A Thriving And Competitive App Ecosystem
Ahead of today’s Senate Judiciary Antitrust Subcommittee hearing, it is important to keep these facts in mind:
— The mobile ecosystem is growing and competitive.
— The app store model benefits small developers; breaking the model would harm them.
— The openness of Android promotes choice for consumers and developers.
— App developers are succeeding.
The mobile ecosystem is growing and competitive.
Today’s app ecosystem is thriving, thanks to numerous app stores that are competing for more active users and downloads.
— Apple’s App Store reportedly earned $72.3 billion in 2020.
— Microsoft Windows App Store has over 670,000 apps and games, available to every Windows user.
— Huawei AppGallery now has 530 million monthly active users, reaching 384 billion downloads in 2020.
Between 2016 and 2020, over $320 billion in venture capital investments poured into mobile technology companies, more than doubling the previous 5 years, highlights Crunchbase‘s data researcher Gené Teare. “Mobile has driven consumer and enterprise technology innovation with geo-location, cloud services and Artificial Intelligence, creating leading companies in transportation, financial services, health care and entertainment.”
The mobile ecosystem is “highly competitive,” as Developers Alliance noted in a letter to the House Judiciary Antitrust Subcommittee. “The developer ecosystem is highly competitive, with millions of developers competing for market success alongside dozens of platforms competing with each other. We ask you to bear in mind however that a handful of companies claiming competitive harm do not represent the developer community’s experience overall.”
The app store model benefits small developers; breaking the model would harm them.
The app store model benefits small developers, according to the Developers Alliance, which “represents over 70,000 developers from 50 states and many countries.”
— “Small developers get a lot from the app stores that link them to the market. Beyond the tools, training, and marketing services, they get to borrow a global brand that users know and maybe even trust.”
— “The ecosystem around app stores frees-up developers to focus their work on harnessing software to build better lives, unburdening them from secondary activities such as setting up systems to collect and remit sales taxes, establishing fraud-proof payment systems, scanning their network for malware, protecting customer data, and managing engagement with users.”
— “The stores take a percentage of revenue to pay for this once apps become successful, so the risk is shared and startups get help early-on (when they need it most).”
— “App stores are the gateway to a global market where even the smallest developer house can grow to reach billions – no matter where your desk is.”
Breaking the app store business model would harm small developers.
— “Destroying the current business models of our ecosystem partners will not make their services free; it will make them disappear. Forced sharing of the digital economy’s assets may bring about a socialist utopia, but it might equally lead to a digital dark age and the death of innovation. In either case, the strong will survive, and the little guys will get crushed,” reminds the Developers Alliance.
— “These stores are the free-market alternative to the walled gardens that came before, where a small number of mediocre apps were built in-house. Removing the business case for app stores may benefit the companies that have outgrown them, but the cost is the destruction of the on-ramp millions of emerging apps are counting on,” highlights Bruce Gustafson, President and CEO of The Developers Alliance.
The openness of Android promotes choice for consumers and developers.
Android has always allowed third-party app stores, providing choices for app developers and consumers. For example, consumers can easily download Fortnite from a third-party app store. And a range of app stores come preinstalled—in fact, “most phones running Android already come with at least two app stores installed.”
Android powers thousands of smartphone models across a wide range of prices, making digital content more accessible, highlights the Joint Center for Political and Economic Studies.
— “Android is one of the few affordable phone options for cost-conscious consumers. Whereas many Apple models cost around $400, individuals can easily find Android smartphones for just $100. This has been extremely helpful for people with fewer resources, including many in communities of color.”
— “Our research shows how important low-cost, off-the-shelf apps are for Black and Latino businesses to get ahead. The data clearly demonstrate that these apps help entrepreneurs become more efficient while providing more services to customers.”
App developers are succeeding.
App developers are seeing record revenue and user growth.
— In 2020, 25% more app developers earned $2 million+ than in 2019.
— Match Group‘s revenue last quarter (Q4 2020) grew 19%, with an operating margin of 33%. Its 2020 revenue was up 17% to $2.4 billion.
— Epic Games announced last week that it has raised another $1 billion, with its valuation up 66% from last year to nearly $29 billion.
— Riot Games wanted to launch a mobile version of its PC-based League of Legends video game. Using Google Play’s pre-registration and testing technology to gather users. feedback, Riot Games reached 40 million pre-registrations globally before it even launched.