Mobile Phones and Web3
App developers have a complex relationship with Apple and Google via their app stores. If you build something and want mass adoption, you need a mobile phone app and must work within the guidelines they set. The guidelines are complex and can be difficult to navigate, and the costs of selling goods in the app stores is high. These two massive players are impacting the speed of adoption of web3, let’s see how.
We’ll start with the process for getting a new app approved. I’m going to mostly focus on Apple in this article, but Google basically works in much the same way. Apple’s “App Store Review Guidelines” can be found here. It stretches on for pages and covers five main categories — Safety, Performance, Business, Design, and Legal. They state upfront that their app store is “highly curated” and that “every app is reviewed by experts and an editorial team”.
From talking to dozens of startups building apps, I have heard frequently that getting a new app approved can be an arduous process. You submit your app for review and then wait a few days for an answer. Sometimes if they reject your app, it comes with very specific areas to make changes, and other times it is opaque. Sometimes they do a cursory glance and reject your app for features you don’t even have installed. Most people tell me to expect 1–2 weeks to get a new app on the store, and it can be much longer if you are involved in areas that are hot button topics for Apple.
I love this explanation from Apple’s website, clear as mud: We will reject apps for any content or behavior that we believe is over the line. What line, you ask? Well, as a Supreme Court Justice once said, “I’ll know it when I see it”. And we think that you will also know it when you cross it.
Apple and Google take a big cut of the revenues that come from purchases in apps on their app stores. If you are a subscription app like Netflix or Headspace, you pay the app store when someone makes their subscription payment. If you are a video game like Candy Crush and you offer in-app purchases, then the app stores take a cut of this too. For many years, the app store fees were set at a massive, fixed rate of 30% of gross sales. Under heavy pressure from app developers and while facing a lawsuit from Fortnite creator Epic Games, they agreed to lower their rates somewhat. Now the rate is 15% on the first $1MM in annual sales, and then 30% thereafter. CNBC reported that Apple paid $60Bn to developers on the app store in 2021, with a net revenue to Apple somewhere in the $20Bn range.
So far, Apple and Google have not embraced web3 at all. Any app that sells NFTs is not currently allowed. They do allow Crypto trading apps like Coinbase and Gemini, but nothing selling digital collectibles or anything similar. OpenSea launched an app last year, but all you can do on this is view collections, not purchase NFTs. NBA Top Shot, with hundreds of thousands of users, is web browser only still. MetaMask has gotten around the app store rules somewhat by embedding a browser into their wallet app, which can be used to connect directly to NFT mint sites and make purchases. It’s not a great app experience, but it generally works.
None of the video games that use NFTs have been able to clear the app store guidelines and make it onto an Apple or Google phone in a native manner yet either. Generally these games are being played on PC or sometimes on mobile web, with the NFT purchases happening off phone.
It stinks that Apple and Google have so much power to stop this new technology from reaching consumers. They would argue they are protecting users from scams and frauds, and there is definitely some legit truth to this idea. However, I am looking forward to the day that they set some guidelines for the industry and allow responsible app developers to get rolling. Apple and Google already have wallets installed on their phones that allow users to connect a credit card and make seamless purchases. When they make the move to Crypto wallets and allow users to transact with tokens, it will be a breakthrough moment for the industry. I even think they could end up winning the Wallet Wars. Check out this post I wrote before on the topic.
The fine folks at Solana have decided they can’t wait for Apple and Google to get in the game. They have decided to launch their own mobile phone next year called Saga. Their phone will be built on the Android open-source platform, and it will have access to the Google App Store. The big difference is that Saga will also have a second app store using the Solana Mobile Stack, to allow “developers to create rich mobile experiences for wallets and apps on Solana”. Saga is being built by the team at OSOM (pronounced “Awesome!”), led by Jason Keats. Keats was the Head of iPad Architecture at Apple. He’s a serious hitter and a fun podcast guest. Check him out here with Solana founder Anatoly Yakovenko. The phone is going to cost $999 or something in that range. No clue if this will attract big buyer numbers, but it sounds like the goal is to push Apple and Google off the fence and into the web3 action.
I’m going to finish up here on this topic, but I know there will be more to discuss on mobile phones and web3 in the future. Please follow me on Twitter for more frequent updates.
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