Apple’s current battle with regulators and software vendors around the world over the fees in the App Store (and the compulsion to use it on iPhone, iPad, Apple Watch and Apple TV) might not have had to be if the company’s management were on its Head of Marketing had heard – pretty much a decade ago. That emerges from emails that emerged as part of the process between the iPhone manufacturer and Epic Games.
According to this, Phil Schiller, meanwhile resigned as Senior Vice President of Worldwide Marketing and only works as an “Apple Fellow” (who, however, still has a great influence), suggested the commission rate in the App Store in an email in July 2011 to reduce. “Food for thought” is the headline of the message that was addressed directly to service boss Eddy Cue and CEO Steve Jobs, who died a few months later.
Reduction from “position of strength”
The E-mail asks the question of whether Apple should continue to use the still current 70/30 split between app developers and corporations. He is a “firm supporter” of the regulation – also that it applies to all app stores. However, he does not believe that the commission will “remain unchanged forever”. He believes that “one day there will be such a big challenge from another platform” – be it Google with a special offer or a web-based model – that Apple will have to act.
A reduction in the contribution should come from a “position of strength”, continued Schiller, and that must be used “to our advantage as much as possible”. Interestingly, Schiller gives specific numbers. “Just as a thought, once we make more than $ 1 billion a year in profits from the App Store, that’s enough to think about.” Then you can reduce it to about 75/25 or 80/20. “I know this is controversial, but I’m just trying to set it up as a different way of looking at the size of the business.”
Apple’s app store is highly profitable
In fact, Apple has exceeded billions in profits from the App Store for many years. The software store is extremely profitable for the group. The services business of which he is part is growing year after year, with sales amounting to almost 17 billion US dollars in the last quarter.
Apple reduced the rate from 30 to 15 percent for users who use a subscription for more than a year; Furthermore, there are now 15 percent for app providers with sales that are a maximum of one million dollars. Antitrust authorities and competition watchdogs from all over the world are currently taking action against Apple – mainly due to the fact that the company is forcing developers into its app store. However, with a lower commission, this compulsion would certainly be more justifiable – if the management had listened to Schiller.