This Week in Apps: India bans Chinese apps, Apple freezes game updates in China, iOS developer backlash continues

Sarah Perez
·15 min read

Welcome back to This Week in Apps, the Extra Crunch series that recaps the latest OS news, the applications they support and the money that flows through it all.

The app industry is as hot as ever, with a record 204 billion downloads and $120 billion in consumer spending in 2019. People are now spending three hours and 40 minutes per day using apps, rivaling TV. Apps aren’t just a way to pass idle hours — they’re a big business. In 2019, mobile-first companies had a combined $544 billion valuation, 6.5x higher than those without a mobile focus.

In this Extra Crunch series, we help you keep up with the latest news from the world of apps, delivered on a weekly basis.

This week, we're tracking the continued ramifications of the in-app purchases incident ignited by Basecamp, which has emboldened more developers to voice their gripes with Apple publicly in the past few days. The app stores are also this week enmeshed in world of politics, ranging from the India-China border dispute to apps impacted by China's big brother-esque regulations to the latest with Apple's antitrust probe.

HEADLINES

Dozens of Chinese apps banned in India

In a major upset to mobile app businesses competing on a global stage, India this week blocked 59 apps developed by Chinese firms, due to concerns that the apps were engaging in activities that threatened the "national security and defense of India," according to the Indian government.

The ban itself is a political power move as it follows deadly clashes between Indian and Chinese troops along the disputed Himalayan border in June, which led to the death of at least 20 Indian soldiers on June 16. (China didn't disclose its casualties.) Indian government officials claimed they had received reports of the apps stealing and transmitting user data in an unauthorized manner to servers outside the country. This is what necessitated the ban, they said.

India's move could prove to have larger repercussions, as it sets the stage for a world where Chinese internet companies are excluded from key markets. This isn't something that's limited to apps, of course. For instance, the U.S. is rallying its allies to stop using Huawei technologies for 5G. But China's policies could mean its more successful apps, like TikTok, will lose key markets and therefore, forfeit revenue and power.

  • India's ban threatens TikTok's growth in a key market

The move to ban the Chinese apps in India most notably impacts TikTok. To date, India had been the app's largest overseas market until now, with some 200M+ users across around 611M lifetime downloads. In the most recent quarter, TikTok and the 58 other banned apps combined, had been downloaded around 330M times. The ban is estimated to impact roughly one in three smartphone users in India, according to research firm Counterpoint.

Google and Apple began to comply with New Delhi’s order on Thursday, to prevent Indian users from accessing the banned apps. In addition, India’s Department of Telecommunications ordered telecom networks and ISPs to block access to those 59 apps immediately.

Kevin Mayer, the chief executive of TikTok, said on Wednesday his app was in compliance with Indian privacy and security requirements and he was looking forward to meeting with various stakeholders in the Indian government to discuss.

 

Chinese app companies have had success, until now, in tapping into the Indian market to drive growth. But Indian smartphone users have become wary about how many Chinese companies have managed to gain a spot on their homescreen. Recently, an app called "Remove China Apps" gained popularity in India to detect and delete apps developed by Chinese firms. Google has since removed the app from Google Play. It also introduced changes in Android 11 that makes it more difficult for app developers to access a broader list of installed apps.

Apple freezes updates for thousands of games on the China App Store

Apple has stopped updating tens of thousands of mobile games on the China App Store after being pressured by the Chinese government to comply with its local regulations, according to a report this week by The Financial Times. The issue has to do with China's requirement that all games show proof of having a government-granted Internet Content Provider license. Though the requirement has been in place since 2016, Apple has allowed games to continue to publish and operate while they wait for their review -- something that takes time and can be difficult to obtain. Currently, there are around 60,000 games that need a license in order to legally operate in China, but Chinese regulators have only issued around 43,000 licenses since 2010, The FT said.

This move could have a significant impact on App Store revenue, Apple's largest App Store market. Sensor Tower estimates that Apple's China App Store generates $16.4B per year compared with the U.S.'s $15.4B. Newzoo, meanwhile, estimates iOS to generate 53% of total game revenue for China, which is around $13B.

iOS developer backlash continues

Basecamp's willingness to broadcast its frustrations over Apple's in-app purchase (IAP) policies led to other developers deciding to speak up over their troubles with Apple and App Store rejections. In years past, developers would typically keep such grievances private for fear of backlash. But with the ongoing antitrust probe and other recent events, some developers believe they now have the chance to say their piece without repercussions.

  • Down Dog speaks out against auto-converting subscriptions

This week, for example, yoga app developer Down Dog claimed Apple rejected its update for not agreeing to turn its free trial into a paid subscription when users don't cancel. The developer said they experimented with auto-charging trials in the past, but it was problematic. Fewer users tried the product as a result and they faced a large number of refund requests.

The issue, they seem to be claiming, is that Apple doesn't just want subscription revenue, it also wants to tell developers how to run their business. The developer positions its free trial that doesn't convert to a subscription as a consumer-friendly practice.

In reality, the developer is hoping to funnel more subscriptions through its website after the trial ends to avoid Apple's commission. Users who want to become paid customers can either subscribe through IAP or the developers's website, the company said on Twitter. (Of course, the app can't tell its users that's the case.)

Finding ways to retain more revenue is a valid concern for app businesses, but dressing up this decision as solely a pro-consumer practice (not auto-charging, that is) is a bit disingenuous. While many users may like that the app doesn't auto-convert to a paid subscription, that could speak more to the fact that users aren't perceiving there to be enough value in the paid experience or that they don't like subscription business model, in this case.

  • AnyList explains why it won't support Sign In With Apple

Meanwhile, on the non-IAP front, developer AnyList announced it won't support Sign In With Apple, per the new June 30th rule. The developer argues that third-party login systems, in general, become customer support headaches for developers. On top of this, Apple's system ties accounts to a user's iCloud email -- but these emails are often unused and unchecked, as many customers today use Gmail, Yahoo, or Hotmail. Meaning, the developer can't effectively use the iCloud address for support messages.

In addition, customers who use the private "Hide My Email" option can't easily find the address in order to log on other platforms -- like Android. This also impacts AnyList users' ability to collaborate on lists -- a key feature for its app, where a user shares a list by typing in the email of another person.

The post goes on to note the Sign In With Apple system had a security flaw that Apple paid out a bug bounty on, but that felt like piling on and detracted from the more critical points the post were making. Bug bounties are commonly used to help companies identify holes in products, and doesn't necessarily mean the system is so massively insecure that it is unusable.

But overall, the issues brought up here feel like valid concerns that aren't unique to AnyList's app, in some cases. Apple is mandating Sign In With Apple as part of its efforts to become a more consumer privacy-minded company. But it has also pushed off a lot of the headaches around customer support to developers to figure out, instead of offering them tools to effectively support their app users.

Perhaps, Apple should have introduced a platform for in-app customer support messages that developers could plug into, without gaining access to personal private details of their users, for example. Or maybe, Apple could have offered to relay support messages to the customer's mobile number, instead of (or in addition to) forcing use of iCloud emails. Or maybe, as AnyList argues, adopting Sign In With Apple should be a developer choice -- or at least one that can be appealed before an app is rejected.

  • Apple's App Store rules under regulatory scrutiny in U.S.

According to Bloomberg, Justice Department lawyers met with App Store developers, large and small, as recently as last week to ask about App Store rules that require developers to use the App Store for subscriptions, and whether Apple's lowering of its 30% commission would solve problems. In addition, the DOJ asked about the overall App Store review process as a whole and about Google Play. This investigation has been ongoing since mid-2019, but no final decision has been made about whether to bring a case, the report said. Bloomberg is one of now several outlets to report on the talks.

This same week, an Apple executive defended the App Store rules, amid both this and the ongoing E.U. antitrust probe, saying that its store compares to a "quality department store" where Apple need to ensure all apps meet the same baseline quality and reliability standards. That's a valid defense for having policies in general, but doesn't quite address the issues around how those policies have been enforced.

MORE NEWS

Apple cancels some Arcade Games as strategy shifts

Apple apple arcade launches on app store sept 19 091619
Apple apple arcade launches on app store sept 19 091619

Apple ended its contract for multiple future Apple Arcade titles, according to Bloomberg. The company told the impacted developers their upcoming games didn't have the engagement Apple is seeking, the unnamed developers claimed. Apple now wants Arcade titles to drive repeat usage to retain subscribers -- a hint that Apple may be looking to tweak Arcade to better hook subscribers on its games, rather it being than a playground where particular genres -- including those that don't work well as free-to-play models -- can flourish.

Apple paid the developers through their milestones, but the canceled contracts have put some business into financial disarray among the pandemic. Apple, in response, said it was always planning to make changes to Arcade based on subscriber feedback. Arcade is one of now several subscription offerings that comprise Apple's 'services' revenue. But like any subscription, Apple is looking for ways to reduce churn and increase retention. That could mean, over time, Arcade starts looking more like the App Store in terms of its content with the hook being the exclusivity and not necessarily the differentiated gaming genres it supports.

Facebook shuts down its TikTok clone, Lasso

Despite having an ideal moment to make the push into India (see above!), Facebook threw in the towel on Lasso, its year-and-a-half old TikTok clone. The app, which had also offered an algorithmic feed of short videos overlaid on music, will close down on July 10.

Lasso had been available in Colombia, Mexico, the U.S., Argentina, Chile, Peru, Panama, Costa Rica, El Salvador, Ecuador and Uruguay, However, it never broke out to become a mobile hit -- something Facebook can't seem to produce independently these days. In its largest market, Mexico, the app had fewer than 80,000 daily actives on Android, according to App Annie.

PUBG Mobile doubles its lifetime revenue to $3B in 7 months

Image Credits: Sensor Tower

The game was already one of the most successful on the mobile market before the coronavirus pandemic hit, and an example of consumers' growing interest in cross-platform gaming. But the resulting impacts of COVID-19 lockdowns and self-quarantines has accelerated consumer spending in this title. According a report from Sensor Tower, the Tencent-backed game doubled its lifetime revenue in just over seven months to more than $3 billion globally, including the combined player spending from Game For Peace, the title’s Chinese localization, and global revenue for PUBG Mobile. So far in 2020, the two game reached $1.3B with revenue peaking a $270M in March during the height of coronavirus lockdowns.

Industry insiders don't think the coronavirus bump is something that will drop when lockdowns are over. Rather it pushed the industry -- be it gaming, streaming, ecommerce or anything else -- to reach certain milestones faster than anticipated.

WhatsApp's update adds QR codes, animated stickers, and more

WhatsApp's messaging app got a handy little upgrade this week, with the addition of new animated sticker packs, dark mode support for web and desktop, improvements to group video calls, and, QR codes. The latter has been a popular way for messaging app users to connect -- new friends can scan each other's QR code to add them to WhatsApp's contacts -- but had yet to be offered.

Google removes 25 malicious Android apps

Google's policing of its Play Store still leaves a lot to be desired. This week, the company removed 25 malicious Android applications that were caught stealing Facebook credentials from their users, ZDNet reported. The apps had posed as step counters, image editors, video editors, wallpaper apps, flashlight applications, file managers, and mobile games. The apps worked but contained malicious code. Together, the apps had 2.34 million downloads.

Facebook kills its experimental Pinterest rival

Facebook’s recently launched app, Hobbi, an experiment in short-form content creation around personal projects, hobbies and other Pinterest-y content, is already shutting down. The app first arrived on iOS in February as one of now several launches from Facebook’s internal R&D group, the NPE Team. Hobbi users have been notified by way of push notification that the app is shutting down on July 10, 2020. In the few months it’s been live on the U.S. App Store, Hobbi only gained 7,000 downloads, according to estimates from Sensor Tower. Apptopia also reported the app had under 10,000 downloads and saw minimal gains during May and June.

Global app revenue jumped to $50B in the first half of 2020, due to COVID impacts

Image Credits: Sensor Tower

Consumer spending on mobile apps and app installs grew significantly during the first half of 2020, in part due to the COVID-19 pandemic, according to new data from Sensor Tower. In the first half of the year, consumers spent $50.1 billion worldwide across the App Store and Google Play — a figure that’s up 23.4% from the first half of 2019. Previously, revenue had grown 20% between the first half of 2018 and 2019, for comparison. In addition, first-time app installs were up 26.1% year-over-year in the first half of 2020 to reach 71.5 billion downloads.

Apple’s App Store accounted for 18.3 billion of those downloads, up 22.8% year-over-year, while Google Play delivered 53.2 billion new app installs, up 27.3%. You can read a fuller analysis of H1 2020 trends here.

More Reading

Funding and M&A

  • Chinese online learning app Zuoyebang raises $750M. U.S. investment firm Tiger Global and Hong Kong-based private equity firm FountainVest Partners led the six-year-old startup’s Series E. The app offers online courses, runs live lessons, and allows students to take a picture of a problem, then upload it to the app and get its solution.

  • OurPeople, a team communication and engagement platform for deskless workers, raises $2M. Leading the round is Alpine Meridian, an investment firm that specialises in digital media, e-commerce and healthcare, and entrepreneur Robert Neveu.

  • Live broadcasting platform Caffeine raises $113M in Series D funding round. The service runs online and on iOS and Android.

  • Dish and Boost Mobile's merger completes, allowing Dish to enter the consumer wireless market and compete against Verizon, AT&T, and T-Mobile. (Disclosure: Verizon owns TechCrunch.)

  • SciPlay acquires Israeli game developer Come2Play for undisclosed sum (h/t Apptopia)

  • GAMEE acquired by Animoca Brands, a family of various global gaming companies (h/t Apptopia)

Downloads

Image Credits: Apple

Apple's Design Awards were announced this week, instead of during the week of WWDC as usual. Big winners leveraged Apple Pencil, spatial audio, CoreML and Metal 2 technologies among other things. All apps are worth a download, if only to see where Apple's favor currently lies.