Apple's App Store is too big to change

Apple's App Store is too big to change

Apple isn't changing the way the App Store works because Apple doesn't want to change it

Apple made waves this week by announcing a $100 million settlement with smaller app developers that sued the company. But despite the changes announced yesterday, nothing is really changing for developers — the App Store is huge and relies heavily on in-app purchase fees for this to happen.

Apple's disposal includes a number of new policies that "clarify [y]" the App Store rules. Developers can now contact customers about alternative payment methods using data collected from their apps (as long as the notification itself is done outside of their app), which they were previously barred from doing. Apple has promised to maintain the App Store Small Business Program, which cuts 15 percent of Apple's revenue for developers who earn less than $1 million annually in their current position for three years.

The same goes for organizing your search results by "objective characteristics" such as downloads, star ratings, and text relevance. Developers can set new price points for apps, and Apple promises to give them more information about how the appeal works. It also plans to publish an annual transparency report regarding the App Store review process.

But none of this is going to make any difference to how the App Store really works in the long run, or how most of its money-making developers work with it.

The agreement gives small businesses concessions on the App Store, but some of the larger companies make most of their money on the App Store itself.

While Apple itself didn't provide any numbers for how many of its developers would fall into the "small app" category of making less than $1 million, a SensorTower report from late last year claimed that nearly 98 percent of all App Store developers accounted for it. are eligible for this. program. That report also noted that those developers — whom Apple calls the "vast majority" of iOS app developers — account for only 5 percent of the App Store's total revenue.

The economics of the App Store in 2021 are rules set by a multitrillion-dollar company to peg revenue from in-app transactions at 2 percent of developers, who account for 95 percent of commerce on Apple's platform. And all these rules and regulations and settlements and clarifications are there to placate the vast majority of developers who are effectively mere bystanders in that big crossfire.

So what does Apple care if it has to pay $100 million (paid out of its latest class action suit) or $59 million (the estimated annual cost of Apple's Small App Business program)? As long as it's able to defend a 30 percent cut in purchases coming through its store from big developers and apps, it's going to hold a class action suit over things like search rankings or new price points for apps. . Whoever gives concession can give.

Apple's biggest change, the option to discuss alternative payment methods, is also hidden. Developers are now allowed to discuss alternative payment methods for subscriptions or services outside of their app using contact information received in the app – for example, to sign up for deals that they now send to your inbox An email address may offer a form to submit. .

But if you really want to sell something in your app, you'll still have to use Apple's payment methods (and pay Apple's deductible), something that's still a topic of contention for a lot of developers. Is. the point is. And as the dramatic battle between Apple and Hey last year showed, bypassing Apple's payments isn't always easy, even if you're willing to jump through Apple's hoops and sign up users outside of the app. Do it.

The simple fact is that the App Store is a big business for Apple at the moment, and the App Store's business in 2021 is in-app purchases and subscriptions. Consider the top-grossing apps offered on Apple's store. None of the paid apps are on App Annie's list of 50 top grossers; Only one on CensorTower's list of 200 includes Minecraft (ranked 109th as of publication time, and as a game that exclusively contains in-app purchases). The biggest moneymakers on the platform -- and therefore, the biggest moneymakers for Apple -- are all free-to-play games, streaming services and subscription-based apps that rely on customers purchasing and subscribing through Apple's payment processors. .

With the amount at stake here, Apple wasn't going to make it possible (or even easier) for developers to alert users about alternative payment methods within their apps.