The App Store Evolves
The changes in the Google Play Store Policy served as a catalyst for the Indian developer community to band together and demand that their interests be heard. But is there any merit in their demand. After all these changes simply bring the Google Play Store on par with what the Apple App Store has been doing since App Stores were invented.
This is a slightly enhanced version of my article that first appeared in The Mint.
Late last week, news broke of a virtual meeting that had been convened by doyens of the Indian startup ecosystem. Ordinarily, there wouldn’t have been anything remarkable about this meeting had it not become such a rallying call for the Indian developer community against the changes that Google was looking to implement to its Play Store policy. After years of forbearance, all apps downloaded from its Play Store were going to be required to route their revenues through that store and pay a 30% fee to Google as well.
Digital service providers in India receive much of their revenue from subscriptions, in-app purchases, the sale of virtual items and the like. Small wonder that this change in policy gave rise to widespread consternation. Android developers use built-in browsers for payments so that the entire value of their revenue accrues to them. If all purchases now have to be routed through Google Play Store—and subject to a 30% cut—they stand to lose a sizeable chunk of their intake. In the words of one of the startups, this would be the “death knell" for digital companies in India.
While this sounds dire, some context might be appropriate before we jump to any conclusions.
When Steve Jobs first launched Apple’s App Store in 2007, he drew attention to a fundamental difference between the mobile environment and the internet.
“These are devices that need to work," he said, “and you can’t do that if you load any software on them. That doesn’t mean there’s not going to be software to buy that you can load on them coming from us. It doesn’t mean we have to write it all, but it means it has to be more of a controlled environment."
True to that philosophy, Apple’s mobile environment has always been tightly constrained. iOS devices are manufactured exclusively by Apple. Third-party apps have to be approved before they show up on its App Store and side-loading is simply not possible without breaking into the device. All in-app purchases are routed through Apple’s App Store and subject to a 30% fee.
Google’s approach, with its Android operating system, was diametrically different. Not only were there no restrictions as to the hardware on which the operating system could be installed, there were far fewer restrictions on functionality. Greater latitude was allowed for side-loading and in-app purchases were broadly fine. Arguably, it is precisely because of this laissez faire approach that Android phones proliferated to the extent that they have.
But even though this strategy resulted in growth, it came at the cost of quality. Today, even though there are some great apps in the Android ecosystem, there is far more malware than there should be.
Google is aware of this problem and conscious that it needs fixing. Since it’s too late to put in a pre-approval system for apps, the only option was to deepen trust in its Play Store. Today, all apps offered by this store are scanned by Play Protect, Google’s home-brewed mobile threat protection service that uses machine learning to weed out malware. Payments routed through Google’s payment services are assured against fraud by unscrupulous developers. This and other measures make its Play Store the most trusted source of apps in the Android ecosystem.
This is why app developers want to be listed on Google Play Store and why Google believes that despite the policy changes it is introducing, developers will not desert it. As much as the new revenue sharing scheme is going to impact their profitability, Google is hoping that the benefits that Play Store offers will be incentive enough for developers to stay.
But there is one more significant aspect of the Android ecosystem that is worth mentioning at this stage. Unlike with iOS, for which you can only download apps from Apple’s App Store, the Android universe imposes no such restriction. Anyone can create an app store through which mobile applications can be made available for everyone to download.
What this means is that any app developer that does not like the new terms of engagement of Play Store is free to list its apps on any of the other available app stores or—if they so choose—even set up a new app store just for themselves. That being the case, developers who do not want to forsake a share of their revenue in exchange for the privilege of being listed on Play Store still have other avenues through which their apps can be downloaded.
So maybe Jobs was right, after all. Maybe there is some merit in ensuring that our mobile app environment is carefully controlled. Mobile phones are such an integral part of our lives that we entrust them with many of our deepest, darkest secrets. As a result, they simply must work as advertised—which is why it is imperative to ensure that the apps we install on them never betray that trust.
Earlier this week, Google deferred its decision to enforce its Play Store’s rule changes in India to 2022. This has effectively postponed the issue to a later date. That said, given the visceral angst that Google’s decision sparked, there is clearly a deeper, underlying issue that is unlikely to abate in a hurry.
But that is a story for another column.