The 2024 Apple Autumn Conference is approaching, and the new iPhone 16 series is highly anticipated. However, on the eve of the press conference, the contradiction between Apple, Tencent and Tiktok escalated again.
Previously, it was reported that Apple had increased the pressure on Tencent and ByteDance. Apple hoped to "plug" the payment loopholes in small games and prevent developers from guiding users to external payment systems. Apple had warned Tencent that it would refuse to provide WeChat updates in the future if it did not cancel the ability of developers and users to bypass Apple's ecosystem. In August, Tencent's management stated during the earnings call that there were some misunderstandings about the nature of the current situation, which is that Tencent has not yet commercialized small games on iOS through in app purchases (bypassing payments), and related discussions are currently underway. On September 2nd, there were rumors that WeChat may not support iPhone 16, and once an iPhone is upgraded to iOS 18.2, it will not be able to use WeChat, and users will not be able to use WeChat. First Financial learned from insiders that this rumor is a rumor.
In order to protect the business model of iOS, Apple has also adjusted the review policy of the App Store, requiring all apps to comply with stricter privacy protection regulations. Protecting user privacy is worthy of support, but in actual implementation, it is considered by the industry as an excuse to restrict some functions of Chinese company apps. Given that Apple's original 30% commission for domestic developers was already the highest level in the world, it is not surprising that it has caused widespread dissatisfaction among Chinese developers.
The game between super apps and closed source systems
Industry analysts believe that the "fight" between Apple, Tencent and Tiktok is a game between super apps and closed source systems, and the core is the battle of business models. The ecology and revenue model of small games like WeChat and Tiktok ecology are built based on the small programs of super apps. As the operator of iOS system, Apple extends its hand into the small programs of super apps and forcibly draws fees from manufacturers. Is it really reasonable?
Tencent's management stated in the latest earnings conference that there is a natural tension between the gaming or digital content industry and app stores, rooted in the fact that app stores charge about 30% commission, which the gaming industry sees as a heavy burden. Over time, whether for regulatory or commercial reasons, the trend is that app store commission rates will change or decrease.
Some application developers also hope to reduce their reliance on in app purchases. Game companies face fierce competition in terms of user retention time and installation frequency. Currently, there are 1200 apps being launched on Google's App Store every day, while on Apple's App Store, there are also around 1600 new apps being launched every day. We can see that the cost of acquiring users is becoming increasingly high, and there is also significant pressure on advertising revenue. This is partly due to the removal of advertising identifiers (IDFA) by iOS, which has affected the monetization opportunities for app developers. "PubMatic's Chief Growth Officer Paulina Klimenko gave an example, stating that due to reality, app developers will be more proactive in exploring and using incremental budgets that may not have been utilized in the past, rather than relying solely on software installation budgets, such as choosing to add them. In app purchase (IAP) strategy. This means that more developers are turning their attention to the placement of super ecological apps, rather than relying mainly on purchases within the App Store.
Meta CEO Mark Zuckerberg expressed his dissatisfaction with the closed system during a conversation in July this year. He mentioned the limitations of Apple's iOS ecosystem on Facebook and stated that there will always be a closed and an open system in the software world. Although the number of Android phones is larger, Apple has basically obtained all the profits. Apple has clearly won the competition in this generation of computing, and he hopes to return to a stage where an open ecosystem wins and leads in the next generation of computing.
Wang Peng, a researcher at the Beijing Academy of Social Sciences, believes that it is reasonable for Apple to charge channel fees, as the development of the iOS ecosystem is a cost for Apple. However, it is important to have transparent pricing, respect the market, and sufficient communication with developers and consumers.
"Whether or not to open up is Apple's choice to maintain its ecology, but it should not hinder developers and consumers from choosing." Dai Yongsheng, a professor of the School of Finance and Finance of Renmin University of China, also stressed this point when participating in the connection of the First Finance video program.
If companies like Tencent show Apple that their concessions can provide good growth prospects for Apple's ecosystem in the future, and new technologies or formats may emerge, allowing Apple to discover that reducing fees can open up a long-term business model, then Apple may make changes, "said Qiang Hongjie, Associate Professor of Data Science and Interdisciplinary Studies at the School of Business, Central South University.
Apple needs a reasonable charging model
Apple's iOS system has always been a closed ecosystem, and in this closed system, Apple has previously been questioned for limiting the income of application developers due to setting rules. Taking advertising as an example, Apple has previously decided to enable the ATT (Application Tracking Transparency Factor) framework in iOS 14 and subsequent systems, restricting applications from reading the IDFA (Identifier For Advertising) of user devices to protect user privacy. The relevant privacy regulations will be implemented in 2021. IDFA can help developers obtain user information to display personalized advertisements. At that time, Apple was questioned for restricting the income of professionals in gaming, advertising and marketing to support its own advertising business.
"As an advertising technology company, we are happy to see a transparent and neutral open Internet, which means that different channels can fully participate in the competition in the new environment, and we can also give play to our ability to provide liquidity opportunities for developers and match advertising channels for advertisers." As far as advertising is concerned, Paulina Klimenko said.
The strengthening of the "walled garden" has two major negative impacts on advertisers: firstly, the tightening of privacy policies has increased the difficulty of precise advertising, and data closure makes it difficult for advertisers to push content to users they want to reach, and it is also difficult to effectively evaluate the effectiveness of advertising; On the other hand, the dominant position of Apple's iOS system is also driving up marketing costs within the "walled garden" and compressing manufacturers' budget space.
Apple wins by devices, while Super Eco Apps win by content. Everyone is different. The openness and innovation of Super Eco Apps have appeared on many platforms in China and are also very popular overseas. Their competitiveness, innovation, and leadership are all on different levels. "Qiao Yunyun, founder of Zhiniuer, believes that Super Apps have attracted a large number of developers and users through an open ecosystem, but there are differences in profit models and user experiences. Compared to closed systems like Apple, Super APP provides more flexibility and innovation space, but also faces challenges in technology integration and market competitiveness. Both parties also have different responsibilities and regulatory issues in terms of user privacy and data security.
Whether Apple and app developers will continue to have a power struggle or rely on both parties finding a balance point.