A Developer’s Perspective About Apple vs Epic Trial
Like many developers, I have been following the trial between Apple and Epic for a while. The trial is quite important for both developers who are earning money from App Stores and end-users. If the trial is concluded with Epic’s expectations, it will change the ecosystem of mobile apps. Therefore as one who has been working in this ecosystem for more than 10 years, I would like to share my opinions.
Let me give you some background info about myself. I have been working in companies that develop software for 15 years, 10 of which have been working on mobile apps. So I have had many chances to see behaviors of Apple and Google in different cases. Today, I am still working in a company that develops mobile apps and earns money by using stores’ IAPs(in-app-purchase).
As many developers agree, the ecosystem is driven by Apple. It defines and executes the approaches of stores such as the permission system and privacy controls. Google follows Apple. As a developer, I believe Apple achieved to create an OS secure thanks to its privacy controls and permissions given to apps. Unlike traditional software development, it restricts app developers and forces them to follow its rules. It is hard to say this true for Android. Although some developers believe the true way is not to restrict, I think Apple has the correct method. Our phones are much, much more personal compared to our computers since apps working on our phones are supposed to be restricted by rules.
Apple is much better than Google about OS security. However, creating a restricted OS is the first requirement to develop a secure environment. Even though OS security is great, it is not enough to create a secure environment. There is one more important requirement that is a review process. Even if developers have to play in the rules of the stores, still it is possible to trick people. Thanks to well defined and executed review process, malicious developers could be restricted. Apple is much better than Google about this topic, as well.
Up to now, you can think I am a fan of Apple :) However, I am not. Although it is impossible to say Apple achieved totally secure environment, I think it is much closer to be a secure environment in comparison to alternatives.
Commission Rate
Even if Apple is good at managing its store, some of its regulations aren’t fair. The first one is the commission rate of its store, 30% is too high to pay. Before this trial, Apple hadn’t taken a step to decrease its commission. It hasn’t needed to change this rate so far. That shows us Apple has a monopoly in the Apple App Store. There isn’t any competition among its competitors. Think that if Apple changed the rate to 40%, what would happen. Let me answer this question: “Nothing”. We have to follow it. That’s why it is called a monopoly.
Apple has many own apps such as Apple Music. If you want to develop an application that has the same business model as Apple Music like Spotify, it is hard to fight with Apple because of the fact that you have to pay Apple 30% of your revenue. Maybe you need to increase your price that could effects your business in the competition with Apple.
We found out that “Apple runs App Store with 78% profit margin, according to court testimony”. It is making excess profits by cutting 30% commission from each payment.
In my opinion, this commission rate should be decreased to the level of traditional payment methods, less than 5%.
Alternative Payment Method
If Apple says that it isn’t possible to decrease the commission rate to a low level because of its operational spending to keep its payment system up. In this case, Apple should allow alternative payment methods for competition in its store.
Today, if Apple gave this chance to developers, we wouldn’t talk about its commission rate. There would be a market that offers different payment methods. I think this is fair for everyone.
I would like to leave a note here. If Apple allowed alternative payment methods, the user experience shouldn’t be more difficult than the Apple payment system. Otherwise, still Apple will have a competitive advantage. Therefore Apple should be audited by laws.
One App Store
Another controversial topic is there is only one store to download apps. It makes Apple so strong because of the fact that it can decide whether an app can be published/updated or not.
As many people may have heard, Apple had rejected Spotify because of different reasons. This power gives Apple a quiet advantage. It makes the competition almost impossible.
Although I generally approve of Apple’s regulations in the review process, being only one authority and deciding apps’ existence aren’t acceptable. Apple rejects, does not allow apps to be published, even removes apps from the store without caring about developers’ efforts.
Pre-Installed Apps
As each iPhone user knows, iPhone comes with many pre-installed Apple apps. If your business is the same business model as one of Apple’s apps, you start the competition behind Apple thanks to its pre-installed apps.
Again, I am going to give Apple Music as an example. Spotify has a serious disadvantage since Apple Music comes as pre-defined.
ATT(App Tracking Transparency) — IDFA
App tracking transparency (ATT) is a new privacy protection framework for Apple device owners. With ATT, when an Apple device owner downloads or opens an app, a notification pops up asking if the user wants to be tracked across third-party apps and websites.
Apple has brought this control to apps with iOS 14.5 update. If the user selects “Not to Track”, Ad Networks aren’t able to define the user.
The reason behind this move is to gain a competitive advantage against its competitors not only AdNetworks such as Facebook, Google but also other apps like Netflix, Spotify, Amazon, etc.
Many blog posts, news have been published about the fight between Apple and Facebook so far. However, this move is not only decreasing the revenue of Facebook but also bringing many advantages to Apple to increase its revenue.
- Many developers will change their revenue models from Ads to subscriptions. It will bring the commission to Apple from those who are earning on Ads and not paying commissions to Apple.
- Apps like Netflix, Spotify, Epic will struggle to find users. User acquisition will be difficult because of non-personalized ads. However, Apple’s apps will continue to come as pre-installed.
- There’s a global setting switch that lets users just opt out of all apps by default in Settings > Privacy > Tracking. Whereas, it has an additional toggle, located in “Settings > Privacy > Apple Advertising,” to disable the tracking. It is not fair.
- Apple appears to be providing its homegrown ad network with more granular measurement functionality that what everyone else will get through SKAdNetwork.
Apple does still have some tracking that it uses to serve personalized ads within the App Store, Stocks, and Apple News apps. As detailed here, Apple uses information like location, keyboard language settings, device type, OS version, mobile carrier, and more to serve customers more relevant ads within its apps. It also uses account information and past purchases to lump customers into market segments to better target ads within those apps.
Final Thought
As seen, it is really hard to compete with Apple since it has many advantages on its platform. Unless Apple allows both alternative payment systems and alternative stores, Apple will remain a monopoly.
My expectation from the trial is forcing Apple to let alternative payment system.
What is your opinion, who is in the wrong?
Feel free to leave a comment, dm me on Twitter or LinkedIn. I writes about tech at twitter.
