Skip to content
Thoughtful, detailed coverage of everything Apple for 28 years
and the TidBITS Content Network for Apple professionals
WWDC keynote at AltConf London

Photo by Adam Engst

17 comments

Pondering the Impact of the App Store at 10

The iOS App Store is celebrating its 10th anniversary. Apple has commemorated the event with a self-congratulatory article, whose tone rankled from the very first sentence:

When Apple introduced the App Store on July 10, 2008 with 500 apps, it ignited a cultural, social and economic phenomenon that changed how people work, play, meet, travel and so much more.

Don’t get me wrong. There’s no question that the App Store has had a significant impact on individuals and developers alike, and the article includes numerous testimonials. There are also stories like this one from Alan Oppenheimer, who went from helping to create AppleTalk and running an Internet service provider to developing what became Art Authority.

The App Store’s numbers are also hugely impressive. Over 500 million people from 155 countries visit the App Store each week, and Apple says it has paid out $100 billion to developers over the past decade. Currently, there are 20 million Apple developers, and the App Store hosts over 2 million apps. (According to Statista, Google Play offers 3.8 billion apps.)

So yes, the App Store has been successful. But it’s a just a store, and one that suffers from poor app discovery and high developer transaction fees. And how much of its success is due purely to the popularity of the iPhone and iPad? (It’s also fair to ask how much of the popularity of the iPhone was driven by the App Store.) Any hardware platform that sells hundreds of millions of devices and has a software development kit will end up with lots of apps.

Also integral to the App Store’s success is Apple’s tight control over distribution and sales. The only way to sell an iOS app outside the App Store or to distribute an app that doesn’t abide by Apple’s guidelines is through Cydia, which requires a jailbroken device. Needless to say, because jailbreaking relies on security vulnerabilities, Apple makes it as hard as possible. The result is that the App Store is an almost complete monopoly for iOS apps, although the upside is a marketplace largely free of apps that abuse user privacy and security.

Apple goes on to claim that “Before 2008, the software industry was dominated by a few large companies.” Obviously, before 2007, there was no iPhone, so this claim must be about desktop computers like the Mac, but it’s still patently untrue. Sure, Microsoft and Adobe were juggernauts back then (and still are), but there were lots of small developers, many of whom created innovative Mac software that we’ve covered in TidBITS for years. It’s also worth noting that Apple far prefers an industry made up of smaller companies who will never pose a threat. Apple doesn’t want iOS and macOS to depend on software like Microsoft Office or Adobe Creative Cloud that can be used just as easily on other platforms.

Apple’s article implies that the App Store is the path to riches. Some small developers have indeed done very well, but the bulk of the App Store payouts go to large companies—Pokémon Go generated $2 billion in 2017 alone. It’s hard to find current information, but in 2011, one survey found that the median revenue from an iOS game was $2400. (That means that half of the games in this survey made more than $2400 and half made less. The average, which was skewed by a few top performers, was over $86,000.) My point is merely that, despite the big numbers Apple throws around, most apps from most developers don’t make much money.

It is true that the App Store removed certain types of friction from software publishing by providing a distribution and payment system. But if that was so important, the companion Mac App Store, which debuted in 2010, should be more dominant than it is. Thanks to Apple’s often draconian technical requirements (particularly related to sandboxing), fussy submission process, and 30% transaction fees, many Mac developers have avoided the Mac App Store entirely, and some high-profile developers have pulled their products. Apple seems to be making changes to woo them back with macOS 10.14 Mojave, but the point stands—when developers have a choice, they don’t always choose the App Store.

Part of my discomfort with the App Store has been related to the limited number of business models that Apple allows. Yes, Apple added in-app purchases in 2009 and enabled subscriptions in all app types in 2016, but the company has never allowed true trial versions, coupon-based discounting, or paid upgrades. Developers have figured out workarounds in some of these cases, but in the end, the App Store is anything but a “free market.” Perhaps the rise of subscriptions is changing this, but for most of the App Store’s existence, Apple’s forced economic models made developers chase new customers rather than serve existing users with upgrades.

Even more philosophically discomfiting has been watching how the App Store drove the prices—and thus perceived value—of software to essentially zero. Because app discovery in the App Store has always been terrible, and there are so few ways to stand out from the many similar apps in any category, developers responded by competing largely on price. Apps that have price tags at all are considered expensive now, and many free apps rely on intrusive and potentially privacy-damaging advertising. Of course, that’s largely following the lead of the Web, where advertising has long been the dominant approach for revenue generation, and where users are becoming increasingly uncomfortable with ad tracking and personalization.

At this point, any criticisms risk sounding like sour grapes. The App Store is a fact of life, and with no competition, substantive changes will be few and far between. But I don’t think we need to glorify what the App Store has achieved or assume that it has necessarily produced the best of all possible worlds. Even without the App Store, the iOS ecosystem may have evolved very similarly—it’s not as though the Mac world has suffered horribly from app distribution outside the Mac App Store.

In the end, I have much less problem praising the iPhone and the iPad, and iOS in general, along with the useful and entertaining apps provided by independent developers and corporate behemoths alike. But extolling the virtues of the App Store? It’s like talking about how great malls are.

Subscribe today so you don’t miss any TidBITS articles!

Every week you’ll get tech tips, in-depth reviews, and insightful news analysis for discerning Apple users. For 28 years, we’ve published professional, member-supported tech journalism that makes you smarter.

Registration confirmation will be emailed to you.

Comments About Pondering the Impact of the App Store at 10

Notable Replies

  1. At this point, any criticisms risk sounding like sour grapes.

    Nice article, Adam. I don’t think you sound like sour grapes. You just refuse to reiterate marketing fluff in the face of actual facts. That’s exactly what I come here for. Otherwise we could just subscribe to whatever Apple’s propaganda division streams out.

    I also vividly remember how opposed Apple initially was to apps and third-party software development on the iPhone. For quite a while Steve was pushing the idea of web apps only beside Apple’s built-in apps. Apple eventually was forced kicking and screaming to offer an API and third-party apps. For them to now turn around and act as if they single-handedly invented the app store idea and in the process saved the software developer world is rather rich.

    There is more than enough great stuff to celebrate about the App Store. And many of us are glad we have it. But the way Apple is now spinning things is if not borderline false at the very least disingenuous.

  2. ace
    Adam Engst

    The App Store’s revenues are also hugely impressive. Over 500 million people from 155 countries visit the App Store each week, and Apple says it has paid out $100 billion to developers over the past decade. Currently, there are 20 million Apple developers, and the App Store hosts over 2 million apps. (According to Statista, Google Play offers 3.8 billion apps.)

    The App Store might not have the number of apps or the amount of downloads that Android has, but the revenue the App Store generates continues to skyrocket:

    "Global app revenue climbed 35 percent in 2017 to reach nearly $60 billion, according to a new report today from app intelligence firm Sensor Tower, which measured paid apps, subscriptions, and in-app purchases across both Apple’s App Store and Google Play. However, Apple is the one pulling in the most revenue, the report found – at nearly double that of Google Play.

    Specifically, Sensor Tower pegged App Store revenue at $38.5 billion last year, compared with an estimated $20.1 billion spent on Google Play. That’s 34.7 percent growth over 2016 for the App Store, compared with 34.2 percent growth for Google Play."

    https://techcrunch.com/2018/01/05/app-revenue-climbed-35-percent-to-60-billion-in-2017

    For years I’ve read that the big reason people buy Android is price, and that Android users spend a lot less on apps and on online purchases.

    The App Store’s walled garden, and the strict regulation of apps is a big selling point, especially at a time when privacy and security continue to be hot topics in the news. Google is primarily in the business of selling information about its users; Apple is focused on selling high priced hardware, and increasingly, service.

    So yes, the App Store has been successful. But it’s a just a store, and one that suffers from poor app discovery and high developer transaction fees. And how much of its success is due purely to the popularity of the iPhone and iPad? (It’s also fair to ask how much of the popularity of the iPhone was driven by the App Store.) Any hardware platform that sells hundreds of millions of devices and has a software development kit will end up with lots of apps.

    There are many reasons for developers to moan and groan about the App Store, but I do think that the ability to create apps that will run on Mac OS and iOS will be a big boost for them. They did make other announcements at the Developers Conference that sounded interesting at least to this non-developer. However, I do wonder about how thrilled developers are about the new Screen Time tracking features.

  3. I don’t think even Apple knew the full extent of the impact it would have.

    Whatever about the money, it was the shift where an app became a item of culture, alongside music, books and film.

    Software’s reach extended to the popular imagination, to the realm of ideas and influence, as well as entertainment and functionality. It changed how the world thinks.

  4. Yeah, I agree. I’ve been an Apple Computer Consultant for 28 years. For me, the App Store SUCKS! The search engine is useless. If I have an unmet software need, I’ll go to Google for solutions. And, I’d rather buy direct from a software vendor, than use App Store. I look for high quality in my software tools, long term commitments/support. Top Examples are: Carbon Copy Cloner, Cocktail, DiskWarrior, EasyFind, Google Chrome, MacTracker, PasswordWallet, PDFpenPro, Quickbooks 2016, Quicken 2007, TeamViewer, TextWrangler, VueScan, Wake Up Time, Wifi Explorer. Seriously, 2 Million Apps is TOO MUCH, prune it Apple, select quality over quantity.

  5. Steve, it is the 10th Anniversary of the iOS App Store the article is about. AFAIK, those apps you list are NOT iOS apps but rather mostly Mac Applications.

    I agree with your comments as they apply to the Mac Applications Store (MAS) but they don’t apply to the iOS store (App Store).

  6. I also vividly remember how opposed Apple initially was to apps and third-party software development on the iPhone.

    There was initial opposition to apps running on the iPhone. Once Apple realized how big the demand from developers was and realized the potential of the market, boom, there was a Software Development Kit and App Store. It was only about a year or so after iPhone was out in the wild, and millions of apps were downloaded the first day the store opened.

    For quite a while Steve was pushing the idea of web apps only beside Apple’s built-in apps. Apple eventually was forced kicking and screaming to offer an API and third-party apps.

    It was around this time that Android phones were just starting to be released, and I’ll bet Steve Jobs realized if he did’t get a venue for app development, sale and monetization out there first, iPhone could be doomed. He was well aware that there were billions of active iTunes accounts out there, and there was a lot of trust built up that would translate into purchases for the App Store.

    He also realized that quality and privacy were strong selling points, and the initial Android releases were notoriously buggy and virus ridden.

    For them to now turn around and act as if they single-handedly invented the app store idea and in the process saved the software developer world is rather rich.

    Whether or not they developed the first App Store is debatable, but Apple is definitely the pioneer who put app stores on the map. And it has consistently generated a lot more revenue than Google’s.

  7. I have never believed that Apple released the SDK and App Store in response to what they heard after introducing the iPhone. I have always thought that they intended to have third party app development all along, it just wasn’t ready as soon as the hardware was. Maybe the App Store wasn’t completely planned out before the iPhone but there was going to be something.

  8. The iOS App Store has mostly been a windfall for software that uses psychological manipulation to sell consumable in-app purchases. I don’t think anyone at Apple could have foreseen this outcome, but they certainly aren’t complaining about profiting from it. Every time I hear Tim Cook crow about how much Apple pays out to developers I try to guess what percentage went to developers like Omni and Panic who make useful, high-quality software and what percentage was basically flushed down the toilet with apps like Pokémon and Candy Crush. I wouldn’t be surprised if 80% goes to the latter.

    If I’m bitter it’s because of how disappointed I am about how the App Store economy shook out. I remember when it first opened being excited about buying beautifully-crafted apps like Emerald Chronometer and about the promise it held for small software developers to be able to reach a huge audience. I sure wish it had turned out differently.

  9. Spending money on entertainment is not waste. An app that shows pictures of watches is an ironic choice of counterexample for frivolous spending.

    So the cream doesn’t rise to the top within the App Store, that makes it like the rest of the economy. It’s not like developers are forbidden to engage in marketing outside the Store; where a cereal is placed on grocery store shelves is not the only way it can attract buyers, cereal companies advertise. I’d be much more concerned about Apple trying to pick winners and losers within the App Store than with good apps being drowned out in the noise of many mediocre or bad apps.

  10. You genuinely missed his point.

    The app store is full of junk. It may be less than Google’s, but we all know it’s still bad. Sure, McD is the most popular restaurant too, but then again, we get to chose among many restaurants. On iOS you are confined to one food court which is owned and operated solely by Apple. So yes, it is on Apple when there is so much crap that you have trouble finding the gems. Case in point, the MAS is sitting there mostly unused while many of us continue to get good quality software elsewhere.

  11. I think you’re right about this; Apple doesn’t hesitate when it comes to innovation, beating the competition, or raking in revenue. And they don’t like being scooped by rivals.

  12. The iOS App Store has mostly been a windfall for software that uses psychological manipulation to sell consumable in-app purchases.

    What’s the problem with developers earning money? Compared to Google Play, App Store apps are carefully vetted for privacy, security and content that’s appropriate for minors. Just a week or two ago I read about another malware problem with Google Play apps, though the reported Play malware incidents seem to be fewer than they were.

    I don’t think anyone at Apple could have foreseen this outcome, but they certainly aren’t complaining about profiting from it.

    They more than foresaw it, they promoted, encouraged and facilitated it. Remember how popular, profitable and expensive video gaming machines and games were at the time? And how clunky the hardware and software they ran was?

    Every time I hear Tim Cook crow about how much Apple pays out to developers I try to guess what percentage went to developers like Omni and Panic who make useful, high-quality software and what percentage was basically flushed down the toilet with apps like Pokémon and Candy Crush. I wouldn’t be surprised if 80% goes to the latter.

    So 1984 really should be just like 1984? Tim Cook isn’t forcing anyone to download anything from the App Store they don’t want to. Apps like Candy Crush and Pokémon make a ton of money because many millions of people love them.

  13. I expect Steve can answer for himself but if his point was the App Store is full of junk, Pokemon and Candy Crush are not good examples of that.

    I don’t deny the App Store is full of junk. It should be. The food court analogy doesn’t work because a food court is strictly limited by the physical space. Apple should not be a gatekeeper, only allowing “gems” to be offered. Anyone who wants to make an app for iOS devices should be able to do so. It’s fine for them to have standards for the security and privacy of users.

    I don’t know how good or bad the App Store is for discovering apps compared to Google’s or some hypothetical ideal. To me, the App Store is mainly a tool for the transaction of acquiring an app. I know about good apps through publications like TidBITS, word of mouth, and searching on the web. I might look at screenshots and reviews in the App Store but only after better resources brought me to an app.

  14. Same here. I usually need a recommendation from a knowledgable place like TidBITS because I cannot really search for anything in the app store. I don’t know if Apple can’t do search right or if the SNR is just too low, but whenever I tried to search I was bombarded with crap and didn’t really get anywhere. I also miss filter criteria, like no in-app purchases (to weed out the freemium junk), no subscriptions, or a minimum price setting.

    With software (regardless now of App Store or Google Play) it appears quantity has become everything and I have to find a method to deal with the onslaught of junk. I admit I miss the old shareware days where you could buy high-quality stuff for $30. Nowadays everything is “free”, but then they try to lock you in to a subscription or sell your data or some other sleazebaggery. Ironically, this has pushed me closer to big software houses (MS, FileMaker, Omni, etc.) because I know that 90% of the App Store apps I try turn out to be anywhere from bad to disgusting and have to be discarded after just a few minutes of use. IIRC the app store was supposed to bring software devs closer to users and encourage smaller coding outfits. At least for me, the opposite has been the case. I’m not saying Apple is to blame for this situation, but I guess it’s fair to say they are benefitting from it.

    On a much more positive note, macOS has UNIX underpinnings which means I can compile tons of free code from source that was never intended for the Mac. One I get the CLI tools installed, I have gcc and that’s almost all that’s needed to get going. A lot of the stuff runs great and my line of work would be a whole lot more difficult if I couldn’t just do that (another reason I really like macOS running on Intel vs. PPC as it used to or ARM as some seem to want). Thanks to this experience I’ve learned more about modern programming and I’ve even extended my Linux knowhow thanks to some of the stuff I learn when compiling other people’s code on my Mac. Not saying that this is an alternative for mainstream consumers, but for geeks it’s an awesome option. I am so happy MacOS went this route back in the day.

  15. I’m never really sure what people are trying to prove with statements like that.

    McD has served billions of meals and yet there is zero doubt that they sell awful food. No respected food critic would ever consider comparing them to an outfit that actually takes quality food seriously.

    The fact that you can make junk, sell it to billions of people, and get rich in the process does not say anything about you or about junk. It just illustrates that many humans are dumb and that with enough propaganda you can sell just about anything to the masses. I’m sure that’s good to know if you’re one of the few big software CEOs, but for me as a user and consumer, it’s entirely irrelevant.

    I would hope Apple holds higher standards to apps than McD holds to food. I know I definitely do.

  16. I think this discussion has outlived its usefulness—closing this topic.

Join the discussion in the TidBITS Discourse forum

Participants