Executive Had Asked Apple To Review App Store Policies Since 2011
Phil Schiller, the Apple executive in charge of the App Store, had raised the possibility of the company reducing its 30 percent commission rate to 25 or even 20 percent in 2011 as a result of competition.
Schiller mentioned the idea in an email to then Apple CEO Steve Jobs and head of Apple services Eddy Cue. Now, that email, first reported by Bloomberg, has been made public as part of the company’s legal battle with Epic Games.
“Do we think our 70/30 split will last forever? I think someday we will see enough challenge from another platform or web-based solutions to want to adjust our model,” the email read.
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Schiller then went ahead to suggest Apple would be better of changing its fee structure “from a position of strength rather than weakness”. The exec then floated the idea of Apple dropping its commission rate immediately the App Store starts generating over $1 billion in annual profit.
“I know that this is controversial, I just tee it up as another way to look at the size of the business; what we want to achieve, and how we stay competitive. Just food for thought,” Schiller says in the mail. The mail has an attachment of a Wall Street Journal article from 2011 discussing the possibility of developers bypassing the App Store fees.
The company’s 30 percent commission on many in-app purchases is at the center ifs legal battle with Epic Games. Epic is accusing the App Store tied to iPhones and iPads of being a monopoly. The company is arguing that it has to compulsorily use the app store for all its in-app purchases within Fortnite. Its switch to offering its own in-app payments system is the reason Apple chose to kick Fortnite out of the App Store.
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