Just like Amazon, Google and Facebook, Apple is facing antitrust scrutiny in the United States and Europe. Amid the antitrust investigations, Apple has tweaked the App Store search algorithms to give third-party apps a fair playing ground, and hopefully ease the antitrust concerns in the process. Apple’s own apps will no longer dominate the top positions in App Store search results.
The Cupertino company has been accused of using its dominance to give its own apps an unfair advantage over those of rivals. The App Store is the only place where iPhone and iPad users can download apps. Visibility in the App Store could make or break a third-party developer. Even popular apps such as Netflix, Spotify, and Stitcher would often appear dozens of spots deep in the search results.
The New York Times studied the App Store search results for the last six years for hundreds of common search terms like “podcasts” and “music.” The publication found that Apple’s own apps occupied the top spots for more than 700 search terms since 2016. Searching for “music” would show Clips and iTunes Remote above popular music apps like Spotify and Pandora.
There's a gold rush coming as electric vehicle manufacturers fight for market share, proclaimed David Einhorn at this year's 2021 Sohn Investment Conference. Check out our coverage of the 2021 Sohn Investment Conference here. Q1 2021 hedge fund letters, conferences and more SORRY! This content is exclusively for paying members. SIGN UP HERE If you Read More
A separate review of search results conducted by the Wall Street Journal also concluded in July that the App Store search algorithms were giving Apple’s first-party apps a clear edge over third-party apps.
The App Store search algorithms were updated in July
The iPhone maker updated the App Store search algorithms in July this year, just four months after music streaming service Spotify filed a formal complaint with European antitrust regulators about Apple’s behavior.
Following the update, the search results look more balanced and fair. Many of the first-party apps such as Apple Wallet have dropped in rank. Apple executives told the New York Times that the App Store was working just the way it was supposed to. They said the algorithms have been “improved” rather than “corrected.”
Apple executives avoided admitting any wrongdoing, especially at a time the company faces antitrust scrutiny. Apple’s VP of Worldwide Marketing Phil Schiller told the Times, “There’s nothing about the way we run search in the App Store that’s designed or intended to drive Apple’s downloads of our own apps.”
Schiller added that the App Store presents results “based on what we think the user wants.” The company said part of the reason its own apps ranked at the top is that the search algorithms give preference to apps already installed on the device. Apple’s own apps come pre-installed on iPhones and iPads. It means the first-party apps appeared higher in the ranking.
Another reason was that a feature in the App Store grouped apps by the same developer in results, which resulted in multiple Apple apps occupying the top spots. Also, most of the first-party apps have basic names like Music and Podcasts, so they get a preference if you search for relevant terms. The App Store search algorithms rank apps based on their relevance, ratings, user clicks, popularity based on downloads, and a number of other factors.
The App Store has been a lucrative source of revenue for third-party app developers. According to Apple, developers have earned more than $120 billion in digital sale through the App Store. But the platform has been at the center of antitrust scrutiny because it’s the only place where iPhone and iPad users can go to download apps. Apple takes up to 30% cut of revenues generated through in-app purchases.
Meanwhile, Apple is preparing to launch three new iPhones – rumored to be called iPhone 11, iPhone 11 Pro, and iPhone 11R – on September 10. Here’s how you can watch the event live. The iPhone 11 devices would feature a triple camera setup on the back. The iPhone 11 would have a 5.8-inch OLED display while the Pro model would get a 6.5-inch OLED panel. The affordable iPhone 11R is said to sport a 6.1-inch display.
Ahead of the launch event, reputed Apple analyst Ming-Chi Kuo has told investors that the new iPhones would lack support for Apple Pencil. Past reports had claimed that Apple would add the Apple Pencil support for the Pro version. The iPhone 11 series would also launch without the bidirectional wireless charging support, according to Kuo. Without any major upgrades, Kuo expects the new iPhone sales to be weak going into the holiday shopping season.