPhone developer's point of view

There are plenty of negative things you can say about Apple if you want, but the App store is a brilliant idea that was superbly executed.

Apple's 30% is a great deal. I don't have to devote even one second to maintaining the software and systems that run my storefront. It's like if I wanted to lease a high street store, and the people I'm leasing to offered to provide all the employees and advertising as well, so I could just sit at home, provide the products and take the profits.

Now there are some practices I wish they would change. For instance, they don't pay you on sales from any territory until they exceed US$250. On the other hand, on my own I would be completely unable to handle the complexities of foreign sales.

I don't think Apple's going to increase the cut. Why? Because their deals with record companies and others have remained stable over time. They seem to start a financial arrangement and stick to it. I think they are more interested in creating a stable marketplace where everyone makes money than sucking up every dollar that's on the table.

D

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Dead Vulture

Whoops...

Oops, I meant to write that each app purchased from the Apple App Store can be installed on up to 5 iPhones or iPod Touches. (not "up to up to 5 Macs or PCs"!)

-Mart

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Paris Hilton

Who's iPhone is it?

Does it belong to the customer or to Apple?

If I buy an iPhone I'd like to be the judge of what I could stick on it.

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Dead Vulture

The basis of this article is speculation that Apple will raise costs a lot

So, the basis of your problem is IF Apple starts raising their 30% and putting the squeeze on developers?

Without that supposition, you wouldn't even have an article here! You built a whole article around something that doesn't exist or probably won't happen.

Amazing! A better article might have been to suppose Steve Jobs started murdering school children. Just think if that happened! You could probably have a whole series of articles talking about the conundrum that would create for both Apple users and Developers and the resulting market shakeup.

If you are going to make up a situation in an effort to justify writing an article, can't you come up with anything more fanciful?

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@David H Dennis

I hope other developers have gone into this with open eyes too.

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Anonymous Coward

See what you've done now, moaning minnies?

without his superswearing powers, Ted is rendered fail incarnate.

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RE: Stange analogy

Hmm, not a good analogy. Yes the App Store is the nice, ready, well prepared, fully serviced retail park you describe - but the alternative is out in the 'burbs (as you put it) but where it's illegal for people to go. Not just a case of out of the way, but people have to break the law to get there. There's this big wall around the iPhone township - you've got to get some tools and break through to visit anywhere else (like you store in the 'burbs).

Same with the iPhone - got a choice of using the App Store, or relying on people who have broken 'the law' (ie their licencing agreements etc) in order to get to your out of town store.

If the App Store is a great as it's claimed, then there's no harm in allowing free speech - people will use it because of it's benefits. But to prevent any competition is like the story says, touching on the protection racket.

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@Justin Case

Then don't buy an iPhone. Problem solved.

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Alert

Rates actually more than the mob?

My father used to work for NatWest. At a directors lunch in the early seventies, there was a discussion about why their credit cards weren't taking off. It was pointed out that at 29% interest, they were being under cut by the Mob who only charged 25%...

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Unhappy

Hey, this is no fun!

Who censored all the bad words out of my Failandyou?

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You clearly have no idea

No problems, market it , sell it, collect the money (all real world activities in commerce) and then see how it nets out at. You clearly live in some form of retro communist vacuum.

Judging buy the number of apps for sale (which grows at an amazing rate per day), quite a few people seem it get the general concept. Lets not even begin to ponder the fact that the humble user finds the whole experience of being able to find all these goodies in a single spot with a constant purchasing experience kind of nice !

Nope lets find and collect all the pieces of the Berlin wall lying in peoples trophy cabinets and reassemble it so we can go back to the Utopia that once was and Nationalise the Appstore comrade.

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Bravo

Well done folks, comments were better than the article

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Flame

Wtf crap is this?

For heaven's sake who decided to publish this crap?

As everyone making mobile software - he'll let's broaden it to all commercial software - 30% is bloody amazing.

Oh no they might raise their cut. Please, grow up and get over yourself.

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Open Systems and Apple.

See, I always thought the point of an open system was being able to do what one wants with it, where 'one' is the user, not the vendor.

By that token, very few of Apple's products can be considered 'open'. If the user wants to install something their mate wrote while high on caffeine, is that possible without Apple's approval? What if the user's friends want the same?

And where is the line drawn between 'friends' and 'potential customers of a vendor lock-in scheme'?

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Flame

"Sticking with the tradition of being the savior that nobody asked for"

Now THAT'S what I call a zinger.

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Anonymous Coward

At least check the market and compare

Others have posted about this and their analysis is more complete, and they show Apple was the least expensive (30% has credit card, and other expenses) and security for the user and developer (no piracy of your product, credit card problems, which is a plus to startups), and a lot of exposure, try having packing, distribution, inventory, (old version box obsolescence) and brick and mortar margins into account on your analysis, and then compare this to THE CRIME YOU DESCRIBE. You can see from your poor point of view that: You can calculate your price add apple's cut and sell for that.

Your only point is APPLE Filters what they sell and there is no other options (YET) to sell your product, on the first point there should improvement as the market stabilizes and apple learns, but try to go to any store and force them to sell your product and they can refuse, look at game console markets and other PDA's.

You try to give a CRIMINAL PERSPECTIVE to this market and you don't see it is flourishing, new players are having great sales and they focus on the development. AND There are things to improve without resorting to OFFENSIVE OPINIONS. I see no pros or contras on the complete app store (which you probably didn't look at from all point of views, at least form your article)

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good analogy, misses the point

It is true that Apple is creating a monopoly for the iPhone, and theoretically they can raise the price at any time. On the other hand, we see from the iTunes store other products that Apple tends not to raise the price of a product, even when pressured by the content provider. So it equivocal whether they would risk the iPhone franchise by forcing higher prices on software given that they have not risked the iPod market by raising prices on music.

Of course it ti snot clear that comparing the iPhone and Google markets is valid. The iPhone directly generates money for Apple, so they can afford to promote free Apps. Any Android based phone probably only indirectly benefits Google by increasing the base to which they can push ads. It is probably not in their interest to support a global store. Also, since it still seems like phones are going to be connected to cell phone companies, it is unclear whether all phones are going to allow all Apps. It is possible that some phone company will modify android, which they are allowed to do, to only work with approved content on the cell phone store.

So while the Apple strategy is worrisome, and those that have a problem with it should not buy or develop for iPhone, it is too early to say that the Google strategy is going to give an overall advantage to developers or consumers.

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Heart

There are a lot of people missing the point

Most of the comments seem to be missing the point of this article...

Sure the Apple store is well setup, and sure the current (70/30) split still leaves plenty of room for the developers to make a profit.

The problem is that Apple prevents the developers from selling via any other channel. The developers can't sell directly and no one else can setup an iPhone App store and offer a competing rate (say 80/20). And if Apple decided it wanted to change the ration and take 70% for itself and give only 30% back to the developers, the only choices the developers would have are:

- watch their profits shrink

- throw all their hard work out the window.

Hardly an open market is it?

On top of this, Apple also gets to decide what applications are allowed to be sold. They are already blocking applications from smaller developers that compete with applications from their "preferred" partners, completely blocking companies from selling legitimate products.

Anyone who thinks this is fair and equitable (let alone legal) has Mr Jobs so far up their *ss their vision is distorted

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Re: There are a lot of people missing the point

Anonymous Coward said:

"Most of the comments seem to be missing the point of this article"

I'm afraid you're missing the point of most of the comments.

"The problem is that Apple prevents the developers from selling via any other channel"

On the contrary, Apple is not preventing developers from using a different channel. There is nothing stopping them from developing and selling their apps on Android Marketplace or Microsoft MarketPlace, RIM, Symbian etc. You see Apple is not a monopoly like Microsoft, there are quite a number of other viable mobile platforms out there for developers to target if they want to do something Apple or the carriers restrict.

The point with developing for the iPhone is the attraction for customers and developers alike that it is a one-stop-shop. This is the major selling point and heck it certainly seems to be working damn well. Only half a dozen apps have fallen foul of Apple’s restrictions out of the 6,000 apps available on the store, so that’s not a bad record.

“And if Apple decided it wanted to change the ration and take 70% for itself and give only 30% back to the developers”

I’m sorry but everyone knows there is no way Apple would do this. Apple sells hardware not software. The iTunes Music Store proves that in no uncertain terms (5 billion songs sold and tracks are still 99c each no matter how the Labels scream and complain).

“Anyone who thinks this is fair and equitable (let alone legal) has Mr Jobs so far up their *ss their vision is distorted”

Of course it is fair and legal and you’re the one with the distorted vision. The iPhone is not the only smartphone platform in the market. Do you think it is legal that Microsoft is the gatekeeper of all software on the Xbox platform (or the Zune platform) or Nintendo on the Wii and GB platforms or Sony on the PS etc? Of course it is – they are specific business plans and if developers don’t like it, they go to a different platform (desktop PC gaming for example).

Now if the iPhone had say 90% of the smartphone market, then you would have a case for potentially monopolistic practices. That is why MS was successfully prosecuted for abusing its monopoly position in stamping out competition on desktop PCs.

-Mart

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@Anonymous Coward

Thank f**k someone sees the point of this article. Well put, AC.

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Re: There are a lot of people missing the point

Anonymous Coward said:

"On top of this, Apple also gets to decide what applications are allowed to be sold. They are already blocking applications from smaller developers that compete with applications from their "preferred" partners, completely blocking companies from selling legitimate products."

By the way, I should have said I do agree that it is not good that Apple is blocking some apps that appear to compete with some of their apps such as the podcasting app and the email app. Mind you, they did allow about 3 other email apps, so perhaps their reason that the rejected email one was badly coded was in fact legitimate.

The podcasting app may have been rejected because of concerns with bandwidth usage, something that would have been prompted by the carriers. Other mobile app platforms will also have to contend with this.

However, the dropping of the NDA was an excellent first in loosening the reigns as the iPhone/iPod Touch App Store matures, as was only allowing reviews of apps by people who actually purchased those apps, so here’s hoping other quirks and issues will also be ironed out as time goes by.

-Mart

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So whats the problem?

I have had to rebuild my computer many times after some untested application found its way onto my PC. I like the fact that all apps are given a tough review. My phone is important to me. Want to put software on my primary communications device which is my single tether with the rest of the world? Run it past the app store gods and see if it flies.

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Dead Vulture

Fail and Fail

It takes some doing to get most of the Reg readership actually defending Apple against (yet another) sideswipe at the iPhone, great work Ted!

Of course the article is complete pox. Apple = the mob doesn't work when that mob simply don't exist in Symbian Boulevard, or Android Street, or Windows Square. The Apple Appstore is much more like a private shopping arcade or mall - the shop owners aren't paying the mob for protection, they're simply paying rent, and in return the mall owner makes sure the mall is a nice place to be and attracts enough punters. If a better mall opens next door, or Apple don't maintain theirs properly, or indeed put the rent up too high, then it's actually the developers who have all the power to up sticks and move elsewhere, and make some other mall (or smartphone platform) a success.

I've owned four different Symbian and Windows Mobile handsets over the last 4-5 years, and installed many different apps on all of them. I never paid a penny for them, partly because it was so easy not to, and partly because most of them weren't worth the high prices being asked anyway (a result of all the other overheads that the Appstore takes away). Since getting my iPhone on saturday I've already spent a crisp tenner on a couple of very nice, good value apps, and I don't expect to stop their either. As a consumer, the Appstore gives me much better value than the likes of Handango and the rest can offer, along with much easier access to both free and paid apps all in one place, and automatic updates to installed apps too - what's not to like? For the developers, meanwhile, it's already meant 70% of £10 going into their pockets, as opposed to 100% of absolutely nothing.

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