The U.S. Supreme Court recently ruled against Apple in a landmark case that threatens to upend the App Store. But should Apple be forced to change how it approves, hosts and distributes apps?
If you’re unfamiliar, the case of Apple v. Pepper was brought by four iPhone owners who claim Apple's App Store is a monopoly over iOS apps. Apple says iPhone owners shouldn’t be able to sue over App Store issues because they’re customers of developers who make apps, not Apple itself. Developers pay Apple $99 per year to publish apps to the App Store, and retain 70 percent of the purchase price for every app or in-app sale.
The Supreme Court shot down Apple’s position, which means any iOS user can sue Apple for its "monopoly" over the App Store. Apple’s claim that its true customers are developers, not users, is interesting. It makes us wonder if Apple will listen to developers who want change, and if that means developers who are unhappy can sue over App Store monopolies and other issues.
Apple says: “We’re confident we will prevail when the facts are presented and that the App Store is not a monopoly by any metric.” It goes on to add: “Developers have a number of platforms to choose from to deliver their software – from other apps stores, to Smart TVs to gaming consoles – and we work hard every day to make our store is the best, safest and most competitive in the world.”
Not untrue, but developers who publish to the App Store aren’t exactly enamored with it. One of the most common complaints is revenue sharing. Developers are starting to wonder why they should relinquish 30 percent of every sale to Apple, an argument that’s only strengthened with recent changes. Apple now allows developers and companies to buy ad space within the App Store, and many have used that feature to ‘squat’ on App Store search. You can buy ad space targeting a competitor’s app name as a keyword, and your ad/app will show prominently in search, even if a user searched for the other app specifically.
There’s nothing wrong with that, but it skews the equitable playing field for developers. A deep-pocketed company could simply purchase ad space and diminish competitors.
As app notarization and cross-platform apps become standard, developers are also wondering if (or when) they’ll be able to self-host apps for iOS as they can for the Mac. There’s a subtle uprising of developers who want parity on all fronts once cross-platform apps become standard, including the self-hosting and distribution of apps.
Aside from the 70/30 split, some developers also want Apple to allow users to pay developers directly. This could create many other headaches, like Apple barring developers from distributing apps until an invoice was settled, but some are eager for it. Again, this is very Mac-like; on the desktop, users can pay the developer directly for self-hosted/distributed apps, which eliminates Apple from that revenue equation altogether.
Some don’t care to see change. This may be born of a belief that Apple won’t actually do anything to adjust its model, or simply contentment with the App Store as-is. It’s hard to know, but some are happy with things as they are.
But what do you want? Do you think Apple needs to morph the App Store to fit a more modern app economy, or are things fine as they are? Tell us what you think in the anonymous survey above. We’ll be publishing results in a future Dice Insights article, so stay tuned!