Going into its third year, the App Store had become successful beyond anyone - probably even Apple's - wildest dreams. It was enabling and serving more apps from more developers to more customers than any single software source in history. However, while iPhone and iPad apps were the most popular in mobile history, they were far from the most capable. That's why, in April of 2010 at the iPhone OS 4 - renamed iOS 4 shortly thereafter - preview event, Apple started amping up apps. Folders increased the raw number of apps that could be loaded onto any device at one time, Calendar access let developers hook into the event system, and iAd gave them an additional, Apple-owned option for monetizing free apps. The biggest new feature, however, for users and developers alike, was multitasking. Kind of.
By January, 2011, 10 billion apps had been downloaded. By March, 65,000 tablet-optimized apps were available at the iPad 2 launch, and $2 billion had been paid out to developers. By July, the App Store's reach hit 123 countries worldwide.
The big background bargain
When iOS 4 launched there were roughly 200,000 apps in the App Store. The Home screen had been increased to 11 pages, capable of displaying 180 apps on the iPhone, but some people shot right past that and had to resort to Spotlight to search for apps that had fallen off the screen. That was... less than ideal. There was also no way to organize even those apps that made it onto a Home screen. With the store growing and growing, customers needed a way to fit more apps onto their iPhones and iPads.
Enter Folders. One level deep, they allowed 12 apps on iPhone and iPod touch, and 16 apps on iPad to fit comfortably into the space of a single Home screen icon. That meant 2160 apps could be kept visible on the iPhone at once, but practically speaking, it removed all limitations. Everyone and anyone could just download away.
That addressed the "more apps" problem. To address the "more apps running" problem, Apple came up with a decidedly Apple solution. Rather then simply enabling full on background multitasking, the way desktop operating systems - or competing mobile platforms like Google's Android do - Apple looked at what functionality users wanted, and created specific APIs to enable it. Or at least some of it.
- Background audio allowed music to keep streaming for apps like Pandora.
- Background Voice over IP allowed incoming calls, and persistent calls, for apps like Skype.
- Background location allowed turn-by-turn for apps like TomTom.
- Push notifications allowed server-side alerts (introduced previously).
- Local notifications allowed 3rd party alarms, times, and reminded for apps like Todo.
- Task completion allowed things like photos to keep uploading in apps like Facebook.
- Fast app switching worked like cmd + tab (alt + tab) to more quickly jump between recent apps.
It was far from complete, however. For example, task completion meant internet connections would time out and get shut down after a certain period. That prevented apps like persistent SSH clients or RSS that updated in the background. Also, even though notifications could still come in for Twitter or IM apps, they couldn't actually download content until the app launched, making them functionally inferior to true background apps like Mail and SMS/Messages.
Marco Arment highlighted the root of the problem on Marco.org:
I've already received multiple emails from people who are excited for iOS 4's multitasking because they can't wait for this to finally stop being an issue, because they think Instapaper will be able to download articles periodically in the background.
It's painful to respond, crushing their hopes, to tell them that the iOS multitasking system doesn't allow me to do that.
By naming these features "multitasking", Apple has set customers' expectations to include what apps can do in a traditional computer multitasking environment.
It's going to mislead people into expecting such behavior from apps, but we can't actually deliver most of it.
Still, background API were important for iOS, as Slacker radio told us at the time:
Right now 4 out of 5 of our mobile apps are on platforms that support multitasking and our listeners have let us know they enjoy being able to utilize their smartphone's functions while listening to their favorite music. We are elated that soon Slacker listeners using their iPhone will have this same capability.
Background support required developers to update their apps, and while it took some longer than others, it did result in many more, and more functional apps to hit the app store.
Serving and getting served
Downward price pressure continued to be a problem for developers. Many had tried "lite" versions of their apps, giving away some level of functionality for free in hopes of up-selling customers on the full, paid version. Others had, with hesitation or gluttony, jumped on freemium model. It was in Apple's best interest that apps remain as cheap as possible, because that increased the value of the iPhones and iPads they were selling. But developers still needed to make enough money to keep themselves in business, and keep making apps.
So, after letting Google scoop AdMob out from under them, Apple purchased Quattro Wireless and turned it into iAd. Mobile advertising was another way for Apple to make money, and help developers make money, from free apps.
Produced in HTML 5, Apple took control of initial campaigns but later released an authoring tool, iAd Producer, as well. There was some initial concern that Apple might prohibit other, third party networks following the launch of iAd, or restrict their ability to collect data to such an extent that they may as well be prohibited. Ultimately, and much to everyone's relief, Apple chose to compete with iAd as a better experience for users, and a premium brand for advertisers. (Even going so far as to release an iAd Gallery app in the U.S. App Store.)
Initial ad buys started at $100,000,000 but dropped it to $500,000 in February of 2011, and dropped it again to $100,000 in February of 2012. At the same time, Apple also increased revenue sharing for developers from the initial 60% to 70%, bringing it in line with the agency model.
Despite concerns over fill rates and revenue over the years, not all iAd experiences have been negative. Developer David Smith has noted an upswing.
After a very bumpy start it has stabilized into a very solid platform that serves its intended goal of providing a native mechanism for making money in free apps. In fact, the performance of iAd has grown so solid over the past 6 months or so that I recently dropped all other advertising platforms from Audiobooks (previously I've integrated with MobClix, Admob, and Adsense).
Still, it's rare to here iAd mentioned these days, even by Apple, and that's likely the most telling statistic involving the relative success or failure - or priority within Apple - of iAd.
Game Center, however, is a different story. Introduced alongside the rest of iOS 4 at WWDC 2010, Game Center didn't ship until later in the fall. More Xbox Lite than Xbox Live, it did offer features such as invitations, matchmaking, achievements, and leader boards.
As with in-app purchases, ego gratification is a powerful motivator, and Game Center hoped to use socialization and gamification in combination with public recognition to do just that.
With iOS 5 it was expanded to include friend recommendations and sorting, game recommendation, and the ability to buy games right inside Game Center. With OS X Mountain Lion, it was expanded to include the Mac as well.
It's not without its fair share of problems, however. Apple has traditionally struggled far more with services and social than they have hardware and software, so it's no surprise a social service would be painful. Most famously, Loren Brichter's Letterpress, which was the first smash-hit game to use Game Center's match-making and asynchronous turn-based play APIs took down the WebObjects-based service. A lot. Apple didn't make a Game Center app, so developers were left to hit any bugs or limitations head-on, without Apple experiencing them first.
More personally annoying, Challenges became like spam, where Game Center friends would continuously send you alerts to games you didn't own, and didn't want to own, and no granular controls were provided to prevent it. Rather than encourage people to try the games, they encouraged people to turn off notifications, or unfriend people.
Making it up on volume
In August of 2010, Apple announced a volume purchasing program. It let educational institutions make bulk purchases at a 50% discount.
The purchasing of discounted applications involved the use of vouchers that could be purchased via the Apple Store for Education in $100, $500, $1,000, $5,000, and $10,000 denominations. Those vouchers could then be distributed to the program facilitators to be redeemed within the App Store.
In early 2011 a non-practicing entity named Lodsys began suing App Store developers over their use of in-app purchases as upgrade options. A legalized form of extortion typically referred to as patent trolling, targeting small developers who can't afford the legal bills necessary to defend themselves was seen as an easy way to start collecting even more money at volume. Craig Hockenberry of the Iconfactory wrote an open letter to Apple, describing the plight of the indie developer, on Furbo.org:
In and of itself, paying half of a percent of our App Store sales to Lodsys isn't going to put us out of business. The fear we have is that this is the first step on a very slippery slope.
It's well known that the top titles in the App Store can earn tens of thousands of dollars per day. There are many predators with dubious patents who see dollar signs when they look at the flock of iOS developers.
What these predators don't realize is that for every developer who's earning millions, there are many thousands who are earning much less. This backbone of the iOS ecosystem is doing well with work we love, but that is very much at risk with increased legal costs. We wonder what happens when these predators discover that the earnings from these apps are much lower than they expect. Will the licensing fees increase as a result? Will our next infringement be 5%, 10%, or more?
In May, Apple filed to intervene in the cases. To date, however, Lodsys is still suing developers who can ill afford it, using patents that may or may not be valid, exhausted, or otherwise inapplicable. Marco Arment:
We're all losers — except patent trolls like [alleged Lodsys parent company] Intellectual Ventures and Nathan Myhrvold, who continue to steal time, money, and willpower from thousands of hard-working people and make the world a worse place, with no repercussions for themselves. Hell, the culinary world thinks Myhrvold's some sort of genius hero.
I don't know how anyone in this racket sleeps at night.
So the App Store's third year ended pretty much like its second, with more apps and more types of apps made possible, yet with issues old and new remaining.
- App Store Year Zero: How unsweetened web apps and unsigned code drove the iPhone to an SDK
- App Store Year One: Shocking successes, game-changers, and unpredictable pain
- App Store Year Two: Pushy new app options, iPads, and the advent of freemium
- App Store Year Four: Subscriptions, iCloud offer fantastic new services... and controversies