On November 30th, Josh Elman, a prominent technology executive who had previously worked in venture capital and as the VP of Product at stock trading app Robinhood, announced that he would be joining the App Store team at Apple to “help customers discover the best apps.”
Apple spends an enormous amount of money on App Store curation and editorial, but it has hitherto made very few visible investments into app discovery. The App Store was overhauled in 2017, when the Top Grossing chart was removed, the Top Downloaded chart was relegated to a below-the-fold position, and a great deal of editorial flourish was added to the portal. The new app discovery PM position will likely be responsible for the most investment that the App Store has seen since then.
But why now? The timing coincides with a number of other dynamics that are currently playing out within the app economy:
- In June, Apple announced that it would deprecate its unique, device-level advertising identifier, the IDFA, with the launch of iOS14. While this change has been delayed to “early 2021” (the latest intelligence I’ve heard about the date is March), developer anxiety about the impending deprivation persists, as it will significantly degrade the efficiency of paid app advertising and reduce the ability of developers to aggregate audiences for their apps;
- Apple is currently under attack from a coalition of app developers over its terms of service — specifically, that Apple forces developers to use iTunes Connect’s payment processing service for in-app purchases and that Apple takes a platform fee cut of revenue generated within the App Store.
Apple’s decision to prioritize app discovery aligns with these two developments. As I wrote in Why is Apple rebuilding the App Economy?, one of Apple’s motivations in deprecating the IDFA is to regain editorial control of the App Store and to once again become the authority that decides which apps are successful:
Taking back control over app distribution…is Apple’s primary motivation in deprecating the IDFA: ads have become the foremost mechanic through which apps are discovered, and Apple has lost total editorial control over content distribution. Related to the point above, Facebook is the primary beneficiary of this dynamic: Facebook ads front-run organic search and discovery, and Facebook effectively serves as the principal point of app discovery.
Developers have clamored for better and more systematic discovery for years. App Store discovery has been chronicled within the pages of this website ad nauseam, although my position has always been that app store discovery is not broken, precisely because ads fulfill that function and because consumers don’t notice the apps to which they are never exposed.
But Apple suddenly investing resources into app discovery is a very conspicuous means of signaling to developers that their success on the App Store will become less dependent on user acquisition spend — which is convenient, considering that user acquisition spend will become much less efficient in very short order. So Apple wins goodwill from developers while simultaneously creating severe obstacles to growth through user acquisition and handicapping Facebook in the process.
This maneuver isn’t dissimilar to Apple’s recent — strategically genius — decision to reduce platform fees to 15% for developers making less than $1MM per year: the change is designed for maximal goodwill value with developers. In the case of platform fees, Epic and its conspirators look greedy (and insensitive) by complaining that the gesture is hollow. And in the case of app discovery: it is unlikely that many app developers will shed tears over Facebook’s lost revenues.