“If Apple Inc. is lucky, a 10-page complaint posted on social media by a Chinese law firm might be a minor annoyance resulting in little more than some bad press,” Tim Culpan writes for Bloomberg Gadfly. “However… Apple’s app store business model may be in danger.”
“The lawyers represent around 20 app developers who are alleging that Apple abuses its dominant position, and they’ve filed complaints to two key regulators,” Culpan writes. “One grievance is that the U.S. company failed to provide a full Chinese version of its app store terms and conditions. While perhaps not spurious, Apple can easily rectify this problem and may even face a rap-on-the-knuckles fine. Far more serious is the developers’ claim that Apple’s 30 percent cut of in-app transactions is excessive.”
“Should regulators there decide that a 30 percent cut — especially on lucrative in-app purchases — is excessive or unlawful, then the implications may be felt globally,” Culpan writes. “If it wants to protect its new Fortune 100 business, Apple needs to be sure this annoyance in China disappears quietly.”
Read more in the full article here.
MacDailyNews Take: In the full article, Culpan writes, “Cook himself boasts that the company garners twice the revenue of the Google Play store, despite iOS having around one-sixth the global share,” without noting that Google charges the same in-app transaction fees, making it sound like only Apple is charging such fees.
Cook’s “boast” isn’t about what Culpan thinks it is and/or wants his readers to think it is. Cook is merely highlighting the FACT that Apple’s iOS users are worth 12X what those who settle for Android are worth (2X the revenue on 1/6th of the market share) because Apple’s iOS users have disposable income and the proven will to spend it. That makes Apple’s App Store much more valuable to developers. If anything, Apple should be charging 12X what Google charges for in-app transactions, but they aren’t. If anything, developers – those who even bother with Android apps – should be complaining about Google’s excessive in-app transaction fees.
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