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App developers gain an edge over Apple as a judge opens a way for them to get around a huge sales commission.
Apple has taken to calling its iPhone App Store an ''economic miracle'' and it has pointed to developers like Zack Shakeed as proof.
Mr. Shakked created an iPhone app that helps companies find trending hashtags on social media. Over the past 12 months, his sales have topped $5 million.
But one of Mr. Shakked's largest expenses is paying a cut to Apple, the world's richest company. In his case, Apple took nearly $1.5 million - its fee for letting him run his app on its devices.
Now, Mr. Shakked has hope that he could soon keep at least some of that money. Last week, a U.S. District Court ordered Apple to allow developers to steer their customers off their iPhone apps to pay for their goods and services, which Apple had banned.
That is big news for developers like Mr. Shakked, because sales completed outside Apple's payment system are not subject to its commission of up to 30 percent.
''It finally feels like the small guys got a win,'' Mr. Shakked, 25, said. ''There's a sense of justice.''
The ruling on Friday, in Apple's year-long legal fight with Epic Games, the maker of the popular video game Fortnite, set off celebrations among App developers. From one-person start-ups to Fortune-500 companies, they have long complained about paying hefty cuts of their businesses to Apple.
The impact of the decision will be felt most by developers like Mr. Shakked. He said the change could save him hundreds of thousands of dollars a year, which would allow him to hire more employees.
''It's a very big deal,'' said Dens Zhadanov, a board member at Readdle, which makes five productivity apps for tasks like email that together have been downloaded roughly 175 million times. The change could save his company millions of dollars each year, he said.
The court fight has often been framed as a battle between industry heavy weights : Apple with stock valued at $2.5 trillion, versus Epic, a far smaller company but still one of the few app makers capable of taking on the Silicon Valley titan.
The verdict is not to be a big hit to Apple's bottom line. In fact, the company declared victory, since judge Yvonne Gonzalez Rogers, of U.S. District Court for the Northern of California, ruled that Epic had failed to prove that Apple had a monopoly in the mobile video game market - which would have had a much more serious consequence.
The decision appeared to disappoint Epic. Tim Sweeney, its chief executive, said the ruling wasn't a ''win for developers or consumers.'' He vowed to continue his company's fight.
There could be a number of barriers to the mandated App Store changes. Apple could ask another judge to temporarily block the order, which is set to take effect in 90 days. Epic on Sunday appealed the decision, a process that could take several years.
The Match Group, the maker of the dating apps Tinder and Hinge, is on track to pay Apple and Google - which controls a similar app store for phones that run its Android Software - more than $500 million is commissions this year, the company's single largest expense, said Gaary Swidler, Match's finance chief.
The company was already considering ways to use the ruling on Friday to cut down that bill as much as possible, he said. One way could be to charge less for subscriptions that are paid on one of its websites.
One analyst estimated that the change could save Match $80 million a year, but Mr. Swidler said there were too many questions to make such a broadcast.
''Depending on what the take rate would be, it would help us from a bottom line perspective, and it will allow us to invest more in our business, and will also allow us to pass on the benefits to consumers,'' he said.
The Honor and Serving of the Latest Global Operational Research on Tech Titans, Business Practices, and the Ecosystem players, continues. The World Students Society thanks authors Jack Nicas and Kellen Browning.
With respectful dedication to Law, level markets, Ecosystem App Developers, and then Students, Professors and Teachers of the world. See Ya all prepare and register for Great Global Elections on The World Students Society : wssciw.blogspot.com and Twitter - !E-WOW! - The Ecosystem 2011 :
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