Apple flexes its control over the App Store
App le ’s most impactful changes this week weren’t new iPads or operating systems. The company also shook up the App Store with new rules and ad slots designed to wring more money out of its tight grip over the iOS ecosystem. The changes have big ramifications for developers, either forcing them to share more of their money with App le or deal with ads they don’t like. And as developers have found in the past, they don’t have much room to push back.The most aggressive change was a direct shot at Meta. Now, anyone who buys an in- app ad from within the app itself — like a Facebook or Instagram “boost” to better surface a post — will have to use App le ’s in- app purchasing system, sending a 30 percent cut of the payment to App le . There’s a carveout for ad management app s , but the broader effect is that a key purchase funnel now has to go through App le . It’s a particularly frustrating thing for social app s like Meta, which are already dealing with the effects of App le ’s “Ask App Not to Track” prompt. (Meta estimated earlier this year that the prompt will cost it about $10 billion in ad revenue.) App le also takes a cut of NFT sales with these new rules. If an app sells NFTs, it must use App le ’s in- app purchase system. Trading volumes for NFTs have fallen dramatically throughout 2022, so this may not have as big of an impact as it would have earlier in the year. But for those who are continuing to try to make NFTs a thing, selling them via iPhone app s means you won’t get as much money as you would have before. Since most people are buying NFTs to try and make money off them, this inherently stifles NFTs on iOS. But if the NFT market skyrockets again, App le will now be well-positioned to profit from it.Developers also have to contend with ads showing up in more places, including on their own app s. The App Store previously kept ads limited to the search tab, showing up in the “Suggested” section when you first t app ed the tab and at the top of search results. They now app ear in the Today tab (the one with the big cards featuring things like app s and in- app events) and in the “You Might Also Like” section of individual app listings . It’s a major move to expand App le ’s growing advertising business.Part of this mismatch is due to the fact that developers can run app ads in listings that aren’t relevant to the app itself, as shown by Overcast developer Marco Arment. The situation was bad enough that App le paused ads related to gambling and “a few other categories” on App Store product pages just a day after the ads launched. We don’t know how long that pause will be in place, and App le will still be showing ads on individual App Store listings, which likely means that this won’t be the only time the company has to respond to bad ads in the wrong places.The changes broadly represent App le ’s growing desire to make more money from the App Store . As the company focuses on increasing its services revenue, finding new areas of app s and the App Store to take a cut are just more levers App le can pull to add to its bottom line. App le has been willing to make unpopular decisions to bolster its services figures — like raising prices on App le Music, App le TV Plus, and App le One, also this week — and the App Store changes will likely add to the money pile as well.And, frustratingly for developers, there may not be much they can do about it all. Meta, Twitter, and TikTok could make the choice to remove boosts from their app s, but smaller social networks that may want to experiment with a similar model might be forced to accept App le ’s terms. NFTs are unpopular for some good reasons, and with this week’s changes, developers might have to charge more for them in their app s, which seems like a detriment to NFTs ever gaining traction again. And ads directly in app listings could keep showing unexpected suggestions or ads for app s that aren’t very reputable, which will surely be a thorn for developers. App le has aggressively pulled these levers because it can; it flips a few switches, updates its App Store rules, and can suddenly make more money. But with App le commanding one of the two most widely used mobile app marketplaces on the planet, developers are forced to put up with its policies — otherwise, they’ll be removing themselves from potentially reaching a huge amount of customers on App le ’s lucrative App Store platform. And while criticizing the company on Twitter seemed to work for the gambling ads, App le shows no signs of backing down on its other changes.The updates just add to broader frustrations with the App Store . Spotify, a vocal critic of the App Store , said this week that App le is “choking competition and the imagination of app developers ” amid a tussle over the app ’s audiobooks functionality. Meta pushed back against App le ’s boost changes, arguing that the company “continues to evolve its policies to grow their own business while undercutting others in the digital economy.”
