Apple Developers Seek App Store Modifications at Annual Conference: WSJ

Apple Inc’s AAPL weeklong annual conference for software developers from June 7 arrives on the heels of Apple’s legal tussle with “Fortnite” maker Epic Games Inc, which underscored the growing animosity with some developers from Apple’s alleged monopoly status, the Wall Street Journal reports.

What Happened: Some developers hated Apple’s latest new digital-ad industry-disrupting privacy rules while others detested App Store’s 30% commission on digital revenue.

Apple has refuted the monopoly allegations. The iPhone maker justified its commission as in line with rivals’ and the fair for the value it has created. Apple had blamed Epic for attempting to bypass its fair dues.

Apple halved its app store commission to 15% for apps with $1 million or less in revenue after the August Epic lawsuit. Interestingly, only a small share of apps generates over $1 million.

Apple is estimated to showcase its latest operating systems, including iOS 15, with additional privacy features, changes to notifications, and messaging system features, which compete against Facebook Inc’s FB messaging app WhatsApp.

Facebook protested Apple’s 2020 plans of introducing new privacy tools in its iOS 14 mobile operating system over ad business disruption concerns.

Apple’s privacy-policy changes, including user tracking consent, have fueled developers’ concerns.

Though Apple defended the policy citing user privacy protection, Facebook calls it foul play.

Apple’s 2020 billings and sales facilitated by its App Store rose an estimated 24% to $643 billion compared to 2019, fueled by quarantined users. The shares almost doubled in value in 2020.

The number of available apps in the App Store has grown from 500 in 2008 to 1.8 million at present.

Why It Matters: Apple spends over $50 million on the conference with 6,000 developer attendees in person and tens of millions more online. The 2021’s 200-plus sessions were being held virtually.

The Epic trial judge confronted Apple with survey data that disclosed 39% of developers were either very dissatisfied or somewhat dissatisfied with Apple’s distribution services.

Interestingly, over 90% of Apple developers do not plan to sever ties, Reuters reports based on Creative Strategies CEO Ben Bajarin. Smaller independent developers who paid smaller fees preferred Apple compared to larger company developers who pay higher fees. Over 50% of the developers sought a fee cap at 10% and more clarity over app rejection and a possible remedy.

Price action: AAPL shares traded lower by 0.77% at $124.92 in the market session on the last check Monday.