About | ACP | Buy | Industry Watch | Learning Curve | News | Products | Search
Home » Industry Watch

WaPo Dunking Apple

Not another inconsequential knuckle rap.

Get It

Try It

CUPERTINO/WASHINGTON (Rixstep) — The DOJ and the FTC might be silent for the moment but Washington Post staff writer Rob Pegoraro isn't - he's come out with a series of biting attacks on Apple's 'app store' politics.

An Unkind Cut

'The phrase ''30 percent'' now amounts to fighting words in the media and gadget industries', wrote Pegoraro on 19 February.

And it's a problem, explains Pegoraro, because Apple won't offer one-click buying as an option but as a requirement. In one fell swoop, Apple grab 30% of corporate revenues. (TIME already opted out.) Nobody's going outside the Apple corral to buy from a supplier when the price inside according to agreement must be at least as good or better.

No External Links

But it's worse still, says Pegoraro: Apple won't even allow publishers to provide external links to their own publishing services. And worse still: for Apple won't tell publishers who their customers are. Only Steve Jobs knows and Jobs is only a go-between, a monkey in the middle. Apple annex a publisher's business and then charge them 30% for the privilege, says Pegoraro.

Money Mover

Apple move money for others and not much more. Fees for moving money tend to hover around 2%, Pegoraro reminds his readers.

Other money movers seem to be following suit but the other players don't like it. Elle and Popular Science will play along for now but TIME and Rhapsody don't like it, both having either yanked their apps or planning on doing so.

One Pass

Google countered immediately with a system called One Pass that works across several platforms - Google take only 10%. 'It's difficult to regard Apple's extortionate arrangement as a benefit to anybody but Apple', writes Pegoraro.


'How greedy is that 30 percent commission?' asks Pegoraro in another article of the computer hardware company that, in an OEM industry with paper thin margins, reputedly runs a markup of 60% or more. Pegoraro goes on to give several examples.

  • 'The check-cashing place a few blocks from my house charges a 2 percent fee.'
  • 'Walmart charges a flat $3 fee to cash checks of up to $1,000.'
  • ''PayPal's rates to receive funds max out at 2.9 percent plus 30 cents. The same maximum rate applies at Google Checkout.
  • 'Square ships an iPhone app that lets you take credit card payments in the field; for that high-tech convenience, the San Francisco firm charges at most 3.5 percent plus 15 cents.'
  • 'Real estate agents usually charge a 6 percent commission, which you can sometimes negotiate for less.'
  • 'At Kagi, a small software store I've used to buy Mac shareware over the years, developers pay a maximum of 8.74 percent of a transaction plus 75 cents.'
  • 'If you auction off something on eBay, the site will keep 9 percent of its selling price - up to a $50 cap.'

And this is still about publishing and doesn't reach into the broader topic of software licensing and 'flipping the switch'.

Tap tap tap.

Our philosophy is simple: when Apple brings a new subscriber to the app, Apple earns a 30 percent share. Yo.
 - Steve Jobs
Jobs' quote evokes a rooster taking credit for the sun rising.
 - Rob Pegoraro
Apple doesn't come to this debate with a history of upstanding behaviour.
 - Rob Pegoraro
Handing over 30 cents of every subscription dollar to Apple amounts to economic suicide.
 - Rob Pegoraro
You have to jump out of the system, tear down the safety gates, peel away the layers of abstraction that the computer provides for the vast majority of people who don't want to know how it all works. It's about using the Copy ][+ sector editor to learn how the disk operating system boots, then modifying it so the computer makes a sound every time it reads a sector from the disk. Or displaying a graphical splash screen on startup before it lists the disk catalog and takes you to that BASIC prompt. Or copying a myriad of wondrous commands from the Beagle Bros. Peeks & Pokes Chart and trying to figure out what the fuck I had just done. Just for the hell of it. Because it was fun. Because it scared my parents. Because I absolutely had to know how it all worked.
 - Mark Pilgrim Tinkerer's Sunset

See Also
Washington Post: Apple demands subscription revenue from publishers
Washington Post: Apple's taking 30 percent of app store subscriptions is an unkind cut

Red Hat Diaries: Apple's Mistake
Industry Watch: Steve's a Bad Bad Boy (Again)
Industry Watch: Mac Developer Program Update
Red Hat Diaries: The Steve Gambit (As Predicted)
Industry Watch: Steve Jobs to App Store for Mac: 'Nope'

WSJ Online: Regulators Eye Apple Anew
Reuters: US regulators probe Apple subscription plan
Businessweek: US Said to Examine New Apple Service for Violations
Telegraph: Apple's new subscription service catches anti-trust regulator's eye

About | ACP | Buy | Industry Watch | Learning Curve | News | Products | Search
Copyright © Rixstep. All rights reserved.