The app industry continues to grow, with a record 218 billion downloads and $143 billion in global consumer spend in 2020. Consumers last year also spent 3.5 trillion minutes using apps on Android devices alone. And in the U.S., app usage surged ahead of the time spent watching live TV. Currently, the average American watches 3.7 hours of live TV per day, but now spends four hours per day on their mobile devices.
Welcome back to This Week in Apps, the weekly TechCrunch series that recaps the latest in mobile OS news, mobile applications and the overall app economy.
Apps aren’t just a way to pass idle hours — they’re also a big business. In 2019, mobile-first companies had a combined $544 billion valuation, 6.5x higher than those without a mobile focus. In 2020, investors poured $73 billion in capital into mobile companies — a figure that’s up 27% year-over-year.
This Week in Apps offers a way to keep up with this fast-moving industry in one place with the latest from the world of apps, including news, updates, startup fundings, mergers and acquisitions, and suggestions about new apps and games to try, too.
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At the start of the day on Friday, it seemed like the week’s big App Store news would be Epic Games’ attempt to get back into the App Store in South Korea, following the passage of a law that forced Apple and Google to permit apps to use third-party payment systems. But Friday turned out to have much bigger news in store.
That morning, U.S. District Judge Yvonne Gonzalez Rogers issued a ruling in California’s Epic Games v. Apple antitrust case, where the Fortnite maker had alleged Apple was abusing its market power by forcing developers to use its own in-app payment systems. The judge’s decision favored Apple on the larger matter of whether or not it was acting in a monopolistic fashion. The judge said both parties had defined Apple’s relevant market incorrectly — it wasn’t just the App Store or gaming, but specifically, the $100 billion market for digital mobile gaming transactions. And while Apple had a lot of financial success here, with a 55%+ market share and high profit margins, that success was “not illegal” under either federal or state antitrust law.
This decision also means Epic Games was in breach of its contract when it implemented its own payments system in its Fortnite iOS app (it now owes Apple $12 million for that), and Apple won’t be forced to host third-party app stores or allow apps to be sideloaded on its mobile devices. For Apple, this is a huge win.
However, the judge did find that Apple was engaging in anticompetitive behavior under California’s competition laws with regard to its anti-steering provisions, which Rogers said “illegally stifle consumer choice.” As a result, Apple may no longer prohibit developers from including links, buttons, or other calls to action in their apps that direct customers to other purchasing mechanisms besides Apple’s own. This is a huge win for Apple’s developer community, many of whom have long since fought for the right to send customers over to their own websites to make purchases or subscribe, so they could save on fees by avoiding Apple’s in-app purchase commissions. As developer pushback has increased over the years, Apple tried to placate its community by reducing commissions from 30% to 15% for developers with under $1 million in revenues. But it had still blocked developers from telling consumers they could go elsewhere to make a payment from inside their apps.
In recent weeks, this particular guideline was starting to fall apart, as Apple made concessions related to other lawsuits and legislation, including a settlement with a Japanese regulator that saw the tech giant change its policies for “reader apps”– apps that provide access to purchased content — that would allow them to point users to their own website where users could sign up and manage their accounts. Another settlement gave developers permission to use customer contact information collected inside their app to tell customers about other payment options. And South Korea’s new law forced Apple and Google to allow developers to use their own third-party payment systems if they chose. The larger ramifications of how this policy change will play out remain to be seen. Apple will likely still require its in-app purchase mechanism to remain in place as an option, and it may enact new rules around how and where developers can add their links or other calls to action that direct customers to alternative purchasing mechanisms. The injunction’s wording is vague enough that we’ll also likely see some attempts to place payment buttons that load up alt purchasing screens inside the app, which may not agree with how Apple interprets the ruling. It’s most likely that Apple will simply allow any developer to steer users outside the app, as it does now for the “reader” apps — a system that still makes Apple’s own IAPs feel more seamless and consumer-friendly by comparison.
Then there is the matter of developer adoption. For smaller developers, it may not make sense to try to support two separate payment mechanisms if Apple’s is still required. And some may be concerned about other, less obvious potential punitive measures for avoiding IAPs — like reduced visibility in App Store searches, perhaps, or fewer App Store Editorial highlights. On the consumer side, things could also become more difficult. Apple’s holes in App Review have allowed too many scam apps to thrive. If these apps now also start to route around IAPs, it could finally motivate Apple to expand its review team to crack down on apps that abuse subscriptions — particularly if there will be no easy way to toggle those external subscriptions off, as there is now for Apple’s IAPs. And while ultimately that’s an issue between the customer and developer, Apple could take the fall for hosting the scam apps in the first place — especially when a scam app developer becomes unreachable and the subscription keeps renewing.
There were a few other notable bits tucked inside the ruling, which paint a picture of an App Store where almost all the revenue is delivered by games and their “whales”: Gaming apps account for approximately 70% of all App Store revenues and is generated by less than 10% of App Store consumers.
Over 80% of consumer accounts generate virtually no revenue, as 80% of all apps on the App Store are free.
Apple enjoys a market share of over 55% in the market of digital mobile gaming transactions.
Over 98% of Apple’s IAP revenue came from games in 2018 to 2019.
Game transactions overall accounted for 76% of App Store revenue in 2017, 62.9% in 2018, and 68% in 2020.
Apple announced it will hold its next big hardware event on September 14 (10 am pt/1 pm et), when the company is expected to introduce new iPhones (iPhone 13?), which are rumored to have a new 120Hz ProMotion screen and a new Portrait mode for video called Cinematic Mode. The event, dubbed “California Streaming,” may also introduce an Apple Watch Series 7 and new AirPods. (The event invite also had a nifty AR Easter egg included.)
Another App Store monopoly lawsuit had expanded ahead of the Epic ruling to include other developers who argued the App Store suppressed certain free apps in rankings and rejected others. Developers suing include the makers of Coronavirus Reporter, Bitcoin Lottery, WebCaller, and Caller-ID apps. It’s unclear what merit the suit will now have given the Epic decision.
Image Credits: Google The final Android 12 beta arrives. Google this week rolled out the final developer beta (Android 12 Beta 5) before the public launch of its new mobile operating system in just a few weeks. The update delivered some minor tweaks and fixes but had already reached platform stability with Beta 4. Among the changes are the introduction of new Material You Clock widgets, a “Paint Chips” widget Easter Egg, a more powerful Pixel Launcher, relocated smart home controls, an overheating notification on Pixel phones, a Material You-themed Calculator app, and a search bar that’s regained rounded edges. Google Workspace apps will also feature a Material You design, which you can preview here.
Google released Android for Cars App Library version 1.1 and completed the transition to Jetpack. Android Auto apps using features that require Car App API level 2+, such as map interactivity, vehicle’s hardware data, multiple-length text, long message and sign-in templates, can now be used in cars with Android Auto 6.7+, the company said.
Chinese firm Xiaomi is promising 3 years of full Android OS updates, including Android 14, and an additional full year of security patches for its upcoming devices, the 11T Pro and 11T.
Google and Jio delayed their plan to launch the much-awaited JioPhone Next in India due to chip shortages.
Leafly launched an in-app marijuana ordering option following the changes to Apple’s App Store rules which now permit apps to directly facilitate these orders where legal. Other marijuana apps including Eaze and Weedmaps have done the same.
Amazon is offering Indian farmers real-time advice and info through a dedicated mobile app that helps them make decisions about crops and deploy machine learning tech. The company sees securing a steady stream of fruit, vegetables, and other groceries as a key to dominating Indian online commerce, Bloomberg reported.
Singapore-based Shopee has overtaken Mercado Libre to become the top shopping app in Latin America, Apptopia’s research found.
The News Highlights
- An epic trial drives App Store adjustments, Android 12 is on the horizon, and Twitter is experimenting with communities
- Check the latest update on Security news
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