Complaints from developers focus on the terms they are forced to agree to that mean they can only distribute their apps to iPhones and iPads via the App Store, as well as the fact that some developers who offer in-app extras are required to use Apple’s payment system rather than an alternative. Apple charges these developers a commission of up to 30 per cent whenever a transaction is carried out.

As such, the CMA will investigate whether Apple has a dominant position when it comes to the distribution of apps in the UK and, if so, whether Apple uses this position to impose ‘unfair or anti-competitive’ terms on developers.

“Millions of us use apps every day to check the weather, play a game or order a takeaway. So, complaints that Apple is using its market position to set terms which are unfair or may restrict competition and choice – potentially causing customers to lose out when buying and using apps – warrant careful scrutiny,” said Andrea Coscelli, Chief Executive of the CMA.

“Our ongoing examination into digital markets has already uncovered some worrying trends. We know that businesses, as well as consumers, may suffer real harm if anti-competitive practices by big tech go unchecked. That’s why we’re pressing on with setting up the new Digital Markets Unit and launching new investigations wherever we have grounds to do so.”

The post The CMA investigates Apple over unfair App Store terms appeared first on Mobile Marketing Magazine.

Apple’s announcement has been met with a rather mixed response. A mixture of praise and anger with a sprinkling of cynicism.

“As a business that works with a huge number of start-ups and with services catered to bring them to the market successfully, we see the reduction of the App Store commission structure as a positive shift in the ecosystem. Developers have historically been at the mercy of the big tech providers, with stringent, and at times arbitrary, rules imposed on developers. One of the biggest obstacles for any app entering the market is sustainable business growth and revenue generation. The 30 per cent commission structure is a big hurdle that impacts many app businesses’ ability to make a profit,” says Megan Dean, Associate Growth Director at Yodel Mobile.

“Apple has historically tried to cater to the pleas of indie developers, such as the redesign of the App Store with iOS 11 to offer further opportunities for discovery. In tandem with this new policy change, it is definitely a step in the right direction, and we would love to see them keep making more of these positive changes in order to be more in line with the demands of the developers.”

The cynicism around Apple’s decision stems from the timing of the announcement – in relation to legal challenges faced by the company over its App Store practices – and the fact that reducing commission for small developers does very little damage to the tech giant’s App Store revenue.

Data from both App Annie and Sensor Tower suggests that around 98 per cent of iOS apps generate less than $1m in annual revenue, but these apps only provide between five and eight per cent of Apple’s App Store revenues.

“Apples App Store bottom line stays healthy, because 95 per cent of Apples App Store revenues are generated by less than 20,000 developers and publishers who will not be participating in this reduction of the App Store tax,” says Kristan Rivers, CEO of AdInMo. “This was a cynical but also typically brilliant move, a way for Apple to generate goodwill with a large number of developers and allow the company a plausible defence in conversations in courtrooms and with regulators, all while taking a very minimal hit to margins.”

Liz Waldeck, Regional Lead of Client Partnerships at AdColony sees this as a “great move for smaller developers” and feels the move will “tamp down anti-competitive rhetoric coming from some corners”.

But, as you’d expect, certain major developers – namely Spotify, Match Group, and Epic Games – aren’t so happy, showing that Apple continues to be seen in this unfamiliar role as the “bad guy of the industry,” as Rivers puts it.

Currently, we know very little about the ‘App Store Small Business Program’ that Apple will introduce in January, other than its plans to reduce the commission for small developers. From what we do know, Apple’s application of the $1m threshold could cause some problems for the small developers it’s intended to help.

Developers who qualify for the program are those who made up to $1m this year. Should any of these developers exceed $1m in revenue, Apple will apply the standard commission rate of 30 per cent for the remainder of the year and it will automatically also apply to the following year. Should sales fall back below $1m in that year, the developer can requalify for the program in the next calendar year. So, for example, if an app makes over $1m in 2021, it would be paying 30 per cent on all sales throughout 2022. Should sales fall below $1m in 2022, it would be able to return to the program in 2023.

“The $1m revenue line isn’t hard for a successful publisher with a good monetisation team to cross either,” Waldeck adds. “Is it possible some smaller hyper-casual publishers move to more in-app purchases without a 30 per cent Apple tax? Maybe. It will be interesting to watch advanced publishers’ behaviour as they get close to that line in the sand. Turn off in-app purchases? Crank up ads? Change in-app purchase prices?”

Apple’s decision to reduce App Store fees for smaller developers may also help other developers in a way many may not have considered, providing a “lifeline” for those who make most of their revenue from ad-supported free apps, according to Ionut Ciobotaru, Chief Product Officer at Verve Group.

“Apple’s announcement certainly helps smaller, indie developers who make their money from subscription-based models or in-app purchases. But it’s also a bit of a lifeline for developers that make the majority of their revenue from ad-supported free apps, especially in light of the upcoming IDFA deprecation on iOS,” says Ciobotaru.

It’s a still a little too early for us to predict the full extent to which Apple’s commission cuts will benefit or hinder smaller developers, but the general outlook is a positive one for small businesses.

Apple will continue to face scrutiny from regulators in the US and Europe, and continue to be criticised by the likes of Spotify, Match Group, and Epic, though the introduction of the App Store Small Business Program will go toward placing the company in a better standing in its legal disputes.

“Small app developers can often feel straightjacketed because of the amount of commission taken from them by the app marketplace,” says Aude Barral, Co-founder of CodinGame. “The announcement means that smaller developers will now enjoy a bigger slice of the Apple pie. And giving more money back to small businesses, particularly with so many struggling to keep their heads above water during the global pandemic, can only be a positive development.

“On the other hand, cynics will say this announcement was conveniently timed, diverting attention away from ongoing legal disputes that Apple is tied up in,” she concludes.

The post Is Apples App Store commission cut actually a good thing for smaller developers? appeared first on Mobile Marketing Magazine.

From January, app developers who earn $1m or less from the App Store will only have to give Apple 15 per cent of the money they earn. Currently, 30 per cent of the revenue made by apps on the App Store goes back to Apple. The changes are part of Apple’s ‘App Store Small Business Program’.

“Small businesses are the backbone of our global economy and the beating heart of innovation and opportunity in communities around the world. We’re launching this program to help small business owners write the next chapter of creativity and prosperity on the App Store, and to build the kind of quality apps our customers love,” said Tim Cook, Apple’s CEO. “The App Store has been an engine of economic growth like none other, creating millions of new jobs and a pathway to entrepreneurship accessible to anyone with a great idea. Our new program carries that progress forward — helping developers fund their small businesses, take risks on new ideas, expand their teams, and continue to make apps that enrich people’s lives.”

The launch of the program comes on the same day as Fortnite maker Epic Games filing a lawsuit against Apple in Australia, alleging that the tech giant misuses its power by claiming a piece of all the revenue earned by apps. Epic filed a similar lawsuit against Apple in the US earlier this year.

In June, the European Commission opened up formal investigations into Apple’s App Store rules.

The post Apple halves App Store commission for small developers appeared first on Mobile Marketing Magazine.

According to new research conducted by the UCL School of Management and the University of Toronto at Scarborough, it may not be beneficial for app developers to try to join larger platforms like Apple’s iOS App Store. The study revealed that the most popular and dominant app platforms are often overcrowded and oversaturated, pushing new games and apps to the backburner with little to no attention.

The study notes that while the iOS App Store raked in $519bn in commerce in 2019, the platform is extremely guilty of favoring older and more-well known games, making it almost impossible for new apps to survive in the space. In additional to Apple, researchers revealed other platforms including Steam and Kickstarter also make it harder for new apps and developers to stand out. To conclude the study, researchers advise app developers to seek out newer and lesser known platforms to work with.

“We discovered that as platform companies become increasingly dominant, their governance strategies shift from being largely supportive of the wider complement (app) population to becoming more selective and geared toward consumers,” said Joost Rietveld, Assistant Professor of Strategy & Entrepreneurship.

Rietveld continued: “Sufficient levels of participation by both consumers and app developers can set in motion a virtuous cycle that cements a platform’s dominant position of power. But not all developers benefit equally; its likely a small group of developers will generate most of the value. Essentially, there is a large split between the winners and losers and, importantly, this split becomes bigger as the platform cements its dominant position in the market.”

The post Report: Dominant app platforms are making it harder for developers to prosper appeared first on Mobile Marketing Magazine.

Amongst the elite group there are 7,920 publishers, which generated 23.6bn unique installs from their almost 30bn app downloads. The massive group behind the one per cent is made up of 784,080 publishers – meaning they individually average around 7,650 downloads per month. For context, this is less than a thousandth of a per cent of the 682m installs Facebook achieved in Q2.

The gap between the top one per cent and the rest is further illustrated by just 1,526 publishers generating $20.5bn in revenue, leaving only $1.5bn for the other 151,056 publishers.

Narrowing down the figure to reflect just games publisher shows that 1,080 publishers claimed 9.1bn downloads out of a total of 11.1bn. The remaining 2m downloads were split between 106,920 publishers, each averaging approximately 18,000 downloads each.

Gaming app revenue reached $16.3bn globally in Q3 2019. However, as with above, a huge chunk of this – $15.5bn – went to the top 445 publishers. The remaining $800m was split between 44,029 publishers.

Though a small group of publishers dominated the app market in the third quarter, this isn’t a new trend. Since Q3 2014, there has been little fluctuation between the revenue and download share of the top one per cent.

The post The top one per cent of app publishers account for four-fifths of new downloads appeared first on Mobile Marketing Magazine.

When Lucky Kat Studios decided to create a game inspired by Super Nintendo’s game design and cats, they had an extremely low budget, but they knew the game had potential be a hit. Lucky Kat, an indie game developer, had a user acquisition budget set at zero for Nom Cat, but realized the company could use the social media of popular online cats to drive downloads.

Lucky Kat Studios then went on to reach out to the Facebook pages of Garfield, Grumpy Cat, and more to ask the celebrity cats for endorsements. This technique resulted in the organic reach of 40m people on day one, followed by 2m app installs in the first few weeks after launch.

Eventually, Nom Cat hit #1 in the app store, but not without the help of ironSource, a mobile monetization platform for game developers. Included on ironSource’s dashboard of features is an engagement rate tab and A/B testing tool, which Lucky Kat Studios used most commonly in the Nom Cat campaign. Lucky Kat Studios continues to use ironSource’s mediation platform for their other games, including Beat Street, Kaiju Rush, Thunderdogs, and Nom Plant. 

“Our success is largely due to the fact that we continually optimize and improve our monetization strategy. ironSources A/B testing tool has been invaluable in enabling us to efficiently test any theory we have without hurting our bottom line. In one example, we tested the size of our waterfall setup, and saw better results when we increased the number of instances, which was contrary to our assumption. The ability to regularly run tests through ironSource was crucial in optimizing our waterfall strategy and achieving the growth that we did,” said Herdjie Zhou, Co-Founder and CEO of Lucky Kat Studios.

“Our goal at ironSource is to become the go-to growth platform for developers, and working with a company like Lucky Kat is a dream for us. Its incredible to see the impact that solutions like our A/B testing tool can have on their immediate results, and how it empowers them to make changes to their monetization strategy and gameplay that otherwise would have been extremely challenging or damaging to test,” said Nadav Ashkenazi, VP global partnership at ironSource.

The post Case Study: Nom Cat reaches #1 in the app store with the help of ironSource appeared first on Mobile Marketing Magazine.

The US Supreme Court has voted in favor of allowing a group of iPhone owners to bring an antitrust lawsuit against Apple, after the group claimed the tech giant is using its power to monopolize the App Store. The Supreme Court ruled 5-4 against Apple on Monday, after the iPhone users argued that Apple’s 30 per cent commission on App Store purchases leads to hiked prices and is an abuse of power.

In its defense, Apple stated customers were purchasing apps from developers, and those developers were in charge of setting prices. The court, led by Justice Kavanaugh, came back and said that Apple must take responsibility since it contracts those third-party developers and still gets its 30 per cent commission for each sale of the 2m apps on the App Store. The court also said that by ruling in favor of Apple, it would be preventing consumers from suing against a monopoly.

“If a retailer has engaged in unlawful monopolistic conduct that has caused consumers to pay higher-than-competitive prices, it does not matter how the retailer structured its relationship with an upstream manufacturer or supplier—whether, for example, the retailer employed a markup or kept a commission,” said the court.

Apple has previously run into trouble with other companies for taking such a large cut of App Store purchases. Spotify has been extremely vocal about its issue with Apple taking money from subscriptions made via the App Store, and even released a video asking potential customers to not subscribe on iOS. Netflix and Amazon followed suit, making most purchases unavailable via the App Store.

iPhone users who wish to move forward with the antitrust lawsuit can do so under the precedent set by Illinois Brick Co. v. Illinois, an antitrust case from 1977. Apple’s stock has dropped 5 per cent since the ruling was announced.

The post iPhone users can sue Apple over antitrust violations, rules US Supreme Court appeared first on Mobile Marketing Magazine.

Earlier this month, the Ministry of Electronics and Information Technology demanded that TikTok no longer be made available to download from the Apple and Google app stores, following a ruling from the Madras High Court to ban the app, saying it encourages pornography and makes children vulnerable to sexual predators.

Bytedance argued that TikTok was just a platform where users upload videos and that the company should not be held liable for the actions of these users – and the court agreed. As such, the Ministry of Electronics and Information Technology will ask Apple and Google to make the app available on their platforms again, once it has received the court’s order, according to Reuters.

“We are glad about this decision and we believe it is also greatly welcomed by our thriving community in India, who use TikTok as a platform to showcase their creativity,” A TikTok spokesperson told us in a statement. “We are grateful for the opportunity to continue serving our users better. While we’re pleased that our efforts to fight against misuse of the platform have been recognised, the work is never ‘done’ on our end. We are committed to continuously enhancing our safety features as a testament to our ongoing commitment to our users in India.”

Controversy over its content isn’t new ground for TikTok. In February, the creators of Musical.ly, the app which merged with TikTok after being acquired in 2017, reached a $5.7m settlement with the Federal Trade Commission over the alleged collection of children’s information without parental consent.

Earlier this month, a BBC investigation found that TikTok was failing to ban users who post sexually explicit comments, despite the app’s recent push to promote online safety and digital wellbeing.

*This article has been updated to include TikToks statement

The post TikToks India ban has been lifted appeared first on Mobile Marketing Magazine.

The decision from the Ministry of Electronics and Information Technology was made in response to a request from the Madras High Court to ban the app. The court determined that the app is encouraging pornography and makes children vulnerable to sexual predators.

The order does not affect the 120m monthly active users or the 240m total users who already have the TikTok app in India. It does, however, almost immediately kill off any further growth potential in a country which has become an important market for the app.

“We have faith in the Indian judicial system and we are optimistic about an outcome that would be well received by over 120 million monthly active users in India, who continue using TikTok to showcase their creativity and capture moments that matter in their everyday lives,” said a statement from TikTok.

This isn’t the first time that TikTok has been punished over content and child safety concerns. In February, the creators of Musical.ly, the app which merged with TikTok after being acquired in 2017, reached a $5.7m settlement with the Federal Trade Commission for allegedly collected children’s information without parental consent.

Earlier this month, a BBC investigation found that TikTok was failing to ban users who post sexually explicit comments, despite the app putting efforts into online safety and digital wellbeing.

The post TikTok downloads blocked in India appeared first on Mobile Marketing Magazine.

In a lengthy statement, Apple accuses Spotify of looking to “keep all the benefits of the App Store ecosystem… without making any contributions to the marketplace” and of wrapping its “financial motivations in misleading rhetoric about who we are what we’ve built and what we do to support independent developers, musicians, songwriters and creators of all stripes”.

Spotify’s main complaints centred around Apple’s music streaming service, Apple Music, not being subject to the same rules as other services on App Store, as well as not being happy about the 30 per cent tax that exists on purchases made through Apple’s payment system and the restrictions enforced if Spotify bypasses the payment system.

Apple’s rebuttal argues its case point-by-point, addressing every aspect of Spotify’s complaint, even going as far as criticising Spotify for its treatment of artists – stating the music streaming service distributes “the music you love while making ever-smaller contributions to the artists, musicians and songwriters who create it — even going so far as to take these creators to court”.

Apple states that it has approved and distributed almost 200 app updates for Spotify, helping toward the app being downloaded more than 300m times through the App Store, and says that “the only time we have requested adjustments is when Spotify has tried to sidestep the same rules that every other app follows”.

It then goes on to highlight some of the occasions where the pair have worked together to bring Spotify to Apple devices and platforms.

Apple notes that 84 per cent of apps in the App Store pay it nothing, because free apps and those that earn revenue exclusively through advertising aren’t charged. When it comes to the 30 per cent tax, Apple highlights that this is only the case for the first year of an annual subscription, dropping to 15 per cent in the years after. And it points to how many of Spotify’s users are using its ad-supported product anyway, noting that “only a tiny fraction of their subscriptions fall under Apple’s revenue-sharing model. Spotify is asking for that number to be zero”.

Apple’s final point highlights that Spotify has recently sued music creators after the US Copyright Royalty Board ruled that it needs to increase royalty payments, accusing the music streaming service of only looking for ways to make more money off of others.

“We share Spotify’s love of music and their vision of sharing it with the world. Where we differ is how you achieve that goal,” writes Apple. “Underneath the rhetoric, Spotify’s aim is to make more money off others’ work. And it’s not just the App Store that they’re trying to squeeze — it’s also artists, musicians and songwriters.”

Despite all of the above, Apple still signed off in a somewhat pleasant manner, concluding that “we’re proud of the work we’ve done to help Spotify build a successful business reaching hundreds of millions of music lovers, and we wish them continued success — after all, that was the whole point of creating the App Store in the first place”.

Who comes out on top in the case remains to be seen but the European Commission in the past has tended rule against the tech giants in similar cases – most recently, Google.

The post Apple hits back at Spotify over European Commission complaint appeared first on Mobile Marketing Magazine.