Where will the App Store go?
Yesterday, Judge Gonzalez Rogers adjudicated on the "Epic" case in the game industry. The judge defined the market as "digital mobile gaming" and said Apple did not have a monopoly on that market. However, she concluded Apple violated California's laws against unfair competition and ordered Apple to let developers include links in their apps to other payment methods within 90 days. The result was partial win-wins for both parties. But it looked like Apple was more satisfied with it. "Success is not illegal." is the line that Apple salvaged from the legal fight. And Tim Sweeney (Epic's chief executive) disclosed his disappointment at Twitter.
Many articles say that it will make a massive dent in Apple's universe. Apple's stock fell more than 3% at the day. But I couldn't find many articles that said what Apple would actually move with the ruling. Doesn't Apple take things too easy in a crisis of losing more than $20B revenue? So, I'd like to give full play to my imagination.
The first scenario could be the straight one: Apple is satisfied with maintaining its authority over the app distribution and lets developers circumvent the 30% Apple tax. The App Store's annual revenue is more than $20B. Let's assume that (generously) 50% of the transaction would be done without Apple's transaction method. So, Apple will lose $10B. As one who thinks of Apple as a cult and a lifetime Apple zealot (or fanboy whatever), I must be happy to see that the company prefers pure integrity (to protect the users!) to money. But the shareholders must have different ideas, and we all know the current pope (you know..) is no one do that kind of thing.
With the second scenario, Apple might modify the business model. The current Apple developer program costs $99 annually. So Apple might raise the fee or associate the fee with developers' revenue. The ostensible reason to collect the 30% is to maintain the App Store for developers. App Store provides various functionalities such as: storage and network for the app distribution, auditing to protect users, easy in-app purchase transactions, etc. Apple might change its business model and go on with the Cloud-like model: by charging network, storage, processing, and so on. But I believe this scenario is unlikely to happen. Establishing a new business model is challenging. And it will burden developers with too much unpredictability.
And the third scenario is that I believe it has a fair chance to be realized. "(Almost) Nothing will change." Developers still have to pay the 30% tax, and there will be almost no change in Apple's revenue. How in the world can this happen?
The first article (3.1.1) about the business model of the App Store Review Guidelines is as follows.
If you want to unlock features or functionality within your app, (by way of example: subscriptions, in-game currencies, game levels, access to premium content, or unlocking a full version), you must use in-app purchase. Apps may not use their own mechanisms to unlock content or functionality, such as license keys, augmented reality markers, QR codes, etc. Apps and their metadata may not include buttons, external links, or other calls to action that direct customers to purchasing mechanisms other than in-app purchase.
Apple may change the article slightly to conform to the new ruling.
If you want to unlock features or functionality within your app, (by way of example: subscriptions, in-game currencies, game levels, access to premium content, or unlocking a full version), you must use in-app purchase. Apps may not use their own mechanisms to unlock content or functionality, such as license keys, augmented reality markers, QR codes, etc. Apps and their metadata may include buttons, external links, or other calls to action that direct customers to the external purchasing mechanisms.
The core idea here is: if the transaction is done in the context of the in-app purchase, and the ruling is literally about the payment method, Apple still may grasp the control. For example, the game item purchase in an iOS app is made by the in-app purchase, usually by clicking a button in the game (e.g., "Buy 100 gold"). Each in-app purchase transaction is a fulfillment of an in-app transaction item, and we should do it with Apple's StoreKit API. Until now, the whole procedure (button click -> purchasing -> fulfillment) is all done on the Apple side. Now, Apple may provide an external link and a callback for purchasing only. That is to say; the process would be changed to: button click -> redirect to external purchasing -> call a callback from the external side -> fulfillment in the app. Omitting the callback won't give the item to users - no way to elude. Apple still can recognize all the transactions (who bought what), and it can issue invoices of the 30% to developers later. The only change is who is the first collector.
Yes, we don't know what will actually happen. We have 90 days, and the probable appeals can add years to it. Personally, I believe the one and only App Store is Apple's legitimate right. The integrity of credible authority is the pinnacle of the Apple ecosystem and what I like it most (Though there might be many who disagree with it). So, I hope there will always be one iOS App Store. But I also believe Apple needs to do much more for their developers and show some respect to them. Maybe Apple could lower the tax preemptively at next week's event. (and toasters at WWDC)