How Apple uses its App Store to copy the best ideas
How Apple uses its App Store to copy the best ideas
Apple plays a dual role in the app
economy: provider of access to independent apps and giant competitor to them.
Clue, a popular app women use to track their periods, has risen to
near the top of Apple's Health and Fitness category.
It could be downhill from here.
Apple plans this month to incorporate some of Clue's core
functionality such as fertility and period prediction into its own Health app
that comes pre-installed in every iPhone and is free, unlike Clue, which earns
money by selling subscriptions and services in its free app. Apple's past
incorporation of functionality included in other third-party apps has often led
to their demise.
Clue's new threat shows how Apple plays a dual role in the app
economy: provider of access to independent apps and giant competitor to them.
"It's a love-hate relationship, of course. You don't want to
annoy the milkman when you only have one milkman," said Ida Tin, Clue's
CEO, who coined the term "fem tech." Though Tin believes her
Berlin-based company can coexist with Apple, she said it highlights the
"skewed power distribution" in the tech industry.
Developers have come to accept that, without warning, Apple can
make their work obsolete by announcing a new app or feature that uses or
incorporates their ideas. Some apps have simply buckled under the pressure, in
some cases shutting down. They generally don't sue Apple because of the
difficulty and expense in fighting the tech giant-and the consequences they
might face from being dependent on the platform.
The imbalance of power between Apple and the apps on its platform
could turn into a rare chink in the company's armor as regulators and lawmakers
put the dominance of big technology companies under an antitrust microscope.
When Apple made a flashlight part of its operating system in 2013,
it rendered instantly redundant a myriad apps that offered that functionality.
Everything from the iPhone's included "Measure" app to its built-in
animated emoji were originally apps in the App Store.
In this year's September software updates, in addition to the
period tracker, Apple has added the ability to use an iPad as a second computer
screen, a feature initially offered by a popular app called Duet Display. Its
iPhone and iPad keyboards will include the ability to type by swiping,
mimicking apps like Switftkey and others.
The misfortune of having an idea copied by Apple even has an
industry term. "Getting Sherlocked" harks back to the time Apple's
desktop search tool called "Sherlock" borrowed many of the features
of a third-party companion tool called "Watson," which no longer
exists.
Imitation is common in the tech industry. "We have always
been shameless about stealing great ideas," Apple co-founder Steve Jobs
once said.
But what makes Apple's practice different is its access to a trove
of data that nobody else has. The App Store, where the original apps were
offered and competed for downloads, collects a vast amount of information on
which kinds of apps are successful-even monitoring how much time users spend in
them. That data is shared widely among leaders at the tech giant and could be
used to make strategic decisions on product development, said Phillip
Shoemaker, who served as Apple's director of App Store review from 2009 to
2016.
"I think Apple gets a lot of inspiration from apps that are
on the App Store," he said.
"Healthy competition, in every category, constantly drives
everyone who makes apps, including Apple, to improve," Apple spokesman
Fred Sainz said in a statement. "We wouldn't have it any other way, because
that's how our users get the best experiences possible." He added that the
App Store has more than 2 million apps, showing "that a great idea can
come from anywhere and touch people's lives everywhere."
The titans of technology aren't just powerful because they're big
or profitable. They are also the omniscient rulers of their platforms, able to
use information on smaller competitors to their own advantage and expand their
reach through greater functionality.
When companies sell their products on Amazon, for instance, the
online retail giant can see before anyone else if a new category is successful.
Similarly, Apple benefits greatly from the inventiveness of
millions of app developers, first when their apps spur customers to keep using
iPhones - and again if Apple takes their most successful ideas and copies them.
And when apps collect payments, Apple takes a 15 to 30 percent cut.
Technology platforms like Apple and Amazon can use the information
to "identify potential nascent threats and then acquire that threat and
then find a way to disadvantage it," said Maurice Stucke, a professor at
the University of Tennessee College of Law and author of several books on
antitrust policy.
Once Apple duplicates the idea behind an app, the in-house version
often benefits from functionality that outside developers are prohibited from
using. Apple Music, for instance, is the only streaming service that is
entitled to take full advantage of Siri. Apple says it plans to change that
policy in its new operating system, iOS 13. Apple's walkie talkie app, which
launched after independent apps had proved the appeal of the concept, is the
only one that can operate on Apple Watch.
For developers of mobile apps, it's hard to avoid Apple. Apple is
responsible for 71 percent of all U.S. revenue generated by mobile apps,
according to Sensor Tower, a market research firm. To ignore Apple (the only
alternative is Google-owned Android) is tantamount to failure.
But when it comes to copying apps, Apple's biggest advantage over
the years has been its ability to offer many of them at no additional charge,
the cost included in the price of the phone itself. That is even more critical
to Apple now as sales of the iPhone, its most lucrative product, have slowed.
To prove its usefulness to consumers, Apple is offering them more and more
services. Apple itself makes more than 40 apps, a number that has steadily
increased over the years as the company has pushed into new areas. Many come
pre-installed on the iPhone.
In a climate of unprecedented scrutiny of the power of big
technology companies, some wonder whether Apple's creation of apps imitating
ones that already exist on its platform, aided by market data it collects from
them, could be harming competition and hurting innovation.
Sen. Elizabeth Warren, D-Mass., zeroed in on the App Store earlier
this year. "Either they run the platform or they play in the store. They
don't get to do both at the same time," she told The Verge.
The Justice Department is reviewing Apple and other tech giants
for possible antitrust violations. Leading another investigation is Rep. David
Cicilline, D-R.I., chairman of the House Judiciary subcommittee on antitrust,
commercial and administrative law. Music app Spotify filed a complaint in the
European Union earlier this year, claiming unfair competition in the App Store
by giving its Apple Music app an advantage.
Copying technology has gotten tech giants in trouble before. Two
decades ago, the DOJ and 20 states sued Microsoft, whose operating system
Windows was dominant at the time, after Microsoft copied the Netscape web
browser and made its own version, Internet Explorer, the default option in Windows.
Microsoft settled the case.
Kyle Andeer, Apple's vice president of corporate law, speaking at
a House Judiciary subcommittee hearing in July, said only a small number of
apps in the App Store are made by Apple. "In every category where our
software competes, we face multiple strong competitors," he said.
That dynamic is at the center of another brewing antitrust storm
around Amazon, which is being investigated in Europe for allegedly using data
gathered from products sold in its store to figure out which ones to copy and
sell under private-label brands like AmazonBasics.
"We will cooperate fully with the European Commission and
continue working hard to support businesses of all sizes and help them
grow," Amazon said in a statement.
At the same July congressional hearing, lawmakers questioned
Amazon on whether it can use that data as a road map to duplicate the products
under more than 80 private-label brands it uses to sell everything from
batteries to polo shirts, eating into the profits of the sellers that helped
make the Amazon platform successful. Nate Sutton, Amazon's associate general
counsel for competition, denied that the company uses its data for that
purpose. (Amazon CEO and founder Jeff Bezos owns The Washington Post.)
At first, the only software allowed to be installed on an iPhone
was Apple's. A year after the phone launched in 2007, Apple opened up to allow
third parties to build new programs for the phone. One of the first to develop
apps was DoApp, a small company comprised of software developers in Minnesota.
DoApp manipulated the screen of the iPhone - and later the camera
flash - so that it could be used as a handy light. Called myLite, the app was
free and supported by ads. It was wildly popular for its usefulness and earned
the honor of being among the very first batch of iPhone apps. While it quickly
generated hundreds of copycats, DoApp had a head start and continued to earn
between $10,000 and $30,000 per month, income that allowed the company to
experiment and innovate on other ideas like news apps and games.
In 2013, by which time myLite had more than 10 million people
using it every month, DoApp sent a software engineer to Apple's Worldwide
Developers Conference in Silicon Valley, as it did every year. At the annual
event, attended by thousands of coders responsible for the apps that run on
iPhones, iPads and other Apple products, Apple unveils new software to a
cheering audience. On stage that year, Craig Federighi, Apple's senior vice
president of software engineering, showed a new feature that users could access
by swiping up from the bottom of the phone, without even unlocking it.
"Turn on airplane mode, adjust your brightness, play a song,
even get a flashlight," he said. "If you wake up in the middle of the
night and you need to find something, your flashlight is right there." In
the audience, former vice president Al Gore, a board member, nodded in
approval.
"I'm like, there goes our model," Wade Beavers, DoApp's
CEO, said he thought as he watched the announcement. After that, income from
myLite "fizzled down to essentially zero," over the course of several
months, Beavers said. It was also bad news for all the other flashlight apps.
DoApp continued to develop apps before selling the company in
2016. Beavers is now an angel investor and venture capital adviser in
technology companies, but he said he wouldn't invest in any company trying to
create mobile apps. "Ten years later, Apple is still doing the same
thing," he said.
Decisions on which new apps to develop are strategic and made at
the top rungs of the company, according to people familiar with how Apple
operates.
App developers are required to submit their ideas to Apple for
approval before they're allowed into the store, and Shoemaker ran the team that
decided who gets in and who is rejected. Shoemaker pointed out that while he
worked for Apple, his department was careful not to share information about
apps submitted for review. Shoemaker didn't want to create the perception that
Apple could take ideas from developers before their apps are uploaded to the
store. Top Apple executives could still peek at apps under review, Shoemaker
said.
But once a third-party app was accepted into the App Store, those
barriers were removed. Apple got data on how those apps were used and for how
long - the most valuable metric, Shoemaker said. The data, aggregated for
hundreds of millions of users, he said, was "critical" to determining
what kinds of apps were worth getting inspiration from and when. He said that
top Apple executives would bring up the metric at meetings, marveling at how
much time people spent in the most popular apps such as Facebook.
Shoemaker said he got regular emails from angry app developers,
irked that the company had rejected their app or, in some cases, killed their
app off by copying them. He said he would forward them to Apple's legal team.
Apple has been able to set rules about what apps can do that give
an advantage to its own versions, developers say.
Several companies have offered walkie talkie apps for the iPhone
for several years, demonstrating that people would use their phones in
different ways. One of them, Voxer, wanted to integrate its functionality with
the Apple Watch, said founder Tom Katis, but Apple would not allow any other
walkie talkie apps on the Apple Watch. Then last year, Apple launched its own
built-in walkie talkie function on the Apple Watch, mimicking some of the
features of the existing apps.
Katis said he believes other companies could create better
versions, were they allowed to try. Apple was recently forced to temporarily
shut down the walkie talkie app because of a bug that caused a security
vulnerability. "It would be super cool to have an actual walkie talkie
that works well on the Apple Watch," Katis said, adding that he doesn't
harbor any ill will toward Apple.
Apple's home grown "Shortcuts" app, which allows iPhone
users to create customized automations, enjoys the same kind of advantages over
outside competitors. Earlier apps like IFTTT (If This, Then That) don't have
the same level of access to Apple's operating system and can't work as
smoothly. Linden Tibbets, IFTTT's chief executive, said Apple is doing what all
dominant companies that own big platforms eventually do: copying the "most
successful applications" and subsuming them into the operating system, he
said.
This June, Natalia Zarawska, an iOS developer for Clue, traveled
from Berlin to Silicon Valley for the Worldwide Developers Conference. She said
when Apple announced its new period tracking features in the Health app, she
was at first surprised and then a little angry. Other developers started
offering their condolences.
Zarawska said Apple software developers, who were conducting
classes, told her they loved Clue and offered assistance and advice for
developing new app features. But they didn't answer one of Zarawska's most
burning questions: Would Clue be able to access the new women's health data
available in the revamped Apple app? Or, as Zarawska worried, would Apple keep
that data for itself, giving its own app the advantage?
"There's always a risk that a company larger than you copies
you," said Rahul Dewan, the founder of Duet Display, an app that turns the
iPad into a second Mac or Windows display and costs $9.99. Apple announced in
June that it was introducing that function itself as part of an upcoming
software update - a copying that Dewan, a former Apple employee, said he had
planned for by adding additional features. He had seen Apple do this to other
apps. "The only constant in technology is change," he said.
Alaric Cole, a prolific developer of mobile apps, has seen so many
of his ideas incorporated into Apple's own software that he penned a blog post,
titled "Apple literally stole my thunder," in 2013 when Apple
incorporated some of his ideas into its weather app.
But Apple's copying didn't stop. Cole's "Penboard" app,
which allowed people to scribble notes directly into iMessages, was copied a
year later, when Apple announced it was launching that feature directly in
iMessage, effectively killing Penboard.
"It's a shame to me because I liked the App Store," Cole
said. "But yeah, I do think they have been abusing their place."
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