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Despegaryesterday at 5:19 PM2 repliesview on HN

>Yes, obviously they want to make as much money as possible, and this is at odds with consumer interests.

It's not at odds with consumer interests at all. It's at odds with developer interests.

It would actually cost consumers more if Apple couldn't make any money from developers directly because they'd try to make it up by charging more for Apple products.

Developers might prefer to shift the burden to consumers's wallets instead of their own, but overall this model is beneficial for everyone involved. It is also better for the environment because directly making money from developers incentivizes them to support old hardware for as long as possible.


Replies

aksttoday at 5:43 AM

That's just not how that works, how much consumers will pay is a binding constraint. Apple isn't subsiding their phone with developer fees and distributing their below marginal cost. Apple is almost certainly charging well above its marginal costs and is already charging the revenue maximising price, it's not willingly leaving money on the table.

Not entirely how you've made formed this connection but respectively it sounds like you've confused several things here.

xp84yesterday at 5:36 PM

> because they'd try to make it up by charging more for Apple products. > Developers might prefer to shift the burden to consumers's wallets

I vigorously disagree with this. It sounds very confused about economics, specifically prices.

Apple, as every market actor does, charges the absolute maximum price the market will bear for their products and not a penny less. They cannot "make up" any money that comes from unrelated parties (such as their Google payola for search, or their casino games for children IAP revenue) by raising product prices. If they could raise their product prices and have that be profit-positive, they would have done it yesterday.

They could raise prices on phones to make up for a hypothetical "free iCloud+," because the same consumers are the other party in both those transactions so presumably many people would see that the more expensive phone justifies free iCloud services.

Apple doesn't set its prices by saying "OK, we need exactly 83 billion dollars in net income this year, so given that our products cost us 233 billion dollars to make and we have 54 billion dollars in expenses, we need 383 billion in revenue, so now let's set prices of each product to target this."

That $83 billion in net income is just the number they are able to make last year with the prices being what the market would bear. Trying to increase prices to hold it there when a downfall in other revenue happens would depress sales.

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