Apple’s App Store taking too much of the pie

When you hear the word “app” as it relates to cell phones, you normally first think of Apple’s App Store.

Apple has created an extremely successful, if not the most successful, application marketplace to date.

While many competitors have tried to emulate Apple in this regard, they fall short of the sheer number of applications available and the intuitiveness of Apple’s App Store.

It is true that this “walled garden” has been beneficial for the company and many consumers who value user-friendliness above all else.

This setup does create another set of problems, however.

The main issue is the question of who controls the money made through Apple’s service.

As smartphones in general become more commonplace, the next big race will center around who controls the apps.

You might think that smartphone applications, such as those on the iPhone, are trivial in terms of revenue.

That is where you are wrong.

Apple’s App Store economy is estimated to be over $2.4 billion a year.

There are many applications in the marketplace for just 99 cents now, but as operating systems such as iOS become more complex, so do the applications.

As the relative complexity of these applications increase, so does the monetary value.

Currently, the average iPhone user spends around $5 per month, but that amount is expected to increase as more sophisticated apps are released.

So why are companies like Apple interested in this?

It’s simple – Apple gets 30 percent of the revenue.

If you do the math, that means Apple gets roughly $720 million a year from apps alone.

It is interesting to note that Apple has just changed its rules concerning apps to include that it would now take 30 percent of the revenue from “in-app” purchase.

In case you are not familiar with the term, in-app purchases are done from within the application (such as newspaper subscriptions or buying extra content on your FarmVille app).

This move has ruffled many feathers in the developer community because Apple is moving in and taking a larger slice of the pie.

The issue with this is that unless you “jailbreak” your iPhone, the only way to get software is through Apple’s App Store.

Since Apple has such a large market share, it is able to enact these measures without any sort of retribution.

This move means that any developer with an app that includes subscription content or extra in-app content is going to have to go through Apple if they want their application to remain in the App Store.

This move is a poor decision on Apple’s part.

While they can justify taking 30 percent of the revenue for apps because they host and provide bandwidth for them, with this new policy they are simply acting as the middleman.

What magazine or newspaper wants to fork over 30 cents for every dollar for a subscription?

All this is going to do is make other platforms, such as Google’s Android or HP’s webOS, look more profitable to developers and publishers.

While many consumers will not be affected by this change, this creates more animosity between Apple and those who provide valuable apps to consumers.

Although at the end of the day someone is getting the money spent in the App Store, the overwhelming majority of it should always go to the content creator.