The App Ecosystem: A Weekly Update

Welcome back to This Week in Apps, the series from TechCrunch dedicated to recapping the latest developments in mobile operating systems, applications, and the broader app economy.

The app industry continues to thrive, having experienced a record 218 billion downloads and $143 billion in global consumer spending in 2020.

Last year, consumers devoted an impressive 3.5 trillion minutes to using apps on Android devices alone. Furthermore, app usage in the U.S. now surpasses the time spent watching live television. Currently, the average American dedicates 3.7 hours daily to live TV, but spends four hours per day on their mobile devices.

Apps are not merely a source of entertainment; they represent a significant business opportunity. Companies prioritizing mobile platforms achieved a combined valuation of $544 billion in 2019, a figure 6.5 times greater than those without a mobile focus. In 2020, investors channeled $73 billion into mobile companies, marking a 27% year-over-year increase.

This week’s focus includes an app store bill in Arizona, the rising trend of animating family photos, and the future of Twitter’s Spaces feature, among other topics.

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Top Stories

Arizona Considers Legislation to Circumvent App Store Fees

The Arizona House of Representatives recently passed a bill (HB 2005) that could significantly alter the dynamic between app developers and major app stores like Apple and Google. Unlike a similar measure defeated in North Dakota, this bill doesn’t mandate alternative app distribution methods.

Instead, it concentrates on granting developers the right to utilize third-party payment systems, allowing them to bypass the standard 15%-20% commission charged by Apple and Google on app sales, in-app purchases, and subscriptions.

Lobbyists representing Apple and Google actively opposed this bill even before its formal introduction by Arizona State Representative Regina Cobb. Cobb stated she was contacted by a lobbyist representing Match Group and the Coalition for App Fairness (CAF) – an organization comprising some of Apple’s largest competitors, including Epic Games, Match Group, Spotify, and Tile – to challenge Apple’s control over the app ecosystem.

CAF also supported the North Dakota bill and is currently advocating for similar legislation in other states, such as Minnesota, Georgia, and Hawaii.

Some legislators have expressed concerns that this issue is better addressed at the federal level and questioned the state’s ability to effectively enforce such a policy. The Arizona bill must still pass the Senate and avoid a potential veto by Governor Doug Ducey to become law. If enacted, it could establish Arizona as a favorable location for app businesses and potentially inspire similar legislation in other states.

Animated Family Photos Become a Viral Trend

MyHeritage’s recent update, enabling users to animate old photographs, propelled the app to the top of the App Store this week. The company introduced “Deep Nostalgia,” a feature powered by technology from Israeli tech company D-ID (a TechCrunch Battlefield alum). This technology maps facial features from the photo onto a driver video, creating what is termed a “live portrait.”

The app quickly gained traction on social media platforms, including TikTok, as users animated photos of deceased relatives and historical figures.

Many touching videos emerged, showing individuals reacting emotionally to seeing their loved ones “come to life” again through the technology, often accompanied by poignant music.

While MyHeritage experienced a surge in popularity, a smaller startup, Rosebud, swiftly adapted to address the same demand with its TokkingHeads app. Originally designed for creating humorous videos and memes, TokkingHeads now offers similar animation features, carefully avoiding the creation of “deepfakes.”

Following the release of MyHeritage’s update, TokkingHeads quickly updated its features and saw a dramatic increase in downloads: 1,000 downloads on February 28, 2021, rising to 8,000 the next day, and then 24,000 and 28,000 on March 2 and 3, respectively.

As of the time of writing, the app has reached as high as No. 12 in the App Store’s Entertainment category and No. 94 Overall, with daily increases in downloads.

Rosebud’s ambitions extend beyond animated photos. The company is developing internal tools for generating backgrounds and visuals for personalized media, currently testing these tools with personalized meditation videos on TikTok. Rosebud is backed by $2.2 million in seed funding led by Khosla Ventures.

Weekly News

Platforms: Apple

Apple clarifies the Siri music service feature in iOS 14.5. The company explains that the feature, which asks users their preferred music service, is an example of Siri Intelligence and does not designate a “default” service.

The courtroom battle between Apple and Epic Games is scheduled to begin on May 3. The judge has determined the case is significant enough to warrant an in-person trial with witnesses.

The U.K.’s Competition and Markets Authority (CMA) is launching an investigation into Apple’s App Store, responding to complaints from developers regarding unfair terms.

Apple releases iOS 14.5 beta 3. This release includes a notification for Apple Watch unlocking, restores the Siri feature for audio app selection, updates the Find My screen, and references Apple Card Family features.

A historical revelation: Scott Forstall, formerly of Apple, once advised Pandora to use jailbroken iPhones for app development prior to the App Store’s launch.

Apple is discontinuing Buddybuild, the app development service it acquired in 2018. Existing customers have been notified of the service’s termination on March 31, 2021.

Apple’s upcoming AirTags will include an anti-stalking feature. The latest iOS 14.5 beta introduces “Item Safety Features” to alert users if an AirTag is secretly placed in their belongings.

Platforms: Google

Google Play is reducing the minimum price limit for products in over 20 markets. Developers can now set prices between 10 and 30 U.S. cents, aiming to reach a wider customer base.

Google debuted Flutter 2, expanding the framework’s capabilities beyond mobile. Flutter 2 now supports native app development across iOS, Android, Windows, macOS, Linux, web browsers, and even automotive and TV platforms.

The Google Play Console added new metrics and benchmarks to help developers assess app engagement and monetization against peer groups.

E-commerce

Twitter is testing new e-commerce features for tweets. The company is experimenting with organic tweets that include product information, pricing, and a “Shop” button.

Amazon’s mobile app received a new icon…again. The initial design, featuring an arrow on a brown box, drew criticism for its resemblance to imagery associated with historical events. The updated icon features a smoother tape edge.

Augmented Reality

The Google Play Service for AR app has been updated to support dual cameras on Android phones, initially on Pixel 4 devices.

Fintech

Further evidence of Apple Card Family support has been discovered in the iOS 14.5 beta 3.

Social

Twitter Spaces launched on Android, beating Clubhouse to the platform. Twitter’s social audio service is rapidly evolving, with features like titles, scheduling options, co-host support, and guest lists being added. This rapid development allowed the product to reach Android users this week. However, Android users can currently only join Spaces, not host them.

LinkedIn will stop using IDFA ahead of the iOS App Tracking Transparency launch. The company will rely on “first-party data” for advertising purposes.

Instagram accidentally hid “likes” for some U.S. users due to a bug in an ongoing test. The issue has been resolved.

Parler dropped its lawsuit against AWS but continues its legal battle. The company is now pursuing new charges against Amazon, including defamation, negligence, and breach of contract.

TikTok launched a Business Profile section for marketers and brands. This section provides marketing tips, insights, and event information.

TikTok formed a Safety Advisory Council in Europe following a tragic incident involving a dangerous online challenge.

Instagram launched “Live Rooms” for live broadcasts with up to four creators.

Facebook launched BARS, a TikTok-like app for creating and sharing raps.

TikTok launched TikTok Q&A, allowing creators to respond to viewer questions with text or video replies.

Photos

Apple introduced a service to transfer iCloud photos and videos to Google Photos.

MyHeritage topped the App Store charts after launching Deep Nostalgia.

Messaging & Communications

WhatsApp brought voice and video calls to its desktop companion app. These calls are end-to-end encrypted.

WeChat updated its emojis to remove potentially offensive imagery.

Streaming & Entertainment

Netflix launched “Fast Laughs,” a TikTok-like feed of funny video clips.

Apple discontinued Music Memos, advising users to export their content to Voice Memos.

Hulu restored picture-in-picture mode on iOS.

Spotify’s podcast listeners in the U.S. are projected to surpass Apple Podcasts in 2021.

Gaming

Genshin Impact has generated $874 million in consumer spending since its launch.

Hypercasual games are now the largest genre for game downloads.

Books and Reading

Flipboard expanded its local coverage to over 1,000 cities and towns.

Google Play Books added new tools for younger readers.

Health & Fitness

COVID-19 exposure notification apps have not seen widespread adoption.

Amazon Halo integrated with Alexa.

Best Buy Health partnered with Lively to offer health services for Apple Watch users.

Period tracking app Clue received FDA clearance for a digital contraceptive.

Jamaica’s JamCOVID app and website were taken offline following security breaches.

Productivity

Business and productivity apps reached 7.1 billion downloads in 2020.

Microsoft discontinued Delve mobile apps.

Microsoft launched Group Transcribe, a mobile transcription app for in-person meetings.

Security & Privacy

Thousands of Android and iOS apps are leaking data from the cloud.

A new jailbreak tool was released for almost every iPhone.

Google’s apps are receiving privacy label updates.

Funding and M&A

💰 Stream raised $38 million for its chat and activity feed service.

💰 Whatnot raised $20 million for its livestreaming platform for collectibles.

💰 Snapcommerce raised $85 million for its personalized mobile shopping platform.

💰 Instacart raised $265 million at a $39 billion valuation.

🤝 Okta acquired Auth0 for $6.5 billion.

🤝 Square acquired Jay-Z’s TIDAL for $297 million.

📈 AppLovin filed its S-1 ahead of its IPO.

💰 Maestro raised $15 million for its interactive commerce tools.

🤝 Indie weather app Weather Line was acquired.

💰 Indian jobs app Apna raised $12.5 million.

💰 Istanbul’s Dream Games raised $50 million for its mobile game, Royal Match.

Downloads

West Tenth

West Tenth’s new app provides a platform for home-based business owners, particularly women, to connect with potential clients. (iOS and Android)

Cappuccino

Cappuccino offers a platform for private social audio conversations among friends. (iOS and Android)

Tweets