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Apple’s WWDC meeting marks a busy year for developer companies



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the annual conference for software developers began on monday. It came with something unusual for the iPhone maker: app developers are unhappy with the terms of their App Store.

CEO Tim Cook kicked off the one-week World Developer Conference, which was usually a rally for the company and its employees, with a virtual event posted on the company’s website that revealed software changes planned for this year. These include updates to the iMessage text messaging system, which include new ways to share photos and changes to FaceTime video calling software, which aims to improve sound quality by reducing ambient noise and other improvements.

“We look forward to sharing our latest technology with you and the incredible community of millions of Apple developers around the world,”

; said Mr. Cook. “Your creativity and innovative applications continue to offer new and meaningful ways to enrich people’s lives.”

This year’s event follows in the footsteps of Apple’s courtroom battle with Fortnite maker Epic Games Inc., which highlighted the increasingly difficult relationship some developers have with a company that controls access to billions of iPhone users around the world.

Last month’s trial, in which Epic accused Apple of misconduct, limited a year to rare disagreements among app developers. The period includes public sparring with Facebook Inc.

CEO Mark Zuckerberg and Mr. Cook’s defense before the Congress of Apple’s conduct.

Documents provided by lawyers for Epic Games were filed in court in a battle with Apple last month in Oakland, California.


Photo:

Brittany Hosi-Small / Reuters

At the heart of developers’ difficulties is money. Some dislike the new privacy policies that Apple recently adopted, which has disrupted the digital advertising industry. Others hate the 30% commission that Apple takes on digital revenue generated through the App Store.

Apple denied the claims that it was a monopoly, and defended its commission in line with competitors and fairly for the value it created. Apple said Epic wants to make ends meet by paying its fair share for using the App Store.

Apple’s hardware, software and services work so harmoniously that the connection is often called a fenced garden. The idea is central to recent antitrust control and the Epic v. Apple case. Joanna Stern from WSJ went to a real fenced garden to explain everything. Photo illustration: Adele Morgan / The Wall Street Journal

“The future of Apple’s acceptance by developers is the elephant in this year’s WWDC room,” said Gene Munster, managing partner at Loup Ventures, a venture capital firm specializing in technology research.

On Monday, Apple is expected to unveil its latest operating systems, including iOS 15, which may have additional privacy features, notification changes and new features for its messaging system, which competes with Facebook’s WhatsApp messaging app.

After the Epic lawsuit was filed in August, Apple cut its commission to 15 percent from 30 percent for apps with $ 1 million in revenue or less, a decision Mr Cook said was a concern for small businesses.

In a courtroom sketch, lawyers consulted with Judge Yvonne Gonzalez Rodgers during the antitrust trial.


Photo:

Vicki Beringer / Reuters

A small share of applications generates over $ 1 million. Most apps on the App Store are free and do not pay any commission. Free games generate money mainly through ads in applications for which Apple does not collect sales discounts.

The year of discontent began at last year’s WWDC, when Apple said it planned to introduce new privacy tools in its iOS 14 mobile operating system. Developers, including Facebook, complained that this would disrupt their advertising business. In-app ads are often targeted to users based on their online activity data collected by the apps. Developers have spent months puzzled by new strategies to deal with changes to Apple’s privacy policy, which now require users to agree to be tracked.

Mr Cook urged change as a way to protect users’ privacy and help them control how their data is used. But in January, Mr Zuckerberg said Apple had every incentive to “use its dominant position on the platform to interfere with how our apps and other apps work.”

On Monday, Mr. Zuckerberg made a new attempt for Apple, saying that Facebook will not collect a reduction in revenue from live performances, subscriptions and other forms of profit of creators until 2023. “And when we introduce a share of revenue, it will be more less than 30% that Apple and others take, “Mr Zuckerberg wrote on his Facebook page.

Amid the grievances, Apple tried to highlight what Mr. Cook called an economic miracle unleashed by the App Store.

Apple recently published a report estimating that billing and sales facilitated by its App Store increased 24% to $ 643 billion last year compared to 2019, fueled by quarantine users who want to avoid personal interactions. Last year, investors were rewarded with stocks almost doubling in value.

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The App Store is a large part of Apple’s so-called service unit, part of the company’s business, which Mr. Cook is committed to generating growth after previous years of slowing iPhone sales. Nick Rodelli, head of CFRA Legal Edge, an investment research firm, estimates that app store commissions, along with money generated by Google’s default search engine for its devices, account for 40 percent of Apple’s pre-tax revenue.

Since the launch of the App Store in 2008, the number of available applications has grown to about 1.8 million out of 500.

The tension makes this year’s developer conference even more important. According to court testimony from Phil Schiller, Apple’s CEO who runs the App Store, Apple spent more than $ 50 million on the event. In a typical year, 6,000 developers would attend in person and tens of millions more would watch online, he said. This year’s 200 sessions are held virtually and are published online.

During the Epic trial, U.S. District Judge Yvonne Gonzalez Rodgers – who is expected to rule on the case in the coming months – confronted Mr Cook with survey data showing that 39% of developers are either very dissatisfied. , or somewhat dissatisfied with Apple’s distribution services.

“How acceptable is that?” She asked.

In his testimony, Mr Cook said he was not familiar with the document, but noted that Apple rejected about 40% of applications submitted to the store each week. (An Apple lawyer later cited an internal survey from 2019, according to which 19% of developers reported dissatisfaction.)

“There’s definitely some friction in the system,” Mr Cook said, adding that strict standards ensure that users have a good experience in the App Store.

The assumption that 39% of developers are dissatisfied with Apple is a staggering figure for those who have been following Apple closely. “Apple is used to having 99% customer satisfaction,” said Ben Baharin, chief analyst at Creative Strategies Inc.

Epic vs. Apple

Related coverage of the dispute selected by the editors

Write to Tim Higgins at Tim.Higgins@WSJ.com

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