Were we surprised by this turn of events? Trouble looked to be developing the minute Elon Musk purchased Twitter and stated he would charge $8 for a Verified account due to the Apple "tax." However, it is unfair to single out Apple since Google has the same problem; it's just that Apple gets more attention. Hence, Musk threats to go to "war" with Apple rather than Google. So, my friends, is this term Apple Tax new for you? Must be for most of us. Let's read on to understand every aspect of the Apple Tax and Elon’s open challenge to end this Apple tax.
Apple's strategy differs from others in that it allows for in-app purchases and automatically renewing subscriptions. According to Apple's developer website, for the first year of a subscriber's service, developers get 70% of the subscription fee at each billing cycle, less applicable taxes. When a customer has paid for a year of service, the company receives 85% of the subscription fee (less any taxes) as income. Put another way; Apple retains 30% of the revenue0 generated by app creators.
Does it Work With Any App on the App Store?
False, seeing as how Apple offers a discounted service tailored specifically to local entrepreneurs. Aside from that, any subscription, such as Twitter Blue, that has been paid through the iPhone app must utilise Apple's in-app payment mechanism. Apple bills the customer directly rather than the programmer. After all the invoicing is complete, Apple will get a 30% cut of the sales, which drops to 15% after a year.
The commission rate for paid applications and in-app purchases for developers participating in the App Store Small Business programme is decreased to 15%. Both returning and first-time App Store developers are eligible for the programme and the lower commission if they have generated less than $1 million in total app sales in the previous calendar year. Since Twitter made about $5 billion in sales in 2021, it is evident that the company does not qualify for this programme.
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As to why this is an issue for Elon Musk and Twitter?
Since acquiring the company, Musk has made several assertions, including that he plans to charge customers for almost all features inside the Twitter app., just like the Authenticated account. Moreover, he intends to include a payment system inside the programme. Apple and Google won't be very interested in Twitter's in-app purchases since they won't bring in a huge sum of money. However, it is a hefty sum that Musk and Twitter will owe to Apple and Google. The reason behind the war warning with Apple.
Is there a way for Musk to avoid paying Apple Tax?
He can indeed do it. Some popular applications have been exposed for deliberately avoiding Apple's fee. If you want to join Netflix, you can't do so through the app on an iPhone. "Netflix membership sign-up is disabled inside the app. Yes, we realise it's an inconvenience, "he catches a notification from the mobile device and reads it. Those who already have a Netflix account may access it using the app, but new users cannot create accounts through it. This option is available to Musk and Twitter if they want to restrict desktop access to subscription services. Even if it's inconvenient, it's the only way to prevent 'war’.
Can Twitter be removed from the Apple and Google app stores?
Certainly, as soon as Epic Games (the developer) refused to pay the cut to Apple, Apple swiftly removed Fortnite, one of the most popular games. Google essentially used the same approach. Fortnite is still not accessible on the App Store, even though the firms are engaged in an intense court battle for its availability.
Is it possible for Elon Musk to create an "alternative" phone?
No way's going to happen. Even if he had the means to do so, his suggestion to create his phone would be unfeasible. Let's pretend for a second that Musk has developed a new mobile device. What kind of power source will it have? How many people who are content in their Android and iOS bubbles will purchase it as a replacement? Will he spend a fortune maintaining Twitter? It is quite improbable that Musk will release a new smartphone.
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