Apple’s Mac App Store: Will developers pay?

By on Oct 20, 2010 at 4:11 PM
Opinions October 20, 2010

Today, at Apple’s “Back to the Mac” media event, company CEO Steve Jobs announced that within the next 90 days Apple would be opening a desktop application store; modeled after the very successful mobile store currently utilized by iOS devices. The desktop application store will provide an app catalog, automatic updates, and will allow users to install purchased software on any Mac they own. Along with having the same look, feel, and features as its mobile counterpart, the Mac App Store will also have the same revenue-sharing model; 70% of revenue will go to developers, 30% of revenue will go to Apple. This got us thinking: will developers pay? Hit the jump to see our take on the developer’s conundrum.

When you think about the iOS App Store, the choice for developers is pretty simple. The iOS App Store is the only conventional way to get your iOS-native code onto an iDevice (outside of jailbreaking) and access the millions of end-users currently using Apple’s mobile OS. It literally is, for better or worse, the only game in town. Desktop application development is, however, much different. Most desktop computer users are accustomed to visiting a company’s website or third-party retailers to look for software. This is done, everyday, by millions and millions of Mac users and it often doesn’t cost developers a dime. So what is the value-add for developers who decide to utilize the Mac App Store? In our estimation it is all about exposure.

If you’ve ever used iOS for more than a month, you’ve probably ended up buying an application that, without the App Store, you would not have known existed. iOS applications, splayed-out in an organized format, allows users to easily scour hundreds of apps in minutes buying some they need… and some they don’t. Apple’s Mac App Store could be a boom for shareware developers on its OS X platform. Applications like Pixelmator, Transmit, and Mailplane — which are excellent shareware apps made by smaller companies — would literally be “included” with every Mac. Normally, end-users would have to launch fairly specific Google queries, or know what they are looking for, to stumble across such great, smaller applications. The Mac App Store will allow people to instinctively and impulsively purchase applications by just entering a password.

Now, the likelihood of seeing Microsoft’s Office Suite — which retails for over $200 — on the Mac App Store is, in our opinion, pretty slim; we don’t see large software companies wanting to let Apple in on their revenue stream. But we’re pretty sure this isn’t exactly who Apple is targeting here.

If you’re a developer we’re interested in hearing from you. Would you sacrifice 30% of your application’s revenue to know that your app will be included in a catalog bundled on every Mac sold? Or does the thought of someone else making profits from your code turn you off. Let us know your thoughts in the comments.

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  • Steve

    The retail / distribution markup is easily 30% for most PC / Mac software. This is a no brainer. Publicity, bandwidth, and merchant processing fees almost make it worth it. And yes Office will be on there also.

    • Eric

      It is no where near 30%, except for software that is sold off the shelves! For digital purchase the overhead of selling, advertising and distributing is very low. In fact it can be nearly 0% if you rely solely on word of mouth which is very powerful in the social media environment today. I think this is ridiculous, they expect to take 30% of the profit margins from the developer? They are crazy, I would NEVER put my software up on a site that would charge me 30%, and most payment processing don’t even remotely come close to this amount. Even if I do spend an absurd amount on advertising for my product, its not directly related to the amount I sell, while this would be, so you lose 30% of your profit margin even if you do VERY well in selling. This is very much different if you bought ad space because you could spend 20k on ads, and make that all back because you aren’t losing a percentage on each sale as you would through the app store for each and every single sell.

  • Hockey88

    Today, 95% of the applications I use (mostly business) are on-demand software or cloud based applications. Updating and upgrading applications are a thing of the past via an app store.

    • Jkr

      But if you look at the iOS app store, it’s not really a business type deal, apple really isnt focusing on business with their products, it’s rare that you even see a Mac in the business world.

      So it’s safe to assume they are trying to make this for smaller apps, games apps, and simple productivity apps, it’s also a way for ios developers to get their apps to move to the computer.

      It’s a smart decision for apple at the moment, and I think it’s going to bring a lot of new intreats in buying macs, after all the app store is the main selling feature of the iPhone/iPod touch/iPad why not Mac?

  • http://dvsdjtv.com K-Sea – DVSDJ.com

    Totally agree with the other posts, I’d also say that piracy of apps in the app store must go way down. I haven’t checked for pirated apps for my iphone but these app-store apps must make harder to crack a copy.

    Look at that, along with the wholesale vs retail price markup price of all products and I think it’s an interesting concept that will draw more users.

    • sirpaul

      All you need to use a cracked app is a jailbroken device. And ANYONE can crack an iOS app easily.

  • GT

    Most software developers, big and small, could easily use this. No more packaging, distribution, marketing, labor etc… needed. Also, do you think Best Buy sells it and doesn’t make a profit? From that $200 MS Office software sold in stores, MS makes probably only $150-165, if that much. Online selling is the way to go.

    It will benefit the smaller companies more so than the bigger because of better exposure for their products. But remember, the smaller companies have been selling online primarily because they usually don’t have the big budgets to sell through normal retailers. It might hurt them more per sale, but they should makeup for it through volume.

    • Ubuntu User

      My thoughts exactly.

      • Ubuntu User

        Scratch that. Wrong post.

    • Richard

      You obviously have no clue how the brick and mortar scenario works. The price you see in the store is not what the store paid, in all likelyhood that is more then 50% below the sticker price you see in the store, take off cost of manufacturing, distribution, personel cost etc and Microsoft makes far less on a sale then you think.

      Typically a developer would get 20% (if you’re lucky) of the purchase price, in this case if the store bought for lets say $50, you get 20% of that $50 as a developer, so… think before you decide that software companies make big bucks..

  • Gobie

    As usual, Microsoft is copying Apple!

    Err, wait. Apple is copying Linux with this desktop “App Store” thing.

    • Ubuntu User

      My thoughts exactly

  • JohnBoy

    How many “general consumers” really use many apps on their Mac’s?

    I’m pretty general. I have a 15″ MBP, but I have only a few third party apps – Skype, MS Office…? And then a few different widgets.

    MOST people use these computers for browsing, photos, and some video editing. This App store may actually have “general” people searching through and finding new games and what not.

    RIM’s CEO said people are sick of Apple telling them “what to think”. They are kind of doing that again, but are likely to be successful at it.

    *When I say “general”, most people that read this tech blog probably aren’t general, but a little ahead of the curve.

  • badchad

    One point that everyone has missed: compared to the iOS, very few people use Mac OS. They may not have the user base to support a desktop app store.

    • bbfan1986

      But with about 15 million Macs sold each each and half being new customers – that won’t be a problem for too much longer. I’m hooked on the IPhone and iPad I have now and have every intention on making my next computer purchase a Mac. Just waiting for my October ’09 Sony Vaio to die (It won’t die!!!). In fact I’m saving to get a Mac mini for the bedroom and one of these new MacBook Air’s for my main computer. Should start saving now cause I want to get them around the time that OS X Lion is release in the Summertime.

      • macsftl

        You’re an idiot if you want either the Mac Mini or the MacBook Air as a main computer. Total idiot.
        Your Sony not dying is probably a sign your next one should be one too..

  • Game One

    “If you’ve ever used iOS for more than a month, you’ve probably ended up buying an application that, without the App Store, you would not have known existed. ”

    Wrong. The App Store is not the place where users come across the best apps. The App Store can only let you look into a few hundred apps at the max. Most developers get to know about new apps from reviews on blogs and websites.

    The Mac App Store is going to be a terrible failure, but Apple will never accept it. Instead, Steve Jobs will give us a cumulative number of apps without offering us a split between the iOS and OS X, letting us all assume that the Mac App Store is some massive hit..

    • Paul Walker

      > Most developers get to know about new apps from reviews on blogs and websites.

      Sorry, most consumers aren’t developers. Try again.

  • Andrew

    The Windows 8 slides that leaked 6 months ago had one of this. Whats actually important to the market, is what THEIR revenue model is. Because thats where the moneys at.

  • http://www.beyondthetech.com BeyondtheTech

    What sort of protection scheme will they have? For iPhone apps, it’s FairPlay v2, but that’s been cracked way too easily on jailbroken devices. There was even rumor of being able to install cracked apps on unjailbroken devices, but I haven’t heard of any news since.

    In either case, FairPlay needs to be taken up a notch. These aren’t going to be $0.99 apps on the Mac App Store. They’re likely going to be priced a lot higher, so developers want to make sure it’s not going to turn out to be a free-for-all when hackers remove a wrapper or whatever and make it launch on anyone’s Macs.

  • http://pulse.yahoo.com/_GQVPWCWS6NGCAGNNDZBZ4MINMI Apple

    the margin on software is high but I don’t know how high.

    What is the normal split between developer and Marketer, shipper, retailer, etc.

    Does a developer actually make 70% of the MSRP when it is sold in a store. The store isn’t the only one making money here and plus the developer has a bunch of other costs as well.

    So could increased exposure on the app store increase sales enough to offset the 30% to apple?

    BUT again what is the developer final in pocket revenue or profit using the typical sales route (in store, on line, etc.)

    I didn’t see that information.

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