Apps, Apple, and the App Store
From games to fitness trackers to streaming services: in the App Store, there is a suitable app for almost everything. But how does Apple decide what is allowed on the platform and what is not? Prof. Jens Förderer and doctoral student Michaela Lindenmayr got to the bottom of this.
“But there is one more thing” – with this almost magical phrase, Apple founder Steve Jobs announced the first iPhone in 2007. With it, the California company created a product that not only became a mega-seller, but also revolutionized an entire industry. The recipe for success: a well-functioning touch display and an intuitive operating system based on mobile application software – or apps for short.
Apple didn’t invent apps, but it did establish them. Today, the technology group relies 99.99 percent on external developers. The bottom line is that Apple opens the door to innovation, ideas, and business models, but must act as a strict gatekeeper to keep the quality in the App Store high. Prof. Förderer and Michaela Lindenmayr from the Chair of Innovation & Digitalization at TUM Campus Heilbronn have analyzed how this balancing act works and derived recommendations for other platform operators. We summarize the most important findings.
Prof. Jens Förderer holds the Chair of Innovation & Digitalization at TUM Campus Heilbronn.
Quality, Quantity, and Network Effects
Apple iOS is the world’s second-largest platform for application software, behind Android. With more than two million programs, the App Store covers a very broad and differentiated range. In doing so, Apple takes advantage of network effects: the large number of apps provided is an incentive for consumers. This in turn makes it attractive for developers to make their content available. Both sides benefit.
So the more apps, the better? Yes and no. Because the quality also has to be right. If bad apps get out of hand, the line between high-quality and low-quality content becomes blurred for users. It is then no longer worthwhile for providers to invest in good quality. The result: the market fails and the platform fails.
Best Practice: What Platform Operators Can Learn from Apple
Apple has taken a number of measures to ensure quality. The so-called Code of Conduct defines the required framework conditions for app developers who want to distribute their products via the App Store. A continuous app review process ensures that external apps meet the requirements. Using automatic filters and manual inspections, Apple regularly checks whether the requirements are being met. In the event of a violation – such as the unauthorized use of customer data or an inferior layout – measures are initiated.
In concrete terms, this means that the app in question will not be published in the App Store until further notice. Developers then have a chance to correct the deficiency and resubmit the app for the review process. In the case of a gray area, Apple involves the Executive Review Board. If there is still a need for clarification, the company communicates directly with the providers. In the case of illegal violations – for example, pornographic content or content that glorifies violence – charges are filed.
Digital change and the progress of technologies are forcing platform operators to regularly check their control systems for applicability and up-to-dateness. The results from Förderer and Lindenmayr show that it pays to involve external provider companies in this process and to coordinate the set of rules with them. Following the Apple example, this increases the acceptance of updates. The pioneer uses programs and events for this purpose and presents innovations at annual conferences.
Michaela Lindenmayr is a doctoral student at the Chair of Innovation & Digitalization at TUM Campus Heilbronn.
“Such measures keep the Californian tech giant at the top,” believes Jens Förderer. Because the fact that the app offering is decisive for the success of a platform has been proven in the past by Palm (later HP), RIM, and Microsoft – through their failure. If an application is ruled out, alternatives are needed. If the offer is no longer right for consumers, this can lead to consumers turning their backs on the brand. The path to the competing product from Samsung & Co. is then not far away, and any network effects are lost. A broad and differentiated offering – as in the case of Apple – reduces dependencies on individual apps and developers.
The analysis by Förderer and Lindenmayr shows that Apple’s success story involves much more than a stylish device, a hip brand, and a simple operating system. Seamless quality management, networking formats, and constant collaboration with the app community have played a significant role in the international success and reputation of what is probably the most valuable brand in the world.
Five steps to platform success, according to the app store model:
1. A transparent and structured set of rules
2. Control of compliance according to clear guidelines
3. Firmly defined measures in the event of non-compliance with quality criteria
4. Avoidance of dependencies, thanks to diversity of offerings
5. Checking the control system for applicability and up-to-dateness
