Why the 70/30 model is no longer cutting it for Apple Developers

When Steve Jobs launched the App Store in July of 2008, it was a groundbreaking, visionary innovation — arguably as important as the invention of the iPhone itself.

The iOS SDK, hosting and distribution of apps to every iPhone user on the planet, and of course, the 70/30 revenue split for developers were all game-changing and, up until then, had no precedent in tech lore.

Not only did they change the game, but they set the standard for the industry in such an influential way that the ripple effects of those decisions reverberate through all of our connected lives, even today.

If you were an iOS developer in those early days, it was an exciting time.

It’s undeniable…

Apple changed the lives of countless developers (and created millions of jobs and billions in revenues) in a real, meaningful way by allowing them to distribute their newly-minted apps at an unprecedented scale.

But, it wasn’t a one-way street of course.

In fact… The App Store would have been a digital ghost town, and certainly wouldn’t have been possible without developers.

By sheer participation, developers granted implicit consent & agreement to Apple’s terms.

Since there were no predecessors OR a frame of reference on how an App Store of this kind would operate prior to Apple, it is perfectly understandable that most developers opted into all the terms as a default choice back then.

I mean…

It was the only game in town as far as developers being able to create, distribute and make their apps accessible on a global scale… from the palm of someone’s hand.

…and the App Store was just the beginning.

Just a few months after the App Store, like any budding duopolistic love story — The Play Store was launched by Google with an identical economic model to Apple with the same 70/30 split.

The details might differ to some degree, but, generally speaking — it’s the same paradigm, different companies.

But, here we are, almost two decades later… in a different world… and the terms between this monolithic duopoly and developers have yet to change.

In fact, it’s concerning that many developers in unrelated products & industries continue to use the same 70/30 model (or one similar to it) as a default simply because of its popularity.

Sure, there are commendable organizations like Coalition for App Fairness fighting the good fight — but, as I’ve said before, individual developers are ultimately responsible, for they are the most important decision-makers in any ecosystem.

By the way… before I continue… let me get this public service announcement out of the way so I don’t have to call security on anyone…

Hey Apple fanboys & fangirls, take a chill pill

I want to acknowledge that — YES, Apple provides a valuable service, which includes things like payment processing, infrastructure, hosting, distribution, etc. and they deserve to be rewarded.

The thing is, if your app is not on the App Store, it cannot be installed on an iPhone (at least currently, which is likely going to change in 2024 with the Digital Markets Act) and since Apple controls all of the buyers, they have a monopsony.

In addition, no one can install another operating system on their phone on Apple hardware, which also makes them a monopoly.

My argument(s) & concerns are more about the empirically provable, hypocritical, and anti-competitive terms they’ve set for developers from the context of Apple being both a monopoly and a monopsony — especially on their antiquated 70/30 model.

Call me old-fashioned — but if I pay someone $1000+ of my hard-earned shekels to buy the fanciest phone — I’d like to think it’s actually mine with an implicit assumption that I have the freedom to connect with any developer of my choice and pay said developer whatever they’d like, and put their software on my phone, despite the phone manufacturer being opposed to it… ya know… like two free, consenting adults.

Remember — 95%+ of mobile app spending in the U.S. happens on the App Store and Play Store.

I know we’ve collectively acclimated to these habits over the years and have a sense that this is all normal — but, the fact of the matter is…

The current mobile market is neither sane nor healthy for both users and developers — and as Elon Musk said — it’s Definitely NOT ok, because…

Developers have no choice but to deal with and acquiesce to the terms (and demands) of a mafia-like duopoly.

The thing is…

You cannot build a company or an app or any innovation with a mobile component and ignore one or both of the only distribution platforms in existence — at least not without losing most of your reach & total addressable market.

…and if you’re OKAY with a gargantuan, incumbent duopoly controlling the distribution of a mode of computing that has become critical to western life, you’re likely delusional OR stuck in 2008 — or both.

Besides…

The time has come for developers to flush the anachronistic 70/30 model down the toilet and consider alternative paradigms that might thrive in the future.

In fact… once you’re ready for it…

I am going to talk about what I believe is a far superior alternative to the outdated 70/30 model — not by trying to “improve” or “redefine” it, but by obliterating it.

It’s an entirely new and counterintuitive paradigm for developers of the next era.

But, before we talk about the next era, we have to understand the previous era to see how we got here… and take into account all of the lessons & mistakes along the way.

So…

Let’s take a saunter down Apple’s memory lane to refresh our minds about…

The (partly fortuitous) history of the App Store

Many people don’t realize that Steve Jobs was originally opposed to having an App Store.

In fact, Apple first told developers that in order to develop for the iPhone, they’d need to build WebApps for Safari(!).

The full Safari engine is inside the iPhone — so, you can write amazing Web 2.0 and Ajax apps that look exactly and behave exactly like apps on the iPhone.

And these apps can integrate perfectly with iPhone services.

They can make a call, they can send an email, and they can look up a location on Google Maps.

And guess what? There’s no SDK that you need!

You’ve got everything you need if you know how to write apps using the most modern web standards to write amazing apps for the iPhone today.

So developers, we think we’ve got a very sweet story for you.

You can begin building your iPhone apps today.

—Steve Jobs, 2007

While most people at Apple lacked conviction and were under the foggy haze of Jobs’ reality distortion field, there was one guy on the Apple board that vehemently disagreed with him.

That one guy was an Apple board member who loved the App Store approach so much that he called Jobs over six times in order to change his mind.

Jobs at first quashed the discussion [of apps], partly because he felt his team did not have the bandwidth to figure out all the complexities that would be involved in policing third-party app developers.

So it took phoning him half a dozen times to lobby for the potential of apps.

— Arthur Levinson, Apple board member

Levinson helped nurture a seed of an idea about the potential of the App Store model, and along with some persistent nudging, finally helped persuade Jobs.

That’s right…

The so-called “visionary” idolized by Apple fanboys around the world needed a guy like Levinson to smack him over the head multiple times before he ran with the idea… just so your grandma could later play Candy Crush in-between commercial breaks while watching daytime television.

Shortly thereafter, Jobs went full force in making the App Store a reality.

Let me just say it:

We want native third-party applications on the iPhone, and we plan to have an SDK in developers’ hands in February.

We are excited about creating a vibrant third-party developer community around the iPhone and enabling hundreds of new applications for our users.

With our revolutionary multi-touch interface, powerful hardware, and advanced software architecture, we believe we have created the best mobile platform ever for developers.

— Steve Jobs, October 2017

When Apple finally released the iPhone SDK, it was well-received by developers.

It was novel… exciting… innovative… and most developers couldn’t wait to play with it.

How could they not?

Developers could build and test apps quickly (with the included iPhone simulator) while having access to some of the same APIs Apple used to build its apps.

This catalyzed an app development frenzy, which, along with the launch of the App store, eventually cemented the invention of the iPhone & the App store in the annals of tech mythology.

Granted, a handful of fringe, anarchist vendors, users, and developers have been critical of Apple’s policies on the App Store since the early days… but…

All in all, despite a few minor hiccups, things were all unicorns and rainbows for many years as Apple printed cash money faster than the Federal Reserve, courtesy of exorbitant commissions powered by developers 🌈

In the meantime, while Apple executives were partying and sipping vintage bottles of Dom Perignon, some of those rebellious developers were building and running fast-growing companies (with accompanying apps) in the shadows.

Eventually, some of those fringe developers were no longer fringe — and became increasingly vocal about App Store policies — namely, about being able to sidestep Apple’s restrictions & the up-to-30% tax it imposes on payments — which ultimately escalated into multiple lawsuits against Apple.

Apple has been massively profiting from its App Store monopoly by restricting the ability of developers to freely conduct business directly with their users.

Their anti-competitive practices have gone unchecked for over a decade, and they’re only getting more brazen.

I’m now looking forward to presenting my case, and I’m confident the court will see Apple’s practices for what they are.

— Kosta Eleftheriou, Developer

Initially, a bunch of smaller developers decided to band together and file a lawsuit against Apple.

Then, Apple & Timmy Cook decided to settle with those developers for ~$100 million, which, relatively speaking, is like me finding a few nickels stuck within the lint in my pants pockets — but, hey, $100m is a good start, I guess.

While all of this was going on, big corporations were also getting louder.

One of the most notable cases against Apple was mounted by Spotify, which publicized a compelling timeline of events about Apple’s mafioso App store policies for the entire world to see.

The second most notable case is of course Epic Games v. Apple — which was kickstarted by Epic Games CEO Tim Sweeney with the launch of an entertaining Nineteen Eighty-Fortnite video parodying Apple’s own 1984 advertisement, which referenced George Orwell.

Apple has locked down and crippled the ecosystem by inventing an absolute monopoly on the distribution of software, and on monetization of software.

Google essentially intentionally stifles competing stores by having user interface barriers and obstruction.

If every developer could accept their own payments and avoid the 30% tax by Apple and Google, we could pass the savings along to all our consumers and players would get a better deal on items. And you’d have economic competition.

— Tim Sweeney, CEO of Epic Games

Remember: Spotify & Epic Games are huge companies with deep pockets and resources that allow them to fight back — unlike the majority of smaller developers, who cannot afford such luxury.

In other words, for every Spotify & Epic Games — there’s an ocean of developers downstream that are getting hustled and consequently, barely scraping by, as a result of Apple’s draconian policies crafted to maximize shareholder value.

Unless you’re Stevie Wonder — it should be obvious that the App store is no longer what it was originally intended to be… and if you’re a developer, you are already acutely aware that…

Many independent developers get screwed by Apple

The iPhone’s success was largely propelled by the hard work & creativity of all the third-party developers (which is why Apple even used the slogan “there’s an app for that!” to drive sales) because they generated exponentially more demand for the actual device.

Then, Apple showed their gratitude for all the developers by doing a classic “bait and switch” — the ole’ switcheroo — by waiting till tens of millions of device owners were locked into their ecosystem before changing App Store policies to impose exorbitant tariffs, vague and opaque review processes, & penalties for developers who compete with Apple’s own applications.

In short, Apple has been using security and privacy as a pretext to exclude competition, charge exorbitant taxes, and enforce draconian policies for years.

“With the App Store being the only way to install apps onto your iPhone and iPad, Apple has complete and unprecedented power over their customer’s devices.

The decisions they make with regard to third-party apps need to be above reproach and currently are not.

With great power comes great responsibility, and Apple needs to own up to their [sic] irresponsibilities and fix these significant problems.

If they don’t, the regulators just might.”

— Phillip Shoemaker, Apple’s former app approval chief from 2009–2016

As I mentioned earlier — there are countless (hardworking) independent developers that get exploited regularly without getting much media attention.

Unlike Spotify or Epic Games — you never hear about them as they get shut down in the shadows of Apple hell, often without recourse or explanation.

For example, if you’re a developer, you need to be aware that…

• Apple can manually alter App Store search results without being transparent about it like it did with Fortnite.
• It’s insanely difficult to get your app on the App Store, and If you manage to jump through all the hoops and get it approved, then it becomes just as hard to deploy changes.
• Apple’s “strict” App review process works until it doesn’t — and unlike math, it’s not an exact science and prone to individual subjectivity.
• Apple’s App review process can be hypocritical where they’ll punish you for infractions that they themselves are guilty of.
• A lot of your success depends on the placement (*based on vague, opaque criteria) Apple gives you based on their mercurial mood, so unless you’re the “chosen one” you might not have a chance.
• Despite taking a 30% cut, Apple can also show ads for other, competing apps above your app in search.
• If your app becomes a success with the potential of being a direct competitor to Apple’s existing or potential future product(s), Apple might retaliate by either copying your app (like with Tile vs AirTag & Find My iPhone &, Spotify vs Apple Music, etc) OR by excluding you from being featured.

I mean, what’s the incentive for any independent developer — when they have to risk major R&D costs & limited resources to build anything novel or disruptive — while having to deal with non-transparent app review policies with no guarantee of being able to distribute their app, or worse: being punished by their capricious tech overlords if said app has the potential to disrupt one of their products?

Not much — and if you disagree or have a personal story, I’d love to hear what you think in the comments below.

Other than that…

I know… I’ve roasted Apple quite a bit… so in the interest of a fair trial, you might be asking…

What’s Apple’s response to all the accusations?

It’s a reasonable question… and my criticism would be unfair if I didn’t mention Apple’s stance on all of this.

In short — they’ve resisted change for as long as possible, OR made the bare minimum in compromises — OR in the rare case, agreed to change due to regulators enforcing literal laws against their policies.

As far as Apple being against sideloading (which I didn’t cover) — their official stance has always been because of their concerns for user security & privacy.

…and they claim they enforce it via a strict App Review process that protects users from privacy-violating & malicious apps.

Granted, after years of defiance, Apple is finally going to yield & allow sideloading in a few years in order to comply with EU regulators & with a component of The Digital Markets Act.

Similarly, in the Epic Games trial, the court ordered Apple to change its policies to allow developers to communicate with their users & allow external links to purchasing mechanisms.

As far as the 70/30 App Store model — Timmy Cook testified under oath before congress and said “we treat every developer the same” — well, “every developer” except if you have a secret sweetheart deal with a bunch of handpicked companies, like Netflix — where Apple relaxed their “strict” App Store policies in private and hooked Netflix up with a 15% discount not available to other developers.

All this is to say that it is a terrible error to impute morals or values to giant corporations.

Apple and Google are both immortal colony organisms that view human beings as inconvenient gut flora.

They are remorseless paperclip-maximizing artificial life forms.

They are, in other words, limited liability corporations.

, Journalist & Sci-fi author

Plus, Timmy Cook continues to put more emphasis on and frames his response(s) around how the App Store provides disproportionate benefits to developers instead of acknowledging the symbiotic nature of the relationship between developers & the App Store.

In Apple’s defense (after much backlash) their App Store Small Business Program did reduce App Store commissions down to 15% for smaller developers earning up to $1m per year — which is definitely a step in the right direction.

As of today…

Apple charges 15% for paid apps & in-app purchases from developers who make less than <$1m/year, and 30% for paid apps & in-app purchases from developers who make more than >$1m/year

But, other than that, as of this writing, there are no indications that Apple will change its 70/30 model.

This leaves us with one dangling, unanswered question…

So, if the 70/30 model is outdated, what’s a developer to do?

It’s a great question — one which all developers must come up with an answer to, as they are the immediate recipients of any alternative model to what is currently in existence.

Look, I get it…

Apple literally invented the modern concept of the app store, and their innovative contributions to humanity are significant.

The engineering, product, design, and most things that come out of Apple have been consistently top-notch, and perhaps even legendary — and personally, I’m a big fan of it all.

So, if one were to ask “Is Apple a net benefit to the world?” — the answer is a resounding YES.

No doubt.

But, I do believe the time has come for independent developers to consider alternative paradigms instead of being dependent on an antiquated paradigm that is almost two decades old.

Sure, like most things, it might have started out with great intentions, but that doesn’t mean those same intentions will be reflected in the final form.

As I’ve said before, individual developers are ultimately responsible for shaping the future of technology — so it’s important to think about how developers can value their contributions fairly before settling on a default option due to popularity or some other equally irrational reason.

What we need is an abundance of choice in new, innovative paradigms for future developers — so developers have more variety in choosing how they want to launch & distribute their applications.

To throw an idea into the hat of new paradigms…

For example, Archway is building the best way for developers to launch decentralized, blockchain-based apps (dapps) on a global scale.

The magic sauce involves built-in, protocol-level rewards that will reward developers in proportion to how much demand or traction their dapp commands from its users.

The more valuable your dapp (or even a single smart contract you’ve written for a specific, niche purpose) — the more you get rewarded.

So, hypothetically, if your dapp becomes a blockbuster on the first week of launch, instead of draining your limited resources in order to keep up with demand, imagine being rewarded for being in demand — so much so that you can actually be self-sustaining without anyone else’s support.

Then, as a developer, you can literally use those rewards from the first week to bootstrap your core development team (or yourself) to propel more growth instead of being dependent on a mercurial tech overlord.

Now, I am not delusional enough to make a 1:1 comparison of Archway or Web3 or Blockchain with a company like Apple — that would be silly.

It’s not even remotely in the same ballpark — but, I am making a 1:1 comparison to the paradigm by which developers are rewarded.

The Web3 landscape is fast-growing, yes — but still nascent — and sure, it’ll have its share of unexpected challenges.

In the meantime, individual developers around the world are making critical decisions on which ideas are going to shape the future, and if you’re looking in the rearview mirror, you might get left behind.

…and the more alternative paradigms developers can choose from, the better it is for everyone 🎩

The future has many names.

For the weak, it’s unattainable.

For the fearful, it’s unknown.

For the bold, it’s ideal.

— Victor Hugo

Hint: if you’re still entranced by an almost two-decade-old paradigm with questionable policies, you’re likely looking in the rearview mirror.

You see…

When we plant a garden, we often mulch and fertilize the soil.

Then, we carefully place the tender plants in the ground and continue to care for them regularly until the mature plant provides the harvest — whether of fruits, vegetables, or flowers.

When new ideas are nurtured by a passionate community, they too grow and multiply like those well-tended plants.

Remember: much like the App Store, every new idea starts out as a fragile sprout — and in its infancy, there are many barriers and challenges — most of which are unknown 🌱

…and like I’ve mentioned before, no one knows how those new ideas will mature in the future, including experts — so you can’t outsource your thinking to someone else either.

So…

Never underestimate a new idea… especially during its infancy.

I mean…

It’s simple to calculate how many seeds are in an apple… but who among us can ever say how many apples are in a seed? 🍎

In the case of the App Store, even Steve Jobs required some persistent nurturing by some guy you’ve never even heard of before that idea matured into THE App Store you’re familiar with as being “obvious” in its current form.

So, any new paradigm that’s envisioned in the best interest(s) of developers will still require some conscious nurturing by a small, passionate army of geeky mavericks — before it becomes “obvious” to the rest of the world.

You must first imagine it… then dig a cave into the future and demand space.

Initially, the digging is utopian, but in the future, it becomes reality 🔮

So…

If you’re a developer (and a geeky maverick) interested in having a real stake in shaping the future and claiming back your sovereignty instead of being exploited by a faceless duopoly — Archway might be for you.

If not, you know where to go 😉

Archway is the best way for developers to launch decentralized apps & smart contracts on a global scale while earning automagic, on-chain rewards.

If you’d like to stay in the loop with what we’re building — be sure to sign up for Our Newsletter and join the Archway community via Our Twitter & Our Discord.

Due to US regulations, the ARCH token will not be available to US residents.