App Store, Developers and their Customers

The narrative around Apple vs Hey in the past week has mostly focused on the draconian, and often arbitrary, App Store rules. And for good measure. Rules formulated in the early days of the App Store are due for a change.

However, most of the discussions have ignored the third side of this relationship — the customer. This is where the suggestions to dismantle the App Store or allowing alternative “App Stores” become a problem. While this may be good for some developers (some is the critical word here), it most certainly won’t be the preferred outcome for customers. 

The fundamental problem with this suggestion is that it ignores the second and third-order effects on customers. Let’s break this down — from the customer’s perspective. 

There are more reasons beyond what I mention here on why breaking up the App Store as the centralised distribution point is a bad idea.

Where do I get apps from?

There is no ambiguity about this. There’s one App Store. That’s where I get my apps from. And it’s already there when I buy a new phone. Nothing else to download. No dance with cables connected to laptops.

Even if we assume regulations force Apple’s hand to bundle alternate Stores with the iPhone, do customers know enough to trust them? And, worst case, if there’s no store app bundled – what then? The App Store (and the Play Store) solves this problem. Customers have built their habits with this reality for 10+ years. What happens if this is suddenly broken?

Is the app safe to download?

The stores abstract away this decision by imposing constraints and via the review process. What happens if it becomes the Wild West – like the Windows desktop app universe? How do customers know if an app can be trusted? This doesn’t affect the big-name developers or large corporations. But it does affect apps from small independent developers.

With alternate stores out there, can customers trust these stores versus something they have used for 10+ years?

Is the app any good?

Reviews, ratings and editorial recommendations play a role in customer decision making. A fragmented store ecosystem makes this far more difficult for customers to know if an app is really what it says it is.

How do I pay for the app?

This is one of the contentious issues of the current debate. But, let’s accept it, the integrated payment system makes life way easier for both customers and developers. I have had this experience first hand with payment processing via traditional gateways versus Apple Pay. While CC conversion rates on traditional gateways hover around 80%, Apple Pay is consistently around 98-100%. What’s better?

Let’s think through what happens if this wasn’t an option.

  1. Customers have to go through the dance of providing card details and 2FA.
  2. Lower payment success means increased customer dissatisfaction.
  3. And lower conversions for the developer along with increased support requests.

How do I track my subscriptions?

We are living in an era of subscriptions. Everything is a subscription. And it is very easy to lose track of what I am subscribed to and from where. On the App Store, this is consolidated. Allows me to track and change any time without going through credit card statements or searching for mails.

This is an already fragmented system today, and dissing the App Store will make things more difficult for customers.

Have I already purchased this app?

A fragmented distribution eco-system can also drive repurchases of the same app from different sources. Then this becomes a customer support issue. Not something independent developers or small businesses want to add this to their task list.

So, why are these issues? The PC (Windows and Mac) ecosystem has existed for decades. And people have adapted to life with the fragmented distribution models.

What’s fundamentally different is who uses phones. Global PC shipments in Q4’19 were at 70.6 m units [1]. Global smartphone shipments were 368.8m units [2]. And this gap has been widening in the last decade.

A generation of users who have never used a PC. Their knowledge of the platform is far limited than those debating the virtues of breaking the App Store apart. This is not the solution.

But that doesn’t mean that the rules should remain as is. What happened in the context of Hey is not ideal. But before we jump to recommending solutions, let’s think through the second and third-order effects on customers.

Before I could hit publish, spotted this. Change is inevitable.

[1] Gartner Says Worldwide PC Shipments Grew 2.3% in 4Q19 and 0.6% for the Year
[2] Smartphone shipments by vendor worldwide from 4th quarter 2009 to 1st quarter 2020