Why is Apple’s App Store “sitting on fire”?

Tram Ho

At the same time, leading app manufacturers such as Match Group, owner of dating software Tinder or Epic Games, the company behind Fortnite, criticized Apple for its App Store policy, including a fee of 30 % with every digital transaction on the market or the trend of launching a third-party competition with “apples”.

Smaller developers also spoke on social media about the App Store’s policy after David Hansson, Chief Technology Officer of Basecamp, publicly criticized Apple. On Twitter, Hansson said Apple declined to update its Hey email app because Apple requires users to subscribe to the App Store. Applying this provision, iPhone manufacturers will receive 15% to 30% from any user who pays through the application.

A representative of Match Group said in an email: ” Apple chokes industries like e-books, music, videos, cloud storage, games and online dating when it takes away 30% of their revenue. more than when Apple entered the space, as we are constantly witnessing. We are aware they are using force to crush us . ”

Vì sao App Store của Apple đang “ngồi trên lửa”? - Ảnh 1.

The App Store is one of Apple’s most important services, bringing in more than $ 46 billion for the company in 2019, accounting for nearly 18% of total revenue. Investors see this as a new growth engine and the company targets $ 50 billion this year. However, Apple did not disclose the percentage of revenue earned from the App Store.

Developer’s concerns

The App Store is the only way for most users to install software on iPhones and iPads. To update apps on iOS, developers must go through the App Review process. An Apple employee is responsible for collating with the lengthy list of regulations and making decisions to approve or reject in minutes.

There are 3 main problems that programmers encounter with the App Store:

The evaluation process is not clear: They think that the decision made in App Review seems arbitrary and the application is often completely removed from the App Store for small and unfair reasons. In addition, it is difficult to contact an Apple representative and be restored. Basecamp’s Hansson testified before Congress that software developers were worried about being rejected by Apple.

Commission: Apple gets 30% of revenue from paid apps or in-app purchases. This fee is reduced to 15% after the first year. Programmers believe that Apple is overcharging and making their business significantly less profitable. In its annual report, Apple said it believes people buy Apple computers because of third-party software and notes that developers can stop producing software for Apple if they feel it makes Google Android or Microsoft Windows less expensive. worse.

Unequal competition: Software manufacturers are also concerned that Apple may use data on App Store trends to develop competing applications and applications. Once these features are introduced, they are deeply integrated into Apple’s operating system, a privilege that third-party developers do not have. They call that behavior “Sherlocking,” referring to past events. It was Apple that launched a search engine called Sherlock on a Mac computer in 1998, facing a third-party Watson product.

Apple against the world

Apple argues that tight control of the App Store helps the company ensure the software runs on iPhones safely. In addition, many businesses make money from the App Store both directly and indirectly. In the statement, the spokesperson asserted that Apple obeyed the law in everything and pursued competition at all stages, believing it helped them deliver better results.

Apple expressed disappointment when the European Commission relied on unfounded complaints from some companies that wanted free benefits and did not want to play by the rules like others. Apple wants to maintain a level playing field where people with determination and good ideas can succeed.

Tim Sweeney, CEO of Epic Games – the company pays 30% for Apple for every purchase in Fortnite game – responded: “Apple talks about the fair playing field. For me, it means: All developers iOS is free direct payment processing, all users are free to install the software from any source. ”

Antitrust pressure also weighed on the App Store in the US. Antitrust Council of the Judiciary Committee is working to bring Apple CEO Tim Cook to the hearing with other counterparts from Amazon, Facebook, Alphabet.

According to Chris Sagers, Professor of Antitrust Law at Cleveland State University, the European investigation is a bigger concern for Apple, unless the new antitrust law is passed. One problem with any antitrust suit against Apple in the US is that the iPhone does not seem to have a dominant market share compared to Google Android. 46% of smartphones sold in the US in the first quarter of 2020 were iPhones, according to Counterpoint Research. Google Play also charges 30% for each successful transaction on the market.

Tensions escalated at an unfortunate time for Apple. The Global Developers Conference WWDC 2020 will open next week in the form of online. Some companies said they would follow the event and continue to develop products for Apple, but it is no longer a top priority. Their big plan is to support Windows.

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Source : Genk