Apple Massive Developer Conference Is Attempting To Overcome Backlash

Apple's massive developer conference is attempting to overcome backlash

A cloud hangs over Apple's annual developer conference this week: many app developers are dissatisfied with the company at the moment.

For more than a decade, Apple (AAPL) app developers have been subjected to stringent payment restrictions, rigorous application approval processes, and hefty 30% commissions on in-app purchases, all in the name of reaching a large and growing audience of iPhone and iPad owners.

However, Apple's latest Worldwide Developer Conference, which is primarily focused on software updates, began Monday, following months of tensions — and a high-profile trial — over the restrictions that its App Store requires developers to follow. Antitrust authorities and legislators in a number of countries, including the United States, are currently investigating how the company operates the App Store. Additionally, app developers are speaking out.

Minutes before the start of WWDC on Monday, Facebook (FB) CEO Mark Zuckerberg, who has frequently clashed with Apple, announced that the social network would not take a cut from content creators on its platform for at least the next 18 months. He also took a shot at Apple in the process.

"To enable more creators to earn a living on our platforms, we're keeping paid online events, fan subscriptions, badges, and our upcoming independent news products all free for creators until 2023," Zuckerberg wrote on Facebook. "And when we do introduce a revenue share, it will be less than Apple and others take, which is 30%."

Additionally, Zuckerberg stated that Facebook will launch a "payout interface" that will allow creators to see how much money they are losing to companies such as Apple and Google due to fees.

A few days earlier, Marco Arment, a prominent Apple developer and founder of the online bookmarking service Instapaper, slammed the company's leadership in a blog post for attempting to extract money from developers while Apple earns enormous profits from hardware sales.

"However, bullying and gaslighting developers into believing that we should be kissing Apple's feet for allowing us to add billions of dollars of value to their platform is not only greedy, stingy, and morally repugnant, but also deeply insulting," he said.

The criticisms target Apple's underlying power dynamic with its developer community: developers rely on Apple to reach users, while Apple relies on developers to build apps that help attract users.

As Arment put it, "without our apps, the iPhone is worthless to the vast majority of its current customers." 

 

Tensions are increasing

Apple's commissions on in-app purchases have long been a source of contention and scrutiny, but tensions reached a zenith recently when Epic Games, the maker of the popular video game Fortnite, squared off against Apple in federal court.

Epic accuses Apple of monopolistic control over its "walled garden" iOS operating system, claiming that developers are forced to comply with onerous restrictions in order to reach hundreds of millions of iPhone and iPad users. Apple argues that users can purchase apps elsewhere and that its commission helps the company improve the quality and security of its devices. The trial, which concluded on May 24, is expected to reach a conclusion in the coming months.

Epic's lawsuit brought to light a slew of developer grievances with Apple, and those tensions continue to simmer in the shadow of this week's WWDC.

In an interview with Axios published on the eve of WWDC, David Baszucki, the CEO of Roblox, another game platform that was mentioned numerous times during the Apple-Epic trial, expressed support for lowering app commissions.

"It's reasonable to assume we want to return as much money to developers as possible," Baszucki said, noting that his company has "excellent relationships" with Apple and other app store operators. "If those store fees were to change, we would return the majority of the savings to the creator community."

Apple did not immediately respond to a request for comment, but the company highlighted its developer support several times throughout the Epic trial, including the $50 million it claims to spend on WWDC.

"We invert the world for developers," CEO Tim Cook stated on the stand. However, he acknowledged that Apple makes decisions "in the best interests of the user" and that "at times, there is a conflict between developer and user desires."

Apple reminded users and developers of the benefits of its ecosystem on Monday as it unveiled new software features. According to the company, the App Store now receives 600 million weekly visitors from 175 countries and regions, and it has paid out more than $230 billion to developers since the App Store launched in 2008.

Apple announced today that it will make one of its popular products, video calling service FaceTime, accessible to users of rival platforms Android and Windows. This is seen as a possible response to accusations that Apple's iOS ecosystem is closed and restrictive.

"Apple is balancing a tightrope at WWDC between convincing software developers to double down on its platform and... collecting its 30% fee," Wedbush analyst Dan Ives told CNN Business.

 

Is there going to be a showdown over privacy?

While Apple is courting developers at this week's event, the company is also doubling down on privacy protections, which may aggravate some developers and businesses.

Apple announced several new user controls during Monday's keynote. Among them are "mail privacy protection," which enables users to conceal their IP addresses and physical locations from businesses, and "hide my email," which generates a random email address when users sign up for new websites, ensuring that businesses do not obtain users' real email addresses. Another feature, dubbed "app privacy report," notifies users whenever an app accesses their phone's location, contacts, camera, or microphone, as well as any third-party websites with which the app shares their data.

Apple previously implemented an App Tracking Transparency feature that requires iPhone apps to obtain permission from users before tracking and selling their behavior. Facebook, which derives almost all of its revenue from advertising, warned investors in August that Apple's software changes could harm its business and has been especially vocal in its opposition.

The latest privacy changes are likely to "increase anxiety" among businesses that rely on user data for tracking, advertising, and monetisation, CCS Insight Chief Analyst Ben Wood wrote in an email following Monday's keynote.

Apple, on the other hand, is sticking to its guns and betting that its devices' superior privacy and security features make them worth paying for, developing for, and commissioning.

"We believe that great features and privacy should not have to be mutually exclusive," Craig Federighi, Apple's senior vice president of software engineering, said during the keynote. "We believe you are entitled to both."