How Apple uses its App Store to copy the best ideas
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 preinstalled 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 armour 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 per cent 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 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.
Apple CEO Tim Cook speaks during an announcement of new products at the Apple Worldwide Developers Conference in San Jose in 2018.