Over the years, with the rapid development of Apple, the Apple tax has also become an important source of income for Apple, but all along, the high Apple tax has been the most criticized thing by various developers in the Apple ecosystem, and Apple collected 40 billion Apple taxes in China last year.
1. Apple collects 40 billion apple taxes in China in one year?
According to the report of the Financial Associated Press, Apple's revenue and net profit fell by 4.3% and 2.2% year-on-year respectively in Q1 this year, but the service sector still grew against the trend, with a year-on-year increase of 14.2%, which is the fastest growing business in revenue and has become Apple's second largest source of revenue, accounting for 26% of total revenue. Apple CEO Tim Cook said that service revenue hit a record high this quarter and expects service revenue to still achieve double-digit growth in the next fiscal quarter.
It is reported that the service sector mainly includes subscription services, warranties, search engine licensing agreements and payment revenues. It is worth noting that the "Apple tax" under this sector has long been criticized by the industry - Apple users must pay for software through Apple's purchase system, and Apple will take a 30% channel fee, which is called the "Apple tax" and began in 2011.
According to Apple's official website, according to the statistics of the analysis agency Analysis Group, the transaction volume of digital goods/services in China in the Apple App Store in 2022 will be 21 billion US dollars, if the revenue growth rate of Apple's service business in Q4 last year was 11.3%, 91% came from large developers, the global general tax rate was 30%, 9% of the transaction volume came from small developers, and the global general tax rate was 15%, and the "Apple tax" in China in 2023 exceeded 40 billion yuan. In addition, in January this year, the U.S. court found in an effective antitrust judgment that the operating profit margin of the "Apple tax" revenue was as high as 75% after deducting a series of costs.
In January this year, the App Store policy in the United States was adjusted to officially support third-party payment methods, and Apple's commission ratio was reduced from the previous 30% (15% for small businesses) to 27% (12% for small businesses).
Second, when can there be less goose plucking in apples?
In the wave of digital economy, Apple, as the world's leading technology company, has been attracting attention for its business model and strategy. Especially in the Chinese market, Apple collects tens of billions of yuan in so-called "Apple taxes" every year through its unique App Store platform and payment mechanism, what should we think about this?
First of all, the "Apple tax" refers to the 30% channel fee that Apple charges developers on its App Store platform for in-app purchases (IAPs). When a user purchases an in-app product or service through an Apple device, the transaction must be done through Apple's payment system, and Apple takes a 30% cut of the fee. This fee is known as the "Apple tax" and covers almost all payment scenarios in Apple apps. This commission model is premised on the closed nature of the apple ecosystem. In the closed ecosystem built by Apple, users cannot bypass the App Store to download apps directly, and developers cannot choose other payment platforms, so they can only accept Apple's commission policy. This mandatory payment method has led to a lack of autonomy in pricing and profit distribution for developers, which has sparked widespread dissatisfaction and controversy.
Second, the reasonableness of the Apple tax is constantly being questioned, especially whether it constitutes an abuse of market dominance. With no third-party app stores available on iOS devices, Apple has a virtual monopoly on the distribution of apps on its platform, leaving developers with no choice but to accept Apple's tax or fail to reach a large iOS user base. This kind of mandatory payment channel in a closed ecosystem restricts market competition, which may lead consumers to pay higher prices, and also compresses developers' profit margins. Around the world, including China, the European Union, the United States, and other places, regulators and courts have begun to investigate and adjudicate on Apple's practices in an attempt to assess whether it violated antitrust laws.
Third, the Apple tax indirectly affects consumer experience and spending. Within the Apple ecosystem, some of the costs may eventually be passed on to consumers as developers factor in the cost of the Apple tax. For example, users who purchase video memberships, live stream tips, and in-game purchases on iOS may find that the price is higher than that on Android. This phenomenon not only increases the financial burden of users, but also may reduce their willingness to consume in the app, thus affecting the vitality and diversity of the entire application ecosystem.
Fourth, the sustainability of the Apple tax is challenged as the regulation of digital platforms is tightened around the world. Apple itself is also trying to adjust its strategy, such as the aforementioned rate concessions for small-scale developers, to ease the pressure from the outside world. At the same time, while the appeal of Apple's ecosystem remains strong, its advantages are not indestructible. As users become more privacy-conscious, open-minded, and cost-effective, and competitor ecosystems mature, the rationale for Apple's tax will continue to be questioned.