Discussing The Future Of App Distribution

New technology innovations have unlocked latent potential for companies in the business of app distribution. The question, however, hangs over mobile platforms allowing Fairplay to compete.

The global mobile market size has grown over the years at a rate of over 10% y-o-y. As per Technavio, it has the potential to grow by USD 653.91 billion during 2021-2025, and the market’s growth momentum will rise further at a CAGR of 20.65%. This opens up a lot of opportunities for distribution, but, there is a catch – the mobile ecosystem is tightly regulated by two tech behemoths.

With 46% of the market’s growth originating from APAC during the forecast period, China, Japan, and India are the key markets for mobile apps to look out for. With the rapid penetration of smartphones and the internet, mobile app growth is undoubtedly going to see a huge increase in these regions.

 

There Are Hurdles

According to the European Commission, Android is the most closed open source project. While Google says it supports user’s choice of app stores and does not prohibit the pre-installation of other app stores, developers cannot distribute trusted app marketplaces through the Play Store. The lack of trusted app marketplaces on the Play Store means a risky option of side-loading for the brand and user. It becomes a fiscally challenging proposition for developers when 30% is lost at the source for all transactions. Apple collected $15bn in App Store commissions last year and this year Google has imposed similar commissions on the Play Store.

Apart from commissions, “Google puts its own restaurant data above Yelp in search results, Apple bans Spotify from asking for a credit card or even telling you that’s an option, and Amazon makes private label products that compete with its suppliers. Platforms compete with other people on their own platform.”

Read more here.

 

The Big Players’ Reasoning

As news laws try to rein in players like Apple and Google, Apple states that the choice of third-party app stores given to its users could become a security issue and would make the app store more prone to malware and sideloading apps would result in privacy and security issues.

To this, Europe’s tech chief Margrethe Vestager replied saying “I think privacy and security are of paramount importance to everyone,” Vestager told Reuters in an interview.

“The important thing here is, of course, that it’s not a shield against competition because I think customers will not give up neither security nor privacy if they use another app store or if they sideload,” she added.

Read more here.

Antitrust Subcommittee Chairman David N. Cicilline also quoted, “Right now, unregulated tech monopolies have too much power over our economy. They are in a unique position to pick winners and losers, destroy small businesses, raise prices on consumers, and put folks out of work. Our agenda will level the playing field and ensure the wealthiest, most powerful tech monopolies play by the same rules as the rest of us.

Read more about the bipartisan legislative agenda here.

Google on the other hand responded to its antitrust lawsuits saying that it provides much more choice to its users compared to their competitor Apple and that their users can download from other platforms if they don’t want to download from the Playstore.

Google may not have completely banned third-party app stores and app downloads like Apple, but it discourages users from doing so. One such example would be Android’s warning notifications when a user tries to download a third-party app store or consequently apps from the aforementioned app marketplace.

Read more here.

 

What Do We Expect In The Near Future?

With constant retaliation, the big players will surely see resistance and will be forced to make changes in their strategies. Also with a new phase opening in the history of the app store ecosystem, third-party app stores will have to focus more on their security, innovation, and user experience to get more users on board if the monopoly is deflected.

There are multiple alternative app stores like Amazon App Store, Aptoide, and many more that provide a choice to the users. Innovation and development are inevitable and everyone is fostering innovation for an enhanced app store ecosystem.

Indus App Bazaar by Indus OS is India’s leading indigenous app store that provides benefits like free AWS benefits worth $25000, free localization services, and deep analytics to the developers to help them reach their target audience with innovative solutions. Similarly, for the users, the app store provides content and apps in 12 Indian languages + English to remove the language barrier. It also constantly innovates through rich content discovery with the one-tap install, app stories, video feed, and many more avenues to the users.

Giving users a choice is a key to ushering innovation in the manner in which app distribution is happening. Proactive moves like this will ensure fair play allowing a competition-friendly environment benefiting app marketplaces, developers, and users alike.

 

References:

Data on app market size and segments geared for growth:

https://www.grandviewresearch.com/industry-analysis/mobile-application-market 

https://www.technavio.com/report/mobile-apps-market-industry-analysis?utm_source=prnewswire&utm_medium=pressrelease&utm_campaign=T44_SegGeo_republish_report_wk23_006&utm_content=IRTNTR43706 

https://www.statista.com/statistics/1010716/apple-app-store-google-play-app-downloads-forecast/

Policy document by EU:

https://ec.europa.eu/competition/antitrust/cases/dec_docs/40099/40099_9993_3.pdf 

EU to Apple: Do not use privacy as a shield.

https://www.reuters.com/technology/exclusive-eus-vestager-warns-apple-against-using-privacy-security-limit-2021-07-02/ 

https://www.macrumors.com/2021/07/02/apple-privacy-excuses-limit-competition/

Articles by Benedict Evans on the subject:

https://www.ben-evans.com/benedictevans/2021/4/30/resetting-the-app-store

https://www.ben-evans.com/benedictevans/2021/6/15/antitrust

https://www.ben-evans.com/benedictevans/2021/7/8/app-store

Articles predicting the consequences of the forthcoming changes:

https://www.bloomberg.com/news/newsletters/2021-06-30/changes-to-apple-s-app-store-could-have-unintended-consequences

https://cicilline.house.gov/press-release/house-lawmakers-release-anti-monopoly-agenda-stronger-online-economy-opportunity

https://www.news18.com/news/tech/explained-google-vs-america-a-landmark-antitrust-lawsuit-on-play-store-monopoly-3946097.html

https://english.aawsat.com/home/article/3073671/tae-kim/google-app-store-antitrust-suit-right-target-wrong-idea

 

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