Chat or IM apps in China like WeChat and a handful of others offer the ability to send small tips to a contact’s personal mobile wallet. A new report now mentions that Apple has asked WeChat and a handful of other Chinese developers to disable this function. Part of the reason Apple is doing this is because a tip sent through an app constitutes an in-app purchase, and Apple is entitled to a 30% cut from every such transaction, as per the App Store policies.
Further, by asking developers to disable the function or forcing them to offer a 30% cut, Apple might be looking to further its market share in the country. One executive was quoted as saying “We don’t charge anything as the platform, but Apple gets 30 percent for doing nothing.”
Apple has apparently threatened the developers to make the changes or face the possibility of being removed from the App Store. The company is known to use this method on app developers around the world, although it might have a slightly different outcome this time around, considering how crucial China is for Apple’s future.
This tells us about the growing concern among app developers about Apple’s policies. China is dominated by regional manufacturers and Apple has seen its market share shrinking rapidly. The likes of Oppo, Huawei, and Vivo are currently ruling the roost in China, and Apple is in fourth place behind them.
Apple enjoyed a moderate market share of 16% way back in Q1 2015, which has come down to just 9% in Q1 2017. This speaks volumes about the growth of local Chinese OEMs. Apple is caught playing catch up in the country, even though the response for the iPhones have been pretty healthy. It will be interesting to see how the company responds to this in the coming days, although it seems like a tough road ahead for the company.
The concept of tipping someone is slightly different in China, which could also be why Apple is finding it hard to digest the matter. In any case, it is hoped that a resolution is struck soon as Apple cannot afford to have a falling out with the local developers in China.[Via The Wall Street Journal, MacRumors]