The App Business Blog

Today the interwebs have been full of reports of small iOS developers receiving legal threats from a patent troll. Here are two good blog posts with analysis that go deeper than the breathless reporting of arriving FedEx packages.

• Small iOS Developers Targeted over In-App Purchase Patents
• What will Apple do? Second patent attack on app developers in only six weeks

This sucks on so many levels.

Many big corporations have multiple patent related lawsuits ongoing at any given time. See this spider-like diagram of some of the disputes that Apple is currently involved in related to Android (not all of them are software related). To these companies, it’s just a cost of doing business. To us small developers it could mean the end of business.

The patent system was created with the direct intent of providing a common good to society. An inventor enjoys protection for his invention for a limited time in exchange for a public, detailed description of the invention. The idea is that other inventors can build upon this and innovate further, faster. This is good for society.

I feel that software patents are one of the more perverted parts of the patent system. One of the few things that you cannot patent is a mathematical algorithm. In my opinion software is very often quite similar to mathematical algorithms. I would love to have the patent on basic addition. I would graciously charge a very nominal fee each time anyone makes use of addition. I think everyone agrees that this would be absurd (except the owner of the patent of course). But in the world of software patents someone actually succeeded in basically patenting XOR.

Back in the olden days, companies applied for copyright protection for their software. I think this is a perfectly reasonable way to protect software from theft. As long as software has existed there’s been public domain and open source software as an alternative to copyrights and patents. Now there’s a definite common good.

Today I have purchased apps from these independent developers as a small token of support from one developer to fellow developers who were directly affected by this legal travesty.

• Computer LogicX
• mobileAge
• TLA Systems

written by Nick \\ tags: patent

With tech companies amassing ever larger hordes of cash, there are increasing temptations to spend it. In the iOS market there have been several acquisitions lately. (Here’s a list of iOS related acquisitions that I’ve been compiling over time.) But the whopper of all transactions must be the $8.5 billion cash purchase of Skype that Microsoft announced yesterday.

You’ve got to admire the Skype founders deal prowess. First selling their company to eBay for $2.6B, a price that was generally criticized as being to high, leading eBay to later write down the assets by more than a billion. Then participating in a group of investors who bought a majority of the company back from eBay (at a substantially lower price). Again a deal that was roundly criticized as being risky. And now flipping the company to Microsoft for $8.5B. For all the criticism of eBay, they sure know a thing or two about buying and selling – they made two billion and change on the deals.

So what does this have to do with iOS development?

Let’s look at what Microsoft is planning to do with Skype. One idea that has been brought forth is to deeply integrate Skype into Windows Phone 7 to compete with Google Voice on Android and Apple’s Facetime on iOS. But Skype has to be anathema to the AT&Ts and Verizons of the world. I can’t think of any technology/company that has cost phone companies more in lost revenue than Skype. So when Microsoft and their OEMs come to a mobile operator and asks them to sell their fledgling Windows Phone 7 devices, will having Skype deeply integrated into the OS really help them? (It’s probably not a coincidence that Google Voice is not preinstalled on Android devices.) But I guess Microsoft still has plenty of cash available to grease the tracks for deals…

Microsoft has a history of providing lots of APIs to developers. So maybe they will create an OS level API for apps to access Skype. Imagine if your app could easily make VoIP and video calls via the vast Skype network as well as to regular phones. I have lots of ideas of how I would use that in our apps. That’s why I have been asking Apple to create an API for Facetime. Hopefully competitive pressure might entice Apple to do this sooner.

Finally, let’s hope that Apple uses their mountain of cash more wisely.

written by Nick \\ tags: acquisition

In honor of Apple’s founding on April 1, 1976 I usually try to come up with an April Fools joke here on the site. However, the past couple of months I’ve been heads down working on a very large project, so no time for pranks this year. 🙁

So instead I’ll just link to some of the better collections of April Fools jokes this year:

• 35 years of ‘Apple’ Fools Day fun
• PLAYMOBIL(TM) Apple Store Playset
• Who’s Got the Best April Fool’s Pranks?

And of course there’s Scoopertino – funny year round.

I hope to be able to announce the big project real soon now, and get back to more regular blogging.

written by Nick \\ tags: humor

The iPad 2 introduced today brought few surprises. The obvious new hardware was there (camera) and obviously unrealistic rumors were confirmed to be false (e.g. retina screen).

The CPU and graphics speed bump is nice, and in line with Apple’s customary incremental improvements in performance for new hardware models. But pure specs and statistics don’t mean much. It will be interesting to see how much this will be noticeable when you’re interacting with the new iPad. The speed improvements in the first generations of the iPhone were really noticeable, the later ones, not so much. The question that many developers is asking is if there’s more RAM memory to go with the other hardware improvements?

HDMI output and screen mirroring is also very nice. I can see a new category of social games you play gathered around your large TV with an iPad as the central game machine, and each player using their iPhones and iPod Touches as game controllers. (If you add up all the hardware costs this seems like an ridiculously expensive console game, but I think that we’re at the point were many people have older generation of iDevices laying around – perfect for game controllers.) But even though this setup sounds cool to us geeks, it still feels that there’s something essential missing in the Apple entertainment system ecosystem.

The new thinner and lighter iPad 2 design will make the iPad shine when you’re comparing tablets side by side. But it’s hardly specs that you’ll base your purchasing decision on. And the iPad 2 is not yet close to Kindle territory in this aspect. But hold on to the “comparing tablets” thought, well get back to that.

Apple knows that the relentless Android copy machine will churn out many new devices this coming year. They will come in every conceivable combination of hardware specs, form factors and price levels. With the iPad 2 revision, Apple is ahead of, or on par with, the major competitors’ announcements. So when they eventually ship their devices, they cannot claim hardware superiority against the iPad. Thanks to Moore’s Law it’s very unlikely that any competitor will be able to launch a competing tablet in the next year with twice the hardware at the same price as the iPad, or similar hardware at half the price. So over the next year there will mostly be small, incremental changes in theses areas.

The major differentiating factor between competing tablets will be software. Consequently this was the theme of Apple’s event.

You can always argue if the number of iPad optimized apps (65,000) vs. the number of Android Honeycomb apps (100) are the right numbers, or if they are even the right categories to compare.
(We know that Steve has an affinity for nice, round numbers.) But it’s a fact that the iPad has a huge lead in tablet OS maturity and third party software.

Today Apple expanded that gap into a chasm, with the introduction of iMovie and GarageBand for the iPad.

These apps are fantastic in their scope, polish, target audience and aggressive price. How long will it take for equivalent apps to appear on Android? Or anything even remotely close? At the $4.99 price point those apps will have to be sponsored (especially given the size of the Android market for paid apps). Google are not exactly known for creating product with this level of finish. Who’s going to step up to the plate? Motorola? HP? Asus? Dell?

The notion that the iPad is just for consuming content is becoming increasingly silly. (But not as silly as Microsoft’s idea of differentiating tablet OS brands by this criteria.) The ease of creating music and video with these new apps is going to usher in a new era similar to the desktop publishing revolution started by the first Macs. And the cool creative people, teenagers and moms are all going to learn how to do this stuff on an iPad.

Back to comparing competing tablets: Imagine a store with the iPad on display next to several other tablets. The iPad runs iMovie, GarageBand, Pages, Numbers and several of the great 3rd party apps. With similar hardware specs, who in their right mind would pay more (a few hundred dollars more?) for one of the other tablets with a lot fewer apps, and definitely no apps as cool and as polished as the top of the line iPad apps?

Game over?

written by Nick

This post is a follow-up to my prior post about selling content on the App Store with new information from today’s press release from Apple and the updated App Store Review Guidelines.

First of all, kudos to Apple for updating the guidelines. The paragraphs you should look at for this discussion are 11.12 – 11.14. Based on my reading (and keep in mind that I’m an iOS developer, not a lawyer) these are your options:

1. Use IAP only for selling content

This is the most straightforward approach for most smaller developers. Just let Apple handle all the headaches of credit cards, payments, recurring billing, etc. For this convenience you pay 30% to Apple.

2. Use a combination of IAP and your own ecommerce

Most existing publishers who also want to sell content on iOS devices fall into this category. If you want to make content available on the iOS device that a customer has purchased on your ecommerce website, then you have some serious integration work to do, but that’s nothing new.

What’s new is that now you also have to offer the option of purchasing the same content using IAP. And the big, but not surprising, stipulation is that there has to be price parity between the two options. Your customer will pay the same amount in both cases, but you will have to pay 30% to Apple if the customer elects to purchase via IAP, compared to the 5-10% you typically pay to your ecommerce or credit card merchant. (11.13)

Furthermore, you cannot have a “buy” button in your app to direct a customer to your website. In order to purchase from your ecommerce website your customer will have to manually launch Safari, and type in the URL of your website, and complete the purchase there, before returning back to your app. Inconvenient, yes. But still a viable scenario for people who prefer to purchase things online from their desktop. (11.14)

3. Only rely on your ecommerce website

If you have a really well-known brand (Amazon comes to mind) you could remove all buy buttons, website links and purchase capabilities from your app. To buy content, your customers will have to know that they need to go to your website.

The advantage is that you don’t have to fork over 30% to Apple. The disadvantage is that you don’t get the convenience of IAP and you don’t get to ride on the coattails of Apple’s mighty iTunes machine.

Subscriptions

Subscriptions have their own paragraph (11.12) in the guidelines, which basically says: “Apps offering subscriptions must do so using IAP”. That clearly eliminates option 3 above. But is option 2 allowed? Steve Jobs quote in the press release seems to indicate that this option will be allowed: “Our philosophy is simple—when Apple brings a new subscriber to the app, Apple earns a 30 percent share; when the publisher brings an existing or new subscriber to the app, the publisher keeps 100 percent and Apple earns nothing.” A big-name example that seems like a good test case is The Economist which provides print subscribers free access to all content in their iPad app.

If this is not complicated enough yet, what about publishers who sell both subscriptions and single issues? And combinations of print and electronic subscriptions?

What will publishers do?

I believe that most companies will complain and grumble about this for a while. But in the end they will come to the conclusion that 150 million iOS customers is just too big of a market to walk away from.

Some companies do not have the margins to pay Apple 30% for the content they sell. Just like some companies don’t have the margins for sales reps or TV advertising. They will have to look to other channels for selling their content.

What will consumers do?

First of all, Apple will continue to allow you access to content you have purchased elsewhere. So your Kindle books are safe.

People’s habits are difficult to change, and I don’t think these new rules will have a significant impact on how consumers will purchase their content. If you’re used to buying ebooks on Amazon, then you will probably continue to do so (even with a few extra clicks). If pushing the IAP button in apps is second nature to you, then that’s probably not going to change either.

written by Nick \\ tags: App Store

Apple’s rules and mechanisms for selling content in apps have been “evolving” since the App Store opened.

In app commerce variations

One of our very early projects for a client was a wallpaper app where you could download a number of wallpaper images paid for by the app purchase price. After that you could buy additional credits for more downloads. Initially Apple told us to use our own payment mechanism for this, as this was before In App Purchases were available. We implemented a solution using Bango, which Apple then promptly told us to remove or risk rejection. We now use IAP and all is well.

An ebook reader app that I worked on used the one app per book model, which does not scale very well. When IAP became available, this app was used as a showcase in the keynote at WWDC. The purchasing model is still ok, but it appears that the content may not be. More about that below.

For a magazine reader app, an existing ecommerce back-end was used for purchasing single issues as well as subscriptions. The best usability scenario would have been to seamlessly integrate the ecommerce website in a web view. But on the evening before the launch, Apple suddenly had a change of heart and requested (i.e. demanded) that we quit the app and launch Safari for all ecommerce processing.

Amazon does the same thing with their Kindle app, as does Barnes & Noble with their nook app. Interestingly Amazon’s Windowshop app does allow you to buy Kindle editions from within a web view, but not from the native UI. For mega retailers like Amazon, these restrictions and gray areas just become absurd.

What change?

Although not ideal, the launch Safari approach works, and is being used by many apps currently on the App Store for selling content. The fact that so many apps that use this mechanism have been approved, has led us to believe that this had Apple’s blessing. Until now.

The paragraph in question is 11.2 in the
App Store Review Guidelines. The wording here is very vague and depending on how you interpret that single sentence, you can argue that all of the above scenarios should be fine, or all should be rejected. If we accept the premise that Apple’s review and approval process is not random (and I know that to some, this may be a leap of faith), then the interpretation and enforcement of this paragraph must have changed over time.

SKU limit

If Apple required Amazon or B&N to use IAP for their ebooks, they would very quickly run into the max SKU limit of the IAP system. I have heard that the max number of In-App Purchase product items you can have is either 3,000 or 5,000. Although I suspect anyone trying to enter that many items using iTunes Connect would go mad long before approaching that number.

Several of our clients find that IAP is a non-starter because of this limit. Yes I know that you can use consumable IAP items to represent multiple real life SKUs, but that leads to other issues.

Subscriptions

Subscriptions have been part of IAP since the beginning, albeit the functionality was so crippled that I have not seen any project use it. In a nutshell each developer had to manage all aspects of subscriptions beyond processing the payment. And the big deal breaker was that subscriptions did not renew unless the customer opened the app regularly.

Today News Corp launched the much rumored The Daily news app. The news here for developers is that The Daily implements a new subscription system. Not much is known about the system, but the updated iTunes terms of service provides some clues:

(Oddly the printable version of the terms of service does not include this new paragraph.)

It seems clear that these “Paid Subscriptions” do automatically renew until you explicitly cancel. And Apple will provide a mechanism for opting in to sharing your personal information with the publisher, which has been another point of contention between the newspaper/magazine industry and Apple.

Apple’s Eddy Cue says that the new subscription system is “Available on the Daily today, and there’ll be an announcement for other publishers soon.”

Books should be sold in the iBookstore

Having developed many book related apps I was surprised to hear about this rejection of an ebook app. Apparently if your ebook app does not offer any features beyond what an ePub file in iBooks can do, then it will be rejected and you will be asked to submit your book to the iBookstore instead.

I can understand Apple’s position on this from both a usability perspective (the book category is already the largest in the App Store) and from a profit perspective. But I sure don’t want to be on the app review team trying to decide where the line of “enough interactivity” goes.

What now?

My main gripe as a developer is of course the lack of proactive communication from Apple on policy changes like this. When they finally published the App Store Review Guidelines it was clearly stated that it was a “living document”. Well, it’s been pretty dead and void of changes since the initial publication. And I think that most developers would agree that there have been some significant changes since then.

If you currently have an app on the App Store that does not comply with all the latest interpretation and enforcement changes, then it’s unlikely that your app will be pulled from the store immediately. But if you ever want to make an update to that app, you will have to comply with the latest policy/rule/interpretation/enforcement. Even if this means that you have to make fundamental changes to your business.

written by Nick \\ tags: In App Purchase

Where is it?

At first I was a bit perplexed because I could not find the Mac App Store. I looked in iTunes, then I updated iTunes, but still no Mac App Store. A little bit later when the Software Update reminder told me there was an update available to OS X, then the lightbulb when on. Obviously a new OS update would be required to do the install and update magic that is part of the Mac App Store. (A least that makes sense to a developer.) It seems that I was not the only one who was confused. Now Apple has added a tutorial on how to get the Mac App Store to their website.

Pricing

I’m happy to see that the general price level in the Mac App Store is significantly higher than in the iOS App Store. Here’s a detailed analysis of the titles available on opening day.

This is mainly because of existing software titles from Apple and indy developers anchoring the price spectrum with unchanged prices from their other distribution channels. It is probably also reflection of the economics of selling to a smaller market.

Let’s hope that the Mac App Store does not fall into the price-race-to-the-bottom trap, so that it can become a viable channel for indy developers.

UI Design

Apple has been pretty strict in enforcing the HIG for iOS apps, so it’s a bit surprising that they have lowered the bar for the Mac App Store. Hopefully this is just a temporary lapse “justified” by the need to have a nice round number of 1,000 apps available on opening day.

This is especially sad since Mac developers have generally prided themselves in creating beautiful software with excellent interface design. One designer’s head exploded when he saw some of the apps in the Mac App Store, and he created this blog to showcase the worst.

DRM

It looks like some developers did not read the memo about protecting their apps. Check out Alex Curylo’s ValidateStoreReceipt code if you need it.

Updates

One of the benefits of the Mac App Store is that installed applications can be updated with one click, just like you update your installed iOS apps. One difference between iOS and Mac is that Mac applications can be installed from several sources. If you have already purchased an application directly from a developer and now it’s available in the Mac App Store, it’s likely that the Mac App Store will recognize that it has already been installed. Where the purchase button usually is you instead see “INSTALLED”. This is good because it will make it more difficult to purchase software that you already own. But the downside is that you are led to believe that you will receive updates to that title through the Mac App Store, which is not the case.

The best explanation that I’ve read on this says that the Mac App Store looks for a matching bundle identifier and version number. So it might be a good idea to change one or the other to avoid a lot of support headaches. Or you can just send your customers to this easy-to-remember URL: IfIBoughtYourAppAlreadyCanIUpdateItThroughTheMacAppStore.com

Another related question is how developers will deal with upgrade pricing. The lifeblood of many indy developers is the upgrade fees existing customers pay when a new major version is released. But in the iOS world customers have been trained to expect free updates for life for apps that they purchase. The reason this can work is the incredible volume of apps that you can sell to iOS customers, combined with the rapid growth of the platform. It will be interesting to see how this will play out on the Mac side.

Opportunity

If you are an iOS developer I think it can be a good business opportunity to port some of your apps to the Mac. Obviously this won’t work for all types of apps, for example if the primary use case depends on mobility or some device capabilities of the iPhone. Sadly I did not have any apps in the Mac App Store on opening day. But there is at least one title planned for the near future.

written by Nick

2010 was a fantastic year!

The Blog

This blog has grown to almost four thousand regular readers. For this I am humbled and very grateful. It gives me great joy to provide iOS programming advice, and I hope that you have learned something new in this past year.

I typically write about challenges, bugs, tips and tricks that I encounter myself as an iOS developer. It’s also a great repository of solutions for myself. I smile each time I search for a problem in Google, and on the first page of search results is a blog post that I wrote (hopefully) quite some time ago…

That said, I do welcome your input on topics, tutorials, difficulty level, mix between technical posts, business items and general ramblings.

One of my few New Years resolutions is to post more regularly.

Pervasent

In my day job as CTO of Pervasent, I’ve had the privilege to deliver many cool iPhone and iPad apps, work on worthwhile and engaging projects, and consult for enterprise class clients.

The limiting factor for our growth is to find more great iOS developers. (That’s why you’ve seen several open job posts on the blog.) Fortunately we’re now in the situation where top notch developers are contacting us, wanting to join our team. Working with great colleagues on a project is a lot more fun than working by yourself.

Here’s a funny anecdote from a recent job interview: One of the opening questions I like to ask is how long have you been programming in Objective-C. Most iPhone developers will answer somewhere in the range 1-3 years. Imagine my surprise when this individual answered 21 years! (He worked at both Next and Apple.) That rendered several of my followup questions moot…

What’s in store for 2011? More enterprise consulting work. But we’re also working on our own product in the document management space. More about that when we’re ready to release it.

Predictions

I’m not going to do any predictions for this year. When it comes to Apple’s mobile products their release schedule is now well established and we all know that there will be incremental updates to most products on this schedule. As for brand new categories of products, they’re just impossible to predict.

The general mobile device market is definitely exciting, but the macro trends are pretty obvious:

• Apple will continue their curated, vertically integrated, high-margin business.
• Android will become the device volume leader.
• iOS will continue to command the most developer attention.
• The App Store will remain the only financially viable marketplace for selling apps.
• The other platforms (Windows Phone 7, RIM, Palm, Nokia) will continue to fall further behind.

I wish you a Happy and Prosperous 2011. Stay Hungry. Stay Foolish.

Update: Here are some predictions for 2011 that I found interesting, although I don’t necessarily agree with all of them.

• Cringely (especially #2, #9 and #10).
• Kevin C. Tofel and Om Malik @ GigaOm
• Gene Munster
• Computerworld
• Oliver Drobnik

written by Nick

I think we programmers always have projects that never seem to get finished. It could be an app that you’ve been working on for a long time, but it still needs some polish before you think it’s ready to ship. Not to mention all those great ideas that you have for new apps that you haven’t even stared working on.

Today Seth Godin has a great post about shipping something that scares you. He includes an intimidatingly long list of things he shipped in 2010. And then encourages readers to post their own lists.

So here’s my list of apps that I worked on and that shipped in 2010:

• Created the first iOS app that integrates with the Yahoo! Store backend for California Blooms.
• 67 apps in the College SuperFans series for our client SmartPhones Technologies.
• College Scoreboard for football and basketball.
• NutriSleuth, a medical app that could literally save lives.
• Thomas Tilt and Go – a game for HiT entertainment.
• Updates to Angelina Ballerina – another HiT brand.
• Helped my friend Marty ship the first issue of the Omega 1 Motion Comic Movie experience.

In addition there are a few projects in progress that are in review or are almost ready to submit. But that doesn’t count in this context.

The reason for publishing this list is not to brag (although I am quite proud of it), it’s to emphasize that the goal is to ship things. In our case that means getting the apps live on the App Store.

Need help getting things out the door? Checkout Seth Godin’s latest book Linchpin. And the accompanying ShipIt Workbook.

What have you shipped this year? Write a blog post, or submit a comment below. Don’t just post a link, write a story and tells us why shipping this product was scary.

written by Nick

Since April when I received my iPad, I have not purchased a single magazine or book in dead tree form. This was not a conscious decision or strategy, but merely a consequence of the convenience of iBooks and Zinio Magazine Reader.

Two eBooks that I recently read and enjoyed very much are Daemon and Freedom (TM) by Daniel Suarez. The story is about an MMOG that takes over the world. It’s extremely well written and the author is a programmer, so the technical details are believable.

Be sure to get both books. The first one — Daemon — ends without a satisfying conclusion, and Freedom will not make much sense without first reading the Daemon.

Since the iBookstore is not visible in iTunes and there’s no gifting option in iBooks, one way to give these books as a gift is to purchase a regular iTunes Gift Card or Gift Certificate. You may also find specific iBooks gift cards in some stores.

The iBookstore lives a somewhat schizophrenic life. You can’t search or browse books on the web or in iTunes, like you can with apps and music. But yet it is part of the iTunes payment infrastructure. The only way I’ve found to create links to specific books, like the ones above, is to use the Tell a Friend feature in iBooks.

written by Nick \\ tags: iBookstore, iTunes