Apple should reduce the cut
The courtroom battle between Apple and Epic Games is an answer to a bigger case
In the past few years, Apple has been questioned on it’s App Store purchase cuts then and now. According to the App Developers Apple takes too much from them.
But on the other hand, Apple claims that they have allowed the developers to reach the huge audiences, that they would never have imagined.
According to Apple the charges are completely justified.
Before the digital revolution, developers had to sell the games via distributors who used to take a cut of 50% or above. These distributors would then mass-produce the disks for the developers and send them over to their distributor network.
Then came Apple, 2007 the year when everything changed for the industry. Steve Jobs took everything over to the internet via what’s now popularly known as App Store.
The first online software marketplace.
In the beginning, Jobs demanded a 30% cut from the developers to offer them a platform to reach thousands of users and to store the content on the servers. These servers need maintenance, hence the fee.
But with the growing smartphone markets and Apple selling millions of devices each year, the iOS user base is increasing. Due to such factors, last year Apple generated around $15 Billion from App Store alone. But ended up only spending $600 million on server fee.
This way Apple is gaining a lot more revenue than what it claims to be required to maintain their services.
Today Apple already makes a huge profit throughout the range of products and services it offers. They do not need to take the 30% cut on in-App purchases to provide the App Store services. Even if Apple takes half, they will easily be able to maintain the servers and moreover, still generate decent profits.
This, not a cut that I am recommending, Apple has actually agreed to allow Amazon to continue with a reduced cut on the App Store.
Now Epic has joined hands with Spotify, and called out other companies as well. In the past, Apple has successfully defended their rights to take the cut over the apps and still continues at 30%. But this time around, when the major developers are all going against Apple the results might be different.
The Jury may even call out Apple to remove the developer cut at all and allow direct payments to the developer. But, Apple reluctantly just defends their numbers.
To grow further and stay relevant to the young age developers. I know many aspiring developers who have absolutely wonderful apps on the Android store but are not able to get to the App Store due to the 30% transaction fee set up by Apple.
Now we all know that Apple is vesting a lot in its ecosystem and shifting the focus towards becoming a full services based company, they would love to have more and more people locked into the Apple ecosystem and make them stay.
Lowering the transaction fee!! Is the only way to get more developers on board and create a more comprehensive and user-friendly environment for iOS users to thrive in.
