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Apple’s WWDC meeting concludes a year of tension for companies and developers

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The annual conference for software developers started on Monday. It arrived as something unusual for an iPhone maker. In short, app developers were dissatisfied with the terms of the App Store.

Tim Cook, CEO, has launched a week-long Worldwide Developers Conference. This was usually an enthusiastic rally for the company and its followers, and virtual events were streamed on the company’s website, revealing that this year’s software changes were planned. This includes updates to iMessage, a text messaging system that includes a new way to share photos, and changes to FaceTime, a video calling software that aims to improve sound quality by reducing ambient noise among other upgrades. It is.

“We look forward to sharing our latest technology with you and with the amazing community of millions of Apple developers around the world,” Cook said. “Your creativity and groundbreaking apps continue to provide new and meaningful ways to enrich people’s lives.”

This year’s event will take place shortly after Apple’s legal battle with Fortnite maker Epic Games Inc. Increasingly troublesome relationships Some developers have contracts with companies that manage access to over 1 billion iPhone users worldwide.

In last month’s trial, where Epic accused Apple of improper monopoly, there was a year of rare disagreement among app developers.period Includes public sparring When

Facebook Co., Ltd.

CEO

Mark Zuckerberg

And Cook’s defense in front of Congress of Apple’s actions.

Documents provided by Epic Games lawyers were brought to court last month in a dispute with Apple in Oakland, California.


Photo:

Brittany Hosea Small / Reuters

Money is at the heart of developer dissatisfaction. Some people hate Apple’s recent new privacy rules that have disrupted the digital advertising industry. Some people hate Apple’s fees as much as 30% Generated Digital Revenue Through the App Store.

Apple denied the claim that it was monopolistic and defended its fees, saying it was just as fair as its competitors and about the value it created. Apple says Epic wants to avoid paying a fair share to use the App Store

Apple’s hardware, software, and services work so harmoniously that the relationship is often referred to as a “walled garden.” This idea is at the heart of recent antitrust scrutiny and the Epic vs. Apple proceedings. Joanna Stern of the WSJ went to a real walled garden and explained everything.Photo Illustration: Adele Morgan / Wall Street Journal

“The future evaluation of Apple developers is like an elephant in WWDC’s room this year,” said Jean Manster, managing partner of Loop Ventures, a venture capital firm specializing in technology research. ..

On Monday, Apple will announce the latest operating systems, including iOS 15. This may include additional privacy features, notification changes, and new features in the messaging system that compete with Facebook’s messaging app WhatsApp.

After the Epic proceedings were filed in August, Apple reduced fees for apps with revenues of $ 1 million or less from 30% to 15%.

In a court sketch, a lawyer meets with Judge Yvonne Gonzalez Rogers in an antitrust court.


Photo:

Vicky Beringer / Reuters

Only a few apps generate over $ 1 million. Most App Store apps are free and have no fees. Free games make money primarily through in-app advertising, but Apple doesn’t collect sales savings.

The year of dissatisfaction began at WWDC last year when Apple announced plans to introduce new privacy tools to the iOS 14 mobile operating system. Developers, including Facebook, complained that it would disrupt the advertising business. In-app ads often target users based on data about online activity collected by your app.The developer spent several months Mysterious new strategy Users must agree to be tracked in order to respond to changes in Apple’s privacy policy.

Cook strongly defends this change as a way to protect user privacy and give control over how data is used. But in January, Zuckerberg said Apple had all the incentives to “use the dominant position of its platform to interfere with the behavior of our and other apps.”

On Monday, Zuckerberg made a new attempt at Apple, saying Facebook would not collect a portion of the revenue from live performances, subscriptions and other forms of creators until 2023. Less than 30% taken by Apple and other companies. ” Zuckerberg wrote On his Facebook page.

In the midst of complaints, Apple sought to highlight what Cook called the economic miracle unleashed by the App Store.

Apple recently released a report that estimated billing and sales driven by the App Store to reach $ 634 billion last year, up 24% compared to 2019. Last year, investors were rewarded with nearly doubling the value of their stocks.

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The App Store is Apple’s so-called Service unitCook, part of the company’s business, is betting on generating growth after iPhone sales have slowed in recent years. Nick Rodelli, head of investment research firm CFRA Legal Edge, said the app. We estimate that store fees and the money generated by making Google the default search engine for devices make up 40% of Apple’s pre-tax revenue.

Since launching the App Store in 2008, the number of available apps has increased from 500 to about 1.8 million.

Tensions make this year’s developer conference even more important. Apple has spent more than $ 50 million on the event, according to court testimony from Apple executive Phil Schiller, who oversees the App Store. He said that in a typical year, 6,000 developers would attend directly and tens of millions would watch online. This year, more than 200 sessions were virtually held and published online. It has been.

During the Epic trial, US District Court Judge Yvonne Gonzalez Rogers, who plans to bring the case within a few months, presented Cook with the findings. Use Apple’s distribution services.

“How is it accepted?” She asked.

In his testimony, Cook said he wasn’t familiar with the document, but Apple refused. About 40% of submitted apps Go to the store every week. (Apple’s lawyer later pointed out an internal investigation in 2019 that 19% of developers reported dissatisfaction.)

“There’s definitely some friction in the system,” Cook said, adding that strict standards allow users to have a good experience on the App Store.

The suggestion that 39% of developers are dissatisfied with Apple is a surprising number for those who have closely followed Apple. Ben Bajarin, Principal Analyst at Creative Strategies Inc., said:

Epic vs Apple

Relevant coverage of the dispute selected by the editor

Write to Tim Higgins Tim.Higgins@WSJ.com

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Apple’s WWDC meeting concludes a year of tension for companies and developers

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