According to Unshared News August 30, Beijing time morning news, according to reports, Apple Announcing a US$100 million settlement with the small app developer who sued him last week, aroused public concern. Although Apple announced that it will start to change, the environment for developers has not really changed-the scale of the App Store is too large and the reliance on in-app purchases is too heavy, making it hard to return.
Apple’s settlement includes several new policies, which they claim to want to “clarify” the App Store rules. Developers can now use the data collected through the app to inform users of other payment methods (as long as these notifications are sent outside the app), which was previously prohibited. Apple promised to keep the “App Store Small Business Project” unchanged for three years. The project will reduce the revenue share of developers with annual revenues of less than $1 million to 15%.
Apple will also use “objective metrics” such as downloads, ratings, and text relevance to organize search results. Developers can also set new prices for apps, and Apple promises to provide more information on appeals. The company is also preparing to publish an annual transparency report on the App Store review process.
Nevertheless, in the long run, these policies seem unlikely to change the actual operation of the App Store and the main way developers use the App Store to generate revenue.
This settlement agreement made concessions to small companies on the App Store, but it is the few large companies that actually contribute the main income to the App Store.
Although Apple itself did not disclose the specific number of “small apps” with annual revenues of less than $1 million, only that they accounted for the “majority,” but a report by the market research company Sensor Tower at the end of last year believed that App Store developers have approximately 98% are eligible to enjoy this preferential policy. The report pointed out that these developers only accounted for 5% of the App Store’s total revenue.
Technology said: The economic model of the App Store in 2021 was formulated by a company with a market value of trillions of dollars. Although its main charging objects accounted for only 2% of the total number of platform developers, it contributed up to 95% of in-app transaction fees. . The latest rules, policies, reconciliations and clarifications are all designed to appease the developers who account for the largest proportion in the number-but in fact, these developers only act as bystanders in the larger-scale competition. .
If Apple has to pay $100 million here (the latest class action settlement amount) and lose $59 million there (expected annual loss of revenue due to the “Small App Enterprise Project”), what does it really care about? As long as it can keep the 30% revenue share it collects from large developers and applications, it will not hesitate to make any concessions to settle the class action lawsuit.
Apple’s biggest change is to allow developers to consider other payment methods, but this measure is actually not thorough enough. Developers can now only use the contact information obtained through the app, and consider other payment methods for subscriptions or service fees outside of their apps. For example, they can now submit an email address through a form to request to send transaction information to the user’s inbox.
But if you really want to sell content in the app, you still have to use Apple’s payment method, so you have to pay Apple to share-this is still a pain point for many developers. In fact, Apple’s lawsuit with the email app Hey last year showed that even if developers want to bypass Apple’s restrictions and only register users outside of the app, they may not be able to easily bypass Apple’s payment system.
In fact, the App Store has now become an important business for Apple, and in 2021, in-app purchases and subscriptions are the main pillars of this business. Looking at the App Store’s revenue generating list, it’s not difficult to understand: In the top 50 apps listed by the market research company App Annie, there is no paid app; among the 200 paid apps listed by SensorTower, there is only “My World” a paid application. It can be seen that the largest sources of revenue for the App Store are free games, streaming media services and subscription applications, and their main revenue generation methods are to use the Apple payment system to obtain in-app purchases and subscription revenue.
It is precisely because of the importance that Apple will never allow developers to use other payment methods in the app, or even relax the restrictions slightly.
It is estimated that the App Store platform’s sales last year were approximately US$64 billion. According to a 30% share, Apple derives approximately US$19 billion in revenue from it. Since Apple provides a 15% discount share ratio for small businesses and full-year subscription services, the actual amount may be slightly lower than this figure.
The App Store is too large and too important for Apple. Unless the court clearly decides (Epic, Spotify and other companies are actively seeking such a ruling), the core part of its app economy will not undergo any substantive changes.
Of course, Apple’s clarification statement will not touch this core at all.
