What is it like to attend WWDC in person? By all accounts (including this one), it's an amazing, awe-inspiring experience.
If you're reading this newsletter, you may be used to thinking of Apple as a vaguely antagonistic elephant in a world full of mice. With things like the ongoing controversy about App Store commission rates and all the disruption caused by the IDFA Apocalypse over the last two years, a glowing endorsement like this one might seem like cognitive dissonance.
I don't think these are actually at odds. I believe Apple genuinely does care about indie developers. The small, independent dev teams building niche apps that might even be uniquely possible only on iOS, ideally monetizing via in-app purchases or subscriptions. They're the ones who make sense to Apple, who fit into Apple's worldview and use the iOS ecosystem the way Apple wants it to be used (the article above about 'getting Sherlocked' notwithstanding), and who often feel something like Apple's 30% commission rate is a pretty good deal.
Unfortunately, somewhere along the line — as companies get larger and their iOS apps become a part of the end user relationship instead of the entire thing — that care starts to gets smothered by ideology and other business considerations.
The gist of this is that companies running app stores with over a million downloads per year would be required to allow apps to offer alternative payment methods.
If that sounds like an awfully roundabout way to single out Apple and Google, that's because it is: the main backer of the bill is the Coalition for App Fairness, which includes Spotify, Epic Games, Match Group, and most of the other familiar names that typically come up in a disagreement around App Store commission rates.
This isn't law yet in Arizona, and may never get there…but it's an early preview of the kind of proposals that will likely become more common around the world over the next few years.
In related news, Apple finally blinked in its ongoing dispute with the Netherlands Authority for Consumers and Markets.
The newest development: now Apple announced its plans no longer include requiring a completely separate app just for the Netherlands. Still unchanged: a required pre-payment warning modal (very similar to the example above), and a 27% commission rate with mandatory audit rights to Apple.
The ACM hasn't indicated yet whether it considers this satisfactory…so the drama continues for at least a little while longer.
Last week, Apple published a report done by Analysis Group, an international economics consulting firm, under the headline 'Report finds third-party apps see global success on the App Store'.
The Apple press release and the report itself are worth discussing separately: the former is full of carefully-polished PR points, but the latter is a legitimately interesting whitepaper with a lot of fascinating industry data.
Setting aside PR spin, it's probably best to take this analysis at face value for exactly what it shows: in certain markets and for certain verticals, users prefer apps not made by Apple. Nothing more, nothing less.
Carbon Health (a company that offers in-real-life medical clinics, including COVID-19 testing) had their app pulled from the Play Store this week (it was later reinstated).
Why? Google has a new policy of only approving apps that reference COVID-19 if the app is “published, commissioned, or authorized by an official government entity or public health organization” (Apple has taken a similar stance).
There is no easy answer here. Yes, it’s concerning that Google has the ability to unilaterally take action like this. At the same time, the ‘curated experience’ of the app stores is by now well-established, and there is a legitimate need to gate-keep against misleading — or even fraudulent — COVID-related apps.
The real problem is that Apple and Google are acting as de facto market regulators for their respective platforms, but have none of the normal accountabilities or methods for recourse that most of us have come to expect from governmental regulatory agencies.
This week's big story is clearly the fallout from the Meta/Facebook earnings report. We'll get to that in a minute.
But first: a few thoughts on the ever-unfolding situation around alternative in-app payment methods, this time for dating apps in the Netherlands. There have been so many 'alternative payment methods' stories over the last year that you might be thinking 'wait, another one?'
If so, I don't blame you. The short version this time:
But the Byzantine twists of each new version of this story are much less interesting than the clear pattern that is starting to emerge: while these showdowns are always phrased around allowing alternative in-app payment methods, that's just a means to an end: the real objection is the 15-30% commission rate.
I think the unspoken assumption here has been that the commercial models behind the App Store and Play Store are the digital equivalent of a Prince Rupert's drop, and that forcing Apple and Google to budge even slightly on payment methods would cause the whole thing to shift.
In other words, most seemed to hope that if Apple and Google could be forced to allow alternative payment methods in even a small jurisdiction, they would either quickly give up, or decide to overhaul the entire system.
That's not what has happened, at all. In reality, the result so far has been much closer to scorched earth, trench warfare. In every case, Apple and Google are giving only the bare minimum in concessions necessary to comply with the literal letter of each new law, while making sure each change is a Pyrrhic victory for those who brought the complaint (for an example of what I mean, just see the scrupulously detailed guidance above)
One can't entirely blame them for this approach — no one enjoys it when their product roadmap is dictated by court order — but the unfortunate thing is that all this ultimately harms the broader mobile ecosystem. Yes, there are many issues with walled garden app stores. Discoverability, high commission rates, and mercurial review decisions are just a few examples.
But there are also major benefits (no one really wants a return to the days of Windows 98, when an antivirus scanner was the only thing standing between your computer and total anarchy), and avoiding heavy-handed regulation via a few thoughtful compromises would seem like a worthwhile trade.
This has been hanging in the air ever since Apple's settlement with the Japan Fair Trade Commission last fall.
It sounds big on the surface, but read the details and you'll see Apple is basically playing the 'take my toys and go home' card. Per the documentation page, some of the restrictions required for an app to use this new option:
Also, Apple is requiring apps to show a scary-looking fullscreen warning to users before sending them to the website destination — you can see the mockup on this page, about half-way down.
On Monday, the team behind Basecamp officially launched Hey. This makes them the latest in a long list of companies attempting to ‘reinvent email’. And since it’s 2020, any email platform (especially one that costs $99/year) without native mobile apps is dead on arrival.
Of course, Basecamp would prefer not to pay an ‘App Store tax’ of $33/user to Apple each year, so they allow customers to access an existing subscription on mobile, but not purchase a new one.
This approach has been the status quo for many popular apps (Netflix, Dropbox, even the main Basecamp platform) on iOS for years, and Apple occasionally makes even more substantial exceptions. But something apparently went off the rails this time: after initially approving Hey v1.0, Apple blocked the v1.0.1 bug fix. Then they doubled down by claiming the original approval was a mistake, and threatening to remove the app completely.
Given the amount of press coverage, and in the context of the two EU anti-competition probes that coincidentally launched this week, I’d be quite surprised if something doesn’t ‘magically work out’ in this case. But the underlying conflict is going to keep simmering away for as long as the App Store business model involves taking a commission.
Bloomberg dropped an explosive-sounding report this week: Apple to Allow Outside App Stores in Overhaul Spurred by EU Laws (here's an alternative TechCrunch article, if you aren't a Bloomberg subscriber).
Most of the media is talking about this story like some sort of bombshell scoop, but it really shouldn't be a surprise — the bones of the the Digital Markets Act (the 'EU Laws' referenced here) have been an open secret for a while.
It's good to see progress on this, but I've said it before (more than once) and I'll say it again: this is the worst outcome for pretty much everyone involved. Yes, there are many issues with walled garden app stores, but there are also major benefits (no one really wants a return to the days of Windows 98, when an antivirus scanner was the only thing standing between your computer and total anarchy). The unwillingness shown by Apple and — to a somewhat lesser degree — Google towards engaging in any sort of thoughtful compromise is leading to 'product roadmap by regulation'. And since that is basically how we got into cookie consent banner hell with GDPR, I don't think anyone is going to be thrilled with the outcome this time either.
John Koetsier has a great piece on all the open questions around what this new, multi-store world would look like, but I think the key point is this: the primary driver here is pretty obviously a challenge to the 15-30% commission rate. And we already have a clear playbook — going back years — for how Apple and Google respond in these scenarios: they will give only the bare minimum in concessions necessary to comply with the literal letter of each new law.
These changes will be no different, which means we should expect them to come with UX requirements designed to make things as unappealing as possible…and some other way to collect an equivalent amount in fees. This is scorched earth, trench warfare, and the unfortunate thing is that it's just ultimately harming the broader mobile ecosystem.
PS, barring some unforeseen, apocalyptic event, this will be the final Mobile Growth News of 2022. Thanks for reading, for your thoughtful replies (I respond to all of them!), and for coming along for another year of mobile growth. Happy holidays, and see you all again in 2023!