The Apple App Store, which started with a limited pool of 500 applications, counted around 2.11 million mobile apps available exclusively to iOS users as of the first quarter of 2022. The platform is in continuous expansion, with an average of 34,000 thousand apps released per month in the first half of 2022. Gaming apps accounted for 13.7 percent of all the mobile iOS apps hosted in the Store, while business apps accounted for 10.15 percent of all active apps on the platform. As of the third quarter of 2021, iOS apps had a retention rate of 13.6 percent after three days from the first download, which tended to decrease to 4.13 percent after 30 days.
Apple and app publishers: is change coming?
As of June 2022, approximately 94 percent of mobile iOS apps on the Apple App Store were free to download, meaning they operated on ads-based or freemium monetization models for which the 30 percent Apple App Store fee is still required. Standard publishers’ fees to monetize on the Apple App Store have been set at 30 percent commissions for all in-app purchases, subscriptions, or paid downloads, with free hosting for all apps since Steve Jobs’ initial introduction of the platform.As of 2022, the Apple App Store presented several reduced commission rate plans for developers that meet certain criteria. Apps that retain subscribers see their commission fees reduced to 15 percent after the subscriber’s first year, while developers participating in Apple's Small Business Program – introduced in November 2020 - enjoy the same commission fees for both subscriptions and other in-app payments from day one. Apps participating in the company’s News Partner Program – introduced in August 2021 – see their commission fees cut down to 15 percent in case of in-app purchased subscriptions.
While app and mobile gaming publishers have been complaining about platform commissions, lack of direct interaction with users, and the impossibility to redirect users toward third-party payment systems, the 2020 Epic Games v. Apple dispute represented the incident igniting both institutional and public discussion over the app store commissions. In August 2020, Epic Games began promoting the option of using third-party payment systems for in-app sales on its popular game Fortnite. This resulted in Apple and Google removing Fortnite from their app stores and Epic Games hitting both tech giants with antitrust lawsuits.
While the September 2021 Epic Games v. Apple ruling sided with Apple stating that the company was not acting as a monopolist, it also kick-started a series of legal propositions from app developers in their domestic market and abroad to change the Apple App Store dynamics and allow third-party payments. Most recently, dating apps in the Netherlands have obtained the possibility to use third-party payment systems and pay a 27 percent commission fee over these transactions, after Apple came under the scrutiny of the Dutch Authority for Consumers and Markets (ACM).
While the list of companies and app developers suing Apple for its App Store practices has been progressively growing, several major governmental bodies have been drafting propositions and passing new laws to prevent what has been seen as Apple and Google attempting to stifle competition. First the European Union with the Digital Market Act, then the United States Senate with the Open Apps Market Act, governmental bodies have been trying to reduce larger tech companies’ control over the app market and increase competition in the digital environment.
How to best optimize iOS apps in a privacy-focused environment
From not allowing app sideloading to introducing automatic safety updates with the iOS 16 Rapid Security Response, privacy and user safety have long been part of Apple’s commitment to its App Store practices. With the April 2021 introduction of the Apple Tracking Transparency protocols (ATT), users were given the option to opt-in or out of tracking. Even before the ATT implementation, users appear to approve of the possibility, with over 61 percent of U.S. respondents reporting their intention to not allow apps to track them. As of July 2022, 37 percent of app data linked to users collected by iOS apps were used by app publishers for product personalization, while 23 percent and 18 percent went to developers’ advertising and third-party advertising, respectively. Additionally, in September 2021, iOS users were given the possibility to decide whether they wanted to opt out of personalized ads, adding another building block to Apple’s privacy shield.As the Apple App Store will monetize its business even further by adding ads in the Today tab, as well as a recommended section, mobile app publishers will need to step up their app design and improve their placement in the Apple App Store search result ranking. As of June 2022, the median number of daily downloads needed for apps rank in the top 10 apps in the U.S. Apple App Store was 52,000, while games required 26,000 daily downloads. The average number of days since the last released update for the apps ranking in the first 10 positions in the Apple App Store was 83 days, with shopping apps presenting a more frequent update interval of 45 days. The calculated average app name and keyword matching value across all categories for apps that appeared first after a user-prompt search in the Apple App Store was generally higher than for apps ranking between the second and the tenth position, going from 0.30 for gaming apps to 0.36 for finance apps.
