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A new Senate bill would totally upend Apple and Google’s app store dominance
With two giants calling the shots and collecting whatever tolls they see fit, mobile software makers have long complained that app stores take an unfair cut of the cash that should be flowing directly to developers. Hearing those concerns, a group of senators introduced a new bill this week that, if passed, would greatly diminish Apple and Google’s ability to control app purchases in their operating systems and completely shake up the way that mobile software gets distributed.
The new bill, called the Open App Markets Act, would enshrine quite a few rights that could benefit app developers tired of handing 30% of their earnings to Apple and Google. The bill, embedded in full below, would require companies that control operating systems to allow third-party apps and app stores.
It would also prevent those companies from blocking developers from telling users about lower prices for their software that they might find outside of official app stores. Apple and Google would also be barred from leveraging “non-public” information collecting through their platforms to create competing apps.
“This legislation will tear down coercive anticompetitive walls in the app economy, giving consumers more choices and smaller startup tech companies a fighting chance,” said Senator Richard Blumenthal (D-CT), who introduced the bipartisan bill with Sen. Marsha Blackburn (R-TN), and Sen. Amy Klobuchar (D-MN). Klobuchar chairs the Senate’s antitrust subcommittee and Blackburn and Blumenthal are both subcommittee members.
Senator Blackburn called Apple and Google’s app store practices a “direct affront to a free and fair marketplace” and Sen. Klobuchar noted that their behavior raises “serious competition concerns.”
The bill draws on information collected earlier this year from that subcommittee’s hearing on app stores and competition. In the hearing, lawmakers heard from Apple and Google as well as Spotify, Tile and Match Group, three companies that argued their businesses have been negatively impacted by anti-competitive app store policies.
“… We urge Congress to swiftly pass the Open App Markets Act,” Spotify Chief Legal Officer Horacio Gutierrez said of the new bill. “Absent action, we can expect Apple and others to continue changing the rules in favor of their own services, and causing further harm to consumers, developers and the digital economy.”
The Coalition for App Fairness, a developer advocacy group, praised the bill for its potential to spur innovation in digital markets. “The bipartisan Open App Markets Act is a step towards holding big tech companies accountable for practices that stifle competition for developers in the U.S. and around the world,” CAF executive director Meghan DiMuzio said.
Hoping to head off future regulatory headaches, Apple dropped its own fees for companies that generate less than $1 million in App Store revenue from 30% to 15% last year. Google followed suit with its own gesture, dropping fees to 15% for the first $1 million in revenue a developer earns through the Play Store in a year. Some developers critical of the companies’ practices saw those changes as little more than a publicity stunt.
Developers have long complained about the high tolls they pay to distribute their software through the world’s two major mobile operating systems. That fight escalated over the last year when Epic Games circumvented Apple’s payments rules by allowing Fortnite players to pay Epic directly, setting off a legal fight that has huge implications for the mobile software world. Following a May trial, the verdict is expected later this year.
“This will make it easier for developers of all sizes to challenge these harmful practices and seek relief from retaliation, be it during litigation or simply because they dared speak up,” Epic Games VP of Public Policy Corie Wright said of the new bill.
Unlike Apple, Google does allow apps to be “sideloaded,” installed onto devices outside of the Google Play Store. But documents unsealed in Epic’s parallel case against Google revealed that the Play Store’s creator knows the sideloading process is a terrible experience for users — something the company brings up when pressuring developers to stick with its official app marketplace.
The counterargument here is that official app stores make apps safer and smoother for consumers. While Apple and Google extract heavy fees for selling mobile software through the App Store and the Google Play Store, the companies both argue that streamlining apps through those official channels protects people from malware and allows for prompt software updates to patch security concerns that could jeopardize user privacy.
“At Apple, our focus is on maintaining an App Store where people can have confidence that every app must meet our rigorous guidelines and their privacy and security is protected,” an Apple spokesperson told TechCrunch.
Adam Kovacevich, a former Google policy executive who leads the new tech-backed industry group Chamber of Progress, called the new bill “a finger in the eye” for Android and iPhone owners.
“I don’t see any consumers marching in Washington demanding that Congress make their smartphones dumber,” Kovacevich said. “And Congress has better things to do than intervene in a multi-million-dollar dispute between businesses.”
At least in Google’s case, the counterargument has its own counterargument. Android has long been notorious for malware, but apparently most of that malicious software isn’t making its way onto devices through sideloading — it’s walking through the Google Play Store’s front door.
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Youreka Labs spins out with $8.5M to provide smart mobile assistant apps to field workers
Mobile field service startup Youreka Labs Inc. raised an $8.5 million Series A round of funding co-led by Boulder Ventures and Grotech Ventures, with participation from Salesforce Ventures.
The Maryland-based company also officially announced its CEO — Bill Karpovich joined to lead the company after previously general manager at IBM Cloud & Watson Platform.
Youreka Labs spun out into its own company from parent company Synaptic Advisors, a cloud consulting business focused on the customer relationship management transformations using Salesforce and other artificial intelligence and automation technologies.
The company is developing robotic smart mobile assistants that enable frontline workers to perform their jobs more safely and efficiently. This includes things like guided procedures, smart forms and photo or video capture. Youreka is also embedded in existing Salesforce mobile applications like Field Service Mobile so that end-users only have to operate from one mobile app.
Youreka has identified four use cases so far: healthcare, manufacturing, energy and utilities and the public sector. Working with companies like Shell, P&G, Humana and the Transportation Security Administration, the company’s technology makes it possible for someone to share their knowledge and processes with their colleagues in the field, Karpovich told TechCrunch.
“In the case of healthcare, we are taking complex medical assessments from a doctor and pushing them out to nurses out in the field by gathering data into a simple mobile app and making it useful,” he added. “It allows nurses to do a great job without being doctors themselves.”
Karpovich said the company went after Series A dollars because it was “time for it to be on its own.” He was receiving inbound interest from investors, and the capital would enable the company to proceed more rapidly. Today, the company is focused on the Salesforce ecosystem, but that can evolve over time, he added.
The funding will be used to expand the company’s reach and products. He expects to double the team in the next six to 12 months across engineering to be able to expand the platform. Youreka boasts 100 customers today, and Karpovich would also like to invest in marketing to grow that base.
In addition to the use cases already identified, he sees additional potential in financial services and insurance, particularly for those assessing damage. The company is also concentrated in the United States, and Karpovich has plans to expand in the U.K. and Europe.
In 2020, the company grew 300%, which Karpovich attributes to the need of this kind of tool in field service. Youreka has a licensing model with charges per end user per month, along with an administrative license, for the people creating the apps, that also charges per user and per month pricing.
“There are 2.5 million jobs open today because companies can’t find people with the right skills,” he added. “We are making these jobs accessible. Some say that AI is doing away with jobs, but we are using AI to enhance jobs. If we can take 90% of the knowledge and give a digital assistant to less experienced people, you could open up so many opportunities.”
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This Week in Apps: In-app events hit the App Store, TikTok tries Stories, Apple reveals new child safety plan
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.
Do you want This Week in Apps in your inbox every Saturday? Sign up here: techcrunch.com/newsletters
Top Stories
Apple to scan for CSAM imagery
Apple announced a major initiative to scan devices for CSAM imagery. The company on Thursday announced a new set of features, arriving later this year, that will detect child sexual abuse material (CSAM) in its cloud and report it to law enforcement. Companies like Dropbox, Google and Microsoft already scan for CSAM in their cloud services, but Apple had allowed users to encrypt their data before it reached iCloud. Now, Apple’s new technology, NeuralHash, will run on users’ devices, tatformso detect when a users upload known CSAM imagery — without having to first decrypt the images. It even can detect the imagery if it’s been cropped or edited in an attempt to avoid detection.
Meanwhile, on iPhone and iPad, the company will roll out protections to Messages app users that will filter images and alert children and parents if sexually explicit photos are sent to or from a child’s account. Children will not be shown the images but will instead see a grayed-out image instead. If they try to view the image anyway through the link, they’ll be shown interruptive screens that explain why the material may be harmful and are warned that their parents will be notified.
Some privacy advocates pushed back at the idea of such a system, believing it could expand to end-to-end encrypted photos, lead to false positives, or set the stage for more on-device government surveillance in the future. But many cryptology experts believe the system Apple developed provides a good balance between privacy and utility, and have offered their endorsement of the technology. In addition, Apple said reports are manually reviewed before being sent to the National Center for Missing and Exploited Children (NCMEC).
The changes may also benefit iOS developers who deal in user photos and uploads, as predators will no longer store CSAM imagery on iOS devices in the first place, given the new risk of detection.
In-App Events appear on the App Store
Image Credits: Apple
Though not yet publicly available to all users, those testing the new iOS 15 mobile operating system got their first glimpse of a new App Store discovery feature this week: “in-app events.” First announced at this year’s WWDC, the feature will allow developers and Apple editors alike to showcase directly on the App Store upcoming events taking place inside apps.
The events can appear on the App Store homepage, on the app’s product pages or can be discovered through personalized recommendations and search. In some cases, editors will curate events to feature on the App Store. But developers will also be provided tools to submit their own in-app events. TikTok’s “Summer Camp” for creators was one of the first in-app events to be featured, where it received a top spot on the iPadOS 15 App Store.
Weekly News
Platforms: Apple
Apple expands support for student IDs on iPhone and Apple Watch ahead of the fall semester. Tens of thousands more U.S. and Canadian colleges will now support mobile student IDs in the Apple Wallet app, including Auburn University, Northern Arizona University, University of Maine, New Mexico State University and others.
Apple was accused of promoting scam apps in the App Store’s featured section. The company’s failure to properly police its store is one thing, but to curate an editorial list that actually includes the scams is quite another. One of the games rounded up under “Slime Relaxations,” an already iffy category to say the least, was a subscription-based slime simulator that locked users into a $13 AUD per week subscription for its slime simulator. One of the apps on the curated list didn’t even function, implying that Apple’s editors hadn’t even tested the apps they recommend.
Tax changes hit the App Store. Apple announced tax and price changes for apps and IAPs in South Africa, the U.K. and all territories using the Euro currency, all of which will see decreases. Increases will occur in Georgia and Tajikistan, due to new tax changes. Proceeds on the App Store in Italy will be increased to reflect a change to the Digital Services Tax effective rate.
Game Center changes, too. Apple said that on August 4, a new certificate for server-based Game Center verification will be available via the publicKeyUrl.
Fintech
Robinhood stock jumped more than 24% to $46.80 on Tuesday after initially falling 8% on its first day of trading last week, after which it had continued to trade below its opening price of $38.
Square’s Cash app nearly doubled its gross profit to $546 million in Q2, but also reported a $45 million impairment loss on its bitcoin holdings.
Coinbase’s app now lets you buy your cryptocurrency using Apple Pay. The company previously made its Coinbase Card compatible with Apple Pay in June.
Social
An anonymous app called Sendit, which relies on Snap Kit to function, is climbing the charts of the U.S. App Store after Snap suspended similar apps, YOLO and LMK. Snap was sued by the parent of child who was bullied through those apps, which led to his suicide. Sendit also allows for anonymity, and reviews compare it to YOLO. But some reviews also complained about bullying. This isn’t the first time Snap has been involved in a lawsuit related to a young person’s death related to its app. The company was also sued for its irresponsible “speed filter” that critics said encouraged unsafe driving. Three young men died using the filter, which captured them doing 123 mph.
TikTok is testing Stories. As Twitter’s own Stories integrations, Fleets, shuts down, TikTok confirmed it’s testing its own Stories product. The TikTok Stories appear in a left-hand sidebar and allow users to post ephemeral images or video that disappear in 24 hours. Users can also comment on Stories, which are public to their mutual friends and the creator. Stories on TikTok may make more sense than they did on Twitter, as TikTok is already known as a creative platform and it gives the app a more familiar place to integrate its effects toolset and, eventually, advertisements.
Facebook has again re-arranged its privacy settings. The company continually moves around where its privacy features are located, ostensibly to make them easier to find. But users then have to re-learn where to go to find the tools they need, after they had finally memorized the location. This time, the settings have been grouped into six top-level categories, but “privacy” settings have been unbundled from one location to be scattered among the other categories.
A VICE report details ban-as-a-service operations that allow anyone to harass or censor online creators on Instagram. Assuming you can find it, one operation charged $60 per ban, the listing says.
TikTok merged personal accounts with creator accounts. The change means now all non-business accounts on TikTok will have access to the creator tools under Settings, including Analytics, Creator Portal, Promote and Q&A. TikTok shared the news directly with subscribers of its TikTok Creators newsletter in August, and all users will get a push notification alerting them to the change, the company told us.
Discord now lets users customize their profile on its apps. The company added new features to its iOS and Android apps that let you add a description, links and emojis and select a profile color. Paid subscribers can also choose an image or GIF as their banner.
Twitter Spaces added a co-hosting option that allows up to two co-hosts to be added to the live audio chat rooms. Now Spaces can have one main host, two co-hosts and up to 10 speakers. Co-hosts have all the moderation abilities as hosts, but can’t add or remove others as co-hosts.
Messaging
Tencent reopened new user sign-ups for its WeChat messaging app, after having suspended registrations last week for unspecified “technical upgrades.” The company, like many other Chinese tech giants, had to address new regulations from Beijing impacting the tech industry. New rules address how companies handle user data collection and storage, antitrust behavior and other checks on capitalist “excess.” The gaming industry is now worried it’s next to be impacted, with regulations that would restrict gaming for minors to fight addiction.
WhatsApp is adding a new feature that will allow users to send photos and videos that disappear after a single viewing. The Snapchat-inspired feature, however, doesn’t alert you if the other person takes a screenshot — as Snap’s app does. So it may not be ideal for sharing your most sensitive content.
Telegram’s update expands group video calls to support up to 1,000 viewers. It also announced video messages can be recorded in higher quality and can be expanded, regular videos can be watched at 0.5 or 2x speed, screen sharing with sound is available for all video calls, including 1-on-1 calls, and more.
Streaming & Entertainment
American Airlines added free access to TikTok aboard its Viasat-equipped aircraft. Passengers will be able to watch the app’s videos for up to 30 minutes for free and can even download the app if it’s not already installed. After the free time, they can opt to pay for Wi-Fi to keep watching. Considering how easy it is to fall into multi-hour TikTok viewing sessions without knowing it, the addition of the addictive app could make long plane rides feel shorter. Or at least less painful.
Chinese TikTok rival Kuaishou saw stocks fall by more than 15% in Hong Kong, the most since its February IPO. The company is another victim of an ongoing market selloff triggered by increasing investor uncertainty related to China’s recent crackdown on tech companies. Beijing’s campaign to rein in tech has also impacted Tencent, Alibaba, Jack Ma’s Ant Group, food delivery company Meituan and ride-hailing company Didi. Also related, Kuaishou shut down its controversial app Zynn, which had been paying users to watch its short-form videos, including those stolen from other apps.
Twitch overtook YouTube in consumer spending per user in April 2021, and now sees $6.20 per download as of June compared with YouTube’s $5.60, Sensor Tower found.
Image Credits: Sensor Tower
Spotify confirmed tests of a new ad-supported tier called Spotify Plus, which is only $0.99 per month and offers unlimited skips (like free users get on the desktop) and the ability to play the songs you want, instead of only being forced to use shuffle mode.
The company also noted in a forum posting that it’s no longer working on AirPlay2 support, due to “audio driver compatibility” issues.
Mark Cuban-backed audio app Fireside asked its users to invest in the company via an email sent to creators which didn’t share deal terms. The app has yet to launch.
YouTube kicks off its $100 million Shorts Fund aimed at taking on TikTok by providing creators with cash incentives for top videos. Creators will get bonuses of $100 to $10,000 based on their videos’ performance.
Dating
Match Group announced during its Q2 earnings it plans to add to several of the company’s brands over the next 12 to 24 months audio and video chat, including group live video, and other livestreaming technologies. The developments will be powered by innovations from Hyperconnect, the social networking company that this year became Match’s biggest acquisition to date when it bought the Korean app maker for a sizable $1.73 billion. Since then, Match was spotted testing group live video on Tinder, but says that particular product is not launching in the near-term. At least two brands will see Hyperconnect-powered integrations in 2021.
Photos
The Photo & Video category on U.S. app stores saw strong growth in the first half of the year, a Sensor Tower report found. Consumer spend among the top 100 apps grew 34% YoY to $457 million in Q2 2021, with the majority of the revenue (83%) taking place on iOS.
Image Credits: Sensor Tower
Gaming
Epic Games revealed the host of its in-app Rift Tour event is Ariana Grande, in the event that runs August 6-8.
Pokémon GO influencers threatened to boycott the game after Niantic removed the COVID safety measures that had allowed people to more easily play while social distancing. Niantic’s move seemed ill-timed, given the Delta variant is causing a new wave of COVID cases globally.
Health & Fitness
Apple kicked out an app called Unjected from the App Store. The new social app billed itself as a community for the unvaccinated, allowing like-minded users to connect for dating and friendships. Apple said the app violated its policies for COVID-19 content.
Google Pay expanded support for vaccine cards. In Australia, Google’s payments app now allows users to add their COVID-19 digital certification to their device for easy access. The option is available through Google’s newly updated Passes API which lets government agencies distribute digital versions of vaccine cards.
COVID Tech Connect, a U.S. nonprofit initially dedicated to collecting devices like phones and tablets for COVID ICU patients, has now launched its own app. The app, TeleHome, is a device-agnostic, HIPAA-compliant way for patients to place a video call for free at a time when the Delta variant is again filling ICU wards, this time with the unvaccinated — a condition that sometimes overlaps with being low-income. Some among the working poor have been hesitant to get the shot because they can’t miss a day of work, and are worried about side effects. Which is why the Biden administration offered a tax credit to SMBs who offered paid time off to staff to get vaccinated and recover.
Popular journaling app Day One, which was recently acquired by WordPress.com owner Automattic, rolled out a new “Concealed Journals” feature that lets users hide content from others’ viewing. By tapping the eye icon, the content can be easily concealed on a journal by journal basis, which can be useful for those who write to their journal in public, like coffee shops or public transportation.
Edtech
Recently IPO’d language learning app Duolingo is developing a math app for kids. The company says it’s still “very early” in the development process, but will announce more details at its annual conference, Duocon, later this month.
Educational publisher Pearson launched an app that offers U.S. students access to its 1,500 titles for a monthly subscription of $14.99. the Pearson+ mobile app (ack, another +), also offers the option of paying $9.99 per month for access to a single textbook for a minimum of four months.
News & Reading
Quora jumps into the subscription economy. Still not profitable from ads alone, Quora announced two new products that allow its expert creators to monetize their content on its service. With Quora+ ($5/mo or $50/yr), subscribers can pay for any content that a creator paywalls. Creators can choose to enable a adaptive paywall that will use an algorithm to determine when to show the paywall. Another product, Spaces, lets creators write paywalled publications on Quora, similar to Substack. But only a 5% cut goes to Quora, instead of 10% on Substack.
Utilities
Google Maps on iOS added a new live location-sharing feature for iMessage users, allowing them to more easily show your ETA with friends and even how much battery life you have left. The feature competes with iMessage’s built-in location-sharing feature, and offers location sharing of 1 hour up to 3 days. The app also gained a dark mode.
Security & Privacy
Controversial crime app Citizen launched a $20 per month “Protect” service that includes live agent support (who can refer calls to 911 if need be). The agents can gather your precise location, alert your designated emergency contacts, help you navigate to a safe location and monitor the situation until you feel safe. The system of live agent support is similar to in-car or in-home security and safety systems, like those from ADT or OnStar, but works with users out in the real world. The controversial part, however, is the company behind the product: Citizen has been making headlines for launching private security fleets outside law enforcement, and recently offered a reward in a manhunt for an innocent person based on unsubstantiated tips.
Funding and M&A
Square announced its acquisition of the “buy now, pay later” giant AfterPay in a $29 billion deal that values the Australian firm at more than 30% higher than the stock’s last closing price of AUS$96.66. AfterPay has served over 16 million customers and nearly 100,000 merchants globally, to date, and comes at a time when the BNPL space is heating up. Apple has also gotten into the market recently with an Affirm partnership in Canada.
Gaming giant Zynga acquired Chinese game developer StarLark, the team behind the mobile golf game Golf Rival, from Betta Games for $525 million in both cash and stock. Golf Rival is the second-largest mobile golf game behind Playdemic’s Golf Clash, and EA is in the process of buying that studio for $1.4 billion.
U.K.-based Humanity raised an additional $2.5 million for its app that claims to help slow down aging, bringing the total raise to date to $5 million. Backers include Calm’s co-founders, MyFitness Pal’s co-founder and others in the health space. The app works by benchmarking health advice against real-world data, to help users put better health practices into action.
YELA, a Cameo-like app for the Middle East and South Asia, raised $2 million led by U.S. investors that include Tinder co-founder Justin Mateen and Sean Rad, general partner of RAD Fund. The app is focusing on signing celebrities in the regions it serves, where smartphone penetration is high and over 6% of the population is under 35.
London-based health and wellness app maker Palta raised a $100 million Series B led by VNV Global. The company’s products include Flo.Health, Simple Fasting, Zing Fitness Coach and others, which reach a combined 2.4 million active, paid subscribers. The funds will be used to create more mobile subscription products.
Emoji database and Wikipedia-like site Emojipedia was acquired by Zedge, the makers of a phone personalization app offering wallpapers, ringtones and more to 35 million MAUs. Deal terms weren’t disclosed. Emojipedia says the deal provides it with more stability and the opportunity for future growth. For Zedge, the deal provides
….um, a popular web resource it thinks it can better monetize, we suspect.
Mental health app Revery raised $2 million led by Sequoia Capital India’s Surge program for its app that combines cognitive behavioral therapy for insomnia with mobile gaming concepts. The company will focus on other mental health issues in the future.
London-based Nigerian-operating fintech startup Kuda raised a $55 million Series B, valuing its mobile-first challenger bank at $500 million. The inside round was co-led by Valar Ventures and Target Global.
Vietnamese payments provider VNLife raised $250 million in a round led by U.S.-based General Atlantic and Dragoneer Investment Group. PayPal Ventures and others also participated. The round values the business at over $1 billion.
Downloads
Mastodon for iPhone
Fans of decentralized social media efforts now have a new app. The nonprofit behind the open source decentralized social network Mastodon released an official iPhone app, aimed at making the network more accessible to newcomers. The app allows you to find and follow people and topics; post text, images, GIFs, polls, and videos; and get notified of new replies and reblogs, much like Twitter.
Xingtu
@_666eveITS SO COOL FRFR do u guys want a tutorial? #fypシ #醒图 #醒图app♬ original sound – Ian Asher
TikTok users are teaching each other how to switch over to the Chinese App Store in order to get ahold of the Xingtu app for iOS. (An Android version is also available.) The app offers advanced editing tools that let users edit their face and body, like FaceTune, apply makeup, add filters and more. While image-editing apps can be controversial for how they can impact body acceptance, Xingtu offers a variety of artistic filters which is what’s primarily driving the demand. It’s interesting to see the lengths people will go to just to get a few new filters for their photos — perhaps making a case for Instagram to finally update its Post filters instead of pretending no one cares about their static photos anymore.
Tweets
Facebook still dominating top charts, but not the No. 1 spot:
Not cool, Apple:
This user acquisition strategy:
Maybe Stories don’t work everywhere:
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Tapcart, a ‘Shopify for mobile apps,’ raises a $50 million Series B
Shopify changed the e-commerce landscape by making it easier for merchants to set up their websites both quickly and affordably. A startup called Tapcart is now doing the same for mobile commerce.
The company, which has referred to itself as the “Shopify for mobile apps,” today powers the shopping apps for top brands, including Fashion Nova, Pier One Imports, The Hundreds, Patta, Culture Kings, and thousands more. Following a year of 3x revenue growth, in part driven by the pandemic, Tapcart is today announcing the close of a $50 million round of Series B funding, led by Left Lane Capital. Having clearly taken notice of Tapcart’s traction with its own merchant base, Shopify is among the round’s participants.
Other investors in the round include SignalFire, Greycroft, Act One Ventures and Amplify LA.
Tapcart’s co-founders, Sina Mobasser and Eric Netsch, have worked in the mobile app industry for years. Mobasser’s previous company, TestMax, offered one of the first test prep courses on iOS, while Netsch had more recently worked on the agency side to create mobile and digital experiences for brands. Together, the two realized the potential in helping online merchants bring their businesses to mobile, as easily as they were able to go online with Shopify.
Tapcart’s founders Sina Mobasser and Eric Netsch at their Santa Monica HQ. Image Credits: Tapcart
“Now, you can launch an app on our platform in a matter of weeks, where historically it would take up to a year if you wanted to custom build an app,” explains Mobasser. “And you can do it for a low monthly fee.”
Tapcart’s platform itself offers a simple drag-and-drop builder that allows anyone to create a mobile app for their existing Shopify store using tools to design their layout, customize the product detail pages, integrate checkout options, include product reviews, and even optionally add other branded content, like blogs, lookbooks, videos (including live video) and more. Everything is synced directly from Shopify to the app in real-time, so the merchant’s inventory, products and collections are all kept up-to-date. That’s a big differentiator from some rivals, which require duplicate sets of data and data transformation.
Tapcart, meanwhile, leverages all of Shopify’s APIs and SDKs to create a native application that works with Shopify’s existing data structures.
Image Credits: Tapcart
This tight integration with Shopify helps Tapcart because it doesn’t have to focus on the e-commerce infrastructure, as the way things are structured around inventory and collections are roughly 90% the same across brands. Instead, Tapcart focuses on the 10% that makes brands stand out from one another, which includes things like branding, content and design. Its CMS allows merchants to create exclusive content, change the colors and fonts, add videos and more to make the app look and feel fully customized.
Beyond the mobile app creation aspect to its business, Tapcart also helps merchants automate their marketing. Through the Tapcart platform, merchants can communicate with their customers in real-time using push notifications that can alert them to new sales, to encourage them to return to abandoned carts, or any other promotions. The marketing campaigns can be automated, as well, which helps merchants schedule their upcoming launches and product drops ahead of time. The company claims these push notifications deliver click-through rates that are 72% higher than a traditional email or SMS text because of their interactivity and branding.
Image Credits: Tapcart
The platform has quickly found traction with SMB to mid-market enterprise customers who have reached the stage of their business where it makes sense for them to double down on customer retention and conversion and optimize their mobile workflow.
“Our sweet spot is when you have maybe a couple hundred customers in your database,” notes Netsch. “That’s a perfect time to now focus less on the paid acquisition portion of your business and more on how to retain and engage those existing customers, [so they’ll] shop more and have a better experience,” he says.
During the past 12 months, over $1.2 billion in merchant sales have flowed through Tapcart’s platform. And in 2020, Tapcart’s recurring revenue increased by 3x, as mobile apps grew even faster during the pandemic, which had increased consumer mobile screen time by 20% year-over-year from 2019. Mobile commerce spending also grew 55% year-over-year, topping $53 billion globally during the holiday shopping season, the company says. Tapcart’s own merchants saw mobile app orders at a rate of more than once-per-second during this time, and it believes these trends will continue even as the pandemic comes to an end.
Today, Tapcart generates revenue by charging a flat SaaS (software-as-a-service) fee, which differentiates it from a number of competitors who charge a percent of the merchant’s total sales.
Image Credits: Tapcart
With the additional funding, Tapcart plans to focus on its goal of becoming a vertically integrated mobile commerce suite of tools, which more recently includes support for iOS App Clips. It will also soon release an upgraded version of its insights analytics platform and will offer scripts that merchants can install on their mobile websites to compare what works on the site versus what works in the app.
Later this year, Tapcart plans to launch a full marketing automation product that will allow brands to automate and personalize their notifications even further. And it plans to invest in market expansions to make its product better designed for mobile, global commerce.
The funding will allow Santa Monica-based Tapcart to hire another 200 people over the next 24 months, up from the 70 it has currently. These will include new additions across time zones and even in markets like Australia and Europe as it moves toward global expansion.
Shopify’s investment will open up a number of new opportunities as well, including on product, engineering, business strategy and partnerships. It will also help to get Tapcart in front of Shopify’s 1.7 million global merchants.
“There’s still quite a lot of merchants that need better mobile experiences, but have yet to really double down on the mobile effort and get something like a native app,” notes Netsch. “There’s a lot of different ways and methods that merchants are experimenting with mobile growth, and we’re trying to offer all of the best parts of that in a single platform. So there’s tons of expansion for Tapcart to do just that with the existing target addressable market,” he says.
“We believe brands must be where their customers are, and today that means being on their phones,” said Satish Kanwar, VP of product acceleration at Shopify, in a statement. “Tapcart helps merchants create mobile-first shopping experiences that customers love, reinforcing Shopify’s mission to make commerce better for everyone. We look forward to seeing Tapcart expand its success on Shopify with the more than 1.7 million merchants on our platform today.”
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Apple’s App Store facilitated $643 billion in commerce, up 24% from last year
In its antitrust trial with Epic Games, which has just adjourned, Apple argued it doesn’t evaluate its App Store profit and loss as a standalone business. But today, the company put out new figures that indicate it does have a good understanding of the money that flows through its app marketplace, at the very least. The company has now released an updated version of a study performed by the economists at the Analysis Group, which claims the App Store ecosystem facilitated $643 billion in billings and sales in 2020, up 24% from the $519 billion seen the year prior. The new report focuses on the pandemic impacts to apps and the small business developers the App Store serves, among other things.
It also noted that about 90% of the billings and sales facilitated by the App Store actually took place outside its walls, meaning Apple took no commission on those purchases. This is up from the 85% figure reported last year, and is a figure Apple has been using in antitrust battles to paint a picture of an App Store that facilitates a lot commerce where it doesn’t take a commission.
The study then broke down how the different categories of App Store billings and sales were distributed.
Apple takes a commission on the sales of digital goods and services, which were $86 billion in 2020, or 13% of the total. But another $511 billion came from the sale of physical goods and services through apps — think online shopping, food delivery, ride hailing, etc. — or 80% of the total. These aren’t commissioned. And $46 billion came from in-app advertising, or 7% of the total.
The larger point being made with some of these figures is that, while the dollar amount flowing through apps being commissioned is large, it’s much smaller than most of the business being conducted on the App Store.
The report also noted how much of that business originates from China, which accounted for 47% of total global billings and sales ($300 billion) versus the U.S.’s 27% ($175+ billion).
Image Credits: TechCrunch
The study additionally dove into how some App Store categories had been heavily impacted by the pandemic — particularly those apps that helped businesses and schools move online, those that offered ways to shop from your phone, or helped consumers stay entertained and healthy, among other things.
This led to a more than 40% increase in billings and sales from apps offering digital goods and services, while sales in the travel and ride-hailing sectors decreased by 30%. While the latter may gradually return to pre-pandemic levels, some of the acceleration driven by the pandemic in other categories — like online shopping and grocery delivery — could be here to stay.
To break it down further, general retail grew to $383 billion in 2020, up from $268 billion last year. Food delivery and pickup grew from $31 billion in 2019 to $36 billion in 2021. Grocery shopping jumped from $14 billion to $22 billion. But travel fell from $57 billion in 2019 to $38 billion in 2020, and ride hailing dropped from $40 billion to $26 billion. (None of these categories are commissioned.)
The study then continued with a deep dive into how the App Store aided small businesses.
Highlighting how smaller businesses benefit from a tech giant’s ecosystem is a tactic others have taken to, as well, in order to shore up support for their own operations, which have similarly been accused of being monopolies in recent months.
Amazon, for example, raves about the small businesses benefitting from its marketplace and its sales event Prime Day, even as it stands accused of leveraging nonpublic data to compete with those same small business sellers. Facebook, meanwhile, pushed the small business impact angle when Apple’s new privacy protections in iOS 14 allowed customers to opt out of being tracked — and therefore out of Facebook’s personalized ads empire.
In Apple’s case, it’s pointing to the fact that the number of small developers worldwide has grown by 40% since 2015. This group now makes up more than 90% of App Store developers. The study defines this group of “small” developers as those with fewer than 1 million downloads and less than $1 million in earnings across all their apps. It also excludes any developers that never saw more than 1,000 downloads in a year between 2015 and 2020, to ensure the data focuses on businesses, not hobbyists. (This is a slightly different definition than Apple uses for its Small Business Program, we should note.)
Among this group, more than 1 in 5 saw at least an increase in downloads of at least 25% annually since their first full year on the App Store. And 1 in 4 who sold digital goods and services saw an earnings increase of at least 25% annually.
The study also connected being on the App Store with growing a business’s revenue, noting that only 23% of large developers (those with more than $1 million in earnings in 2020) had already earned more than $1 million back in 2015. Indeed, 42% were active on the App Store in 2015 but hadn’t crossed the $1 million threshold, and another 35% were not even on the App Store — an indication their success has been far more recent.
The research additionally identified more than 75 businesses in the U.S. and Europe, where iOS was essential to their business, that went public or were acquired since 2011. Their valuation totaled nearly $500 billion.
Finally, the study examined how apps transact outside their home market, as around 40% of all downloads of apps from small developers came from outside their home countries and nearly 80% were operating in multiple storefronts.
Image Credits: Apple WWDC 2021 imagery
While the antitrust scrutiny may have pushed Apple into commissioning this type of App Store research last year, it’s interesting to see the company is now updating the data on an annual basis to give the industry a deeper view into the App Store compared with the general developer revenue figure it used to trot out at various events and occasions.
Like last year’s study, the updated research has been released in the days leading up to Apple’s Worldwide Developer Conference. It’s a time of the year when Apple aims to renew its bond with the developer community as it rolls out new software development kits (SDKs), application programming interfaces (API)s, software and other tools — enhancements it wants to remind developers are made possible, in part, because of its App Store fees.
Today, Apple notes it has more than 250,000 APIs included in 40 SDKs. At WWDC 2021, it will host hundreds of virtual sessions, 1-on-1 developer labs and highlight App Store favorites.
“Developers on the App Store prove every day that there is no more innovative, resilient or dynamic marketplace on earth than the app economy,” said Apple CEO Tim Cook, in a statement about the research. “The apps we’ve relied on through the pandemic have been life-changing in so many ways — from groceries delivered to our homes, to teaching tools for parents and educators, to an imaginative and ever-expanding universe of games and entertainment. The result isn’t just incredible apps for users: it’s jobs, it’s opportunity, and it’s untold innovation that will power global economies for many years to come,” he added.
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GasBuddy tops the App Store for the first time due to Colonial Pipeline attack
The GasBuddy mobile app, which typically helps consumers find the cheapest gas nearby, has now become the No. 1 app on the U.S. App Store for the first time ever, due to the fuel shortages in the U.S. that followed the cyberattack on the Colonial Pipeline. Americans, fearful that gas would become unavailable, began panic-buying in ways that haven’t been seen since the great toilet paper outage of 2020. As a result, thousands of gas stations ran out of fuel entirely. This dramatic situation has greatly benefitted the GasBuddy app, which includes a crowdsourced feature that helps users locate which local stations still have gas for sale.
As of Wednesday afternoon, GasBuddy says the effects of the Colonial Pipeline shutdown are being felt across 11 U.S. states, largely in the Southeast and Washington, D.C. North Carolina had the highest number of gas stations with fuel outages, with 65% of stations reportedly out of gas as of 2:48 p.m. ET on Wednesday. Kentucky has the lowest at only 2%. Because this data is self-reported by GasBuddy users, it may not represent the most current information, we should note.
Image Credits: GasBuddy app screenshot
During the week, consumers have been turning to GasBuddy to help them find where they can fill up. Yesterday, the app hit No. 1 in the “Travel” category on the App Store, while it steadily climbed its way up the App Store’s Top Overall charts.
This afternoon, GasBuddy became both the No.1 app in the non-games category as well as the highest-ranked app Overall across the U.S. App Store.
According to data from app store intelligence firm Apptopia, GasBuddy yesterday saw 15,203 new downloads — a 59% increase from its average daily downloads, which were 9,560 for the past 30 days. However, third-party data isn’t always accurate for sudden shots in rank — it catches up a few days after the fact.
Image Credits: Apptopia
Reached for comment, GasBuddy says its downloads were actually far higher than the third-party estimates. Across all platforms, including both iOS and Google Play, it saw 20x more downloads yesterday compared with an average day in 2021. The company told TechCrunch it counted 313,001 total downloads yesterday, compared with average daily downloads for the previous 30 days of 15,339.
Broken down by platform, GasBuddy says it saw 104,735 downloads on Android and 208,266 downloads on iOS on Tuesday, May 11, 2021.
Apptopia also noted that GasBuddy hadn’t been the No. 1 app on the App Store in all the time it’s been recording app store rankings, which goes back to January 1, 2015. However, it noted the app itself launched back in 2010, making it possible (though not likely) that the app had reached No. 1 at some point.
GasBuddy confirmed that’s not the case. Today is the first time it has ever topped the App Store, though it got close once before when it reached No. 2 behind a walkie-talkie app during Hurricane Irma in September 2017.
Image Credits: App Store screenshot on Wed., May 12, 2021
Consumers can continue to track statewide fuel outages here on GasBuddy’s website as well as where highest prices are being found. In the app, they can report whether gas stations have gas or diesel, as well as current prices.
The Colonial Pipeline, which runs 5,500 miles from the Gulf to the Northeast, shut down on Friday due to a ransomware attack from a criminal hacking network known as DarkSide, which is suspected to be based in Russia or Eastern Europe. The pipeline delivers about 45% of fuel used by the Eastern Seaboard. Reports of the shutdown sent Americans to stock up on gas, worsening the situation further. The U.S. Energy Secretary Jennifer Granholm said the Colonial Pipeline intends to restore operations by the end of the week.
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Apptopia raises $20M to expand its competitive intelligence business beyond mobile
Boston-based Apptopia, a company providing competitive intelligence in the mobile app ecosystem, has closed on $20 million in Series C funding aimed at fueling its expansion beyond the world of mobile apps. The new financing was led by ABS Capital Partners, and follows three consecutive years of 50% year-over-year growth for Apptopia’s business, which has been profitable since the beginning of last year, the company says.
Existing investors, including Blossom Street Ventures, also participated in the round. ABS Capital’s Mike Avon, a co-founder of Millennial Media, and Paul Mariani, are joining Apptopia’s board with this round.
The funding follows what Apptopia says has been increased demand from brands to better understand the digital aspects of their businesses.
Today, Apptopia’s customers include hundreds of corporations and financial institutions, including Google, Visa, Coca-Cola, Target, Zoom, NBC, Unity Technologies, Microsoft, Adobe, Glu, Andreessen Horowitz and Facebook.
In the past, Apptopia’s customers were examining digital engagement and interactions from a macro level, but now they’re looking to dive deeper into specific details, requiring more data. For example, a brand may have previously wanted to know how well a competitor’s promotion fared in terms of new users or app sessions. But now they want to know the answers to specific questions — like how many unique users participated, whether those users were existing customers, whether they returned after the promotion ended, and so on.
The majority of Apptopia’s business is now focused on delivering these sorts of answers to enterprise customers who subscribe to Apptopia’s data — and possibly, to the data from its competitors like Sensor Tower and App Annie, with the goal of blending data sets together for a more accurate understanding of the competitive landscape.
Apptopia’s own data, historically, was not always seen as being the most accurate, admits Apptopia CEO Jonathan Kay. But it has improved over the years.
Kay, previously Apptopia COO, is now taking over the top role from co-founder Eliran Sapir, who’s transitioning to chairman of the board as the company enters its next phase of growth.
Apptopia’s rivals like Sensor Tower and App Annie use mobile panels to gather app data, among other methods, Kay explains. These panels involve consumer-facing apps like VPN clients and ad blockers, which users would download not necessarily understanding that they were agreeing to having their app usage data collected. This led to some controversy as the app data industry’s open secret was exposed to consumers, and the companies tweaked their disclosures, as a result.
But the practice continues and has not impacted the companies’ growth. Sensor Tower, for example, raised $45 million last year, as demand for app data continued to grow. And all involved businesses are expanding with new products and services for their data-hungry customer bases.
Image Credits: Apptopia
Apptopia, meanwhile, decided not to grow its business on the back of mobile panels. (Though in its earlier days it did test and then scrap such a plan.)
It gains access to data from its app developer customers — and this data is already aggregated and anonymized from the developers’ Apple and Google Analytics accounts.
Initially, this method put Apptopia at a disadvantage. Rivals had more accurate data from about 2016 through 2018 because of their use of mobile panels, Kay says. But Apptopia made a strategic decision to not take this sort of risk — that is, build a business that Apple or Google could shut off at any time.
“Instead, what we did is we spent years investing into data science and algorithms,” notes Kay. “We figured out how to extract an equal or greater signal from the same data set that [competitors] had access to.”
Using what Kay describes as “huge, huge amounts of historical data,” Apptopia over time learned what sort of signals went into an app’s app store ranking. A lot of people still think an app’s rank is largely determined by downloads, but there are now a variety of signals that inform rank, Kay points out.
“Really, a rank is just an accumulation of analytical data points that Apple and Google give points for,” he explains. This includes things like number of sessions, how many users, how much time is spent in an app, and more. “Because we didn’t have these panels, we had to spend years figuring out how to do reverse engineering better than our competitors. And, eventually, we figured out how to get the same signal that they could get from the panel from rank. That’s what allowed us to have such a fast-growing, successful business over the past several years.”
As Apptopia was already profitable, it didn’t need to fundraise. But the company wanted to accelerate its expansion into new areas, including its planned expansion outside of mobile apps.
Today, consumers use “apps” on their computers, on their smartwatches and on their TVs, in addition to their phones and tablets. And businesses no longer want to know just what’s happening on mobile — they want the full picture of “app” usage.
“We figured out a way to do that that doesn’t rely on any of what our competitors have done in the past,” says Kay. “So, we will not be using any apps to spy on people,” he states.*
[*Sensor Tower, in response to Kay’s statements, said the following: “We have never collected any personally identifying information (PII) on individual users, nor have we received any of the anonymous usage and engagement metrics our panel provides without user consent.”]
Apptopia was not prepared to offer further details around its future product plans at this time. But Kay said they would not rule out partnerships or being acquisitive to accomplish its goals going forward.
The company also sees a broader future in making its app data more accessible. Last year, for instance, it partnered with Bloomberg to bring mobile data to investors via the Bloomberg App Portal on the Bloomberg Terminal. And it now works with Amazon’s AWS Data Exchange and Snowflake to make access to app data available in other channels, as well. Future partnerships of a similar nature could come into play as another means of differentiating Apptopia’s data from its rivals.
The company declined to offer its current revenue run rate or valuation, but notes that it tripled its valuation from its last fundraise at the end of 2019.
In addition to product expansions, the company plans to leverage the funds to grow its team of 55 by another 25 in 2021, including in engineering and analysts. And it will grow its management team, adding a CFO, CPO and CMO this year.
To date, Apptopia has raised $30 million in outside capital.
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Following Apple’s launch of privacy labels, Google to add a ‘safety’ section in Google Play
Months after Apple’s App Store introduced privacy labels for apps, Google announced its own mobile app marketplace, Google Play, will follow suit. The company today pre-announced its plans to introduce a new “safety” section in Google Play, rolling out next year, which will require app developers to share what sort of data their apps collect, how it’s stored and how it’s used.
For example, developers will need to share what sort of personal information their apps collect, like users’ names or emails, and whether it collects information from the phone, like the user’s precise location, their media files or contacts. Apps will also need to explain how the app uses that information — for example, for enhancing the app’s functionality or for personalization purposes.
Developers who already adhere to specific security and privacy practices will additionally be able to highlight that in their app listing. On this front, Google says it will add new elements that detail whether the app uses security practices like data encryption; if the app follows Google’s Families policy, related to child safety; if the app’s safety section has been verified by an independent third party; whether the app needs data to function or allows users to choose whether or not to share data; and whether the developer agrees to delete user data when a user uninstalls the app in question.
Apps will also be required to provide their privacy policies.
While clearly inspired by Apple’s privacy labels, there are several key differences. Apple’s labels focus on what data is being collected for tracking purposes and what’s linked to the end user. Google’s additions seem to be more about whether or not you can trust the data being collected is being handled responsibility, by allowing the developer to showcase if they follow best practices around data security, for instance. It also gives the developer a way to make a case for why it’s collecting data right on the listing page itself. (Apple’s “ask to track” pop-ups on iOS now force developers to beg inside their apps for access user data.)
Another interesting addition is that Google will allow the app data labels to be independently verified. Assuming these verifications are handled by trusted names, they could help to convey to users that the disclosures aren’t lies. One early criticism of Apple’s privacy labels was that many were providing inaccurate information — and were getting away with it, too.
Google says the new features will not roll out until Q2 2022, but it wanted to announce now in order to give developers plenty of time to prepare.
Image Credits: Google
There is, of course, a lot of irony to be found in an app privacy announcement from Google.
The company was one of the longest holdouts on issuing privacy labels for its own iOS apps, as it scrambled to review (and re-review, we understand) the labels’ content and disclosures. After initially claiming its labels would roll out “soon,” many of Google’s top apps then entered a lengthy period where they received no updates at all, as they were no longer compliant with App Store policies.
It took Google months after the deadline had passed to provide labels for its top apps. And when it did, it was mocked by critics — like privacy-focused search engine DuckDuckGo — for how much data apps like Chrome and the Google app collect.
Google’s plan to add a safety section of its own to Google Play gives it a chance to shift the narrative a bit.
It’s not a privacy push, necessarily. They’re not even called privacy labels! Instead, the changes seem designed to allow app developers to better explain if you can trust their app with your data, rather than setting the expectation that the app should not be collecting data in the first place.
How well this will resonate with consumers remains to be seen. Apple has made a solid case that it’s a company that cares about user privacy, and is adding features that put users in control of their data. It’s a hard argument to fight back against — especially in an era that’s seen too many data breaches to count, careless handling of private data by tech giants, widespread government spying and a creepy adtech industry that grew to feel entitled to user data collection without disclosure.
Google says when the changes roll out, non-compliant apps will be required to fix their violations or become subject to policy enforcement. It hasn’t yet detailed how that process will be handled, or whether it will pause app updates for apps in violation.
The company noted its own apps would be required to share this same information and a privacy policy, too.
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Amazon’s over-the-top business, including IMDb TV and Twitch, tops 120M monthly viewers
Amazon’s free, ad-supported streaming service IMDb TV is getting its own mobile app. The company announced the news today at its first-ever NewFronts presentation to advertisers, where it also shared that its over-the-top streaming businesses combined — meaning, IMDb TV, Twitch, live sports like Thursday Night Football, Amazon’s News app and others — have now grown to more than 120 million monthly viewers.
This over-the-top business, or Amazon OTT as it’s called, includes anywhere ads show up alongside content on the IMDb TV app, Twitch’s game streaming site, during live sports Amazon streams through Prime Video, its 3P network and broadcaster apps and its Amazon’s News app for Fire TV.
IMDb TV viewership, in particular, jumped 138% year-over-year, Amazon noted.
The ad-supported service, which likely benefited from the same pandemic bump that drove streaming service viewership higher across the board last year, is something of a rival to other free, ad-supported streamers, like Fox’s Tubi, ViacomCBS’s Pluto TV or Roku’s The Roku Channel. However, more like Roku’s hub, Amazon leverages IMDb TV to help it sell its own media devices by promising users easy access to free, streaming content.
Today, that’s resulted in the IMDb TV app seeing the majority of its usage on Fire TV. But over the past several months, the app has become more broadly available, with launches on Roku, Chromecast with Google TV, PlayStation 4 consoles, Xbox One and Series X devices, LG Smart TVs, Nvidia, Sony Android TV and TiVo Android TV devices, Amazon says.
Now it will get its own dedicated mobile app, as well, instead of only a small section inside the IMDb app where the service’s content can be found today on smartphones. The new standalone app will arrive this summer on both iOS and Android, says Amazon.
Amazon also told advertisers about IMDb TV’s current user base, noting that 62% were in between ages 18 and 49. And they spend 5.5 hours per week on the app, on average.
The forthcoming mobile launch was one of several announcements Amazon made today at its Newfronts presentation today.
The company also detailed its upcoming IMDb TV slate, including unscripted series “Luke Bryan: My Dirt Road Diary,” “Bug Out” and “Untitled Jeff Lewis Project” as well as scripted releases “Blessed and Highly Favored,” “Greek Candy,” “Primo,” “The Fed,” and “The Pradeeps of Pittsburgh, PA.” Music duo Tegan and Sara’s memoir “High School” will be adapted as an original series for IMDb TV. IMDb TV also announced a new crime drama, “Leverage: Redemption,” and police drama, “On Call.”
IMDb TV parent company Amazon, meanwhile, expanded its deal with the NFL for Thursday Night Football, which now runs 11 seasons, starting with the 2022 season instead of the following year.
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US iPhone users spent an average of $138 on apps in 2020, will grow to $180 in 2021
U.S. consumers spent an average of $138 on iPhone apps last year, an increase of 38% year over year, largely driven by the pandemic impacts, according to new data from app store intelligence firm Sensor Tower. Throughout 2020, consumers turned to iPhone apps for work, school, entertainment, shopping and more, driving per-user spending to a new record and the greatest annual growth since 2016, when it had then popped by 42% year over year.
Sensor Tower tells TechCrunch it expects the trend of increased consumer spend to continue in 2021, when it projects consumer spend per active iPhone in the U.S. to reach an average of $180. This will again be tied, at least in part, to the lift caused by the pandemic — and, particularly, the lift in pandemic-fueled spending on mobile games.
Image Credits: Sensor Tower
Last year’s increased spending on iPhone apps in the U.S. mirrored global trends, which saw consumers spend a record $111 billion on both iOS and Android apps, per Sensor Tower, and $143 billion, per App Annie, whose analysis had also included some third-party Android app stores in China.
In terms of where U.S. iPhone consumer spending was focused in 2020, the largest category was, of course, gaming.
In the U.S., per-device spending on mobile games grew 43% year over year from $53.80 in 2019 to $76.80 in 2020. That’s more than 20 points higher than the 22% growth seen between 2018 and 2019, when in-game spending grew from $44 to $53.80.
U.S. users spent the most money on puzzle games, like Candy Crush Saga and Gardenscapes, which may have helped to take people’s minds off the pandemic and its related stresses. That category averaged $15.50 per active iPhone, followed by casino games, which averaged $13.10, and was driven by physical casinos closures. Strategy games also saw a surge in spending in 2020, growing to an average of $12.30 per iPhone user spending.
Image Credits: Sensor Tower
Another big category for in-app spending was Entertainment. With theaters and concerts shut down, consumers turned to streaming apps in larger numbers. Disney+ launched in late 2019, just months ahead of the pandemic lockdowns and HBO Max soon followed in May 2020.
Average per-device spending in this category was second-highest, at $10.20, up 26% from the $8.10 spent in 2019. For comparison, per-device spending had only grown by 1% between 2018 and 2019.
Other categories in the top five by per-device spending included Photo & Video (up 56% to $9.80), Social Networking (up 41% to $7.90) and Lifestyle (up 14% to $6.50).
These increases were tied to apps like TikTok, YouTube, and Twitch. Twitch saw 680% year-over-year revenue growth in 2020 on U.S. iPhones, specifically. TikTok, meanwhile, saw 140% growth. In the Lifestyle category, dating apps were driving growth as consumers looked to connect with others virtually during lockdowns, while bars and clubs were closed.
Overall, what made 2020 unique was not necessarily what apps people where using, but how often they were being used and how much was being spent.
App Annie had earlier pointed out that the pandemic accelerated mobile adoption by two to three years’ time. And Sensor Tower today tells us that the industry didn’t see the same sort of “seasonality” around spending in certain types of apps, and particularly games, last year — even though, pre-pandemic, there are typically slower parts of the year for spending. That was not the case in 2020, when any time was a good time to spend on apps.
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