Apple Is Throwing a Third Party

Apple commissioned another report — its third — from the Analysis Group:

Today, economists at Analysis Group published a new report on the proliferation of third-party apps on the App Store, with new insights into how third-party apps perform in categories ranging from maps to music streaming, among others. The report finds that third-party apps experience broad regional and global success on the App Store, demonstrating the breadth of opportunity for developers and the wide range of choice available to consumers around the world.


The report analyzes apps from Apple and third-party developers across many popular app types, breaking down regional and global top performers. It also highlights just how many channels developers now have to distribute their apps — from mobile platforms, to PCs, to video game consoles.

It is an interesting report (PDF) but it is not as comprehensive as Apple’s press release implies. Five app categories were analyzed in eight regions, using different metrics depending on the type of app. For example, the study’s authors correctly observe that many people use multiple messaging apps; it is not the type of app where a user gained in one client necessarily implies a lost user in another. Usage behaviour is likely different for music streaming apps, so the study’s authors used the time spent listening in each. That seems fair to me.

Music streaming is where I started to get puzzled as I read this report. There is a large table on page 14 indicating that, in Japan, Spotify has “0.4×>” the use of Apple’s Music app. How would you interpret the way that is written? I assumed it was a shorthand for 0.4 times greater use — that is how Apple displays it in a graphic in its press release — but then I read this bullet point on the following page:

There is only one country and one type of app considered for which the Apple app accounts for more than half of app usage: Music streaming in Japan (55%).

Well that clearly does not add up. Spotify’s share in Japan cannot be “0.4 times greater” than Apple’s 55%. I may be missing something, but I think the table is unclear. A better representation of this research is in Appendix B, beginning on page 20. There, you can see a more complete picture of app usage broken down by country and category. Note each category’s footnotes showing how the share was measured.

In Figure 12, we can see that Spotify is the most popular streaming music service in many regions, excluding China, Korea, and Japan. Japan is the only one where Apple Music listening time is highest and, assuming some rounding errors, Spotify is indeed 0.4× as popular as Apple Music, not more popular. Not a grievous error, to be sure, but a notable one given that it is the only category and country where Apple’s first-party app is so dominant.

We can check this work against the popularity of Google Maps in the U.S., which is shown in Apple’s press release to be “1.5× greater” than the use of Apple Maps. Figure 13 in the report indicates Apple Maps has 16 million daily iPhone users in the U.S., while Google Maps has 24 million.

An aside: remember when Apple was bragging about having three times as much usage of its maps app compared to, presumably, Google Maps? 2015 was ever so long ago, and being so wildly popular could now be considered a liability. Apple is happy to brag in its press release that Netflix is used thirty-five times more often by French users than Apple’s own TV app, and over two hundred times as often by Japanese users. In any other context, this would be an embarrassment.

So Figure 6, the table on page 14 indicating each app’s use relative to Apple’s, should not have greater-than signs beside each number. Some of the third-party apps highlighted in this report are used much less often than Apple’s own.

Having sorted that out, I want to turn your attention toward methodology, where I have questions. Mostly, that is because of this acknowledgement:

For privacy reasons, Apple has limited visibility into usage data. We therefore obtained data on downloads, daily active users, and time spent in app from (formerly App Annie), a third-party provider of mobile device app use data. We also use other publicly available information, including industry reports, news articles, and developer websites.

Apple may have commissioned this study, but it does not appear to have done its authors any favours in getting them proprietary real-world metrics. The report contains endnotes pointing to all of the data sources, and it seems was used an awful lot. Given that Apple may limit its own knowledge of app usage, how is collecting it?

Our data sources include: anonymized and aggregated data from over 1 million apps, sizable consumer panels, top ad networks, and more.

The company has a list of its partnerships, which are primarily ad networks, but it also collects data from apps like a data monitoring utility it owns. Unfortunately, despite promising “a new standard for trust and transparency”, the company does not provide a list of any other apps from which it collects usage data.

Does a combination of ad network partnerships and a sneaky consumption utility mean it is able to provide reliable figures on the use of, say, Messages or the Phone app? I find it hard to believe this is anything more than a best guess.

Some of these figures are surprising. But one that is not is Spotify’s market share. Bob Lefsetz:

We’ve been hearing all this b.s. about Apple catching up with Spotify, but just the opposite appears true, Spotify is pulling away from Apple where it counts, in listenership. Furthermore, the report says that Spotify is especially popular amongst the young, who listen most and are most responsible for the breaking of new artists.

Now in truth Amazon is a stealth competitor. But in reality, Spotify is the world’s default streaming music app.

Apple Music appears to pay a much higher rate than Spotify, but Spotify really does seem to be the brand name music app to Apple’s store brand. It has better playlists, better social features, and has probably escaped culpability in the public eye for financing a guy who just has some questions. And it appears on the cusp of lobbing more legal grief in Apple’s direction.

Apple prioritizes its Music app on iOS. It permits songs to be downloaded from the iTunes Store and added to a user’s library, all on an iPhone or iPad. Even if a third-party music store used the In-App Purchases mechanism, it is not possible for them to modify the Music library. But it seems many users do not care about that. They are happy keeping their music library siloed in whatever app they happen to be using. If they are using Spotify, they use the Spotify library; if they download a mixtape from DatPiff or want to support an indie artist more directly through Bandcamp, they must use each of those apps’ libraries. For the dedicated, this represents competition; for those with less patience, the winning app will be the one offering whatever they listen to most of the time.

It sure is an interesting time for technology policy at government and platform levels. All the findings in this report are the result of choices made primarily by Apple in its design of iOS and the App Store. It seems there is healthy competition in some categories of apps and in some regions. But this report is not comprehensive. Third-party apps have limitations Apple’s own versions do not, and there are many other categories where Apple’s entrant likely pulls ahead — browsers would be an especially interesting case because, although it is one of two types of app where you can set a system-level default on iOS, any third-party browser will still use Apple’s rendering engine.

I do not think this report is garbage; give it a read if you have time. But I think its shortcomings are enough to assume its figures are closer to an elastic estimate than actual data points.