The Leadership Letter

Real correspondence from the people running real companies — and what it reveals about leadership.

Reframe Your Price as a Bundle, Not a Tax

When someone attacks your fee, don't defend the fee — redefine what they're actually buying.

The App Store is not simply a marketplace -- it is part of a larger bundle of tools, technologies and services that Apple makes available to developers to develop and create great applications for iPhone, iPad and other Apple products. Epic has made great use of Apple-provided tools, such as TestFlight, VOIP, Stickers, iCloud document storage, ARKit, Messages Extension, ReplayKit, and Push Notifications.

Because of the App Store, Epic has been able to get Fortnite and other apps into the hands of millions instantly and at no cost, as Apple charges nothing upfront to distribute apps that are free to download. This exposure has earned Epic hundreds of millions of dollars from sales of in-app content.

As you know, Apple has never allowed [a competing in-app store or alternative payment processing]. Not when we launched the App Store in 2008. Not now. We understand this might be in Epic's financial interests, but Apple strongly believes these rules are vital to the health of the Apple platform and carry enormous benefits for both consumers and developers.

The guiding principle of the App Store is to provide a safe, secure and reliable experience for users and a great opportunity for all developers to be successful but, to be clear, when it comes to striking the balance, Apple errs on the side of the consumer.

IAP is the App Store's centralized payment system. It lets users purchase digital goods and services within apps without the inconvenience and security risks of registering their payment information with each developer. To take advantage of Apple's App Store, the bargain is simple: if you charge for software purchased through the App Store, Apple takes a percentage of the charge as commission. This business model has remained unchanged since the App Store launched.

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Court Exhibit
Epic Games, Inc. v. Apple Inc.
4:20-cv-05640 (CAND), Doc. 74-5, filed 2020-09-15
September 15, 2020
Public domain
View the primary source →