‘Get­ting Sher­locked’

How Ap­ple uses its App Store to copy the best ideas

The Prince George Citizen - - Money - Reed ALBERGOTTI

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.

AP FILE PHOTO

Ap­ple CEO Tim Cook speaks dur­ing an an­nounce­ment of new prod­ucts at the Ap­ple World­wide De­vel­op­ers Con­fer­ence in San Jose in 2018.

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