This Week in Apps: App Store outrage, WWDC20 prep, Android subscriptions change

Welcome back to This Week in Apps, the Extra Crunch series that recaps the latest OS news, the applications they support and the money that flows through it all.

The app industry is as hot as ever, with a record 204 billion downloads and $120 billion in consumer spending in 2019. People are now spending three hours and 40 minutes per day using apps, rivaling TV. Apps aren’t just a way to pass idle hours — they’re a big business. In 2019, mobile-first companies had a combined $544 billion valuation, 6.5x higher than those without a mobile focus.

In this Extra Crunch series, we help you keep up with the latest news from the world of apps, delivered on a weekly basis.

This week, one story completely took over the news cycle: Hey vs. Apple. An App Store developer dispute made headlines not because Apple was necessarily in the wrong, per its existing rules, but because of a growing swell of developer resentment against those rules. We’re giving extra bandwidth to this story this week, before jumping into the other headlines.

Also this week we look at what’s expected to arrive at next week’s WWDC20, the TikTok clone Zynn getting banned from both app stores (which is totally fine, I guess!), Facebook’s failed attempts to get its Gaming app approved by Apple, as well as some notable Android updates and other app industry trends.

Main Story: Hey vs. Apple

One story dominated this week’s app news. Unless you were living under the proverbial rock, there’s no way you missed it. After Basecamp received App Store approval for its new email app called Hey, the founders, David Heinemeier Hansson and Jason Fried, turned to Twitter to explain how Apple had now rejected the app’s further updates. Apple told Basecamp it had to offer in-app purchases (IAP) for its full email service within the app, in addition to offering it on the company website. They were not happy, to say the least.

This issue came to a head at a time when regulators are taking a closer look at Apple’s business. The company is facing antitrust investigations in both the U.S. and the E.U. which, in part, will attempt to determine if Apple is abusing its market power to unfairly dominate its competitors. In Hey’s case, the subscription-based app competes with Apple’s built-in free Mail app, which could put this case directly in the regulators’ crosshairs.

But it also brings up the larger concerns over how Apple’s App Store rules have evolved to become a confusing mess which developers — and apparently even Apple’s own App Store reviewers — don’t fully understand. (Apple reportedly told Basecamp that Hey should have never been approved in the first place without IAP.)

Apple has carved out a number of conditions where apps don’t have to implement IAP, by making exceptions for enterprise apps that may have per-seat licensing plans for users and for a set of apps that more directly compete with Apple’s own. These, Apple calls “reader” apps, as they were originally directed making an exception for Amazon’s Kindle. But now this rule offers exceptions to the IAP rule for apps focused on magazines, newspapers, books, audio, music, video, VoIP, access to professional databases, cloud storage, and more.

That leaves other digital service providers wondering why their apps have to pay when others don’t.

Apple didn’t help its argument, when earlier in the week it released a report that detailed how its App Store facilitated $519B in commerce last year. The company had aimed to prove how much business flows through the App Store without Apple taking a 30% commission, positioning the portion of the market Apple profits from as a tiny sliver. But after the Hey debacle, this report only drives home how Apple has singled out one type of app-based business — digital services — as the one that makes the App Store its money.

Apple’s decision to squander its goodwill with the developer community the week before WWDC is an odd one. Heinemeier Hansson, a content marketing expert, easily bested the $1.5 trillion dollar company by using Apple’s hesitance to speak publicly against it. He set the discussion on fire, posted App Store review email screenshots to serve as Apple’s voice, and let the community vent.

Amid the Twitter outrage, large publishers’ antitrust commentary added further fuel to the fire, including those from Spotify, Match, and Epic Games.

For more reading on this topic, here are some of the key articles:

• TechCrunch’s exclusive interview with iOS App Store head, Phil Schiller. The exec said Apple’s position on the Hey app is unchanged and no changes to App Store rules are imminent. “You download the app and it doesn’t work, that’s not what we want on the store,” he argued. (Except of course, at those times when such an experience is totally fine with Apple, as in the case of “reader” apps.) Schiller also said Basecamp could have avoided the problems if Hey had offered a free version with paid upgrades, or if it offered IAP at a higher price than on its own website.
• Daring Fireball’s comments on the “flimsiness” of Business vs. Consumer as a justification for Apple’s rejection of Hey. John Gruber points out that the line between what’s a business app and a consumer app is too blurred. Apple allows some business apps to forgo IAP if they sell enterprise plans (e.g. per seat plans) that often involve upgraded feature sets that aren’t even iOS-specific. But in this day and age, who’s to say that an email service doesn’t deserve the same ability to opt out of IAP in order to serve its own business user base? After all, what if it upgrades its paid service with web-only features — why should Apple get a cut of that business, too?
• App Store policy criticism from The Verge. Nilay Patel sat down with Rep. David Cicilline (D-RI) and Basecamp CTO David Heinemeier Hansson to discuss the plight of Hey for its The Vergecast podcast. Cicilline said Apple’s fees were “exorbitant” and amounted to “highway robbery, basically.” He said Apple bullied developers by charging 30% of their business for access to its market — a decision which crushes smaller developers. “If there were real competition in this marketplace, this wouldn’t happen,” he added. The Verge’s Dieter Bohn also argued that Apple’s interpretation and enforcement of its App Store policies is terrible.
• Basecamp CEO’s take on Apple’s App Store payment policies: Basecamp, the makers of the Hey app, put out a company statement about the App Store rules. The statement doesn’t add anything new to the conversation that wasn’t already in the tweetstorm, except the Basecamp response to Schiller’s suggestions which was something along the lines of 😝. The bottom line is that Hey wants to make the choice for its own business whether it needs the benefit of being able to acquire its users through the App Store or not. One way requires IAP and the other does not.
• Vox’s Recode examines the antitrust case against Apple. The article doesn’t reference Hey, but lays out some of the other antitrust arguments being leveraged against Apple, including its “sherlocking” behavior,

Headlines

Apple has denied Facebook’s Gaming app at least 5 times since February

The Hey debacle is only one of many examples of how Apple exerts its market power over rivals. It has also repeatedly denied Facebook’s Gaming app entry to its App Store, citing the rule (Apple Store Review Guidelines, section 4.7) about not allowing apps whose main purpose is to sell other app, The NYT revealed this week.

Facebook’s Gaming app, which launched on Android in April, isn’t just another app store, however. The app offers users a hub to watch streamers play live, social networking tools, and the ability to play casual games like Zynga’s Words with Friends or Chobolabs Thug Life, for example. The latter is the point of contention, as Apple wants all games sold directly on the App Store, where it’s able to take a cut of their revenues.

One of the iterations Facebook tried was a version that looked almost exactly like how Facebook games are presented within the main Facebook iOS app — a single, alphabetized, unsortable list. The fact that this format was rejected when Apple already allows it elsewhere is an indication that even Apple doesn’t play by its own rules.

Zynn gets kicked out of App Store

Zynn, the TikTok clone that shot to the top of the app store charts in late May, was pulled from Apple’s App Store on Monday. Before its removal, Sensor Tower estimates Zynn was downloaded 5 million times on iOS and 700,000 times on Google Play.

The controversial app had already been removed from the Google Play store, following a series of complaints from influencers who claimed Zynn had uploaded without permission content they had published elsewhere. Others also said they found profiles of themselves on Zynn even though they had never signed up.

In addition, Zynn used a controversial reward system to enable its growth — a system that some described as a pyramid scheme. The app claimed to pay users to watch videos and invite their friends. But users said they had trouble getting their payouts.

The app has since removed the payments system and replaced it with something called “Zynncheers,” which involves points that translate to benefits and rewards. But it’s unclear if the app stores will allow the updated version to return.

Google brings Meet to Gmail’s mobile app

Google this week rolled out a tighter integration between Gmail on mobile and its Meet video conferencing service. The company updated its Gmail on Android or iOS with a new feature that will allow you to join a Meet meeting right from your inbox when you’re emailed a link to a Meet event. In a few weeks, the app will also get a new Meet tab at the bottom of the screen that will show all your upcoming Meet meetings in Google Calendar and will allow you to start a meeting, get a link to share or schedule a meeting in Calendar.

Etsy gets into AR

Retailers like Target, Home Depot, Wayfair, IKEA, and others have embraced augmented reality to help shoppers make decisions about products they’re interested in by visualizing the items in their own homes. This week, Etsy hopped on the AR bandwagon as well, with the launch of an updated iOS app that uses augmented reality features to help consumers shopping for wall art specifically.

The company says it’s seen an increase in customers shopping for home decor since the start of the COVID-19 pandemic. In the last three months, for example, Etsy claims searches for wall decor or art have jumped 94% compared to the same time last year. Similarly, there’s been a 63% increase in searches for paintings and a 54% increase in searches for prints or illustrations.

Brawl Stars has a good first week in China

Supercell’s Brawl Stars generated $17.5M in spending in China after seeing 4.8M downloads in the week following its June 9 launch, according to Sensor Tower. During this period, Brawl Stars generated an estimated $28.8M in gross revenue globally, with China accounting for 60.7% of all player spending The game also racked up 6.7M downloads worldwide, with China representing 71% of all new installs.

This could prove to be the company’s next big hit, as Brawl Stars generated more revenue during its first 7 days in China than the last Supercell hit, Clash Royale, which grossed $9.4M in its launch week there.

Twitter and Facebook talk about Android 11’s Conversation API

Google co-authored blog posts with both Twitter and Facebook this week that details how the company’s respective apps will use Android 11’s new Conversation API. In Twitter’s case, the APIs will surface Twitter DMs, while Facebook talks about Messenger’s use of the new Bubbles API built on top of the notifications API.

Android 11 beta gets its first patch

Google announced this week it’s rolling out a patch for Android 11 beta with Beta 1.5, designed to fix some of the issues experienced with the original release, including crashes, bugs, and problems with Bluetooth, among others.

Google is launching a way to buy Android app subscriptions outside the app itself

Alongside the Android 11 beta news and updates to Android developer tools, Google quietly rolled out a significant change in how Android app developers can market their subscriptions on the Google Play Store. The company confirmed a select set of developers are testing a new feature that allows consumers to purchase an app’s subscription outside of the app itself.

The functionality is being made available through the Android Billing Library version 3, which Google recently introduced. The new library can power a subscription promo code redemption experience, where users can redeem free trials before the app is installed. And it allows consumers to resubscribe to subscriptions they used to pay for from the Google Play subscriptions center.

But the most notable part of the update is how it allows developers to sell subscriptions directly on their app’s details page. Now, next to the app’s “Install” button, consumers will be able to instead choose to click a separate button to purchase the app’s subscription and even its free trial.

Android’s AirDrop competitor spotted in a developer video

Android hasn’t yet released its Android Beam successor and rival to Apple’s AirDrop, but the feature seems to be ready. In one of Google’s Android Developers YouTube videos, the feature was shown when the developer was demonstrating other Android 11 changes. In Android’s Share Sheet, a “Nearby” option appeared alongside a previously unknown new icon. The location in the sharing menu is where Nearby Sharing feature is expected to appear, as well.

Russia un-bans Telegram

Though not a contact-tracing app, Russian officials conceded the app is an important means of sharing critical information about the COVID-19 pandemic. Bloomberg and Engadget reported this week the country’s communications watchdog Roskomnadzor and the General Prosecutor’s office agreed to drop the ban on the Telegram app as a result. Telegram founder Pavel Durov agreed to cooperate with the agencies against terrorism and extremism, the regulators said.

Zoom bends to pressure on encryption offering

Video conferencing app Zoom responded to widespread consumer complaints about its plans to make encryption a paid-only feature. The company this week succumbed to pressure form Congress and the public which pushed the app to bolster user privacy. Now, those using the free service will also gain access to end-to-end encryption, the company announced in a blog post. This will offer stronger protection but will also mean participants can’t call into a Zoom line using their telephone.

Apple to host virtual summer day camps

Apple typically offers “Apple Camp” summer sessions for kids in its Apple Stores. But due to the coronavirus pandemic, it can’t do so this year. Insead, the company is introducing a virtual format called “Apple Camp at Home” which will offer kids 8-12 a digital experience via an Activity Book and live, virtual sessions where kids can learn and ask questions. The free sessions are 30 mins. in length or 60 mins. for Q&A.

TikTok aims for $500M in U.S. revenues in 2020

According to a report from The Information, TikTok is aiming to generated $500M from the U.S. alone in 2020. Last year, the app brought in around $200M-300M in total revenues. It’s unclear if TikTok will meet this goal as its revenue generation efforts — like its ads business — are still under development. And the pandemic has forced advertisers to pull back on budgets, as well.

Calm records 120% more app sessions than Headspace during the quarantine

Apptopia reports meditation app Calm has seen more sessions than its top rival Headspace during the quarantine. Across the top 15 mental wellness apps, app sessions were up 66% year-over-year and MAUs were up 11%. It claims that data doesn’t indicate any significant bump in sessions during quarantine — a statement it seems to be making to counter Sensor Tower’s report of an April surge of 2M new downloads for this group of apps, amid the pandemic. Its data also says net new installs declined 4% year-over-year in May, which seems to be in dispute with the trend Sensor Tower sees.

Nevertheless, both agree on a winner: Calm. New installs of the app were 18% higher in May than January, and app sessions were 23% higher. And on June 14, Calm achieved its highest DAU in its lifetime with approximately 4.6 million.

Get Prepped for WWDC

• Download the latest version of the Apple Developer app. Apple made some changes to its Developer app this week, in anticipation of the surge of viewers who will now experience WWDC via the app. The app now includes updated Discover and WWDC tabs, the option to favorite individual articles in addition to videos and session content, and it runs on Mac for the first time. (But yes, with Catalyst, which is already causing complaints.) Also this week, Apple updated the App Store Connect portal.
• Read about what to expect from the now virtual-only Apple event. We believe Apple will discuss its shift to its in-house ARM processors, its redesigned iMac all-in-one desktop, and possibly Apple’s Tile competitor, AirTags, and its high-end, over-the-ear AirPods Studio. Updates to Apple’s software, including iOS, iPadOS, macOS and more are also expected.
•  Buy the Indie Sticker Pack and support great causes. When a group of indie developers met in person at WWDC over the year, they would exchange stickers and pins of their apps’ logos and icons, which would then be used to decorate their laptops and bags. This year, the developers can’t meet in person, so they’ve created a downloadable $12.99 indie sticker pack where funds will be split 50/50 between the WHO’s COVID-19 Solidarity Response Fund and the Equal Justice Initiative for combatting racial and economic injustice.
• Check out Apple’s WWDC20 Swift Student Challenge winners. 350 Swift Student Challenge winners from 41 different countries and regions will join this year’s virtual WWDC event. Some highlights include Sofia Ongele’s app ReDawn which helps sexual assault survivors access resources; Palash Taneja’s timely Swift playground that teaches coding while simulating how a pandemic moves through a population; app developer Devin Green’s Swift Student Challenge playground featuring an artificial-intelligence robot named Stanny that can recognize and respond to 63 different comments and questions. Also, get jealous about their jackets and pins.

COVID-19 Contact Tracing apps in the news

• Germany and Italy: Both activated their contact-tracing apps this week, fueling a debate about privacy rights. [NYT]
• Norway: The country pulled its contact-tracing app after privacy watchdog’s warning about its continual upload of people’s location. [TechCrunch]
• UK: The UK’s NHS will switch to an alternative design for its contact-tracing app which uses the Apple-Google model, after spending months and millions of pounds on technology experts warned would not work.[The Guardian]
• Japan: Japan sees the launch of COCOA, a contact-tracing app using the Apple-Google API and built by Microsoft engineers. [The Verge]
• NY: The New York AG asks Apple and Google to help vet the third-party contact-tracing apps to ensure they don’t collect sensitive health information. [Engadget]

Funding and M&A

• Productivity startup Spike raises $8M in a round led by Insight Partners to make your email look like a chat app. The Spike app works on on Android, iOS, Mac and Windows.
• Thanks to the pandemic-fueled resurge of interest in edtech, Oslo-based Kahoot raises $28M for its user-generated educational gaming platform, valued at $1.4B. Kahoot’s apps run on smartphones, iPads, and Chromebooks.
• Square acquires Spanish peer-to-peer payment app Verse. The app will complement Square’s own Cash app which works only in the U.S. and U.K. Deal terms were not disclosed, but Verse had raised $37.6M from investors.
• Cloudtenna raises $2.5M and launches a mobile search app that helps enterprise users find content across cloud services like Box, Dropbox, Slack, Google Docs and Office365.
• Playbook, a company aiming to be the Patreon of fitness content, raised $3M seed. The company helps fitness app makers by offering tools that allow them to foster their own communities of users.
• African cross-border mobile payments and fintech startup Chipper Cash raises $13.8M Series A.
• AI-powered digital therapeutics startup Kaia Health raises $26M for its mobile apps that measure, monitor and guide users through therapeutics exercises, like physical therapy.
• Payfone raises $100M for its mobile phone-based digital verification and ID platform.
• Food delivery app DoorDash confirms its $400M raise, valuing the business at under the $16M mark Axios reported. But its IPO timing remains unclear.
• Digital and mobile bank Monzo closed a $76M funding round at a 40% valuation drop.
• Walmart acquires technology and IP from CareZone, which helps people manage their prescriptions. The company had offered an app for managing medication.
• Fortnite maker Epic Games is said to be nearing a $17B valuation with an upcoming $750M round, per Bloomberg.

Downloads

Zoom with a celeb on Cameo

Looking for some quarantine entertainment? Cameo’s personal celeb videos app has been surging during the pandemic, with bookings up 7x since March. Now the app added Zoom calls to the list of booking options.

Peanut adds video chat

Social networking app for women, Peanut, adds a video chatting feature for connecting new friends and fellow moms. A future update will allow for the introduction of group video chat as well.

Navigation app Bird Maps launches in Paris and Tel Aviv

Mobility startup Bird launched a new standalone app, Bird Maps, which offers turn-by-turn navigation for riders who want to use bike or micromobility lanes for their entire trip. The app is available on iOS and Android in Paris and Tel Aviv as part of a pilot test. Bird Maps was created using navigation software from Trailze, an Israeli startup. [TechCrunch]

Flipboard adds Storyboards as a new way to curate content

Flipboard launched a sway to create a one-time collection of articles, videos, podcasts, tweets and other media, called Storyboards. The new format will complement Flipboard’s existing Smart Magazines, which are ongoing collections that mix human and algorithmic curation.

Keen

A new project called Keen from Google’s in-house incubator for new ideas, Area 120, aims to help users track their interests. The app is like a modern rethinking of the Google Alerts service, which allows users to monitor the web for specific content. Except instead of sending emails about new Google  Search results, Keen leverages a combination of machine learning techniques and human collaboration to help users curate content around a topic. Once a Keen is created, you can add and remove content or share it with friends for collaboration purposes. But Google’s ML will keep scouring the web for more to keep the Keen freshly updated. The app is available on the web and Android and don’t worry, Google WILL get all your data! 😬