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The App Store War

The App Store War
By Keith Teare • Issue #272 • View online
Apple agrees to modify App Store rules in Japan in a week where South Korea passes a law forcing Apple and Google to create a billing back-door for developers who want to avoid paying for carriage.

That Was The Week #272
That Was The Week #272
It is incredible how silly we humans can be and how short our memories are. The first iPhone emerged in 2007 and the first Android phone in 2008-9. Apple’s App Store debuted in July 2008, Google’s Play Store in August 2008, branded as Android Market.
The software business before that was mainly an internet, browser-based business, or a desktop software business. I remember clearly how expensive and difficult it was to distribute software before the app stores and smartphones. Even distributing in a single country was hard, forget about global distribution and forget about free distribution.
After investing billions of dollars in a hardware platform, a software operating system, a developer infrastructure, and a distribution platform, and offering all this to developers for free, Apple is under attack for wanting to charge a percentage of revenue to developers who make money from it. Currently 15% for developers who earn less than $1m a year and 30% for those who earn more. Google is similarly under attack.
The iOS and Android ecosystems are a major advance for humanity. Developers, Users, and pretty much every element of our civilization, benefit from them. In 2020 $643 billion in billings were issued by developers on Apple’s store. Google’s Play Store is not as lucrative but it too paid out $114 billion to developers between 2012 and 2020.
By now these amounts together are well over $1 trillion. As a four decades-long software industry participant I can tell you that all of this revenue only exists because of the mobile ecosystem created by the two giants.
The social good that comes with the exosystem adds many trillions of value more to the world. Think of the educational apps, productivity apps, media consumption apps, and more, penetrating every aspect of society and mostly free.
And think of how global the ecosystem is. There are almost 4 billion potential users of an app that can be distributed for free in 24 hours. Today’s billion-dollar and 10 billion dollar startups exist because of the scale and speed of growth that this ecosystem brings.
Yet we want to focus on the fact that these companies charge higher earners a 30% fee for using their platforms for making revenue. The government of South Korea has passed a law forcing the app stores to allow developers to point to alternate billing systems than those built into Android and iOS. Thus giving them a method of avoiding paying Apple or Google a share of revenues. The word is that similar laws will appear elsewhere. This is wrong and short-sighted. All one has to do is imagine Apple or Google discontinuing sales in South Korea in order to see who it would hurt.
My guess is that most developers would rather pay a fee and benefit from all that these companies bring to the table than seek to reinvent the wheel in their own apps. I suspect the revenues of both Apple and Google to grow along with their ecosystems and be barely touched by government interference. More in this week’s video.
The App Store War
The App Store War
The App Store War
Google, Apple Hit by First Law Threatening Dominance Over App-Store Payments
Ben Thompson

Apple drops anti-steering provision for "reader" apps.
Japan Fair Trade Commission closes App Store investigation - Apple
The App Store is too big to change
Google’s App Store Profits No Plaything
The app store model is crumbling
The Theranos Trial
Theranos on trial
Trial of Theranos founder Elizabeth Holmes begins in California | Financial Times
Creator Economy
Salman Rushdie Is Now on Substack
‎Callin - Social Podcasting on the App Store
Can the Metaverse Thrive If It’s Fully Owned by Facebook?
The fall of the SPAC market has digital media companies in disagreement about best path forward - CNBC
Mainstream Blockchain
Jack Dorsey’s Square Moves Closer to a Bitcoin Exchange
Investing in Syndicate
Venture Trends
Price discovery in private markets | by Henry Ward | Aug, 2021 | Medium
The Rise of Elad Gil, Silicon Valley’s Biggest Solo Venture Capitalist — The Information
RT @NYSE: Nice to see @WSJ acknowledging #DirectListing as a path to the public markets, which the NYSE helped pioneer in 2018 🧵👇 1/3 https…
The European Pre-Seed Funding Gap Is Here And It’s A Problem - Todayuknews
Andreessen Horowitz launches new $400M seed fund - SiliconANGLE News
Why corporate VCs want to ditch the label
The Angel VC: 6 things to pre-empt 90% of Due Diligence
Announcing FJ Labs’s Next Partner: Jeff Weinstein
China tightens scrutiny on $9.3 trillion fund industry | Reuters
Startup of the Week
Amazon and Affirm: A Deeper Dive Into A Strategic Partnership - Work From Home Adviser
Tweet of the Week
Laurel Touby
Here here!! I am seeing ageism in venture capital and the startup community and it ain't pretty. This is the next "ism" to be tackled.
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Keith Teare

That Was The Week is a editorialized and curated weekly look at developments in tech, startups and investing

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Keith Teare, Palo Alto, California