We reported yesterday about Apple’s alleged delay in payments to iPhone app developers, but there is more alarming news from iPhone developers about Apple’s refund policies. Apparently, if iPhone users decide that they want a refund for an app (users can get a refund within 90 days, according to Apple policy), Apple requires that developers give back the money they received from the sale. But here’s the kicker—Apple will refund the full amount to the user and says that it has the right to keep its commission. So the developer not only has to return the money for the sale, but also has to reimburse Apple for its commission. Apple charges a 30% commission on all paid apps sold through the App Store. So basically, developers get 70% of a given sale but if the end-user wants a refund, the developer has to pay Apple 100% of the sale.
Here’s the clause in the contract:
In the event that Apple receives any notice or claim from any end-user that: (i) the end-user wishes to cancel its license to any of the Licensed Applications within ninety (90) days of the date of download of that Licensed Application by that end-user; or (ii) a Licensed Application fails to conform to Your specifications or Your product warranty or the requirements of any applicable law, Apple may refund to the end-user the full amount of the price paid by the end-user for that Licensed Application. In the event that Apple refunds any such price to an end-user, You shall reimburse, or grant Apple a credit for, an amount equal to the price for that Licensed Application. Apple will have the right to retain its commission on the sale of that Licensed Application, notwithstanding the refund of the price to the end.
The developer we spoke to seemed to think that the app would become unusable if a consumer gets a refund for a particular application, but the developer was unclear if this actually happens. We were also told that this section of the contract is new, and developers are being forced to sign this in order to sell apps in the next generation App Store (for when the iPhone OS 3.0 is officially released). But we saw a contract from another iPhone developer who signed the agreement back in December and the same clause was part of the contract.
We are assuming that Apple still has to pay bank fees on a charge if a consumer wants a refund, but certainly bank charges don’t amount to 30 percent. This policy still seems incredibly unfair to developers. Apple should instead require developers to return the exact amount they received from a refunded sale, not extra. Apple has a ton of money in the bank and could stand to make a lot more from the app store down the line as the iPhone user base grows. With these fees, Apple is pointing a big red arrow at why developers shouldn’t be developing for the iPhone—namely, they’re at the mercy of Apple, which is making a habit of treating its developers like dirt.
Here’s a copy of the actual contract:
iPhone app contract – Get more Information Technology
Looks like Apple is much worse than Microsoft, which, in comparison, gave much more control and liberty to developers, and didn’t charge them to developer Windows apps.
(my comment was referring to Windows OS for PCs, as I don’t know if this applies to Mobile)
I think Apple is doing their business in a wrong way, though it costs lots of money to host app store, they can’t do this to their developers, who really shape the app store.
Yeah right, because you would pay money to customers if you just where a medium between my “faulty” app and the customers, right?
It’s clear that this is a dangerous condition, but i think it’s pretty logic and also… right.
Plus, has anyone compared the AppStore license to the Nokia Ovi Store, Google App Store? And also i’m understood that MS is also going to open a Mobile Store soon.
Yes, starting to see some smudges on the Apple’s shiny PR exterior. Seems a bit hypocritical indeed.
However, why the hate? Have they done such a *great* job of convincing us that they really don’t want our money, that they love us unconditionally and Apple will save the masses from the evil software company “others”… Lest we forget this is not a commune, this is capitalism.
May be a dick contract for developers but it maintains profitability and looks out for #1: themselves.
e’re not on a commune here people, we’re in cathey’re in business for some higher you can’t blame them. They’re in it to make money. Just like any other company… Someone’s gotta pay for those commercials, fancy storefronts, and delicious packaging. They’re in it to make
ignore the paragraph 4 scratch pad, sorry. :/
Nah, it’s as insightful as the rest.
my bad. fail.
Good thing your comment was such a heavenly slice of value-add, tho. Made up for it all
You are so right, they should have read
the contract before been so quickly to sign
it. It is a money market dog eat dog world
in the electronics market. They always
READ BEFORE YOU SIGN.
There absolutely needs to be a return policy for apps though, albeit this may not be the fairest way to go about it. I have about 10 apps I’m waiting to return.
I totally disagree – I don’t think there should be a return policy at all. But a try-before-you-buy period would be REALLY nice. Right now, that’s how refunds will be used. If you try it first, then want to buy it, it should be non-refundable.
so your comment is pointless in this regard.
I totally agree with that. People have been bashing MS for years when MS is actually very open about the way it does business. Apple are so freaking evil it makes me sick.
no one said apple is a saint. they are as evil as MS/google/etc. BUT they make excellent hardware and software…stuff that just works (mostly) and people are passionate about. MS mostly just makes expensive crap.
“stuff that just works”? Please.
“people are passionate about” . Crack addicts are passionate about crack, should we defend them too? just because a bunch of idiots with way too much time on their hands becomes passionate about something doesn’t mean it’s a good thing.
when a company does something wrong, have the balls to step up and call them on it. don’t make pantsy ass excuses like ‘no one said apple is a saint’.
no one said apple is run by douchebags either, but its quickly becoming apparent that it is.
… or you could go to business school and learn how to make a successful business? Apple must play ball differently than MS based on economies of scale — aka MS can get away with everything, including covering defaults on ridiculously bad applications created by fan boi wannabe software developers. I know I can’t code to save my GPA — that’s why I am not a C.S. Engineer <_<
stuff that works !!??
Paleze…..
Copy and paste on iphone took three years.
Background apps took 3 years
TPM chip in iphones/ipod
MS always had Copy and paste
MS could always run background apps, even in mobile.
No tpm chips – Non proprietary hardware is how MS won the first battle in the late 80s…because windows ran on EVERYTHING…
@jmndos the iPhone hasn’t even been around for 2 years, never mind 3. But yes, copy/paste and multitasking probably should have been in since day one.
“MS mostly just makes expensive crap”
And apple is saving the world with its freebies…
screw you. Microsoft sucks. So does windows and everything associated with it. GO APPLE!
nice comment. reminds me of high school when i dated a cheerleader
Its one of those apple turdburglars…..those that recieve Steve Jobs Cleveland Steamers…
Right on man. Right on.
This notion of App Store is utter bullshit and we can only pray it does not spread.
You’ve made an operating system. Now let developers develop for it. Why the hell should we give you a cut? Just why?
If you replace the word “Apple” with “Microsoft” all of a sudden there would be insane uproar…I mean can you imagine MS charging 30% for apps sold for Windows?
Apple takes a cut of applications sold on the App Store because it needs to pay for the costs involved in hosting them.
Y’all hear that? Apple takes 30% of your app cost cuz it has to “host” your app.
Ever wonder who in the world ever asked Apple to host it?
No one.
Apple takes 30% commission because it has BINDED developers to go through them. Plain and simple. All other reasons are a DISTANT secondary.
Mozilla hosts 6,000 addons, serves millions of downloads each and every month, and charge nothing for that.
Apple acts as we are stiill in the old evil days of feudalism era
Apple devised the appstore scheme. They didn’t have to do it. They could have done something much more open, and stayed out of the actual distribution business. But they saw an opportunity to make more money this way. Businesses don’t set up operations to break even.
Apple designed the App Store to force an excellent user experience, and make a profit at the same time.
Of course developers would be happy to host their apps on their own web sites and advertise left and right. It would become a jungle. It would be fun for the developers but confusing for the average end-user.
That’s what being a control freak about user experience leads to. You got to agree that the experience of buying an app is amazingly simple.
At the expense of the developers.
If developers don’t want to write for the iPhone platform, they don’t have to.
Hmm, you said, “Why the hell should we give [Apple] a cut? Just why?” The reason why is because that’s the cut Apple takes to host your application. If you don’t like that constraint, you’re free to not develop for the iPhone. But it’s also not an arbitrary constraint; there are real costs involved in running the App Store.
“If developers don’t want to write for the iPhone platform, they don’t have to.”
I don’t intend to.
Also, regarding hosting costs: based on a few other people’s estimates, I have calculated that, in 2005, it cost web hosts about 1 cent per 70MB transferred. Since then, the cost has almost certainly dropped.
There is no way that Apple needs 30% of sales just to “cover hosting costs.”
Its communal….the commission also pays for the hosting of the free apps…
By comparison, on the Google Android platform the *CARRIER* gets 30% and the developer gets 70%. The numbers seem the same, except…
(from the Android Developer Distribution Agreement)
3.4 …
Products that can be previewed by the buyer (such as ringtones and wallpapers): No refund is required or allowed.
Products that cannot be previewed by the buyer (such as applications): You authorize Google to give the buyer a full refund of the Product price if the buyer requests the refund within 48 hours after purchase.
In fact, the Apple application store has IMHO consistently exhibited a belligerent, almost indecently self congratulatory attitude both int he way it is structured and in the arbitrary way it is administered.
I think it is absolutely the case that if MS behaved themselves in a similar way they would be pilloried.
@Not Yet: before doing so much pointless comments, go read something.
Mozilla doesn’t charges anything because the addons are FREE.
@Mark: and you think Google is going to pay for your “faulty” app? I don’t think so. I bet they are going to cut your income the next month by the ammount of refunds requested.
And by the way, 48hrs are anything near a nice policy for customers i think.
Apple doesn’t need to recoup anything because these apps are what are driving iphone sales.
Nobody asked apple to limit distribution to their own iphone store. That’s the biggest limitation on what iphones can do right now, is apple’s strict control of what people can develop and how they can develop it and where they can distribute it.
If it costs apple so much money that they need to keep 30% and force refunds from the developers, than maybe they shouldn’t force people to use their app store.
It’s dirty to keep the 30%. What about the developer’s overhead and all their time developing the app. This is all the money they’re getting from this while apple gets the phone sales plus they get commission on the wireless contracts.
You’re absolutely retarded. Go and start your own company and pay for adds build stores, make products and then let some joe blow make apps for you and you can “reimburse them all the money because they made a shitty app. Apple is a company, not a friend who loaned you money and then keeps some of it. Even if they were a “friend” and loaned you money, why shouldn’t you give them a cut? They did most of the work….where would your shitty app be if it wasn’t for Apple?
You know for all you PC retards that make apps for Apple, why don’t you go and cry to MS to make a decent phone, and start writing code for their products?
Go back to your little pathetic lives and get back to your WOW game.
Welcome to the party. Apple has always been much more hostile to 3rd parties than Microsoft. That’s why, despite having a better OS for a decade (pre-Win95), they never really got above 5% market share.
As better alternatives to the locked-down Apple ecosystem arise, like the Palm Pre, Apple’s going to find themselves in a bad position. Apple won’t die overnight or anything, but they’ll start to become much more niche, like they’ve always been.
I agree with the sentiment that Mac OS was qualitatively better for many, many years, and that Apple has always hamstrung itself by going two or three clicks too far on the control dial.
But most of the anti-Apple nerds posting here are the same sort that derided the Mac as a “toy” and were opposed to GUIs. Until, of course, MS came out with their version, at which case GUIs became “respectable” for “business.”
You’ll pardon me if I don’t really care about what PC nerds have to say about Apple’s business process. Same people who think that the “solution” for Apple would have been to license its OS (a business strategy that’s worked on a sample size of one company).
what made you think that anyone wanted to read what you just wrote?
@jeff:
I wanted to read it. What made you think that anyone wants to read your comment?
Actually, mac os became good when they merged with next.
Before that….you couldnt run multiple apps or make use of disk paging….something windows had…
Apple has had the ability to run multiple applications since System 6 in the late 1980s. That wasn’t new with the NeXT acquisition. NeXT and Mac OS X are better than System 6 through 9.x in that they offer isolation between applications.
Apple had some paging (VM) support available back then, too, but it was incompatible with some applications, so Mac OS X is an improvement there as well.
In system 8, if you installed a gig of ram, the OS would disable virtual memory. The control panel said that if you had that much ram, your clearly did not need virtual memory. Meanwhile, the art teacher running photoshop on the computer kept running out out of memory. I fixed that by downgrading it to 896 MB of RAM.
Since then, apple has done a terrific job selling well engineered PC Compatible computers running a customized version of FreeBSD.
perhaps its just me, but this seems to be an opportunity for a rival contender. of course, i am fairly certain at+t is getting a piece of the action too
AT&T doesn’t get any cut of the application revenue from Apple app sales. AT&T’s upside is on the 100% penetration of unlimited data plans.
I think this article misses the point. Apple provides a brilliant service that no one dare match — yet. The ridiculous difference in profit between industrial product based industry and the service industry seems apparent enough here. The middle man need not concern himself with the risk of a shitty product when he can cover his financial ass — aka, if you want to play in the big leagues pony up and come prepared or you will fail like the rest of the 80% of new business ever year (someone fact check that last number. I’m lazy and drunk but still curious).
What do you mean? Android (Google) has the same deal going with Android Marketplace for less cost and less dangerous for Devs.
I completely agree with MacFortune. Android may cost less, Apple’s 30% commission may seem excessive, but you’re buying the exposure that comes with publishing in the iTunes environment. A good chunk of that 30% pays for the credit card service and also pays affiliates through LinkShare to promote your apps and the iTunes store. This puts your business infront of tens of millions of people. And if you sell a quality, sticky app, then refund requests will be minimal.
Your comment is bullshit, comparing Apples and oranges.
There is no charge to develop for OS X on the desktop.
Actually, most of juicy parts of the system are closed or scrambled.
To actually get support from apple, you need to pony up close to at least $300.
Windows has msdn, and the documentation links are not broken either, like apple’s dev site.
I beg to differ – MSDN is full of broken links, and a lot of the documentation that is there is lacking in anything that you couldn’t work out from the API.
I have made 5 iphone apps and have a few more in development. The apps I make aren’t anything crazy and tend to make sales of 20-40 purchases a day each. By no means is this millions of millions of dollars, but it allows me to work for no one else but myself.
I worry that having a 90 day return policy will kill many of us smaller developers. It was previously shown in TechCrunch article that the typical app useage is around 30 days.
I can imagine many people buying games, playing them for a month (or 3), and then requesting a refund because they can.
Get a job hippie
I develop apps for a living too. sorry you are somebody else’s slave
get a life, dickslap
This a resonable business decision on Apple’s part.
If the app gets too many refunds, it’s obviously a lousy product and they shouldn’t be in business to begin with. Keeps ‘em on their toes and Apple has a lot of costs to “sell” it for them.
lol … Apple can go to hell with its out-of-date iPhone … who cares anyway now that Nokia has the 5800 … and the upcoming N97 … there is just no comparison on what you get for your money … its all about the “money” and “value”
don’t make a shitty app & expect to get paid!
Thats pretty thin.
Make an app that the masses will love except a few who just want their money back
I paid 12.00 for an app that was supposed to sync my Exchange tasks from glorious microshaft, & it worked for crap .. did I ask for a refund ? no, they made it better .. thats how shit should be done ..
No way Hosay, no one has monetised a platform like this before….
Apple may be the big bad guys in this regard but they’ve created an industry that helps developers make $$.
Suck it up and make better apps!
Don’t be evil
That’s Google’s motto, not Apple’s
And Google isn’t all that good with following motto’s. More like: Don’t be evil, unless …
Google is a company. Fortunately, they do have some limits, it appears, so far.
Google is more evil than you know. Try getting customer service from them…….
This is greed at best…but Apple is the boss here….
Cydia Store FTW
So far, the only iPhone app I’ve purchased was Cyntact, through the Cydia Store. It was only a buck, and it puts your contact pictures in your contact list, like the Palm Pre. Something that Apple should have done from the beginning.
I really don’t like Apple’s business practices, and can’t bring myself to let Apple get it’s hands on my money. I’m much more comfortable with donating a dollar to help keep the jailbreak community alive.
So, what? You stole your iPhone?
No, I didn’t steal it, but I didn’t buy it from Apple (or AT&T). I got it for cheap on eBay. It’s jailbroken and unlocked, so though Apple did make money from the original sale of the phone, none of my money has gone to Apple.
So buy a different phone. Problem solved.
When something better comes along, I will. As much as I dislike Apple’s practices, I don’t deny that the iPhone is the best consumer smart-phone out there. And, if you can pick one up on eBay for under $400, it makes the alternatives pretty hard to swallow.
When I can get an unlocked Palm Pre for under $400, I’ll gladly get rid of my iPhone. Until then, I’ll stick with the iPhone, but I’m not going to drop a ton of money on apps and made-for-iPhone accessories that will be useless in a year.
thanks for breaking it, i think we will see this changed very soon.
Hold your breath, that should be fun for us.
NO, GOOD! So now maybe App developers will think twice before release apps that freaking suck. I’m tired of paying $1, $2, $3 or even $10 for apps that totally suck! How many of us have paid for apps which we end up removing almost immediately, that is after we’ve already been duped out of three bucks.
App developers — if you gonna charge for you shitty app, be ready to suffer the consequences!
who comes up with these things?
randy, when I buy something I usually read reviews and think before spending my money.
I think customers should think twice before spending money. They don’t force you to buy their apps. That’s your decision.
Someone has to use the app to create the review. In many cases, the review will come from those who buy the application.
Did you think all reviewers were given the app for free? Ha, get real.
Wow, watch out where you’re swinging that massive sense of entitlement, you might hurt someone.
If you think this is good for anyone, you’re not thinking. It’s going to kill off the desire for developers to develop apps and put them up, because every time they do they are opening themselves up to an unlimited amount of financial liability. Users get fewer options, Apple gets less traffic in the app store, and nobody gains anything in the long run.
No I agree it is a good way to keep sh!t out of the store. Although I’ll concede that 90 days is a really long time for a refund. I think 2-7 days is more like it.
Fail./sigh
Thank you. When I worked retail at a camping store we sometimes took returns. a) We paid a credit card charge on BOTH the initial charge and the credit; b) the manufacturer very rarely took back the product–it was ours to resell or, if it was too used, throw or give away. There are no guarantees in life. Don’t want to pay refunds? Don’t make an app that’s likely to be refunded.
The key point for Apple is whether the app is permanently disabled by a refund. If not, then what is to keep people from getting a refund and then just using the app anyway. I think this is where the infamous “kill switch” comes in…
The problem is not about shitty apps or worrying about people returning them.
The bottom line is that this creates a loophole in the App Store that dishonest people will take advantage of.
Getting shit stolen from you is never cool, especially when you work hard on it.
I agree, shitty apps should never see the light of day.
YOU DO ALL REALIZE THAT APPS MUST BE APPROVED BY APPLE BEFORE BEING RELEASED TO THE APP STORE THOUGH, RIGHT?
Blame shitty Apple for shitty apps, not the devs who just want to take money from you idiots.
If you’re stupid enough to buy ‘iFart’, then go fux yourself, you don’t deserve to get your money back.
amen
Bank’s fees have minimums.
Fuck apple
word
I’ll bet you don’t even make iPhone apps. Just go buy another phone. Problem solved. Move on.
in fact, i don’t even buy apple products.
like i said, fuck apple.
Nobody cares
never thought I’d agree with the PoPo XD
It used to be cool when wozniak was running the show….jobs is an bum, and he is being replaced by a bigger bum when he dies…
I care
you apple fan boys should take the iphones out of your asses
apple sucks
Where are apple fan boys and girls?
I think we know where the Apple haters are at the moment… hint hint nudge nudge.
I’m hoping this move by Apple improves the quality of iPhone apps. If your application is good, you shouldn’t be concerned about refunds.
+1
We grew up and learned how to sound less obnoxious — your turn.
We grew up and learned how to sound less obnoxious — but unfortunately still can’t right click our way out of a paper bag./doublepostfail
where did you learn everything about everything?
they will change that as soon as possible or I can already see the new G1 and Palm advertising for developers…..
Oh yeah? Some thing like:
Is your application experiencing a significant number of refund requests? Are users concerned about the quality of your product? Good, we want your app on our platform. We encourage refunds and will not charge fees when one occurs. All the risk is on us if your application stinks.
Somehow, I doubt your right. I’m inclined to believe you’ll see very similar terms for all of the mobile device application stores.
see post above regarding G1’s terms
3.4 Special Refund Requirements.
…
Products that can be previewed by the buyer (such as ringtones and wallpapers): No refund is required or allowed.
Products that cannot be previewed by the buyer (such as applications): You authorize Google to give the buyer a full refund of the Product price if the buyer requests the refund within 48 hours after purchase.
I have no idea why developers accept the terms from apple. First iTunes, Software and now Appstore. I am so starting to wonder.
Well, you have a choice:
1.) Sell iPhone app
2.) Don’t sell iPhone app
Plenty of people fall into category 2, so I don’t see any issues here.
Some people are making a lot of money on iPhone apps. That should tell you something.
Define “a lot”.
How many apps have $1M is sales?
i don’t need $1M. i’d be happy with $10k in app sales. i make most of my income providing technical leadership and strategic technology integration for commercial and government customers, and so far, all my clients’ apps are free. they use them for marketing and visibility.
Option 3: create a competitive alternative to the AppStore of use a simple geek forum to sell apps among confederates — like on Digg or Reddit yatta yatta yatta
here I am again, macFortune to save the day with the correct answer/scenario. Mac must love me, I’m a mindless Mac drone who advertises for free and I get to pay them money to do it! I even made my name MACfortune, GET IT GUYS!??!
Actually it’s got nothing to do with Apple–he’s the Scottish son of Fortune magazine.
I don’t know why people love Apple so much, they are a totally dodgy company. They had a substandard OS for years which the fan boys love. They overcharge for hardware and stop other people making clones. Their list of indiscretions is at least as long as that of MS.
>They had a substandard OS for years which the fan boys love.
For OS9 and earlier, yes this is true. But OS X completely owns Windows.
Yes, I was talking about < OS9. OS X is obviously pretty nice
Meh, the apple “brand” obviously isn’t for you.
As a dude whose hooked up “dad’s fortune buddies” with plenty of Mac’s I gotta say they all call a lot less for help on simple day to day things — a LOT less. Less enough * that my tech junky mom joked that maybe she shouldn’t of divorced my old “incompetent” technophobe man.
there you are God… why haven’t you been answering my prayers lately? your dad’s real lucky to have you!
riiiiing riiiiiing…. whoops, you forgot to set it to vibrate this time!
I’m not an iPhone developer and I don’t own an iPhone either. I’ve been thinking of getting an iPhone but it’s this kind of stuff from Apple that makes me think twice. On one hand they treat developers like dirt and on the other hand I’m afraid of getting locked into the Apple evil empire as an end user.
We’ve had a couple refunds it’s currently far less then 1% of all total sales. From the refunds that we have seen in our financial reports it’s always the 70% value originally given. Apple hasn’t been charging back the full cost of the application just the % they originally gave us.
I believe this provision is to discourage ‘I am rich’ type applications that have a high return rate and can cost Apple several hundred dollars per refund.
I don’t think this is an evil move, nor will it bankrupt any application developer.
Hopefully you are right. It seems that sometimes, Apple does things to help restrain abuse, with the understanding that they will do the right thing. The whole app review process is one example. The problem is that nobody is perfect, and sometimes, you get blow-ups like this.
Ladies and gentlemen, the first comment in this thread to have an iota of rationality!
This article is a joke – outside of the infamous “I Am Rich” app, under what circumstance is EVERY customer of an app going to demand a refund?
then they will start.
Ladies and gentlemen, the first comment in this thread to have an iota of rationality!
This article is a joke – outside of the infamous “I Am Rich” app, under what circumstance is EVERY customer of an app going to demand a refund?
while i’d like to disagree with Greg, it is the first Pro-apple comment that hasn’t been something completely ridiculous like MacFortune saying that apple is doing the right thing because it’s well APPLE… and apple is always correct
Same here. The refunds coming across have so far been the 70% charge back.
If what Greg’s said is true, that mean Apple hasn’t been enforcing the refund terms yet, but who knows what will happen in the future. But having that clause in the contract gives Apple a peace-of-mind and they can make use of it anytime they think appropriate
Well, Apple performed it’s part – offered the product for sale (costs involved), processed the transaction (costs involved), handled the return/credit (costs involved) so they should get paid. They have nothing to do with the fact the customer didn’t like the product.
Much ado about nothing.
That’s not the way sales normally works. If you sell shoes, you get commission for the shoes you sell, and you refund your commission for shoes that are returned. Apple should be paid like any other salesman.
Actually, in the online world, this is exactly how it works.
If, as a software developer, you use an ecommerce provider, they usually keep their commission in the event of a refund (though not a chargeback), as this covers their costs, and, in fact, they delivered their end of the bargain (same as Apple.)
I am not a fan of the practice, but all the big guys do this (including Digital River), so it’s not actually like Apple is breaking the mould here.
The policy is quite concerning. As much as I love the iphone, having to jailbreak it is a pain to access its “full functionality”. I could understand the 70% refund as Greg stated, but making developers pay because someone found out the app wasn’t right for them is just unfair…
Part of me wants to switch to full openness, linux but the range of programs is limited…
What part of “Cost of doing business” do you not understand?
Cost of doing is business, but what if there is not business, as in a refund….digital…then their(apples) cost should also be refunded.
In your logic, people with free apps should pay apple.
I think this is just a way for Apple to encourage people to put their apps up for Free. It’s pretty obvious they would prefer all “amateur” developers to be free and “premium” developers (like EA etc) to be the only paid apps.
Apple better watch out because if there is no money left to be made, expect the innovation to go elsewhere…
Well, I agree that the provision could be altered. Ninety days is way too long for something like software. So you could finish the whole game in that time, then return it and pretend that you did not like it?
At any rate, the prices are so low that most people will very rarely ask for a refund. Who wants to spend 15 minutes of their time trying to get back one buck? Maybe if you are paid less than four bucks an hour… They make more at McDonald’s, don’t they?
Also, the number of people who would ask for a refund is probably limited to the first few who bought the app before there was any significant feedback to help them make a decision (BTW, I wonder whether your feedback disappears once you get the refund… probably).
Anyway, this is almost a nonstory. Move on. Apple still rocks.
For those stating that this is “fair” you are nuts. Apple has developed a market place sure; but, that doesn’t mean it can assume no risk. Just the opposite in fact. Refunds are the risk that apple takes in the market. In return for that risk they take 30%. Apple is passing all risk onto the developed which is b*llsh*t. Couple that with all the other stuff apple is doing to devs and you have a recipe for disaster.
Actually, it’s completely correct and Apple is perfectly within their rights. Why should apple take the risk of poor quality applications. That is too much risk to ask of anyone and I don’t see any mobile device makers accepting that risk.
Your overreacting. Disaster will not come. This policy is not an experiment.
Seems like this refund policy is a non-issue, because according to Apple’s own site,
http://www.appl...ms.html#SERVICE
REFUND POLICY
All Sales and rentals (as applicable) are final.
I don’t know where you got that information, but it is not correct. See the APP STORE section of the policy:
“b. Refund Policy. On occasion, technical problems may delay or prevent delivery of your Product. Your exclusive and sole remedy with respect to Product that is not delivered within a reasonable period will be either replacement of such Product, or refund of the price paid for such Product, as determined by Apple. Otherwise, no refunds are available.”
I think it is important to note that the only time refunds are given is when a technical problem prevents or delays delivery. It’s not like people can use an app for 89 days and then decide “meh, not for me” and get their money back in full. I think people hear “refund” and think of taking a sweater back to JCrew because they didn’t like the color when they got it home. Software in general is very difficult to return unless it is defective in some way.
This is really an issue of principles.
People want refunds. That’s life – and that’s good business.
But to not refund the developer back the fees does not make sense. If developers have high refund rates, they should be kicked off the system.
At least that’s we do refunds at Spare Change.
Mark Rose
Co-Founder
Spare Change
http://www.sparechangeinc.com
Why should Apple refund fees when they did not cause the refund to be requested. If a user is not satisfied with a product, there is an expense to the developer (just like anyone who makes a product).
Here’s a thought–If you focus on good development, you won’t have to be concerned about refunds. Sure, they will happen, but if your product is good, the percentage will be very low.
Bottom line: Cost of doing business.
So where is Apple’s cost of business? They are passing all risks and costs onto the developers. They have rigged it up the same way the recording studios rig artists contracts, passing all the risks and costs on to the artists.
Nice try, Mark. I’m not going to your shitty web site.
Its not like Apple “invented” the concept of an App Store. They just pulled a “Puff Daddy” and remixed it and most people think they are genius pioneers.
Unfortunately, they are getting greedy. I think this is where there is opportunity for RIM, Google and Microsoft to pull less draconian tactics and get some of Apple’s market share. I am really waiting for a Silverlight App Store
Microsoft also charged 30% for xbox games under the xna creator club’s framework. Apple is not alone.
That’s some messed up dealing by Apple.
How do you request a refund? I’ve bought several apps that won’t even launch and just crash on launch that I wish I could get a refund on!
This article is going to accelerate app refunds. Way to go techcrunch!
Just when you think Apple is the shallowest company out there, they find a way to drain a little more out of the tub.
F Apple.
F Steve Jobs.
I hope Woz wins dancing with the starts though.
Yeah, ummm… I didn’t even know you could get an app refund. I’m a developer and I try my hardest to make sure everything is spot on. With out latest project, a few bugs went unnoticed by 2-3 stages of testing. Now it’s live and we are getting hammered in the ratings, but we’ve made it free and we are getting good feedback. I think the idea of the refund is stupid. People will just buy games, play them, get sick of them, and then get a refund. For software like ours (A unit converter) – the feedback has been really useful, and people won’t pay money for it until we get everything fixed. I think having a good ratings system (that tallies reviews from all over the world, not just the country your are in is the way to go). The only people who are going to win in this situation are admob – everyone will start making free apps so they don’t have to worry about the refund issue and then developers will just plaster their apps with advertisments. Def. not the direction I would take if I was Apple. Stupid.
This was debunked as bullshit when it was posted on Kotaku yesterday. Trying finding some real news instead of rehashing yesterday’s news.
http://kotaku.c...elopers-updated
Note the update.
What was updated was the fact that it was just put in the contract, yes it has been there all along. What it doesn’t change is that if Apple enforces it, it could bankrupt developers.
This article is over-doing the hysterical angle. The percentage of refund requests is in reality very low, particularly for a product with a small cost.
By introducing a platform on which other people, i.e developers do business, Apple, Microsoft and perhaps Google have the leverage to impose these kinds of conditions.
The alternative would be to move your applications elsewhere but realistically where can companies and devs who have invested time, energy and money turn to?
The infrastructure costs for the App Store could very well (and probably is) be covered amply by a percentage of the commissions.
My point is, Apple is a corporate entity that seeks to maximise profits, just like any other company. It’s unreasonable to think of it as the moral opposite of Microsoft or whichever company that’s convenient to demonise.
Yay, Apple!
You would literally have to have EVERY APP EVER SOLD BE RETURNED to lose money. You would need to have a HUGE PERCENTAGE OF RETURNS and LITTLE SALES to not recoup development costs. (Even then, most developers are doing free apps for exposure and ad revenue.) Apple would have to exercise this option. Purchasers would have to pursue returns. Apple would have to approve the returns.
All while Apple is hosting the crappy app, processing transactions for the crappy app, wasting time and labor dealing with the crappy app, etc…
Lots and lots of highly unlikely conditionals there. All while Apple is dealing with the real burden (and potentially larger burden than the 30% theoretically lost to the developer) of dealing with a piece of crap while quality apps are having difficulty getting into the Appstore.
I wish that weren’t so. Apple, please bankrupt the shitty developers.
And can real business people explain to the moaners that sometimes it makes financial sense to take a small loss to make a customer happy.
I don’t know Tim. Can real business people explain to us why Apple forces you to host the apps in their store?
Me? I’m not forced to do anything.
What have you been forced to do? Maybe I can explain it to you, but I don’t think it has anything to do with Apple.
I’m sure it has to do with ensuring the platform is kept secure, and having some control over what goes on the device.
Its a way to keep their brand clean. They absolutely can’t afford to have malware infecting the device, as this would seriously damage the brand.
Developers should not expect to provide a refund with no loss. Apple still has to pay a transaction fee for the credit card charge as well as a transaction fee for the return. However, the full 30% is unfair, I agree on that. This is not a big enough concern for me though, since it happens very rarely.
My concern is actually over the lack of a decent refund mechanism. If someone does in fact want a refund, I want to be able to 1) confirm that they actually own my product 2) be able to disable their copy 3) remove any review they may have left. Right now if someone requests a refund, which is rare but does happen. I have to ask them for their receipt, which could very well be fake. I have to send them their money via paypal, which means I still pay Apple their 70% and paypal fees. The user is still free to use the app. And if they left a negative review, it remains. They need to give a way to void transactions.
Why should a dissatisfied customer have a review stating as much removed?
The invoice the user received by email has a button/link that says something like “Report a Problem”. This will eventually take them to a page where they can request a refund.
On the other hand, by keeping 30%, Apple will encourage good application development. If your application is subject to substantial refunds, you need to pull it from the store. Over time, this should help weed out the store, leaving quality options for users.
Isn’t that document under NDA?
So I guess that if I download a song I can get a refund too! I think not! So why the hell should apple not have the same policy for Apps.
Sure I think you should get a refund for a crappy app that crashes or doesn’t work as performed. I really don’t think they make it easy. I haven’t seen a request refund button next to each app in my iTunes. I am sure you have to jump through a few hoops to get a refund.
No way in hell should application developers pay an extra 30% when an app is refunded. Apple should just eat and extra refund fees that can’t be more than 3%. They are making bank with iPhone app sales and it sounds like they are getting greedy since they have this monopoly and are light years ahead of all other phones out there. It really sucks that Apple is being like this. So I can play an expensive game for say $10 for a month then get board with it and get a refund and buy another one? Sounds like a cheap way to keep playing new games for free.
I was just seriously contemplating in buying the new 17″ Macbook pro and running parallels to get my PC apps running. After ready about this Apple can eat their fancy Aluminum case and high priced laptop. I am buying a Dell or IBM or other PC laptop that is rated the best and performs the best. Windows 7 for better or worse here we come! Vista hasn’t turned out to be all that bad.
Good luck to all you iPhone app developers out there. I hope Apple decides to come to their senses for you.
PS. Apple, WHY THE HELL CAN”T YOU ALLOW AN EXTERNAL WIRELESS BLUETOOTH KEYBOARD OR WIRELESS STEREO HEADPHONES TO WORK WITH THE iPHONE? We know it can work in hacked versions of the firmware. Another Monopoly I guess. Who wants to see a drop in Macbook sales because all you need is you iPhone with a keyboard to basic web surf and write emails or even edit a document or a spreadsheet.
Enough said!
Umm..yeah genius, apple just opened up it’s Bluetooth on iPhone OS 3.0 so you see headphones and keyboards by the time 3.0 is released. You should actually read the news before you comment.
P.S. People that would constantly return apps don’t. They jailbreak and steal them. Apple would deny them if they saw a routine. This isn’t Costco.
Thanks. I have read about the OS3 but they have been holding the bluetooth compatibility thing back for quite some time. I was pissed about the Bluetooth thing long before v3 was annouced, actually back when I bought my v1 iPhone, I was hoping for it forever and they never did anything about it. Yes I emailed then all the time with feature request and tried till I was blue, I had a MotoRola Stereo Bluetooth since I had my iPhone it never worked on it, but would work with everything else, like my laptop, girlfriends phone, friends phones but not my iphone! I got it to work in one ear by tricking it, not how I like to listen to my music though.
Definitely looking forward to seeing what v3 brings.
Hopefully this is just a big stink over nothing. Sorry about getting all hyped about it before I just letting off some of my past Apple steam. Hopefully Apple does the right thing.
Still think thier MB Pros are nice but way overpriced.
I am so happy to see the compassion in your response or the thought process that maybe someone missed that report about 3.0. Instead you have to toss out a shitty response. Shitty attitude + shitty people = shitty world. I would like to personally thank all of you who can’t lend a hand to help their fellow man out without lashing their skin first with your forked tongue. Bravo to God on our true self destruct buttons—our mouths. Future generations will just grow increasingly cocky and full of themselves until nothing is capable of being performed together. What a great moment in humanity. I mean, how dare you LMStuff for missing release notes on 3.0. Oh well. Life goes on…Who cares right? Have a great day!
@there, I said it
The thing is, there’s no word if you can actually create a wireless keyboard, or dock-connected keyboard. It looks like the dock accessories will be locked to specific apps, so you may not be able to just hook one up when you want some e-mailing or word processing.
I can’t believe some of the garbage that is going on in this thread. Does Apple have to work out a few things? Yes. But the app store isn’t even 1 year old yet. Comapring this to the Danger App store is a joke. That’s like saying it’s not that big a jump from having a lemonade stand to opening a distributorship. Nobody has ever done something like this to this size. Apple even had to redo the Push Notification System because they didn’t anticipate the growth.
I have never heard such whining from developers over the past year. Most of you probably wouldn’t beaming money anywhere else and still have the nerve to complain. I have heard complaints ranging from the prominence of paid apps to free apps, the pricing of apps to now this. I sure as hell would never drink a beer with a developer if you act like this. The app store has made plenty of millionaires. If you don’t like it, move somewhere else. I’m sure android would love to have you even though you would be making 20% of what you do now. You want to believe that microsoft will somehow be better to you? Yeah we’ll see what happens when they open they’re app store with their track record! This is a company who just released a browser that scored a 20/100 on the acid 3 test and still trying to control the web development through active x. Just remember that there will be somebody to replace your app once you move to another platform.
It’s funny that tech crunch is saying that you shouldn’t develop for a platform. Should we not read tech crunch, for let’s say, letting out a false rumor that last.fm was collaborating with the riaa to give up user name and data? You didn’t even make a full post apology. Just added an update to the story that stated last.fm disputed the story. How much money from lost users did you cost last.fm? You practice what you preach.
Can tech crunch even give an example of how apple has shafted a developer with this rule? Do you think that there is somehow going to be a massive loss of revenue due to this language? If you do, then you are an idiot. The people who would exploit this are already stealing your apps through jailbreak.
If any of you developers who consistently whine (like over app demos and percentage cuts), then good riddance. Chances are the paltform would be better off without you. Congratulations Leena on another post badly written.
+1 internets
Barrow something from 4chan here but clearly a samef**.
I see that Apple has distributed their talking points on this issue from HQ.
First off, how is the Apple App Store any different from the Danger App Store? You make a broad proclamation about it being so different it is not even worth mentioning, but I would like to hear how it differs at all technically. Same developer percentages, same basic concept, same OTA distribution method, same locked down, black box, and need to be approved business model. Nothing new to see here, they just stuck the Apple logo on it.
Next, I absolutely LOVE this idea that we of course have to accept that Apple is always within their rights to protect their own business interests, because they are, after all, a company, but any developer trying to protect their own business interest is a whiner that doesn’t deserve to develop for Apple’s glorious platform. Did it ever occur to you that perhaps these developers are companies too, and just like Apple, would like to limit their liability?
Lastly, you are obviously just a fanboy or paid shill, rather than a professional of any sort, if you think that the only time a bad contract provision matters, is AFTER someone has already been screwed. ANY businessman who ignores a potentially detrimental clause in a contract, simply because they assume good will on the part of the other party is an IDIOT. If Apple never intended to stick developers with their commission on returns, then that clause wouldn’t be in the contract to begin with. It isn’t like the clause just wandered in while no one was looking, and decided to make it’s home on that contract. Someone deliberately had to write that clause, and review that clause, and it is there for a reason. Anyone who doesn’t take the possibility of losing money to that clause into account on their books, is someone who isn’t very good at running a business.
I know, a lot of iPhone developers are just part-time hacks hoping to win the Apple lottery, and make a million off of some idiotic app $1 they threw together in a weekend, but this is exactly the sort of clause which should discourage any serious developer from even thinking about devoting any time to this platform. Combined with the ridiculous approval process, it is just another example of how you could easily lose money on any development effort that involved more than two people, and took more than a few hours to throw together.
Acid 3 isn’t a full standard it is only in the draft stage you fanboi moron that is why Microsoft didn’t fully implement Acid 3. Jeeez…
You know: It’s bad enough when people spread bad information through informal means, but when someone does it under the guise of “journalism” it’s unforgivable. Here are some facts:
1) Apple has not changed the terms of the contract. Clause 6.2 has been in every version of the App Store contract since it began.
2) Apple has not changed their policy with regards to refunds and, in fact, makes it quite difficult for a user to obtain a refund.
3) The 6.2 clause requires “notification of a claim”. A “claim” in a legal sense is not the same thing as saying “I want my money back”. A claim is the assertion of a right. Without a right, established by law or contract, being violated there is no “claim” in a legal sense and clause 6.2 does not come into play. Absent this clause, equity would dictate who returns the money. So, basically, absent a breach of warranty, or some similar scenario, this clause doesn’t apply. Someone saying “I don’t like this application, give me my money back” is NOT A CLAIM.
Put down our pitchforks and torches, people. This is a non-story.
THANK YOU!
Some common sense up here.
I’m an app developer myself and find this “outing” of legal agreements already in place as silly. Of course entries rarely get correct or removed or fixed with proper notice after the fact though on this blog. That’s why its not real journalism.
apple is trying to piss developers. If this is true, foreigner developers will be broke in 3 steps, cause they will have aditional costs to pay taxes in two countries plus costs to send the money back to the USA. Apple is becoming greedy everyday. I hope they do not do developers start regreting developing for Apple, or should we try Android or Microsoft?
Sigh, where are real old media and real journos when you need them. I am sooooo tired of these blogs and the morons that comment. If Techcrunch investigated just a bit rather than just blurt anything and everything it receives they could have looked up how credit card payments work. And especially chargebacks and their effect both in terms of fee per chargeback and their effect on the fee structure (increase your fees for normal payments).
Apple hating on external developers and doing anything they can to make their lives hard? This is news?
Doesnt sound fair to me. I feel there is alot more Apple can do to make it easier for the Developers to sell/promote their Apps.
Guys, I have 5 more promo codes to giveaway for an app that originally costs $4.99, go and grab a promo code by visiting the following URL http://www.whic...e_giveaway.html and leave a message and an email address so I can email a promo code out to you.
No
be evil!
As an end user, i wasnt even aware that a refund could be gotten — it sure isn’t advertised or promoted! And I have downloaded my share of lame, unstable and poorly described/illustrated apps!
I wouldn’t make a big deal about this unless they add a refund button to the 3.0 store…
And, I’d sure be okay with something more similar to the Android policy (24 hour review).
I DO think developers should be more explicit and detailed in the way they promote/descripe their apps!!!
hoo… the refund policy sounds bit odd…
Wait, so you can get refunded on an app? Does this work for any? I don’t have an iphone anymore, so I am just asking here, but: You could buy a game for instance, play the hell out of it for 3 months and return it for a refund?
I never noticed the refund option when I DID have my iphone.
when the average user actually realizes this can be done…..
glad i didn’t get into this game of developing for apple yet!
FUCK APPLE
Man, I can’t wait to buy and refund apps thousands of times from a single programmer whose app I hated in order to put them into debt with apple for hundreds of thousands of dollars.
scary
Let’s see now, who should I bankrupt…
90 days, LOL that would screw over app developers as most users only play with app for a month anyway. I can see many people looking for refunds for the sake of it, wonder those this model apply to crap music purchased on iTunes also?
If only our local arcade machines offered such nice terms per play, would have saved a fortune when I was a kid.
I always liked Apple, but this is just fckd up!
word!