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Apple App Store

In: Business and Management

Submitted By evdgirl
Words 1055
Pages 5
2. Apple and Nintendo’s strategy with respect to their developers are similar in the sense that both Apple and Nintendo try to limit some of the value that their developers create. Even though developers create a complementary product (games and apps for video games and iPhones/iPads/etc.) that creates value, neither Apple nor Nintendo lets the developers capture all potential value. Nintendo restricted developer value creation by limiting the number of licenses to be distributed and the number of NES titles that could be developed a year. Apple takes a similar approach, as developers have to go through a rigorous approval process before their app is accepted into the Apple app store. However, Apple does not limit the number of apps a developer can release a year, unlike Nintendo. Even with its rigorous approval process, Apple does not have a hard number quota of apps for each developer. In addition, Apple does not force its developers into exclusivity agreements like Nintendo does. iOS developers are free to work on other app platforms like Google Play. Thus Apple does not as heavily limit the total value created by its developers when compared to Nintendo. Another similarity is that both Apple and Nintendo charge fees to its developers in order to increase their own value captured. Nintendo does so with licensing fees, while Apple’s Software Development Toolkit charges developers a fee for its user-friendly platform to create applications for the Apple app store. Apple also captures value from its developers by retaining 30% of the revenues for each transaction in the App Store, leaving only 70% to the developers. 3. Yes, indirect network externalities exist in the market for mobile phone apps in the form of two-sided markets, which can generate mutual advantages. Through its developers, Apple can exploit indirect network externalities that increase the...

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