Tim Cook addressed a number of important challenges that Apple has been facing recently regarding the Epic Games lawsuit, App Store’s commissions, its review process, and why Prime Video only pays 15% commission to Apple, during an interview with Kara Swisher of The New York Times.
85% of developers don’t pay any App Store commission as per Tim Cook
When Epic Games’ lawsuit was discussed, Tim Cook spoke about the App Store guidelines. Epic had been following the rules for years, and suddenly decided that they will not follow them anymore. They pulled a deceitful move and hid their payment mechanism from Apple’s reviewers, and later switched it on from a server-side change. Cook said that he feels good about Apple’s stance in the lawsuit.
Addressing the elephant in the room that Apple only takes 15% cut from Amazon and whether App Store’s 30% commission rule should be changed, Cook said that App Store rules are not set in stone, and have changed over time. He said that the vast majority of people don’t pay any commission, which is around 85%. The vast majority of developers already comply with Apple’s requirements for 15% commission, while for subscription models, developers only pay 15% after the second year onwards. He said that the 15% commission for Amazon Prime Video subscriptions also applied to Netflix and other services since they are video streaming services.
When asked why there are no other stores on iPhone, Tim Cook said that sideloading will break the privacy and security model of iOS. Somebody has to keep control and curate, and for iOS, it is Apple and that’s why users have trust and confidence in the App Store. Apple has helped build an economy of half a trillion dollars per year and takes very little commission for running the App Store. The App Store is not an economic miracle, and more than a million users in the United States are selling globally, which makes it one of the fastest-growing job segments.
App Store sees 100,000 app review applications per week, and 40,000 are rejected because they don’t follow the guidelines. If Apple removed its curation, the App Store would not be the same as it is right now.
The complete podcast episode is embedded below.