This week in apps: Apple cuts commissions, Twitter launches fleets and warns of Parler

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Welcome back to This Week in Apps, the TechCrunch series that rounds up the latest operating system news, the apps they support, and the money that goes through it all.

The app industry is hotter than ever, with a record 204 billion downloads and $ 120 billion in consumer spending in 2019. People now spend three hours and 40 minutes a day using apps, which rivals television. Apps aren't just a way of spending idle time – they're big business. In 2019, mobile-first companies had an overall valuation of $ 544 billion, 6.5 times higher than non-mobile companies.

Apple Reduces App Store Commissions to 15% for the vast majority of developers

The changes apply to developers with sales less than $ 1 million.

Credit: TechCrunch

Apple announced a major change to its commission rate on the App Store this week. As of January 1, 2021, the company will only charge app store developers 15% for paid apps and in-app purchases if their business has not exceeded $ 1 million in revenue for all apps in 2020. Qualifications for the new App Store Small Business program, as it is called, will be reassessed annually in the future.

The changes come at a time when Apple is under increased government scrutiny over the functioning of its app store, including antitrust investigations in the US and the US. It has also been at war with developers over in-app purchases year-round, which has led the company to further revise its already complex rules on how and when it can collect its so-called "Apple Tax". And it's in the middle of a fierce legal battle with Fortnite maker Epic Games, which doesn't want to be forced to use Apple Payments or even the App Store.

The commission changes can help silence some angry voices from the broader app developer community, while also giving Apple a chance to show regulators that this enables fair competition.

However, some of Apple's biggest and fiercest critics reacted negatively to the news.

The advocacy group, the Coalition for App Fairness, which includes Epic, Basecamp, Deezer, Match Group, Spotify and many others, said, "Developers want a level playing field from Apple, not a symbolic gesture." They argued that Apple still owns the customer relationship, the $ 1 million threshold is arbitrary, and they said the majority of developers who "make livable income" will not benefit from it.

Match, Spotify and Epic have expressed these feelings separately in their own statements.

However, Apple had claimed that the change would benefit the "vast majority" of App Store developers. Today the App Store hosts 1.8 million apps reaching more than 1.5 billion Apple devices.

Individual developers we spoke to, including those who would qualify for the program, haven't complained. And many were quite surprised by Apple's move.

"I think it's fair to say that without the upcoming antitrust investigation or epic lawsuit, this change wouldn't have been possible. But something can be both a very smart political maneuver and really welcome and useful to the vast majority of developers “Said indie developer James Thomson, maker of the PCalc app and others.

"We are well below the million dollar mark, so we expect our income to grow by about 20% under the new system." We're in a much better position than most companies under the pandemic as our sales are purely digital and people always need calculators (or dice), but we've certainly seen a drop in sales over the past eight months. I can see that the current situation is taking a while to resolve so additional revenue is appreciated, ”he added. "These changes will particularly benefit the small developers who have traditionally been the heart of the development community, and I'm just as excited as I'm surprised," said Thomson.

Others also said they were generally happy with the changes. However, some expressed reservations about the details of how the program worked.

"Overall, I'm very happy with this new program," said developer David Smith, maker of Widgetsmith, Watchsmith, Sleep ++ and a number of other iOS apps. “It will help tons of small developers who can really take advantage of that extra margin. I'm looking forward to all indie developers who can now concentrate on their apps a little earlier. "

However, Smith noted that it was strange that the program wasn't applied in a way that resembled a graduated tax rate. He stated, "Your first $ 1 million is at 15% and the rest at higher tax rates."

"The proposed system creates an awkward distinction between developers. One of the things I've always valued most about the App Store is that developers are treated equally," continued Smith. "It also creates a strange growth stimulus for midsize companies approaching the threshold."

We reached out to third-party analytics companies to better understand the market.

According to App Annie data, around 98% of all iOS developers (i.e. unique publisher accounts) fell below the $ 1 million annual consumer spending threshold in 2019. This supports Apple's claims that the "vast majority" of developers would benefit from it. This developer group accounts for 567,000 unique apps, or 93% of all apps that generate income from in-app purchases.

Combined, their revenue made up just under 8% of the total App Store revenue share – in other words, it's the money Apple could lose.

Credit: App Annie

App Annie also found that the group of midsize developers “approaching” that $ 1 million threshold is really small. The data shows that approximately 0.5% of developers make between $ 800,000 and $ 1 million. And just over 1% is in the $ 500,000 to $ 800,000 range.

Most developers have much smaller sources of income, with 87.7% making less than $ 100,000 in 2019.

Credit: App Annie

Some expressed concern that the Apple system would unfairly punish developers who earned just $ 1 above the $ 1 million threshold and then trap them at the higher rate (30%).

If you sell over $ 1M on @AppStore $ 1, you won't be making income again next year unless you make * $ 430,000 * more. That means that $ 1 over $ 1 million can result in an employee being laid off the following year, as you will now be fined $ 150,000 for the same revenue the next year.

– Francisco Tolmasky (@tolmasky) November 18, 2020

Others speculated, however, that the percentage of developers who “slowly” grew with ARR above $ 800,000 was actually quite small.

I would envision this "dollar over, double commission" scenario dampening the excitement of the cadre hovering around that number. But I think it's very likely that the percentage of developers "slowly increasing the ARR to over $ 800,000" is actually quite small. https://t.co/2eOXFLSBOD

– Matthew Panzarino (@panzer) November 18, 2020

From the data we have collected, it appears that subscription-based apps grow relatively quickly once they cross that $ 1 million threshold. According to data from the RevenueCat subscription platform, the apps on its platform are growing on average 1.5 times compared to the previous year. Once an app crosses the $ 1 million mark, the most likely scenario is that it would make $ 1.5 million in the next year. In addition, we understand that the apps that approach the threshold grow even faster than the average rate. And they rarely fall behind.

"Apple has made many changes to the App Store over the years. This is one of the first that I saw that there really wasn't much to complain about," said Jacob Eiting, CEO of RevenueCat. “It affects the app store economy by and large and is significant to individual indie developers. Sure, it might have been for PR and they might not have a lot of downside, but it's really a great thing for so many developers, ”he said.

We will have more data on this subject in the coming weeks.

Parler's backers revealed … it's the Mercers; Parents warned about the app

Freedom of speech, Parler, which hit the charts after Facebook and Twitter scrutinized the facts, is funded by prominent Conservative donor and Trump supporter Rebekah Mercer, The WSJ revealed.

Rebekah is the daughter of Robert Mercer, the hedge fund manager and principal investor in Cambridge Analytica – the data analytics company behind the biggest data leak in Facebook history, with 87 million users collecting their data for political advertising purposes. The Mercers also have Breitbart News, the Heritage Foundation think tank, the Federalist Society, a super-PAC that initially launched Ted Cruz's candidacy for the Republican president nomination (before moving to Trump) and Citizens United (the Distributed an anti-Clinton film in 2007) and succeeded, among other things, in a Supreme Court ruling that lifted the restrictions on campaign funding.

This week, the nonprofit ParentsTogether warned parents about Parler, saying the app's weak moderation policies and extremist user base put children at risk of exploitation, abuse and recruitment for racial violence. The organization described Parler as hosting dangerous content, including hate speech, incitement to violence and widespread disinformation.

Additionally, the group was concerned that while Apple's App Store rated the app 17+, Google Play rated it as suitable for ages 13+.

"All parents of children under the age of 18 must immediately check their children's phones and tablets to make sure their children have not installed Parler," the group warned parents in a statement. "If your child has Parler installed, we strongly recommend that you delete their account and the app."

Twitter launches fleets

Credit: Bryce Durbin

Twitter released its own version of Stories – also known as "Fleets" – for its global user base this week. The product, which allows users to post ephemeral content that disappears within 24 hours, has already been launched in select markets including Brazil, India, Italy, South Korea and most recently Japan. The rollout encountered some issues almost immediately as the fleets suffered from performance and stability issues. Twitter said it would pause things while this worked. On Thursday, the company announced that the feature is available worldwide.

The reactions to fleets have been mixed. Some users hate the feature that is designed to encourage more users to post on Twitter if they were otherwise too shy to participate. This is mainly due to the "cancel culture" mood of Twitter, which strongly criticizes mistakes, bad attitudes and unpopular opinions. even if they are minor crimes. However, it is not clear how a Stories feature solves this problem, as fleets are still posted on Twitter's public social network.

Twitter has also announced that it will be testing a rival at the clubhouse, where users will join audio chat rooms.

These changes follow the activities of activist Elliott Management Group, who together with Silver Lake acquired a significant stake in Twitter earlier this year. The companies had a plan to push the company towards more innovation and new leadership. The companies later signed a deal to save Twitter CEO Jack Dorsey from being overthrown, get seats on the board, and add someone with expertise in technology and artificial intelligence to the board. Dorsey disagreed with the characterization that her involvement had an impact on product development.

Platforms

Apple's IDFA is the subject of EU data protection complaints. Apple had already told advertisers that they would soon have to give users the option to turn off ad tracking. However, the new complaints are more related to the fact that IDFA was created and saved in the first place, and that Apple's proposed changes don't go far enough as they limit its use by third parties, but not Apple itself.
Apple's Developer Transition Kits (DTKs) help developers to prepare their apps for Apple's silicon. However, it turns out that they can't install iOS or iPadOS apps like M1 Macs.
Google is reminding Android developers that they only have until January 18, 2021 to get approval to keep using location data in the background if you want to stay on Google Play.
Apple released a new version of iOS 14.2 for iPhone 12. The update appears to fix the iPhone 12's mini lock screen issue that caused some users' lock screens to become unresponsive to touch. The update also fixes issues with MMS messages, Made for iPhone hearing aids, and more.
Google also reminds Android developers that as of August 2021For Google Play, all apps must use the Android App Bundle publish format and make other changes.
With Apple, developers can now market and distribute their subscriptions with promotional codes. These one-time alphanumeric codes can be redeemed either in the App Store or in the app itself, enabling developers to attract and retain customers or win back expired subscribers with special offers. Here are some tips on how to get them working.
Apple's iOS 14.3 Beta 2 indicates that Apple will do away with the intermediate step of opening the Shortcuts app when app shortcuts are launched. This was one of the main reasons behind the iOS 14 home screen customization trend, with users designing iOS themes with custom icons and widgets.

Services

security

Dating app bumbles vulnerabilities endangers Facebook likes, locations and images of 95 million online data. It took Bumble six months to fix the bugs and says no user data has been compromised.
TikTok extends parental controls to include search, comment and account data protection. The company launched Family Pairing in April, which allows parents to link their account to their teen's account to manage screen time, direct messages, and whether or not the teen's account is in restricted mode – a special mode that TikTok's feed to a limited-secure set of moderated content. This week it also gave parents the ability to control whether the teen's Liked videos are visible to others, control who can comment on the teen's videos, and decide whether the teen can use TikTok search.
Go SMS Pro messaging app exposed the private photos and files of millions of users. The app popular on Android did not respond to security researchers on this issue. Typically, organizations are given 90 days before vulnerabilities are published.

Apps in the news

Epic Games added video chat to Fortnite via a house party integration. The company bought the video chat app last year. Gamers use their phone or tablet as a webcam while playing on PC, PS4 or PS5.
Epic Games is also suing Apple in Australia. The Fortnite maker is currently in a US legal battle over Apple's obligation to use Apple Pay and pay commissions for in-app purchases. In an interview this week, Tim Sweeney, founder of Epic Games, compared the fight with Apple to a fight for civil rights. (That's a bit much, we'd say.)
Snap acquired Voisey, A UK based app that allows users to create songs and videos by overlaying their own singing. The app had raised $ 1.88 million so far, but the terms of the contract were not immediately available.

Google Maps will be updated with more COVID information and will add the assistant driving mode. The COVID layer in Google Maps for Android and iOS can now show the number of all-time cases detected in an area, links to COVID resources from local authorities, and the number of transit lines in use. In driving mode you can read texts and control your music via maps.
Facebook's Messenger Kids have been redesigned to look more like Messenger. The updated app adds chats to a more traditional vertical list, with news and media previews, and bold text and blue dots to indicate their unread status. A new tab navigation has also been added, which better highlights the separation between apps and games.
YouTube launches 15-second audio ads is aimed at users who listen to music or podcasts while the app is playing in the background.
Apple's Shazam hands over 200 million active users a month.
Instagram is expanding its guides functions and updating the search. With the help of guides, creators can now share tips, resources and other long-form content in a special tab in their profiles. Now anyone can create guides for products, places, and posts. Users can now also search by keywords instead of just names, usernames, hashtags, and locations.
Instagram is also updating its Threads mobile messaging app. The app now adds a tab to make it easier to navigate between stories and statuses. All users should now also have the tabbed inbox where they can see all the stories, not just close friends, and the ability to post stories, not just stories from close friends.
Facebook sued an operator of Instagram clone websites. The operator had scraped Instagram data from around 100,000 accounts with its own 30,000 fake accounts posing as people to avoid detection.

SoundCloud adds a profile verification with official blue checks.
App Growth Awards announce their finalists.
Google launches iOS 14 widgets for Gmail, Drive, and Fit. Says Calendar and Chrome Widgets will be available soon.
State and federal investigators are preparing to bring antitrust lawsuits against Facebook The Washington Post reports on the takeover of Instagram and WhatsApp.
Twitter and Facebook attended another technical hearing in Congress This, in turn, largely served to allow lawmakers to talk only about what they wanted, rather than the issue at hand: the role of social media during the elections. The CEOs were asked about the addictiveness of their apps, their algorithms, their approaches to misinformation and much more.

Dead Pool

Trends

US mobile strategy game spending increases 22% to $ 2.8 billion in the first 10 months of 2020. Sensor tower reports. The top game of player spending during this period was Clash of Clans, which grossed nearly $ 262 million in the US.
The top home screen widget apps hit 1 in 7 US iPhonesclaims another sensor tower report. The five most popular apps – Widgetsmith, Color Widgets, Photo Widget: Simple, WidgetBox, and Photo Widget – have seen a total of 13 million iPhone installs since iOS 14 launched. To date, they have reached 45 million installations worldwide.

Credit: Sensor tower

Duolingo 2

Credit: Duolingo

The language learning app Duolingo confirms the increase of 35 million US dollars on a valuation of 2.4 billion US dollars. The news was reported last week, but the numbers are now official. The app was valued at $ 1.65 billion earlier this year.
Baidu to acquire Joyy's Chinese live streaming service YY for $ 3.6 billion. The search giant is struggling to fight newcomers like ByteDance and video giant Kuaishou. Last year, Joyy's YY acquired a $ 1.45 billion controlling stake in Bigo, which operates the streaming app Bigo Live and TikTok rival Likee.
OpenPhone is raising $ 14 million to replace outdated company phone systems with an app. Yammer founder David Sacks & # 39; Craft Ventures led the way.
Flipkart acquires the AR startup Scapic build an immersive shopping experience. The terms of the contract were not disclosed.
Athlete social platform Strava raises $ 110 million in Series F funding from TCV and Sequoia Capital, along with Dragoneer Investment Group and existing investors including Madrone Capital Partners, Jackson Square Ventures and Go4it Capital.
Yubo raises $ 47.5 million for its social app offers live streaming rooms that are now used by 40 million users. Existing investors Idinvest Partners, Iris Capital, Alven and Sweet Capital returned, and new investor Gaia Capital Partners joined.
Learn English app AllRight raises $ 5 million by Genesis Investments. The Ukrainian startup combines real teachers with AI-enabled tutors.
ContextLogic, the maker of the mobile e-commerce app Wish, has filed for an IPO. Wish saw a drop in sales in 2019, but grew faster in 2020. For the first nine months of 2019, Wish had sales of $ 1.33 billion, compared to $ 1.75 billion for the same period in 2020, or a 32% increase.
Roblox files for its IPO, The company lost $ 206 million on $ 589 million in revenue and has 31.1 million daily active users who now spend up to 22.2 billion hours on the app. This corresponds to an increase of 122% compared to the previous year.

Amazon GameOn

Amazon launched GameOn for Android this week, an app that allows users to record 30-second to five-minute long gameplay clips – including a callback feature that saves the clip after it happens. Clips are then shared on GameOn's social network or elsewhere on social media. The app supports more than 1,000 games at launch, including PUBG Mobile, Crossy Road, Final Fantasy Brave Exvius, and Angry Birds 2. With a selfie camera, players can add their own comments to the clips. Weekly Challenge winners will receive special profile badges. The start will take place after the release of the cloud gaming platform Luna by Amazon.

Google Pay

Credit: Google

Google Pay launched a major redesign of its app for Android and iOS this week with a host of new features, including a mobile bank account. The company has partnered with 11 banks, including Citi and Stanford Federal Credit Union, to launch Plex, a mobile banking service that maintains accounts with partner banks, but Google Pay acts as the front end. Plex users have no monthly fees, overdraft fees, or minimum balance, and can pay both businesses and friends from their account. They can also explore offers and rewards to save money while shopping and get insights into spending, including from their connected bank accounts outside of the app. Another new feature makes it easier to share bills with friends, e. B. restaurant checks, rent or utilities.

Moment & # 39; s RTRO app

RTRO was launched earlier this year and offers the ability to take and share photos and videos with a vintage look. This week, the app was updated with "Instant Film" which allows you to emulate instant photos supported by the app's "Analog Effects Engine". The resulting photos give you the feeling of an instant camera picture.