I’ve spent a lot of time thinking about the whole App Store model in the last couple of months, and that goes double this month with Epic’s choice to use the release of the next major version of their iconic Fortnite game as an opportunity to pick a fight with Apple.

Three things have become extremely clear to me. Firstly, there are no saints or Satans in this drama. Secondly there are no simple solutions — every possible way forward I can conceive of involves tradeoffs. Which makes my third realisation all the more stark — things simply can’t continue as they are. Users are increasingly finding themselves stuck in the middle and having a worse experience for it, and regulators all around the world are taking note. The status quo simply cannot stand, so change is coming, the question is simply what change, and who’ll be in the driving seat.

When I started writing this post I had no idea how I’d end it. I chose to write it precisely because I needed to organise my thoughts, and writing helps me do that. It took a while, but eventually the fog cleared and I was able to marshal my thoughts into a coherent suggestion for how Apple could resolve all this in a positive way.

TL;DR — I think Apple should take the initiative and act before they have a poor solution forced on them, and that they don’t need to throw everything out and start over, but can evolve the current system into one that has a bright future by making just a few important changes.

Users First

I’m going to look at this from the user’s point of view. This is the point of view Tim Cook professes to believe in — build great products that people love and the profits will follow. Franky, that attitude, which Steve Jobs embodied even more strongly, is probably the main reason I love Apple products.

Putting users first has two very important implications — for Apple users to get a good experience over the long term Apple needs to be healthy. A struggling company is unlikely to deliver truly great products! Apple needs a sustainable business model so it can keep investing in its future and can keep driving forward, making evert better products for us to continue falling in love with.

Similarly, putting the users first means cultivating a thriving developer ecosystem. An Apple ecosystem containing only Apple’s own apps would suck!

I know this is stating the obvious, and that this is not a new or original thought. It was true two decades ago on the Mac, and will remain true for decades to come. I do think it’s important to underline the point though. This is not about Apple beating developers or developers beating Apple, but about finding a solution that’s acceptable to both.

Shifting Focus to iOS

Taking it as given that big-picture wise users want a healthy Apple and a thriving developer community, what do we want from iOS specifically?

I would argue we want the following:

1. Easy access to high quality apps at a fair price.
2. Confidence that the apps we download are safe to use. Basically, that they won’t break our phones, or hijack them and turn them against us by either stealing our money, or invading our privacy for profit. Apps shouldn’t be able to brick my phone, steal my stuff, or spy on me!
3. Confidence that all financial transactions are freely entered into, transparent, and that consent for any repeating transactions is informed.
4. Access to a wide range of media from a wide range of providers at a fair price. IMO media includes: music, movies, TV shows, podcasts, books, and, perhaps controversially, games (more on that later).
5. Access to the digital services we rely on through native apps that integrate well with the OS. That includes email, contacts, calendaring, social media, cloud storage, and other Software as a Service offerings. I want to be able to receive a meeting request in Slack, add it to my Office calendar, compose an email to the organiser from my GMail account, and attach a spreadsheet from my DropBox. What’s more, I want all that to work seamlessly!
6. There should be no iOS Tax to use services I’m already subscribed. I don’t pay extra to use DropBox on my Mac or PC, Android users don’t pay extra to use it on their phones, and I don’t want to pay extra to use it on my iPhone or iPad.
7. The mechanisms Apple puts in place to protect the iOS ecosystem should be as transparent to users as possible. I want Apple to work hard to give me a great experience and to keep me safe, but I want them to do all that with as little inconvenience to me as possible! (We users are a demanding lot aren’t we ?)

How is the Status Quo Falling Short?

OK, so I’ve described utopia, how does that stack up to today’s reality?What’s not working well?

The Streaming Media Experience is Falling Short

Subscription media is a sub-standard experience on iOS because Apple’s insistence on always taking a substantial cut is forcing developers to make user-hostile UI choices, or, business-destroying compromises.

Is it really a good user experience to have the Netflix app open with a login box without any help text explaining what a Netflix account is, why you need one, or where you can get one? No! It sucks!

Is it a good user experience not to have all streaming apps deeply integrate with the TV app? Heck no! Why are developers not rushing to integrate? Because they’re in an existential conflict with Apple. Both Spotify and Netflix demonstrate the problem well. Apple competes directly with both, and as well as giving itself the advantage of being pre-installed, it’s also imposing 30% higher costs on its competitors if they choose to give users a good user experience by allowing them to sign up through the app. Is the fact that Spotify have to choose between viability and a good user experience good for users? Nope!

3rd-Party Gaming Subscriptions are Impossible on iOS

Facebook, Microsoft, and Epic have all run head-long into this problem in the last month.

Apple sees games as being apps, like a mail client, but users see games as content, like book or a movie. Just like music, books, TV, and movies, the gaming industry is moving towards gaming subscriptions.

While the user experience may be sub-optimal because users are caught in the middle of a conflict between Apple and the content providers, at least we can read the books we buy on Amazon in the Kindle app, we can get subscription audio books from Audible, we can get streaming music from Spotify, and we can get TV and movies from Netflix.

We can’t get games from Facebook, access games we’re paying to run in Google’s cloud (and soon Microsoft’s), and we can’t play the games we bought on Steam on our phones or tablets.

Questionable In-App-Purchases

A very common business model on iOS is free games that strongly incentivise the use of in-app-purchases. Games being games, many are targeted at kids. I find the entire business model offensive, so I consider these games malware, but that’s my opinion, it’s a long way from a fact ?

It’s important to note Apple are not allowing a free-for-all in their app store. They have implemented parental controls, and they have thrown some of the most egregious abusers of in-app-purchases out of the store.

This business model is subtle, and I find it all the more odious for that reason. These apps make money by persuading kids to pressure their parents to spend money. This is the same business model that led to cartoons advertising products to kids in the 1970s. While there are differences from country to country, as a society, we’ve chosen not to tolerate that. Why? Because we understand that kids have not yet developed the appropriate defences against being manipulated, so we consider it morally bankrupt to prey on their innocence.

I don’t think these games are any different, hence my strong objections. I also find it offensive that Apple is creaming 30% off the top of all this dirty money. That just does not sit well with the socially responsible image Apple have earned in other areas, and work so hard to protect.

Like I say, there have been more overt tricks designed to fool people into spending money inadvertently, and thankfully Apple have generally cracked down on that hard once the media brings it to their attention. But, Apple is happy to take a cut of games that exploit the naiveté of kids, and that makes me cranky.

Software as a Service is Risky on iOS

Developers of software services like the Hey email system are forced to gamble when it comes to iOS. In theory Apple has a category for such apps, that’s why my OneDrive, my Office apps, Evernote, and my DropBox all work on iOS. If I was paying for Basecamp the same would apply.

It seems perfectly reasonable that the makers of Basecamp would be able to write an iOS app for their new service offering, an innovative mail service, since their existing services are fine by Apple, and, others provide paid email services on iOS. So, no problem, right? Wrong! Apple arbitrarily blocked them.

When the rules are unclear, their application inconsistent, and the entire process capricious and arbitrary, developers get understandably spooked. At the very least they’re forced to waste time and energy fighting with Apple, and at worst, Apple’s arbitrary reject could easily kill a promising startup.

Uncertainty kills creativity and innovation, to the detriment of the entire ecosystem. I firmly believe that if developers had more certainty there would be more and better apps in the store.

Follow the Money

As I’m so fond of reminding everyone at every opportunity, corporations are neither moral nor immoral — they are amoral. Ultimately, the financial incentives set up by their chosen business models will guide a company’s actions. Facebook’s business model incentivises them to spy on their users just a little bit less than the amount of creepiness that will drive users away. They constantly push the envelope, and when people get icked out, they back off, but only a little. Inevitably, they hoover up ever more and more information about their users.

When a company’s incentives line up with their users interests things tend to go smoothly, when they are in conflict, they don’t!

Apple has been an example of a well aligned business model — Apple make most of their money selling iOS devices, so the better they make their devices, the better they make their OS, and the healthier the ecosystem, the happier users are, and the more money Apple makes. Harmony!

So, what’s the state of play with the App Store’s business model? Well, when Steve Jobs announced it he was very clear — the App Store should break even, it should exist to make iOS better, not to make money in and of itself. Perfect — the incentives line up!

But, that’s not true anymore, and that’s probably the single biggest difference between Tim Cook’s Apple and Steve Jobs’ Apple. Tim Cook promised Wall St. Apple would extract ever growing revenues from services, and a very big piece of that pie is App Store commissions. Apple’s 30% or 15% cut is no longer about keeping the store running, but about maximising profit.

Apple are now incentivised to allow in-app purchases get as scammy as users will tolerate to keep that money flowing in.

Apple are also incentivised to find ways of getting a cut in as many ways as they possibly can, and that inevitably brings them into conflict with developers. It’s those conflicts that are behind the poor Netflix integration into the TV app and it’s universal search, and it’s those perverse incentives that drive Apple to stop Netflix adding useful help text to their app’s login screen.

There is only one app store on iOS, and Apple get to set the rules. If Apple are a dis-interested party interested only in the health of the platform that’s not problematic, but now that Apple is using the App Store to power it’s promised revenue growth, the power imbalance against competitors inevitably leads to antitrust concerns. When it comes to companies providing services that compete with Apple services they can rightly say that Apple is acting as both the opposing team and the referee, and that’s not fair!

The Sword of Damocles — Regulation

Regulators all around the world are turning their attention to Apple and their app store. It seems inevitable that the status-quo won’t be allowed stand.

The absolute worst-case outcome would not be just regulation, but wildly varying regulation around the world. One set of rules for European iPhones, another set for American iPhones, another for Indian phones, another for Japanese phones, and so on ad infinitum.

As I see it, Apple have two choices — try to tough it out despite the risks, or take pro-active steps to try avoid having external rules enforced on them.

Given the risks of doing nothing, I would much prefer to see Apple take the initiative and do something pro-active.

Solutions?

There seem to be two broad approaches being considered — evolution or revolution. Tweak what we have, or, throw it all out and start over.

Epic and the like want a revolution, Apple want the status quo, but since they probably can’t have it, I expect they’ll try avoid onerous regulation with grudging evolution.

Regardless of which approach Apple ultimately take, I really think the first step needs to be a reversion to Steve Jobs’ philosophy — treat the app store as infrastructure underpinning their products rather than as a profit centre. Let it break even like Steve envisaged, but stop using it to drive growth. That will remove much of the anti-trust pressure, and re-align Apple’s incentives with the best interests of their users.

How Would Revolution Work?

The headline demands from the revolutionary side are simple — allow third-party app stores, and allow third-party payment processing.

Technologies like sandboxing could preserve many if not most of the security advantages iOS has (look to the Mac to see that model in action). The OS can enforce sandboxing, app notarisation, and a permissions system that prevents apps accessing sensitive data like the address book, photo gallery, and calendar, as well as hardware sensors like the camera and mic without explicit user permission.

Enforcing safety from financial fraud is much tricker. I can’t think of a way of doing that without a centralised review processes.

We’d also lose a lot of privacy protections, because while some can be enforced at a technical level, many can’t. iOS can protect access to our location data, but it can’t enforce accurate privacy statements or other forms of transparency like the so-called privacy nutrition labels coming with iOS 14. Those kinds of protections depend on the review processes, and on responding to reports of abuse.

Finally, the app store review process provides two additional things — basic quality control, and enforcement of content policies like age-ratings. Apps that don’t function or don’t actually do anything get filtered out in the review processes, and age ratings, like privacy policies, can only be enforced through human review.

Finally, many people, me included, find it really convenient that there is only one place to go to hunt for iOS apps. Some, or even many, might not value that convenience highly, but many do.

So, what do we stand to gain from a revolution?

• New types of subscriptions we can’t get at the moment like 3rd party like gaming subscriptions
• In-app payment options for more subscription services and digital content stores (Netflix, the Kindle store, etc.)
• A better user experience on what Apple currently class as reader apps
• Developers, particularly large developers, gain more freedom in terms of their business model
• Developers can freely publish anything they want — no more gatekeepers!
• Apple’s anti-trust problems largely, or completely, evaporate

What do we stand to lose?

• Loss of protection from financial fraud
• Poorer privacy protections
• The loss of the quality assurance and age ratings provided by the app store review process
• The loss of the convenience of a single place to find apps
• Apple’s revenue declines dramatically, making Wall St. cranky at Apple, at least temporarily

So How About Evolution?

OK, so if we don’t throw out the whole system as it stands, can Apple really make things substantially better by simply improving the current model? I really think they can.

I’m sure others can add many more good suggestions, but here are some things I’d suggest to Phill Schiller or Tim Cook in the extremely unlikely event they were to ask for my opinions ?

Return to the Steve Jobs Model — App Store as Infrastructure

First and foremost, I think Apple need to return, very publicly, to the Steve Jobs App Store policy — run it as infrastructure, and be really transparent about that fact.

I would argue Apple should go so far as to publish accounts showing the earnings and costs, and commit to re-investing all net earnings into improving the store.

If that seems too harsh, it seems reasonable to expand this model out a little, and have the income from the store cover both the costs of operating the store and of supporting developers, including the cost of training materials, support staff, and tool creation and maintenance.

If Apple could say the store earnings only go to pay for supporting 3rd party developers on their platform, the conflicts of interest would evaporate, and Apple would be able to have a much more constructive relationship with all their developers, large and small. I think it would also greatly reduce the anti-trust pressure they’re under.

Happier devs, happier regulators, and a less distracted Apple can only strengthen Apple’s platforms, which will ultimately lead to more and better apps for us all to enjoy!

Much More Clarify

Apple need to clearly and publicly define all the different classes of app that can exist in their store. We know Apple have a hand-waving reader app concept, and we know there’s a special category for large streaming media services too (that’s how Apple got Amazon to play ball on Apple TV). But, we have no idea what the exact rules are for an app to qualify, exactly what rights and responsibilities come with each category, and even, what other categories might exist behind the scenes.

Apple should maintain a public list of app types detailing the classification criteria, the permissions the category confers on apps, and the limitations the category imposes on apps. There are so many different types of apps these days that a one-rule model is utterly un-workable, and the current obscure sorta-kinda categorisation is just adding confusion and frustration for all parties.

Imagine a world where there is a clear category for content apps that defines how to quality, specifies that content apps can provide access to content bought outside of the iOS app and to content covered by existing subscriptions entered into outside of the app store, but that in exchange, all such apps must implement age ratings and must provide parental controls.

Treat Games as Media

I really thing Apple need to re-classify games as media, and treat them like movies, TV Shows, eBooks, podcasts, and music.

In exchange for this re-classification, Apple could implement an especially restrictive sandbox for games, making sure developers couldn’t abuse their new-found liberty. There’s no need for games to ever access most things on a phone, they just need to be provided with a mechanism for asking for camera, microphone, and location data, so implement that as the OS level, and then let Google, Microsoft, Steam, and Epic sell games like Amazon can sell eBooks, Audible audio books, and Disney TV shows and movies.

Allow Help Text

In an ideal world Apple would have a better classification that its current so-called reader apps, but regardless of what the category is called, apps in this category need to be allowed strike a better balance between usability and safety.

As it stands the apps can’t use 3rd-party payment processors within their apps to protect users from financial abuses. That’s not a bad thing IMO. However, they also can’t offer any kind of explanation to users about how to sign up online.

Apple could continue to prevent 3rd-party payment processors in-app, and continue to prevent apps embedding web views to get around that limitation. They could even continue preventing apps from placing clickable links to their web stores.

But, what they could safely allow is some simple text telling users what to do. By all means make the user open a browser and navigate to the site themselves — that makes it very explicit that the user is leaving the safety of the App Store and venturing out onto the big bad internet.

No security compromises, but a better user experience.

Level the Playing Field

Apple should restrict Apple apps that compete with third parties like Apple Music, Apple Books, and the Apple TV app to using only public APIs.

This would obviously level the playing field, giving the likes of Spotify a fair shot, but it would also strongly encourage Apple to expand their APIs, allowing all third-party apps to add more and better features.

Having Spotify be able to do anything Apple Music can do would definitely improve the user experience, and it would take a lot of regulatory pressure off Apple. I’m quite sure a move like this would end the EU’s investigation into Apple that was initiated by a complaint from Spotify.

Don’t Throw the Baby out with the Bath Water

The great advantage to this tweaking approach is that we don’t lose anything — no reduction in security, no reduction in privacy, no loss of quality control, we retain our ratings, and we still get to search in a single centralised location.

Apple also get to retain a point of control, this would allow Apple to continue to cultivate a healthy ecosystem that serves users well.

Developers also don’t lose anything with this model, and they gain a lot more certainty and clarity. The entire Hey controversy from last month could have been avoided by having clear rules for what Apple now call reader apps. More clarity and transparency also lower the barriers to entry into the market, making it an easier and less risky decision for a company to develop a novel iOS app.

Apple on the other hand do stand to lose something with this approach — they will inevitably lose a chunk of their services revenue. That’s likely to make Wall St. cranky, at least in the short term. Would Apple taking pro-active action make investors more cranky than they would be if Apple had a much less elegant solution forced on them by regulators? Personally, I doubt it, but that’s not something we can know as a fact, so you’ll need to make up your own mind. I think change is inevitable, and I think all change will make Wall St. cranky, so some crankiness is inevitable. Better to minimise it by being pro-active.

But remember, it’s all about us the users, what do we stand to gain from this approach?

• 3rd party gaming subscriptions
• A better user experience accessing digital services
• Happier developers, happier regulators, and a less distracted Apple, leading to a healthier ecosystem which will inevitably lead to more and better apps for all

Final Thoughts

I really don’t think the status quo can last, and that change is inevitable, Apple can either take the lead, or it can be dragged kicking and screaming into a future of someone else’s design. For me the question is whether I have more trust in Apple than I do in regulators when it comes to designing good solutions to complex problems. That’s a no-brainer for me, I’d rather have Apple figure out how to transition from where we are now to a future that works for users, developers, and Apple, and that’s acceptable to regulators.