Apple's 25/65 Rule

Apple's iOS has a 25% share of the mobile operating system market share compared to Google Android's 75%, but despite that penetration disadvantage, Apple controls a 65% share of the global apps revenue marketplace.

That analysis is based on new data from Sensor Tower showing that the overall mobile apps marketplace continued to surge during the first half of 2020, despite -- or maybe because of -- the COVID-19 pandemic.

The finding also comes at an interesting time, as federal regulators are looking at the antitrust implications of big digital media platforms, albeit mostly Google's -- for now.

While the Department of Justice is currently investigating Google's market dominance of search, the market power of the two major mobile operating systems constitutes a real barrier to entry for many developers, especially on Apple's App Store.



(Full disclosure: Over the past several years I developed an app as part of a side hustle startup project, and I got to experience Apple's market power firsthand.)

Our app, which was produced with high-quality code, sailed frictionlessly through Google's PlayStore for any Android user to download, but when it came to Apple's App Store, we were rejected again and again.

The most frustrating part of Apple's constraint was that it was impossible to get a straight answer on why we were being rejected, and what we needed to fix in order to get the app approved for the App Store. And when I finally got through to a human being at Apple, I was told that the reason had nothing to do with the official app developer guidelines we received from Apple, but from separate, internal rules it used to reject us.

I won't bore you with the details, but the reason for my personal anecdote was that I got to experience the frustration of dealing with an unchecked market power that I believe materially harmed our startup.

In our case, while Apple only has a 25% share of the global mobile marketplace, it controlled a critical mass of a vital marketplace we were trying to enter: Madison Avenue.

So while the DOJ is currently focused on the antitrust concerns of Google's search business, I can suggest firsthand that it might be time to take a look at the constraints of Apple's App Store.

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