Welcome back to This Week in Apps, the weekly TechCrunch series that recaps the latest in mobile OS news, mobile applications and the overall app economy.
The app industry continues to grow, with a record 218 billion downloads and $143 billion in global consumer spend in 2020. Consumers last year also spent 3.5 trillion minutes using apps on Android devices alone. And in the U.S., app usage surged ahead of the time spent watching live TV. Currently, the average American watches 3.7 hours of live TV per day, but now spends four hours per day on their mobile devices.
Apps aren’t just a way to pass idle hours — they’re also a big business. In 2019, mobile-first companies had a combined $544 billion valuation, 6.5x higher than those without a mobile focus. In 2020, investors poured $73 billion in capital into mobile companies — a figure that’s up 27% year-over-year.
This Week in Apps offers a way to keep up with this fast-moving industry in one place with the latest from the world of apps, including news, updates, startup fundings, mergers and acquisitions, and suggestions about new apps and games to try, too.
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Following the passage of the so-called “anti-Google law” in South Korea, Google says it will comply with the new mandate by giving Android app developers on Google Play the ability to offer alternative payment systems alongside Google’s own. The legislation represents the first time a government has been able to force app stores to open up to third-party payment systems for in-app purchases — a change that could impact both app stores’ revenues, as developers look to skirt the tech giants’ commissions.
Image Credits: Google
In a blog post this week, Google says developers in South Korea will be able to add an alternative in-app billing system in addition to Google Play’s billing system for their mobile and tablet users in the country. At checkout, users will be able to choose which billing system they want to use for their purchase. Details for developers about how to implement the third-party billing systems will be provided in the weeks ahead, Google said.
The situation in South Korea is interesting as something of a bellwether for how Apple and Google will behave if required by a country to change their app store businesses to promote better competition. In Apple’s case, the company is claiming its current policies are already in compliance based on how the law is written, and has not yet made any changes to its policies related to the matter.
Facebook is challenging Apple by avoiding App Store fees. The social network this week introduced a new feature that allows creators to share custom subscription links, giving them a way to collect direct payments from fans and make money from their work. When a fan signs up through the link, the creator keeps all the money, minus only taxes. As the links are on the web, these subscriptions aren’t being processed through Apple’s in-app payments system — which could be in possible violation of App Store policies.
But Facebook believes that these links are compliant because it’s the creators who are generating the revenue, not Facebook itself. Plus, the company isn’t removing the ability for users to sign up for a creator subscription through the native in-app payments system.
Image Credits: Facebook screenshot
This would also be in line with the recent decision in the Epic Games lawsuit, where the court ruled that Apple can’t stop developers from adding links to alternative payment systems inside their apps alongside Apple’s own. Currently, Apple is in the process of asking the court to not enforce the deadline on compliance with its decision, as the case is now under appeal by both parties.
Facebook may be correct that it’s not breaking the rules, so long as it’s not taking a cut of transactions. Clubhouse earlier this year launched a similar payments feature that allowed users to virtually tip their favorite creators. Because creators kept all the revenue (minus only the card processing fee), Apple did not intervene.
But further down the road, Facebook could find a way to capture some of that subscription revenue — either by a cut of the payment itself, or via the payment processing fees with Novi, or even both. The company’s digital wallet platform Novi has only so far launched limited support for cross-border payments between the U.S. and Guatemala (and has been criticized for failing to live up to its original crypto ambitions). But Novi’s long-term plan is to monetize by offering lower fees than credit and debit cards, compared with traditional providers. Facebook could easily get Novi in front of creators, if it chose. First, however, it has to get its foot in the door and start the payment flow without being blocked by Apple. (Facebook said it won’t collect any fees through 2023.)
Facebook and Apple have been critical of each other’s business models, with Facebook accusing Apple of using its privacy changes as cover to allow itself to carve out a place for itself in the digital advertising business where Facebook and Google lead. CEO Mark Zuckerberg made no bones about the fact that Facebook believes Apple’s commissions are bad for creators, saying: “As we build for the metaverse, we’re focused on unlocking opportunities for creators to make money from their work,” Zuckerberg wrote in a Facebook post. “The 30% fees that Apple takes on transactions make it harder to do that, so we’re updating our Subscriptions product so now creators can earn more.”
Apple’s head of software engineering Craig Federighi gave a keynote address at the Web Summit 2021 conference this week where he spoke out against the idea of “sideloading” apps — meaning, simply, installing an app outside of Apple’s App Store. The speech was given in response to the EU’s draft legislation that proposes Apple open up iPhone to third-party app stores. He argued Apple’s position on the matter, which is that sideloading will put users’ privacy and security at risk and that Apple’s App Store’s vetting process will better protect users.
“Instead of creating choice, it would open up a Pandora’s box of unreviewed malware-ridden software and deny everyone the option of iPhone’s secure approach,” he said. At one point he called apps installed from the web, “a cybercriminal’s best friend,” and painted a picture of how compromised devices could become networks, and malware could threaten government systems, public utilities and enterprises.
Apple is, to some extent, correct that allowing users to download apps from the web could weaken the current state of iPhone security. But, by comparison, Google’s Android already offers sideloading — and it hasn’t so far toppled governments! — even if Android users face more malware issues than their iPhone counterparts. But one issue with Apple’s response is that it blurs the lines between third-party app stores and other forms of sideloading where users install directly from a website. Presumably, a competitive app store would be incentivized to keep its marketplace safe in order to attract and retain its own users. A random app hosted on some website is not the same thing at all.
Apple knows the real threat isn’t to security — after all, the majority of Android users don’t sideload — it’s to its reputation and business model. Customers hitting up the Epic Games Store for downloads or maybe a Facebook Game Store would cut into its revenues significantly. And every time new malware was discovered “sideloaded” onto iPhones, Apple would take a PR hit that would make its platform seem just as vulnerable as Android, losing an advantage it has today over its rival due to being more locked down.
This isn’t the first time Apple has spoken out against sideloading so publicly. CEO Tim Cook already said something similar in June. Apple also recently published a 31-page document laying out its position in detail.
Image Credits: Google
User voting for the Google Play Best of 2021 opened globally this week. Until November 17, Google Play users will have the opportunity to vote on their favorite apps and games of the year. The winners of the Users’ Choice awards and the Best of 2021 picks from the Google Play editorial team will be announced on November 30.
Image Credits: Cash App
Image Credits: App Annie
Image Credits: Facebook
Image Credits: Netflix
Image Credits: Backbone
📈 South Korean mobile payments app Kakao Pay more than doubled in its IPO, popping more than 150% in early trading. The company raised 1.53 trillion won ($1.3 billion), giving it a market cap of more than 11.7 trillion won.
💰 Philippine fintech Mynt raised $300 million in a round co-led by Warburg Pincus and Insight Partners that values its business at over $2 billion. The company is the fintech arm of Globe Telcom and the operator of the mobile wallet app GCash, which saw GTV of over $20 billion last year.
💰 Mumbai-based neobank Fi raised $50 million in a round led by Facebook co-founder Eduardo Saverin’s B Capital, valuing its business at $315 million. The service offers working professional free savings accounts which are owned by Federal Bank.
💰 Chipper Cash, an African cross-border payments app, raised $150 million in a Series C extension round led by Sam Bankman-Fried’s cryptocurrency exchange platform FTX. The new funds come barely six months after the startup closed its first Series C round of $100 million, led by SVB Capital.
💰 Play, a native iOS product design tool that works on the iPhone, announced it has raised $9.1 million in seed rounds led by First Round Capital and including Oceans Ventures, which took place over the past year and in 2020.
💰 When I Work, a messaging and scheduling app for shift-based workers, raised $200 million in a growth round from Bain Capital Tech Opportunities, with participation from Arthur Ventures. The app is used by around 10 million hourly workers in the U.S. across some 200,000 businesses, the company claims.
Twelve years after the franchise debuted on Facebook, Zynga has introduced Farmville 3 on iOS, Android and Mac M1 desktops. The new imagining of the game for mobile devices evolves Farmville into more of a “metaverse,” the company claims, allowing players to not just harvest crops, but also nurture animals and participate in continuously updated new activities like hot air balloon rides or pig races, among other things.
“From the very first time I thought of FarmVille, I thought that could be the beginning of the metaverse where you could start with a square plot of dirt and build that into a persistent connected world. That was my original vision for Zynga and social gaming,” said Zynga founder Mark Pincus. The game will generate revenue through in-app purchases and ads, aiming for $100 million in annual revenue over the next five years.
Alternative mobile browser Firefox shipped its latest release for iOS and Android with an update aimed at helping users address common issues — like the visual clutter of having too many open tabs or needing to pick up where you left off the last time the app was closed, among other things. The changes are a part of the Firefox Beta, which introduced a new homepage that will now serve as a re-entry point to the mobile web, says the browser’s maker, Mozilla. The changes could make Firefox more competitive with default options on mobile devices, like Apple’s Safari or Google’s Chrome. Among the new features are a “Jump back in” section for returning to internet research, easy access to saved searches, and other recent tabs — the latter of which are archived to reduce clutter, but still accessible as needed.