This Week in Apps: App Store Settlement, OnlyFans & Snap Updates
The Ever-Evolving App Landscape: A Weekly Recap
Welcome back to This Week in Apps, your regular TechCrunch series dedicated to recapping the latest developments in mobile operating systems, applications, and the broader app economy.
The app industry demonstrates continued expansion, achieving a record 218 billion downloads and $143 billion in global consumer spending during 2020. Android users alone spent an astounding 3.5 trillion minutes utilizing apps last year. Furthermore, app usage in the U.S. now surpasses the time dedicated to watching live television. Currently, the average American dedicates 3.7 hours daily to live TV, while mobile device usage occupies four hours each day.
Apps are not merely a source of entertainment; they represent a substantial business opportunity. Mobile-first companies boasted a combined valuation of $544 billion in 2019, a figure 6.5 times greater than their non-mobile-focused counterparts. In 2020, investors channeled $73 billion into mobile companies, marking a 27% year-over-year increase.
This Week in Apps provides a centralized resource for staying informed about this rapidly changing industry, offering news, updates, startup funding details, merger and acquisition information, and recommendations for new apps and games.
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Significant changes to the App Store ecosystem were central to the headlines this week. In South Korea, legislators are poised to vote on a groundbreaking bill that could dismantle Apple and Google’s exclusive payment arrangements within their app stores. Meanwhile, Apple reduced commissions to 15% for news publishers’ apps, contingent upon their participation in the Apple News ecosystem. Apple also reached a settlement in a class-action lawsuit brought by U.S. app developers, which, pending court approval, will introduce modifications to App Store regulations – most notably, allowing developers to communicate with their users outside of their iOS apps regarding alternative purchase options.
Top Story: App Store Settlement Falls Short of Expectations
The recent App Store settlement agreement is not as transformative as initial reports suggested. Apple had already made minor adjustments to its App Store policies in June, clarifying that developers could communicate via email and text about purchasing methods outside of Apple’s in-app purchases. However, this was only permitted if developers did not utilize contact information obtained within the app itself. The new settlement alters this slightly.
Developers are now granted a limited advancement, being allowed to inform users – specifically, those who have consented to receive offers via email or other communications – about alternative payment methods beyond in-app purchases. This also necessitates developers collecting user contact information through their app, where users may already be logging in with third-party credentials like Facebook, Google, or Apple’s sign-on systems. (Apple’s system thoughtfully includes an option to conceal your email address from developers!)
This change, however, does not fully address developer concerns. They desire the ability to direct users from within their app to their website, where they could market alternative payment and subscription options – potentially at a reduced rate, avoiding Apple’s commission. Even if Apple permitted this, many consumers might still prefer in-app purchases for convenience. Apple’s primary concern is that such a change could divert substantial revenue from the App Store’s top earners, such as games, to external payment systems.
The settlement also proposes other changes, including an expansion of price points from under 100 to over 500. Apple also agreed to publish a transparency report on the App Review process. (This could prove more significant than the App Store rule changes, potentially prompting Apple to address issues with erroneous rejections, app scams, and delays.) Furthermore, Apple committed to establishing a $100 million fund for U.S. developers earning less than $1 million annually, with payouts ranging from $250 to $30,000 based on app business size.
Developer Reactions to the Settlement
Apple announced the settlement with its characteristic polished press release, strategically released late on a Thursday night with briefings scheduled at times likely to be missed. Apple touted the “even better business opportunity” and expressed appreciation for developer feedback, claiming their “ideas… helped inform the agreement.”
We sought feedback from developers regarding this change. Here’s a selection of responses from the community:
Ryan Jones, founder and CEO of iOS flight tracker Flighty:
“I continue to hope Apple will proactively change the rules, but today wasn’t that day. It’s unwise to allow 70-year-olds reliant on grandchildren for tech support to legislate technology ecosystems. I believe Apple is realizing this is a ticking time bomb – they must change it themselves, or we’ll all suffer the consequences for years. There’s growing resentment towards Apple’s PR, which feels like gaslighting. Anyone who critically reads can see there’s no substance to this announcement. They need to act before courts force them to.”
James Thomson, indie developer and creator of PCalc app:
“Initially, the announcements don’t seem particularly significant for us. It’s primarily a clarification of existing rules already in place. Linking to alternative payment mechanisms within the app remains prohibited, but emailing customers about them is now permitted, provided they’ve opted in. It’s unclear if this wasn’t already allowed. The developer fund is U.S.-only, offering no benefit to us. Overall, this won’t significantly alter the opinions of those advocating for antitrust legislation.”
Becky Hansmeyer, indie developer behind YarnBuddy and Snapthread apps:
“Apple has made no concessions in this settlement. App Store search and discovery remain poor, developers still can’t reference external payment methods within their apps, and App Review remains a needlessly strict process that stifles innovation and punishes good actors while allowing scams to flourish. The ‘Small Developer Assistance Fund’ is merely a payout to class members as a form of self-punishment. This is detrimental to both developers and consumers.”
David Heinemeier Hansson, Basecamp co-founder, developer of HEY email app and noted Apple critic:
“…The touted benefit of this settlement is supposedly that developers can now tell their customers where to buy services outside the app. Except, that’s not what’s happening! Apple is simply ‘clarifying’ that companies can email customers, with their permission, about purchasing options outside the app. This doesn’t address the core issue: developers are still prohibited from informing users within the app or on the signup screen about alternative purchasing options to IAP. This ‘clarification’ reinforces Apple’s right to steer users and offers a meaningless concession of opt-in email, which developers were already doing.”
Kosta Eleftheriou, FlickType developer suing Apple over lost revenues due to App Store scams:
“Apple’s anti-steering provisions remain unchanged. This settlement is a meaningless gesture, a PR game. Labeling the restitution as an ‘assistance’ fund is deceitful and shameful: developers aren’t seeking help, they’re seeking fairness.”
Jacob Eiting, CEO of RevenueCat, which provides app developers with subscription tools:
“The proposed changes are largely a repackaging of existing actions by Apple, a smaller change than the press release suggested. They’re rolling back one recently enacted anti-steering rule, but leaving others in place. The settlement also commits to programs that were likely already underway. The $100 million fund is a settlement payout, not a generous gesture. Seeing how adept Apple has become at self-promotion, this will likely be cited as evidence of developer friendliness for years to come.”
Aaron Pearce, indie iOS developer behind HomeKit-connected apps:
“There were no real changes that matter. These are mostly clarifications of existing rules or statements. The pledge to maintain the Small Business program is welcome, but wasn’t expected to disappear. Keeping App Store search unchanged was almost guaranteed. The only real change is introducing more pricing points, which won’t immediately help developers. The $100 million fund is a lawsuit settlement, not Apple’s generosity. I find the PR spin disingenuous. They aren’t addressing the core problems developers face when trying to ship products to customers.”
CAF, a nonprofit representing developers including Epic Games, Spotify, Tile and others advocating for app store regulation:
“Apple’s sham settlement offer is a desperate attempt to avoid scrutiny from courts, regulators, and legislators worldwide. This offer does nothing to address the fundamental structural problems facing all developers, undermining innovation and competition. Allowing developers to communicate about lower prices outside of apps is not a concession and highlights Apple’s control over the app marketplace. If approved, app makers will still be barred from communicating about lower prices or offering competing payment options within their apps. We will continue our fight for fair and open digital platforms.”
Samantha John, CEO and co-founder of coding app Hopscotch:
“Nothing changed. You could always write whatever you wanted in your emails or on your website. They still aren’t allowing you to link to or mention an alternate payment processor inside your app. It’s a strange news story because it seemed hopeful when I saw the headlines, but nothing actually happened.”
Overall, developers appear unimpressed with this minor concession, and it doesn’t seem likely to halt the push for increased App Store legislation.
Weekly News
Apple Platform Updates
- Apple released the seventh developer betas for iOS 15 and iPadOS 15, as well as watchOS 8 and tvOS 15. Apple announced its new service iCloud Private Relay would now be introduced as a public beta to gather more feedback instead of being enabled by default as part of the iCloud+ subscription service. The release notes indicate some websites still have issues with the feature, including showing content for the wrong region or requiring extra steps to sign in.
- Apple released a beta version of its TestFlight app testing platform to Mac developers for the first time. The beta only worked on macOS Monterey beta 5, released on August 10.
- Apple also released an update to the App Store Connect app, which now allows developers to create multiple TestFlight internal tester groups and configure build access for each one.
- Apple notified developers that local regulatory changes will require them to add the bank account holder’s address in App Store Connect, which must be done by October 22, 2021 to avoid payment interruptions.
- Apple launched a new iOS app called “Siri Speech Study” to gather feedback for Siri improvements. The unlisted app was only open to invited participants who choose to share data when Siri misinterprets a request.
Google Platform Updates
- Google announced a change in how ratings and reviews on Google Play will appear to end users. Developers complained that negative feedback affecting users in one region could lower the overall rating. To address this, starting in November 2021, users on phones will only see ratings specific to their registered country. In early 2022, users on other devices like tablets, Chromebooks and wearables will see ratings specific to their device. Google is rolling out changes to the Google Play Console to help developers prepare, including “Device Type” dimensions.
E-commerce
Augmented Reality
- TikTok is building its own AR development platform, spotted on a website called TikTok Effect House. The company confirmed the creative toolset is in private beta testing, characterizing it as an early experiment.
Fintech
- WhatsApp Pay will get more prominent placement in the messaging app. Changes spotted in testing show the WhatsApp Pay shortcut button between the sticker and camera buttons, making it easier to access.
Social/Creators
- OnlyFans reversed its porn ban. Initially, the company said it would ban sexually explicit content on its platform as of October 1 – a decision met with criticism from the sex worker community. Creators said they received no warning, leaving them little time to prepare. OnlyFans blamed its original decision on pressure from banking partners and payout providers. Now, it says it has received “assurances” from these partners, allowing it to continue as usual. However, the situation may have damaged creator trust, and some may choose to move their businesses elsewhere.
Messaging
Streaming & Entertainment
Gaming
Health & Fitness
Transportation
- Google is shutting down its Android Auto mobile app, aka “Android Auto for Phone Screens,” starting with Android 12. Google Assistant driving mode will be the built-in mobile driving experience going forward.
- Tesla released a redesigned iPhone app in its biggest update in months. The app features new controls, improvement management, new visuals and two differently sized widgets for your home screen. Users can now send commands to their car immediately instead of waiting for it to wake up.
- Electrify America launched CarPlay and Android Auto apps for finding EV charging stations across the U.S. Electrify America operates over 650 stations with 2,700 chargers.
Productivity
Utilities
- Apple Maps expanded its native ratings and photos feature in the U.S. Users can now review places like restaurants, shops and other businesses, and upload photos.
- Google Maps is working to add toll prices to help users price their rides. A similar feature is already available in Waze.
Government & Policy
Security & Privacy
- A report from MDM company Jamf uncovered the most commonly requested iOS permissions by analyzing a sample of nearly 100,000 apps. The most common were Photos, Camera, Location and Microphone access.
- An investigation by the Tech Transparency Project (TTP) found holes in the App Store’s child safety measures, noting it was too easy for kids and teens to access adult apps. However, the study didn’t enable parental controls.
Funding and M&A
💰 Design and editing app Picsart raised $130 million Series C led by Softbank with participation from Sequoia, GSquared, Tribe Capital, Graph Ventures and Siguler Guff & Company. The app has over 1 billion installs across 180 countries and more than 150 million MAUs.
💰 Mexican fintech Flink raised a $57 million Series B round led by Lightspeed Venture Partners. The app allows consumers to participate in the stock market and has grown to 1.6 million users, 85% of whom are first-time investors.
💰 African mobile payments platform OPay raised $400 million in funding led by SoftBank Vision Fund 2, with participation from Sequoia Capital China, Redpoint China, Source Code Capital and Softbank Ventures Asia. The round values the business at $2 billion.
🤝 Meditation app Headspace announced plans to merge with on-demand mental health service Ginger, valuing the combined business at $3 billion with a headcount of over 800.
💰 London-based EV charging platform Bonnet raised $1.3 million (£920,000 total in new funding led by Ascension Ventures, with investors from Imperial College London and APX. The app provides real-time data on charger availability and functionality and bundles of cheaper charging.
💰 European stock trading app Shares raised $10 million in a pre-product seed round led by Singular for its app that would allow users to trade 1,500 stocks without paying fees, and start conversations with friends and learn from experts.
💰 Tencent is in advanced talks to lead a new $20-35 million investment round in Gurgaon-headquartered podcasts and audiobooks app Pocket FM.
💰 Estonia-based grocery delivery app Membo, which serves a European audience, secured Y Combinator backing and will present during the incubator’s Summer 2021 Demo Day.
💰 App marketing optimization platform Liftoff merged with mobile monetization platform Vungle to create a mobile growth platform addressing the complete app growth cycle.
Reading Recs
- A decade and a half of instability: The history of Google messaging apps. Ars Technica analyzes Google’s repeated failures in the messaging app space.
Downloads
Popcorn
A new startup called Popcorn aims to make work communication more personal by offering short video messages, or “pops,” as an alternative to longer emails, texts, or Zoom calls. The app is a free download on iPhone, iPad and Mac.
Luma
A new iPad drawing app called Luma connects the screen with real-world play by allowing kids to attach paper to their iPad and trace the lit-up drawing. The app was built by a team of experienced designers and developers and is backed by prominent investors.
LOVE
A London-based startup called LOVE, valued at $17 million, aims to redefine how people stay in touch with close family and friends. The company is launching a messaging app offering video calling, asynchronous video and audio messaging, and privacy features. LOVE’s unique approach involves user-guided product direction and potential future ownership transfer to its user base.