This Week in Apps: Advertising, Google Play Safety & Epic v. Apple

The Ever-Evolving World of Mobile Apps

Welcome back to This Week in Apps, your regular source for the latest developments in mobile operating systems, applications, and the broader app economy.

The app industry demonstrates continued growth, achieving a record 218 billion downloads and $143 billion in global consumer spending in 2020. Android devices alone saw 3.5 trillion minutes of app usage last year. Currently, average daily app usage in the U.S. – four hours – surpasses the time spent watching live television, which averages 3.7 hours.

The Economic Impact of Apps

Apps are not merely a source of entertainment; they represent a significant 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. Investment in mobile companies reached $73 billion in 2020, marking a 27% year-over-year increase.

This week’s focus includes the Apple-Epic trial, expansion of Apple’s App Store advertising, App Tracking Transparency opt-in rates, TikTok’s new SDKs for third-party apps, Google’s privacy label plans, and more.

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Top Stories

The Apple-Epic Trial Commences

The initial phase of the Epic Games antitrust lawsuit against Apple, concerning App Store fees, has begun, already revealing intriguing details through internal Apple emails presented as trial exhibits. Insights gained so far include Apple’s past considerations regarding App Store fees, internal discussions, and special agreements made with Hulu, as well as its response to Netflix’s decision to bypass in-app purchases.

Here are some key highlights you may have missed.

Fees

• Phil Schiller, formerly Apple’s marketing chief, questioned the sustainability of the 70/30 revenue split a decade ago. He suggested a reduction to 20-25% once the App Store reached $1 billion in profitability.
• Epic CEO Tim Sweeney admitted in court that he would have accepted a special deal for a lower commission if Apple had offered one, despite his public stance on behalf of all developers.
• Apple disputes financial researcher Ned Barnes’s testimony, which indicated App Store operating margins of nearly 78% in 2019. Apple maintains that it does not allocate costs to the App Store, making accurate margin calculations impossible.

Competition

• An internal email from 2016 revealed that Apple’s App Store VP, Matt Fischer, strongly opposed featuring competitor apps on the App Store. Fischer clarified that the employee who wrote the email was misinformed and that Apple has consistently promoted competitors.

App Store Rejections

• Apple rejected 33-36% of app submissions to the App Store between 2017 and 2019. Despite this high rejection rate, fewer than 1% of developers appeal Apple’s decisions, with most rejections being upheld.
• 2017: 5.177 million submissions, 1.69 million rejections (33%)
• 2018: 4.79 million submissions, 1.7 million rejections (35%)
• 2019: 4.8 million submissions, 1.74 million rejections (36%)

Revealing Emails

• Apple offered special deals to Hulu and other developers, granting them access to App Store APIs. Hulu had access to the subscription cancel/refund API since 2015.
• Emails showed Apple attempted to dissuade Netflix from removing IAP support and considered punitive measures during Netflix’s testing phase.
• Internal discussions revealed concerns about the potential conflict between App Store ads and Apple’s commitment to user privacy.

Additional Insights

• Matt Fischer stated he was “blindsided” by the payment update that triggered Epic’s dispute with the App Store, noting a previously positive relationship with the developer.
• Fortnite generated over $9 billion in revenue in 2018 and 2019, and $5.1 billion in 2020.
• Fortnite may return to iOS through Nvidia’s GeForce NOW cloud streaming service.
• Epic paid Sony additional royalties beyond the standard 70/30 split to compensate for cross-play functionality, highlighting Apple’s argument that it is unfairly targeted.
• Apple and Epic previously discussed a subscription bundle offering Fortnite Crew, Apple Music, and Apple TV+ for $20 per month.

Google to Introduce a “Safety” Section on Google Play

Following Apple’s introduction of privacy labels, Google is preparing to launch a similar feature on Google Play in Q2 2022. The new “safety” section will require developers to disclose the types of data their apps collect, how it is stored, and its intended use.

This includes details about personal information collected, such as names and emails, as well as data accessed from the device, like location, media files, and contacts. Developers must also explain how the data is used – for example, to enhance functionality or personalize the user experience – and provide a privacy policy, or face enforcement actions.

While Apple’s labels focus on data collection for tracking, Google’s additions emphasize data security and responsible handling, allowing developers to demonstrate best practices and justify data collection on the listing page. Independent verification of these labels will also be possible.

TikTok Expands Integrations with Third-Party Apps

TikTok is broadening its integration with third-party applications through the launch of two new SDKs: the TikTok Login Kit and the Sound Kit. These tools will enable apps on mobile, web, and consoles to authenticate users using their TikTok credentials and leverage TikTok videos and sounds.

The Login Kit provides a streamlined sign-in process using TikTok credentials, similar to existing social login options. The Sounds Kit allows users to share sounds and music from apps back to TikTok.

Early adopters include gaming apps, anti-anxiety apps, social apps, food review apps, dating apps, creator tools, and NFT platforms.

Apple Expands App Store Advertising

As Apple strengthens its stance against personalized advertising, it is simultaneously expanding its own advertising business with a new ad placement on the App Store. This new, prominent ad slot appears on the Search tab, a high-traffic area for Apple device users.

Developers can participate in Search tab campaigns with no minimum spend, adjusting their campaigns as needed. Pricing is based on a cost-per-thousand-impressions (CPM) model, determined through a second-price auction.

Weekly News

Platforms: Apple

✨ Despite initial polls suggesting higher opt-in rates, Flurry data indicates that only a small percentage of iOS 14.5 users are allowing app tracking. Only 4% of U.S. iPhone users have enabled tracking, while the global average is 12%.

Apple apologized and refunded a woman $1,116.32 after her 9-year-old son with autism racked up charges on mobile games. The son had memorized the mother’s Apple ID password. Apple initially refused the refund.

Apple hired Samy Bengio, a former Google AI research scientist, to work on Siri. He will lead a new AI research unit focused on improving Siri’s capabilities.

Apple released iOS 14.5.1, fixing a bug in App Tracking Transparency.

Platforms: Google

Google paused auto-renewals and free trials on the Play Store in India due to new regulations regarding recurring transactions.

Some users expressed dissatisfaction with the recent Play Store redesign.

Google released Android Studio 4.2, focusing on developer productivity improvements.

Augmented Reality

Snap announced a new Creator Marketplace, initially focused on connecting AR Lens Creators with businesses. It will expand to support all Snap Creators in 2022.

Fintech

A California regulator requested that Chime stop calling itself a “bank” in its URLs and advertising, as it is not a chartered bank.

WhatsApp Pay rolled out to users in Brazil and India.

Social

Twitter expanded Twitter Spaces to all users with 600 or more followers.

Twitter launched a Tip Jar feature, allowing users to directly support creators.

Twitter improved its reply prompts feature, aiming to reduce harmful tweets.

Twitter now allows users to post larger images without cropping.

Instagram added a captions sticker for Stories and Reels.

WhatsApp reported continued user growth, with the majority of users accepting the recent privacy update.

Facebook opened registration for F8 Refresh.

Facebook launched Neighborhoods in Canada, with plans to expand to the U.S.

A court ruled Snap could be sued for its role in a fatal car crash caused by a driver using the app’s speed filter.

Facebook’s Workplace service now has 7 million paid subscribers.

Facebook’s prompts regarding app tracking have been criticized for using scare tactics.

Messaging

Signal claimed Facebook rejected its ads, alleging censorship related to privacy concerns. Facebook disputed this claim.

Instagram added new chat themes and stickers.

Messenger introduced tap-to-record voice messages and swipe-to-archive functionality.

Streaming & Entertainment

Google rolled out Entertainment Space on Android tablets, providing a personalized home page for entertainment content.

Clubhouse’s Android app launched for public testing.

YouTube Shorts is now available to all creators in the U.S.

Soundcloud partnered with Triller.

IMDb TV will launch a standalone mobile app.

Gaming

Twitch’s mobile app reached 22 million global installs in Q1 2021.

PUBG Mobile will relaunch in India as Battlegrounds Mobile India.

Health & Fitness

Facebook added a vaccine finder in India.

Dating

Tinder launched “Vibes,” a new in-app event.

Match Group reported strong earnings.

Government & Policy

China addressed data collection violations by 33 apps.

Funding and M&A

💰 Rapchat raised $2.3 million.

🤝 Twitter acquired Scroll.

💰 alt.bank raised $5.5 million.

💰 Supercell extended a $180 million credit line to Metacore.

🤝 RealSelf acquired YNS Group.

🤝 Epic Games acquired ArtStation.

💰 Sony invested in Discord.

🤝 Zynga is acquiring Chartboost for $250 million.

🤝 Perform was acquired by Beringer Capital.

💰 Vida Health raised $110 million.

💰 Connectcam raised $37 million.

🤝 Kahoot acquired Clever.

💰 Genies raised $65 million.

💰 Wealthsimple raised $750 million CAD.

Downloads

News in Bullets

This mobile news application allows users to customize their news feed by language and location. Enhancements could include a dedicated “news reels” feature, similar to TikTok, focusing on video news content.

The Oregon Trail

This new Apple Arcade title reimagines the classic 1970s strategy game with 12 playable journeys, where player choices impact the outcome.

Update:

Brave’s mobile browser added a playlist feature.