Much of the marketing around Apple’s new iPad Pro has been centered on its ability to run professional grade software and the variety of creativity apps it supports. But for smaller developers of pro software, the iPad Pro may present more of a quandary than a new computing platform.
The reason? Despite the new tablet’s processing power and capabilities, it’s still running on mobile software – and developers aren’t totally convinced the economic incentives exist in the App Store for iOS. In short, they feel they wouldn’t be able to charge users the amounts they normally would for a version of their software that runs on a desktop.
It’s a problem that exists not only around the iPad Pro, but mobile software development in general, and highlights the very real challenges that smaller software companies face when deciding which software platforms to prioritize – especially as mobile tablets and PCs converge.
This is a huge problem for closed, mobile-first devices like Apple’s iPad Pro. Large companies like Adobe can run comprehensive cloud infrastructures and fund the burden of mobile development with the sales of proper software. Smaller developers, however, cannot. This problem doesn’t exist on competitors like the Surface Pro, because they run a traditional, proper desktop.
After the starry eyes of the initial gold rush subsided, it became clear centralised application stores wreaked havoc in the software industry, and caused a spiraling race to the bottom. Sadly, it seems like Apple has no answer to this problem for its iPad Pro.
This has been an issue (of perception) for a LONG time in the software world. For example, when I was working on the Amiga, there was a video processing program that was sold for $50, and they complained to us that sales were bad. We informed them that at that price, no one would take them seriously, so they raised their price to $500 and sold a bunch. So then they ported it to SGI and raised the price to $5000 and sold a ton. Many professionals (or at least their bosses) assume that cheap == bad. As long as Apple sells programs through the App Store, they have an image as cheap, so they won’t be selling to many professionals.
The exception is open source. I don’t think anyone assumes that Apache or Nginx are bad because they don’t cost money.
they may not, but they assume the likes of Libre Office or GIMP are bad.
And compared to commercial offerings they are quite bad.
Oh my god, there is no software for the big new iPad, it’s doomed! It’s worthless! No one should buy it! It’s a total failure as a product! …..etc etc etc.
The thing has been out for a week and here we go with the articles about how awful it is, and the ONLY reason is because developers have not or have not had time yet to come out with software for the thing that takes advantage of the Pencil or any of the new device’s features. Ridiculous. Get back to me a year from now if there is no software that takes advantage of its features and THEN we can visit about whether or not it is a failure. Till then there is NO reason to be all doom & gloom, sheesh.
Nobody is calling it a failure in this article. You’re building a strawman.
Apple photocopied Redmond’s Surface (with WinRT/iOS no less) with the iPad Pro. They should have photocopied the Surface Book and put OS X on there.
One problem is if you price your app at $10, Apple gets $3, at $100, $30.
If Tim Cook believes in a graduated income tax, maybe he should graduate the Apple Tax.
The other part is there’s a lot of experimentation in the OpenSource world, and all of that is closed to Apple. They could – if they wanted to – create a sandbox where you could load and run anything from github. But it would destroy their model.
Shades of Microsoft when they hacked their code to put a logic bomb for Digital Research DRDOS in their 3.1 beta, and to make Netscape a “jarring experience”.
That is the problem with a prison – you can call it a “walled garden”, but if you aren’t free to enter or leave with whatever, it is a Prison.
Postscript (Adobe?) – Another problem is that the hardware is expensive. Usually either the hardware OR the software is a loss-leader. With Apple I have to pay through the nose to be admitted into the sacred app store, and then pay again (and again, and again) for the apps.
Edited 2015-11-19 23:41 UTC
For people who want to read more,
https://en.wikipedia.org/wiki/AARD_code
The fixed percentage is nothing new. Auctioneers have been doing this for a very long time.
If I want to sell something at Auction I would expect to pay between 15-20% + tax for doing so.
If I buy something at Auction mostly I would expect to pay between 10-20% Buyers premium.
At least with apple the tax is only on one side and is levied at the same level for everyone.
The question about the level of the tax is another issue but I geel it is about right.
So where is a problem? If you want 100, just rise the price a little.
30% is actually pretty low compared to other platforms.
Sadly, with many of the desirable new features of Windows, such as .NET Native, restricted to Store Apps, they seem determined in the long run to move in this direction.
You keep banging this drum Thom but have never explained why App Store inherently means low prices.
Yes there are lots of $1 apps out there. And guess what, most of them are worth about that much.
Nothing is stopping anyone from charging a lot of money for a program on the app store. And in fact many people do: Here’s a quite popular one (featured many times by Apple as an example of assistive technology) for $300 https://itunes.apple.com/ca/app/proloquo2go-symbol-based-aac/id30836…
So what’s stopping any developer from charging $50 for their app on the app store? Nothing of course. If people won’t pay $50 it’s because it’s not worth $50. The developers need to figure out how to make their apps equal to or superior to the desktop equivalents, and not just a feature reduced version. Then they can charge equivalent prices.
Edited 2015-11-20 05:09 UTC
leos,
Yes, but do you understand why it’s not worth $50? It’s because of the redundancies produced by having a single global app store. In local markets, you may have been competing against one or two competitors. Simply having a global app store creates new competition, perhaps the competitors are now in the hundreds or thousands. This directly impacts the balance of supply and demand, and therefor prices.
What the “race to the bottom” means is that something they would have paid $50 for might only be worth $1-5 in a central app store.
You may debate whether globalization is good/bad/whatever, but this should answer your question as to why a global app store inherently means lower prices.
Edited 2015-11-20 07:03 UTC
Not even close. What’s the difference between software on the internet for Windows and an App Store? Both are identical global markets. By your logic Photoshop should cost $10 because it’s competing on a global market.
leos,
That’s not my logic. It would be a mistake for anyone to claim globalization doesn’t produce some winners. When economies combine (which is what happens in globalization), those at the top become more powerful than before, however the rest have nowhere to go but down. As Thom already indicated, it’s smaller developers who suffer.
When there are more stores, there are more opportunities to be in the “top 20” for a category. When there’s just one massive store, the rewards for being at the top will be greater, but there are fewer opportunities overall and the majority necessarily get pushed out of the top even though users will still converge on the top.
It might help to think of what happens in corporate mergers. Many at the top will get increased pay, etc, but often what happens to employees at the bottom is that they get laid off. This process has little to do with their performance, but rather is that when two separately functioning groups combine into one larger group, it results in redundancies. The demand for the available supply of employees goes down as a direct consequence of the merger.
This doesn’t imply any malice on the part of those who are responsible, but it is never the less an emergent property that takes place when smaller markets give way to bigger ones.
$3 for a program is nothing. It does not pay for the smallest team of underpayed programmers necessary for the smallest game.
But customers have been pushed by Apple into thinking that software is worthless, and that they deserve perfection just because. Simply look at the venom that is spilled in the app store comments from people that have payed even nothing at all. Like with knickers or socks or t-shirts or jeans or screwdrivers or pliers, we expect the world to be laid at our feet, don’t give a damn if that requires workers in conditions of near slavery, and are outraged if what we get for two cents is, predictably, garbage.
It is but impossible to sell good stuff for a reasonable price: no one will bother; there are hundreds of thousands of alternatives to test at $3, or for free. It seems like the only way to make good money is with pay-as-yo-go schemes, where you turn your program into a beggar that endlessly asks for more money.
Edited 2015-11-20 09:21 UTC
How did Apple do that? It is the developers setting the price, so the developers decided to lower the price. The only thing here is that Apple forced a single, globally visible market for software, and lots of people are willing to take a loss initially in the hopes that they will sell enough “copies”.
Apple really has very little to do with it….
I own a app development company and there is one big issue with the App Store. There are too many apps on the store. Compared to the initial years of the app store, the app store is no longer a marketing tool to promote your app. Which means you have to set up your own expensive marketing. And Apple (and Google as well) is still charging 30%, for just hosting your app, which is basically a rip off.
From business point of view I fail to see the difference between app stores and any other type of stores.
When one sells shirts, how to place them on the distribution channels, make customers pick them vs the 100 other ones in the same store, pay for exposure,….
Shirts were just an example, pick any product you like.
Hi,
The first difference is that physical goods cost more for transport, storage, etc; and there’s often a risk of a shop getting stuck with stock they can’t/don’t sell. This is why mark-up of 20% or more is often reasonable for physical goods. For downloads the cost (to the shop) is more like “half a fart per MiB” and a mark-up of 10% would be hard to justify.
The second difference is that normal products are typically sold by multiple competing shops. This helps to keep the shop’s own mark-up reasonable – if one shop is selling an item for $130 and another shop is selling the exact same item for $115, then consumers can shop around. If application developers are forced to use the same “monopoly shop” there’s nothing to keep that shop’s mark-up sane.
– Brendan
A better comparison might be the Mac store. You have three choices for distribution on a Mac: The store and its 30% cut, a Retail store and its cut of x%, or an alternative digital distribution platform.
Those that have name recognition and a marketing budget, are really moving towards their own digital distribution ( think adobe cloud). They can distribute their own apps for less than a %30 cut.
For large companies, physical stores suck, the app store sucks.
For smaller companies? I’m not quite sure. I think they are also rolling their own digital distribution. Not sure how many physical stores carry mac software these days.
So, while the cut of the app store might be the same as a physical store. I think the market would prefer a non app store digital platform. If that were possible on ios.
D’oh – double post (sorry).
Edited 2015-11-20 13:57 UTC
So basically with app stores software now has to deal with slotting. http://www.justice.gov/atr/economics-slotting-contracts
It’s a standard practice in retail shelf space. Its now apparent in app stores. Prices will have to increase to compensate with the increase marketing and presence.
On the other hand the market is way bigger. There are several orders of magnitude more potential customers now than at the beginning.
Distributing, updating, selling (collecting money), validating all the recent and previous machines and OS’s – I’d argue that these tasks cost much more than 30% of revenue.
Apple Store is far from perfect, several issues have persisted for years but don’t discount the services they do offer.
You can send your app to a company and have it for sale worldwide to millions of devices in only a few steps. The users trust the store and expect product to be stable and as advertised.
Oh yeah, these users charge things from their mobile to their charge card all day and night. Way more than any other platform.
To get into this marketplace and have all of your distribution and collection handled costs you 30%. Take it or leave it, Apple has shareholders, if it really upsets you talk to them.
Developers still price things on value and need. If your dev team needs that client, you’ll pay what you think is fair compared to other tools.
You can’t love open source and laugh at closed source’s “race to the bottom” – it’s caused mainly by open source.
20 years ago it was discovered there was free software that could do what the paid stuff did. It was called open source. It might not have been better overall but it’s value proposition might be.
Just like now. Can the $2 app do what the $50 one can? Can the $50 one do what the $500 one can? Every purchaser has to weight the ever changing market.
Edited 2015-11-20 14:46 UTC
ezraz,
Think of your salary and then imagine that 30% was automatically taken off the top, sent into coffers of the wealthiest corps on the planet simply because they control access to your users. It’s hugely profitable for them because you put in all the real work. Apple’s staff by comparison might spend 5-10 minutes reviewing your app.
As for transaction processing, most merchant accounts/paypal charge around 5%, some less if you shop around. Been there done that, it’s certainly not worth 30% of your income.
As for advertising, apple store isn’t what is used to be. If you are a nobody and want your app to be visible you are going to have to pay for advertising it on top of apple’s 30% cut.
You have no contractual rights with apple, they can ban an app at any time just because they feel it competes with their own services, like apple pay.
On top of that the race to the bottom in apple’s app store is in full force. Sometimes apps get negative reviews simply because they’re not free.
Developers are not paying 30% fees because the services they receive in return are particularly compelling, they pay those fees because apple bans competing stores and maintain a monopoly on IOS users. Who can blame Apple, why compete when you can just ban competitors. I think it’s unfortunate though that we’ve become so reliant on huge corporations who don’t have our interests at heart.
I think we can reasonably agree that the App Store has some pretty strong cons along with its pros. The developer’s concerns in the article are applicable in many distribution channels, not just the App Store, but the App Store makes a lot of them much more acute.
Take the 30% off the top that Apple charges for its services. The vast majority of that is pure profit. The cost of storage for the average app of roughly 30 MB is less than 1 US cent. The cost of bandwidth is also negligible as a percentage of the over all bandwidth costs until you get into the realm of the block buster apps. That leaves the costs of labor involved for curation (of dubious quality considering its capricious nature), and server support people. Taken as a percentage for the average application even a $3 profit on a $10 app is still nearly all profit. The math suggests that this is more of Apple’s well known charging a premium for its name and the “privilege” of reaching the iOS crowd. Even if it’s “industry standard” that doesn’t mean it’s gauged to encourage developers.
Another problem is the sheer number of applications on the App Store. As a consumer, if I don’t know exactly what I’m looking for even in the Play store, I have an Android phone rather than iPhone, I’m not likely to pick out the great apps over the bad ones, and less likely to spend money on one that I have never heard of. Notoriety is important and neither Play nor App Store gives you any inherent notoriety beyond already established brand names (Adobe, Microsoft, Google, Apple, etc). In light of that, the 30% tax is looking even more of a barrier if I were looking at putting my package on App Store. Information overload is a big problem.
Knockoffs. People say competition is a good thing, and in a perfect world, that’s true. But this isn’t a perfect world and copyright infringement and fraud occur. Curation doesn’t catch most of it even on App Store. When a lone developer pours his frustration (yes, program development can be frustrating), expertise, love and care into a program only to have it ripped off by global con artists and Chinese copy cats, there’s much less incentive on further development or new apps from the same developer. It’s also prohibitively expensive, if not impossible to bring legal proceedings even in the most egregious cases of infringement.
Apple’s app store is the digital equivalent of WalMart.
Apple doesn’t need to care about the limitations of their App Store model because they aren’t dependent on selling software to make money. I doubt this will ever change.
Possible solution? Make another app store and call it the “Pro Shop”. It can have a fee for joining (to distinguish it from the regular app store), variable percentage based on price, and minimum app price of (example) $100.
Large companies like Adobe can run comprehensive cloud infrastructures and fund the burden of mobile development with the sales of proper software. Smaller developers, however, cannot
Are you sure Adobe will develop software for the iPad Pro hoping that Adobe’s existing customers will pay again a hefty price for the license of using a product on an iPad Pro version? Or Would Adobe would like to give it for free for their existing customers, thus adding burden to their software development cycle not to mention support?
Its a confusing mess.
allanregistos,
…as that is a product Apple doesn’t actually want to create. i.e. a proper touch enabled computer tablet hybrid (a la MS Surface Pro) – and of course with either a touch focus variant of OS X proper (either with a low power Intel x86 Core i5/7 variant — OR a new Arm build of this touch-heavy variant of OS X).
Or of course a hybrid system with docked/undocked modes – nearly exactly as per MS Surface Pro – with iOS tablet mode and OS X Desktop mode, and ideally, a third mode – OS X “tablet mode”.
Of course they won’t do this,, because this would be a company that actually really did care more about they customers than milk their crop. Such companies perhaps exist – but they’re probably a small minority, and they’re certainly not Apple.
The above – or any variant of that theme that opens up the tablet cum computer to non-App store programs – is the REAL “iPad PRO”.
This current iThing is still a toy with pretensions. An arguably useful toy for sure. But they still aren’t showing any real respect to their userbase. It’s pretty shitty behaviour actually if your honest enough to view it like it really is.
The day iOS accepts non app store programme installations is the day they stop treating their users like little (rich) children. I’d have a lot more respect for them if this occurred.
Ps – if security is a concern, by all means have Pro Mode require user to tick a box that states “lower security Advanced mode – do not choose if you are not an Advanced user”. That all they need to offer to not be digital Slave Owners. (slightly sorry for the inflammatory language there – but it is what it is)
Edited 2015-11-22 20:03 UTC