Changes finally came into play last week – but not everyone is happy…
Apple and its supposed Apple tax in their App Store has been making headlines for quite some time now.
The timing of these latest changes and updates to payment methods applied to apps and in-app purchases follows the Supreme Court’s decision not to hear Apple and Epic’s appeals over the Epic Games v. Apple ruling, which required Apple to discontinue its anti-steering rules.
There have been headline reductions in what developers have to pay to Apple and as users, we are now for the first time given the option to buy apps externally from Apple’s App Store – but as ever, not everything is quite as straightforward as it would first appear.
Also the timing of these changes which have not pleased many developers is not perfect. Apple is about to launch Vision Pro and ideally would love to have developers onside tripping over themselves to have apps ready for the device when it launches on 2nd February – but sadly that is not the case.
Three of the most popular streaming sites – Netflix, YouTube and Spotify made it clear over the past few days that they would not be launching visionOS dedicated apps for the headset or even enabling their iPad apps to run on Apple Vision Pro.
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Too little too late
When Apple launched both the iPhone & iPad developers were queuing around the block to make sure that their apps were ready and waiting. On those occasions, the sheer volume of users made it appealing and worth their while.
But with Vision Pro being such an unknown and niche product this time around Apple has not found the going so easy. Although Apple has stated there will be up to 1 million apps available out of the gate, the best guess is that most of these will simply be modified versions of the iPad apps rather than dedicated visionOS apps.
Developing apps does not come cheap and many developers it seems are not willing to take the risk of spending $1000s on working on visionOS apps for a product that will sell in such small volumes.
Even if Apple manages to hit its forecast of shipping 400,000 units this year that is still a relatively tiny number from which to gain meaningful feedback on new apps.
So what are these changes to the App Store that Apple has implemented – how do they actually shake down?
Apple will now support third-party payments for iPhone apps which on the face of it is what app developers and legislators have been crying out for – but scratching the surface it soon becomes clear that it’s not quite as straightforward as it first sounds.
Developers can now add links in their apps to their websites – but crucially the apps won’t be any cheaper – although there is a workaround which I’ll tell you about in a bit.
Apple will now take only 27% rather than the previous 30% (or 12% instead of 15% for the smaller developers) but it will then be the responsibility of those developers to offer customer support and payment security for all digital content purchased directly and from outside Apples App Store. In the support document sent to developers, Apple said:
Apple is charging a commission on digital purchases initiated within seven days from the link out, as described below. This will not capture all transactions that Apple has facilitated through the App Store but is a reasonable means to account for the substantial value Apple provides developers, including in facilitating linked transactions.
You’ve read that correctly – there is a seven-day window that Apple is implementing after which you will be able to purchase apps cheaper but it’s pretty messy.
If you follow a link and purchase an app seven days after you first click on it they will not be subjected to the 27% or 15% taxes I mentioned earlier so the apps will be cheaper.
As you know apps tend to be very impulsive purchases – you want it there and then but to qualify for the discount you’d have to wait seven days.
Apple has put this hurdle in the way intentionally.
Developers will have to work out ways to keep customers onboard and wanting to complete the purchase a week after clicking the link. It’s all going to be a bit clunky with automated reminder emails being sent out or calendar prompts.
Much in the same way that Apple was seen to toe the line with becoming USB-C compliant, they have done just enough with this set of regulation changes to appease the lawmakers, but can you honestly see yourself waiting a seven-day grace period to save yourself a few dollars?
Needless to say, there have been some quite angry responses to this story from two of Apple longest longest-standing enemies – Epic and Spotify.
War of words
Epic’s founder and CEO, Tim Sweeney called the 27 per cent fee “anti-competitive,” and went on to criticise Apple for the scare tactics they’ll use when a user decides to venture out of the walled garden to purchase an app directly.
He also said that Epic would be contesting Apple’s bad-faith compliance plan in District Court.
Sweeney was not alone in speaking out about these new App Store rules and fees either with Daniel Ek, the CEO of Spotify being quick to weigh in with his thoughts calling them ‘outrageous’. Ek insists that they fly in the face of attempts by the U.S. to introduce more competition to the tech sector.
Where Apple is saying that all developers will benefit from the changes to the App Store Spotify has said;
Once again, Apple has demonstrated that they will stop at nothing to protect the profits they exact on the backs of developers and consumers under their app store monopoly. Their latest move in the U.S. – imposing a 27% fee for transactions made outside of an app on a developer’s website is outrageous and flies in the face of the court’s efforts to enable greater competition and user choice.”
In the run-up to the release of Vision Pro Apple could probably have done with sailing in calmer waters – but somehow they seem to enjoy courting a little spicy controversy – and as importantly being seen not to roll over for anyone.
Reading in-between the lines that is what is going on in the war with Masimo over the blood oxygen sensor in the Apple Watch. They could afford to buy Masimo outright – but that would be seen as a loss.
As Masimo, Epic & Spotify know, pick a fight with Apple at your peril.
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