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Apple Demands 30% of Everything!

Posted by geeknews at 4:43 PM on February 15, 2011

The Money Grab has begun. Apple today through its walled garden has thrown down the gauntlet saying you shall pay me 30% to pass through our gateway. Seriously the implications of today’s announcement must have companies like Netflix, Amazon and anyone else selling a product via their iPhone app wondering if they should be on their devices.

Apple has said pay up or get the hello out. After June 30th you cannot charge for anything unless you are willing to give Apple 30% of the proceeds. Most companies’ profit margins are under 10% and to think that Apple wants 30% is simply insane.

As a content provider who may someday sell access to some of my content. The implications of having to pay Apple 30% for the right to do so on their devices is a very steep percentage to pay.

So what’s next, will Apple demand a portion of adverting revenue running in the content. At this point no one should be surprised at anything this company will do to cash in and fatten their bank accounts.

Makes you want to go out and by an Android Device doesn’t it.

11 Comments

  1. From Jim at 5:28 pm on February 15, 2011

    No!

  2. From Michael Dell at 5:42 pm on February 15, 2011

    While I love my Macs (so far) I will be less likely to buy an iOS device then I was before. I will stick with Android.

  3. From Paul Sylvester at 4:01 am on February 16, 2011

    I have never really been an Apple Fan boy because of the Apple Taxes that they like to put on stuff. I much rather use Ubuntu or something like Android just because they’re more open and less likely to cost as much!

  4. From Daniel M. Clark at 6:43 am on February 16, 2011

    Apple’s a company, and the only – *only* – purpose to a company is to increase profits, right? We’re not talking about a non-profit or a charity, we’re talking about an old-fashioned, capitalist, we’re-here-to-make-money company, right?

    So why is it a problem when this for-profit company figures out a new revenue stream? The stockholders have to be dancing in the streets over this.

    “no one should be surprised at anything this company will do to cash in and fatten their bank accounts” – there’s nothing illegal or unethical about what they’re doing, and this kind of statement should be reserved for truly despicable acts, not just charging more than we think they should.

    Now, having said that, even though I think that this is the right move from a business perspective, it does suck for third parties, and down the line, consumers. Apple has successfully built up a user base of iOS users that is quite loyal, and if Netflix, for example, wants to stay on the device, they’re going to have to play ball. Apple has put them in a tough position, that’s for sure.

    But there’s a solution – all it takes is the top, say, ten of these third parties to band together and yank their apps off the platform. iOS is nothing without the apps, and if enough of them jump ship in protest over this pricing scheme, Apple will back off. The problem is that nobody has yet tried to fight back.

  5. From teemark at 7:20 am on February 16, 2011

    I’m pretty sure it won’t happen, but I would love to see the bigger content providers (ie: Amazon, Sony, Netflix, Pandora) draw line in the sand and pull their products. It’d be interesting to see if Apple’s pride and all-consuming need to control everything would let them back down and compromise with the content providers.
    You know that if Microsoft did something like this they would already be in front of a judge!

  6. From geeknews at 8:36 am on February 16, 2011

    Daniel

    They have a right to make money, but not rob companies. As the Wall Street Journal says, this will likely lead to a Anti Trust lawsuit.

    Todd.

  7. From Daniel M. Clark at 9:11 am on February 16, 2011

    I can’t agree with the idea that they’re robbing anyone. Is 30% too high? Yes. I can’t argue that because it is clearly too high a percentage for them to take. But it’s not robbery. Companies are free to play along or not. Nobody is forcing them to pay.

    Microsoft was in trouble for a lot of things, and I wouldn’t be surprised to see Google face the same kind of action that MS went through in the 90′s as they invade more and more industries that they have no business being in. But Apple charging more for in-app purchases than other companies might like? Come on. Any competent judge should look at that case and say, “fine, don’t pay it. Take your app to the Android platform and be done with it. Nobody is forcing you to be on iOS.”

    Do you really want the government telling companies how much they can charge for their products and services? Unless we’re talking about the commons, and we’re not remotely, the government should have no say in this.

  8. From John Knights at 11:39 am on February 16, 2011

    WRONG WRONG WRONG

    “Our philosophy is simple—when Apple brings a new subscriber to the app, Apple earns a 30 percent share; when the publisher brings an existing or new subscriber to the app, the publisher keeps 100 percent and Apple earns nothing,” said Steve Jobs, Apple’s CEO

    So what is so bad about that? If you do all your own work you get to keep everything – and Apple have distributed and borne all of the costs of your profits for nothing (they lose money) If they bring people in through adverts that they have paid for or whatever they get a cut.

    Let’s not forget that is NOT their profit as costs have to come out of that. If you sold something on behalf of somebody else in any other arena you would demand a cut right? and your first consideration would be what it is costing you to run your operation and how much it has cost you to make that sale.

    Amazon, Valve (Steam) and many others charge in or around 30% but that doesn’t bother people because it’s not Apple. As soon as Apple do anything for better or worse they are the bad guys. For being good at running their business.

    I don’t see anybody rushing to sell content via Google, I wonder if that’s because the return on advertising is paltry and most things are pirated anyway…

  9. From Anthony at 12:10 pm on February 16, 2011

    The only way to change their greedy behavior is to vote with your wallet. Check out http://www.mylastiphone.com and pass along the message!

  10. From Me at 2:44 pm on February 16, 2011

    As far as a move it is a bad idea, whether or not it is apple, to charge that much of a percentage (or a percentage at all) to purchase something within an application just because you are hosting the store that sells the application. I can see the mentality of charging a percentage of the sale of the app (as your are providing the store front), but you are providing no service when it comes to the in app purchases. You are pretty much charging just because you can legally and it will make you money.

  11. From John Knights at 1:36 am on February 17, 2011

    What service does any shop really provide besides stocking the item and giving you a means to pay for it?

    The end user is not paying any more for the product, as the developer will charge what they can for it (or they will if they have any business sense at all) and Apple have a proven track record of increasing sales of promoted products.

    Everybody is still ignoring the fact that developers who bring in people from the outside for the purchase get 100% of the revenue so it’s not like they have no choice.

    They are also ignoring my comments about Valve who have been doing this for years. Turns out they are actually more profitable than Apple too. Gabe Newell is doing a lot of things right…