Welcome back to This Week in Apps, the weekly TechCrunch series that recaps the latest developments in mobile operating systems, mobile applications, and the overall app economy.

The app industry continues its expansion, achieving a record 218 billion downloads and $143 billion in global consumer spending in 2020. Last year also saw consumers dedicate 3.5 trillion minutes to using apps on Android devices alone.

Within the U.S., app usage surpassed the time spent watching live television. Currently, the average American dedicates 3.7 hours daily to live TV, but now spends four hours each day on their mobile devices.

Apps are not merely a source of leisure—they also represent a significant business opportunity. In 2019, mobile-first companies had a combined valuation of $544 billion, which is 6.5 times greater than those without a mobile focus. In 2020, investors channeled $73 billion in capital into mobile companies—a 27% increase year-over-year.

This week, we’re examining the most significant news in the app world, including the impact of the GameStop situation on trading apps, the evolving nature of Apple’s privacy changes in 2021, and more.

Top Stories

The stock market experiences disruption through trading apps

Could any other app news story have overshadowed the GameStop short squeeze this week? The event of a group of Reddit users challenging hedge funds was a legendary tale, even if the reality involved Wall Street participation on both sides of the trade. Whether one admired the spectacle or viewed it with apprehension (or both), what transpired was, at long last, the internet’s influence on the stock market. The GameStop frenzy disrupted the established order, mirroring the internet’s impact on numerous other sectors—including publishing, media, content creation, and politics.

“This represents community,” explained Reddit founder Alexis Ohanian, during an interview on AOC’s Twitch channel on Thursday.

“This is something that extends across platforms and the internet, particularly over the last decade—especially with the prevalence of social media and smartphones. These technologies have connected us in real-time, enabling us to organize around ideas and concepts,” he continued. “We actively seek out these communities, a sense of identity, and a feeling of connection. The internet amplifies this effect due to its scale,” he said. “I believe a byproduct of this ongoing trend is a move toward decentralization and greater individual empowerment—even granting individuals access to opportunities historically monopolized by institutions,” Ohanian noted.

Trading app Robinhood and social app Reddit, the home of the WallStreetBets forum driving the GameStop surge, immediately benefited from the community-driven effort to challenge the hedge funds—and rose to the top of the App Store.

However, Robinhood’s subsequent lack of transparency regarding its decision to halt customer purchases of “meme” stocks like GameStop (due to capital requirements) quickly damaged its reputation. Some investors have initiated lawsuits over their losses. Others launched petitions. And many more downgraded the app with one-star reviews, which Google subsequently removed.

Other trading apps have seen gains not only during the frenzy itself but also afterward, as Robinhood users sought alternative platforms following their experience with the free trading app.

As of Friday, Robinhood remained at No. 1 on the App Store, but is now closely followed on the Top Free iPhone apps chart by No. 2 Webull, No. 6 Fidelity, No. 7 Cash App, No. 12 TD Ameritrade and No. 15 E*TRADE, among others.

Cryptocurrency apps are also climbing the charts, as users recognize the potential of collective action in markets not yet dominated by major investors. Coinbase reached No. 4, while Binance-run apps were at No. 9 and No. 19, Voyager was No. 23 and Kraken No. 24.

In addition, forums where traders can connect are also performing well, with Reddit at No. 3, Discord at No. 14 and Telegram at No. 28, as of the time of writing.

Google states it will implement Apple privacy labels…eventually!

Google failed to meet its previously announced deadline for rolling out privacy labels to its nearly 100 iOS apps. Its initial estimate followed suggestions (supported by Apple’s typical quiet confirmations to the press) that Google was struggling with how to address the privacy issues the updates would reveal. This week, Google again stated that its labels were forthcoming. However, the company is no longer providing a specific timeframe for their arrival. Instead, it indicated that the labels would be rolled out as Google updates its iOS apps with new features and bug fixes, rather than implementing the labels across all its apps simultaneously.

Some Google apps have been updated, including Play Movies & TV, Google Translate, Fiber TV, Fiber, Google Stadia, Google Authenticator, Google Classroom, Smart Lock, Motion Stills, Onduo for Diabetes, Wear OS by Google and Project Baseline — but not Google’s core apps like Search, YouTube, Maps, Gmail or its other productivity apps.

Apple’s IDFA changes are scheduled to begin this spring

Apple announced this week that its tracking restrictions for iOS apps are nearing implementation. The changes, initially delayed to allow developers more time to make updates, will now arrive in “early spring.”

Once implemented, the previous opt-out model for sharing your Identifier for Advertisers (IDFA) will shift to an opt-in model, requiring developers to obtain user permission to track them. Most users will likely decline, and may be annoyed by the request. Users will also be able to adjust IDFA sharing in Settings on a per-app basis, or across all apps simultaneously.

Facebook has already warned investors about the anticipated decline in ad revenue resulting from these changes, which it expects to see in its first-quarter earnings. It may also be preparing a legal challenge.

Google, meanwhile, stated it would adopt Apple’s SKAdNetwork framework and provide feedback to Apple regarding potential improvements.

For years, Apple has been positioning itself as the company that prioritizes consumer privacy. And it’s true that no other major tech company has yet given users this level of control over preventing tracking across the web and within apps.

However, this is not a situation where Apple is the “good actor” while everyone else is “bad”—because the multi-billion-dollar advertising industry is not that simple. By changing its software, Apple has effectively secured a position at the table for its own benefit.

Many do not realize that Apple monitors user activity across its own platform, within a number of its first-party apps—including Apple Music, Apple TV, Apple Books, Apple News, and the App Store. It then uses this first-party data to personalize the ads displayed in Apple News, Stocks, and the App Store.

So while other businesses track users across the web and apps to gather data that enables them to better personalize ads at scale, Apple only tracks users within its own apps and services. (But there are a lot of those! And Apple continues to launch new ones.)

With the new limitations impacting the effectiveness of ads outside of Apple’s ecosystem, advertisers who need to reach a potential customer—for example, with an app recommendation—will need to allocate more funds to Apple-delivered advertising instead. This is because Apple’s ads will be capable of making those more targeted, personalized, and, therefore, more effective recommendations.

Apple states it will adhere to the same rules it is asking other developers to follow. Meaning, if its apps want to track you, they will ask. But most of its apps do not “track” using IDFA. Meanwhile, if users want to disable personalized ads using Apple’s first-party data, that’s a different setting. (Settings –> Privacy –> scroll to bottom –> Apple Advertising –> toggle off Personalized Ads). And no, you won’t be presented with a pop-up asking if that’s a setting you want to enable or disable.

Apple, having skillfully positioned itself as the privacy-focused company—because wow, isn’t adtech problematic?— is now reinforcing that image. Apple CEO Tim Cook this week blamed the adtech industry for the growth of online extremism, violent incitement (e.g., at the U.S. Capitol), and the increasing belief in conspiracies, stating that companies (specifically, Facebook) prioritize engagement and data collection, regardless of the societal damage.

Weekly News

Platforms: Apple

• Apple releases iOS 14.4 to iPhone and iPad users. The update addresses three critical security vulnerabilities, adds Bluetooth audio monitoring to protect users from potentially damaging sound levels, improves the camera’s ability to recognize smaller QR codes, provides a warning if the iPhone 12 has been repaired with non-Apple parts, and fixes other bugs.
• Apple reports record-breaking Q1 2021 with $111.4 billion in revenue. The company exceeded investor expectations on both earnings per share and revenues, with more than the anticipated $103.3 billion in revenues and $1.68 EPS versus the expected $1.41 EPS. Earnings were driven by new 5G iPhones and a 57% increase in China sales.

• Apple dominates the tablet market with 19.2 million iPads shipped in Q4 2020.
• Separately, from the IDFA news, Apple announced this week that Private Click Measurement (PCM) will roll out at the same time as the IDFA changes. PCM measures app-to-web conversions, while SKAdNetwork focuses solely on app-to-app conversions. This provides advertisers with a way to track the performance of apps that run inside ads that direct users to websites.
• A researcher discovered a new iOS security system in iOS 14, BlastDoor, which offers a new sandbox system for processing iMessages data.
• The Washington Post reviews Apple’s App Store privacy labels and finds many of them were inaccurate.

Platforms: Google

• Google Play Store updates its policies on gamified loyalty programs following confusion in India. Real gambling apps remain prohibited in India, but developers now have clearer guidelines.
• Google Play Store opened to Android Auto apps in December, but only for closed testing. This week, it expanded to open testing, meaning there’s no limit to the number of users who can download the app—the next step toward launching to all users in production.

Gaming

U.S. consumer spending on mobile simulation games increased by 61.8% in 2020, reports Sensor Tower. Top titles included Roblox and Township by Playrix.

Entertainment & Streaming

• Netflix can now stream studio-quality audio on Android 9 and newer devices, specifically Extended HE-AAC with MPEG-D DRC (xHE-AAC). This codec improves sound in noisy environments and adapts to varying cellular connections.
• Spotify tests audiobooks. The company released a small selection of nine exclusive audiobook recordings from books in the public domain. The narrators included well-known figures like David Dobrik, Forest Whitaker, Hilary Swank, and Cynthia Erivo, to gauge consumer demand for this type of content.
• Spotify also tests a feature that inserts “slow down” songs into playlists when users approach school zones. The feature was being tested in Australia.
• YouTube reported that its TikTok rival, YouTube Shorts, was seeing 3.5 billion views per day during tests in India.

Security & Privacy

• Apple states that iOS 14.4 fixes three security bugs that may have been exploited by hackers. Details were limited, but two of the bugs were found in WebKit. Apple did not disclose how many users may have been affected.
• TikTok fixed a vulnerability that could have allowed for the theft of private user information.
• WhatsApp added biometric authentication to its web and desktop apps to enhance security for its over 2 billion users.

• A location broker called X-Mode was discovered to still be tracking users via Apple and Android apps, despite app store bans. The broker sold data collected in apps—such as unofficial transportation app New York Subway, Video MP3 Converter, and Moco—to U.S. military contractors.

Communication

Telegram adds a new feature that allows users to import their WhatsApp chats and others, simplifying the switch. The feature, available in version 7.4, supports importing from WhatsApp, Line, and KakaoTalk on iOS and Android.

Social & Photos

Instagram launches a professional dashboard for creators and small businesses. The new in-app destination offers centralized access to tools for tracking performance, discovering insights and trends, growing your business, and staying informed through access to educational resources.

Facebook expands its Facebook News portal to the U.K., its first international market.

• TikTok owner ByteDance’s revenue more than doubled in 2020, according to The Information, reaching approximately $37 billion.
• Snapchat launched a digital literacy program aimed at educating users about data privacy and security. The program teaches users how to enable two-factor authentication and introduced a new filter that connects users to privacy resources.
• Twitter launches Birdwatch, a community-based approach to addressing misinformation on its platform. The system allows users to identify misleading information in tweets and write notes that provide context, in a manner similar to Wikipedia. These notes will eventually be visible directly on tweets after consensus from a diverse group of editors is achieved.
• QAnon is migrating to a free-speech-focused TikTok clone called Clapper, becoming a new home for some of the Parler community. Expect Terms of Service violations shortly…
• TikTok was found to be hosting numerous vape sellers who were clearly marketing to minors, promising no ID checks and discreet packaging to conceal vape purchases from parents.

Health & Fitness

• Apple expands its new Apple Fitness+ service with “Time to Walk,” a feature that offers inspiring audio stories from guests like country music icon Dolly Parton, NBA player Draymond Green, musician Shawn Mendes, Emmy Award winner Uzo Aduba, and others. This launch indicates Apple understands how to broaden the service’s appeal beyond those already committed to regular exercise routines.

• Health and Fitness app downloads grew 30% in 2020, reports App Annie, from $1.5 billion in consumer spending in 2019 to $2 billion in 2020, and from 2 billion downloads to 2.6 billion. On Android phones, time spent increased by 25%.

Government & Policy

• Italy’s data protection agency gave TikTok a deadline to respond to its order to block all users whose age it cannot verify following the death of a 10-year-old girl who repeated a dangerous “challenge” on the social app.
• Iran blocked the Signal messaging app after the WhatsApp exodus sent a surge of users to the open-source, encrypted communication service.
• India stated it will continue its ban on TikTok, UC Browser, and 57 other Chinese apps that the country first banned last June, stating that the responses the companies provided did not adequately address the cybersecurity concerns. TikTok owner ByteDance announced it is closing its India operations and laying off 1,800 employees.

• Norway’s data protection agency notified U.S.-based dating app Grindr of GDPR consent violations, carrying a fine of approximately $12.1 million USD.

Funding and M&A

Buzzy voice chat app Clubhouse raises $100 million, valuing the business at $1 billion. Despite launching less than a year ago and remaining an invite-only experience, the app has established a new form of audio-based social networking. With over 180 investors and the potential end of the pandemic with vaccine rollout, Clubhouse will soon need to demonstrate its value in a reopened world with more activities, including networking events and conferences. It will also eventually need to address what it will become when it finally opens to the public. Its current private, insiders-only atmosphere has provided a degree of protection. However, conversations have become toxic at times, and only a limited audience has heard them—and there’s no transcript. When the public joins, Clubhouse could lose its exclusive appeal and potentially host conversations that cause real harm.

• Twitter acquires newsletter platform Revue, a Substack rival, to provide its users with a way to monetize their Twitter fan base. Despite only announcing this week, the company is already integrating Newsletters on its web app.
• Edtech app ClassDojo raises $30 million led by Product Hunt CEO Josh Buckley. The app has experienced growth during the pandemic as schools and teachers needed a new way to communicate with families at home.

• Scheduling startup Calendly raises $350 million for its cloud-based service that helps people set up and confirm meeting times. The round values the business at $3 billion.
• Virtual social network IMVU raises $35 million from China’s NetEase and others. The app allows users to create virtual rooms and chat with strangers using custom avatars.
• Short-form video app Clash acquires would-be TikTok rival Byte, created by a former Vine founder.
• IAC’s Teltech, home to Robokiller, acquires encrypted messaging app Confide, in an undisclosed deal. Terms were not revealed but included the app and IP, not the team.

Opal raises $4.3 million for its digital well-being assistant for iPhone that blocks distracting apps and websites.

Finance tracking and budgeting app Brigit raises $35 million Series A led by Lightspeed Venture Partners, with participation from DCM, Nyca, Canaan, DN Capital, CRV, Core, Shasta, Hummingbird, Abstract, Brooklyn Bridge Ventures, Secocha, NBA star Kevin Durant, Ashton Kutcher’s Sound Ventures and Flourish Ventures.

SoftBank-backed Travel platform Klook raises $200 million in a round led by Aspex Management. The startup, which helps users book activities in overseas destinations, had been impacted by the pandemic, so pivoted to “staycation” activities and service for local merchants.

Video software company Vimeo raises $300 million in equity from funds and accounts advised by T. Rowe Price Associates, Inc. and Oberndorf Enterprises, LLC at a valuation exceeding $5 billion.

RuneScape publisher Jagex has been acquired by investment firm The Carlyle Group for at least $530 million. The British video game publisher creates both PC and mobile games, including a mobile version of RuneScape with 8 million installs in 2019.

Appointment booking app Booksy raises $70 million to acquire other salon appointment apps and expand internationally. The round was led by Cat Rock Capital with participation from Sprints Capital.

• Fintech startup Albert raises $100 million in Series C funding led by General Atlantic. The funds will be used to expand its financial wellness service, now used by over 5 million people to help save, budget, and more.
• Dating app S’More raises $2.1 million for its concept where users’ photos are initially blurred.
• Stacker raises $1.7 million seed round for its platform that lets non-developers build apps using spreadsheets from Google Sheets or Airtable.
• Kuaishou, ByteDance’s main rival in China, raises $5.4B in Hong Kong IPO, valuing the business at $61B

Downloads

Opal

Opal offers a digital well-being assistant for iPhone that allows you to block distracting websites and apps, set schedules around app usage, lock down apps for stricter and more focused quiet periods, and more. The service operates through a VPN system that limits your access to apps and sites. However, unlike some VPNs on the market, Opal is committed to not collecting any personal data on its users or their private browsing data. Instead, its business model is based on paid subscriptions, not selling user data, it states. The freemium service lets you upgrade to its full feature set for $59.99/year.

Charlie

Founded by a former mobile game industry veteran, Charlie “gamifies” getting out of debt using techniques that worked in gaming, like progress bars, fun auto-save rules that can be triggered by almost any activity, celebrations with confetti, and more. The app plans to expand into a fuller fintech product to help users refinance debt at a lower rate and pay bills directly from the app.