business

Improving fairness and viability of the App Store for developers

I present several changes Apple could do, to nurture honest competition on the App Store and make it more viable for small developers.

Jul 30, 2020 by Aleksandar Vacić 6 minute read

Much have been spoken and written about the Hey app’s (temporary) rejection from the App Store. As predicted and expected, the high public profile of this particular David has forced the Goliath to yield a significant ground. There are many way less known Davids which have the same or worse issues with the App Review capriciousness and ever-changing guidelines.

I have skin in this game. Counting my own apps and client projects, I have participated in development and publishing of over 90 apps on the App Store. And I’ve seen things…I have seen and heard about rejections that are often hard to comprehend.

The huge wave of the bad PR around Hey has forced Apple to look into its practices and promise to change them; namely:

It’s rightfully pointed out that this would be Apple acting as prosecutor, judge and jury; the devil will be in the implementation details. So far, we barely had any avenue to argue, it was reviewer’s way or the highway with (maybe!) an attempt to appeal with App Review Board. Thus this is positive development but how sincere Apple is, remains to be seen.

We need to stay vocal and supportive of one another because the only real leverage [indie] developers have against Apple is being able to rally and sway public opinion. Apple cares and thrives on how it’s perceived. Running to the press is often the only viable thing to do as Apple holds all the cards and they have been ready to use them.

That’s precisely the kind of anti-competitive and monopolistic behaviour that is leading Apple into legal trouble with governments around the world. Anti-trust hearing in US Congress is just one of them, I expect similar events in EU.

Thus one side of the coin is fixing the rules of the business and nurturing honest competition. Here are some proposals:

1. No more hidden rule changes

If Apple wants to institute some new rule or guideline, it should be announced at least 6 months in advance so there’s enough time to plan the transition and compliance path.

2. No more fake distinction between apps

i.e. like the “Reader” type of an app/service they allow for Netflix but not for Hey. The rule about not allowing account creation for a 3rd party service inside an app is petty but can pass sniff test. Fake distinctions between apps do not.

Apple executives love to brag how all apps are treated the same way, including their own but practice says different. Some apps are more equal than others and until this field is truly level their “honest competition” claims are fake.

3. No more shenanigans with trial and automatic subscriptions

Don’t allow unscrupulous developers to trick your own customers, don’t force caring developers to implement such things.

I know it’s next to impossible for Apple to act as police how much some app should charge weekly or monthly for subscription. That would be even more ground for legal investigation.

But what they can do is greatly improve the confirmation part; iOS own payment dialog should display per month / per year total amount for the chosen subscription. Go one step further and provide and enforce system designs for subscription screens through API. They already enforce the usage and design for Apple Pay buttons thus I don’t see why it can’t be done for subscription screens as well.

Those should clearly indicate how much are you looking to spend per month and per year. With this, coloring apps for kids won’t be able to get away with “3-day free trial, $14.99 per week” scams as people will clearly see the huge cost. No freaking coloring book or wallpaper gallery is worth that much.

Over-subscribing fear is real: my apps do not have any subscriptions, some only have (or had) non-expiring IAP and yet people would email asking for the subscription to be cancelled.

Lastly — separate App Store team should routinely and regularly perform reviews of the most profitable apps for subscription deceptions and be ready to sanction them if they don’t follow the rules.

App Store Economics

App Store is a fine platform, in essence. For $99/year, every developer gets their own merchant account, gets free online shop with (more or less) 1-click purchasing for end customers. For this, Apple charged 30% fee in 2008 and they still do so in 2020.

Every single Apple executive is parroting the line how this is so much better than brick & mortar stores that sold shrink-wrapped boxes. Which is complete bullshit. In 2008, software was being sold online for well over a decade, for ~5% fee charged by Kagi, eSellerate and similar payment providers. I am absolutely certain that Stripe or FastSpring would offer similarly competitive packages today.

But Apple does not want to allow that, since App Store is responsible for a hefty chunk of their increasingly important Services revenue. If Bloomberg is to be believed — a hard ask, I know — App Store brings $16B annually. Whatever the actual number, it’s a sharp change from the original premise (stated just 3 years earlier) that “App Store is not setup to make money”.

That 30% fee is just one aspect of the problem. Another, more important one is that App Store encouraged and hastened the race to the bottom. Software prices plummeted. Thus developers are charged more from less, which put untenable pressure on many small to medium developers.

I propose something that would

Namely, institute tiered fee system for App Store distribution of paid / IAP / subs apps:

(These tiers are just an example.)

I believe this system would cost a tiny pct of Apple’s revenue. All those billions paid to developers that Tim Cook is repeating every WWDC — they mostly go to a very small number of developers out of 23M that Apple claims to have registered.

This tiered system would give small upstarts a chance to create something good, use extra money to hire another developer or designer. It will foster creation of new companies and products that will increase the value of Apple’s entire ecosystem which would then drive the value of owning an Apple product higher.

And if and when you get big enough, well – pay up. App Store likely helped you get there and Apple deserves its share of that success for creating products worth buying and developing for.