about us

2012: The Year Scam Apps Killed the App Store

Drafting this one for 2014, because we like to write our blog posts a couple years early at Impending. Let’s hope I’ll never have to dig it up again.

As we’ve learned from Apple’s latest earnings call, App Store revenue growth for developers has begun to stall and slip behind device sales. We all saw this coming, with dozens of beloved indie studios closing shop or selling to larger companies after folding to the pressures of shrinking sales and vanishing profit margins this past year.

Considering the past couple years, rife with hundreds of scams, fraud apps, hoaxes and clones that have hit the top of the charts, it’s no surprise the atmosphere in 2014 among both App Store customers and app developers can be described as cynical.

Most significantly, what we once took for granted before 2012, the “impulse buy”, has largely evaporated. Consumer trust in apps is now completely broken, and even customer reviews can’t be trusted due to more and more elaborately sleazy services for hire to game the system. In this fallout, we have come to understand how important the impulse buy was in a market environment dominated by rock bottom pricing. Developers have raised app pricing to compensate, kicking into effect a feedback loop resulting in sustaining revenue (for now) but plummeting sales, reach and cultural relevance for popular apps.

Customers have also in turn begun to rely more and more heavily on existing giant brands, and are avoiding less known independent developers and studios, and apps that stray from the familiar. As a result innovation in the App Store is in a slow death spiral.

I remember early in 2012, which we can now recognize as the peak of an App Store bubble, when what felt like a utopia took a distinct left turn for the worse with the first wave of scams. Now that we’re stuck in this hole, the road to recovery, if it exists at all, will be painful and take years of education and pro-active improvements from Apple.

But I can’t help but imagine how things might’ve been different…

The Path Not Taken

What if Apple had reacted quickly and effectively years ago, nipping this problem in the bud before it spun out of control and corrupted the App Store? While I won’t dwell on the happier alternate timeline we’re missing out on, I couldn’t help but think on what Apple could’ve done in time, to prevent this from playing out. So let’s walk through some obvious in hindsight misses.

Better Detection in the Submission Process seems obvious. The App Store submission process, at least the nuts and bolts, is entirely opaque. But it seems clear there’s an absence of an automated layer during the process raising flags for potential violations, checking against other screenshots already on the App Store and a trademarks database. There is no other way to explain cases like Pokemon Yellow passing the process two years ago and the countless following imitations. Beyond an insider on the Apple apps approval team. But I’ll refrain from putting on my tinfoil hat for now.

A Beefed Up Fraud Team: I can only speculate at the size and competency of the App Store fraud team, but it seems painfully clear in retrospect that this team was understaffed and unprepared to deal with 2012′s wave of scams. Amazon and other giant online retailers maintain large fraud teams to find the signal through the noise and pick out offenders quickly from automatic flagging. Surely there must be internal red flags automatically raised when brand new apps quickly rack up hundreds of returns and 1 star reviews? Who’s in charge of responding, and why did it take them days to remove Pokemon Yellow from the App Store’s most visible shelf space?

Automated Returns: What I can’t fathom is Apple’s refusal to automatically refund all customers who were defrauded of their money. There have been hundreds of open and shut cases, and to this day Apple requires customers to jump through hoops and phone calls (in 2014!) to receive refunds. This is insanity.

Video Previews in the App Store: Requiring a short video demo of the app in action would have prevented the common scam of providing one or two misleading screenshots to fool browsing customers.

Better Education of App Store Customers: Much like the fashion industry, the App Store’s plague of knockoffs created a problem of uneducated customers unable to recognize the real thing vs. the counterfeit until after the sale. The App Store could have done a better job profiling quality studios and developers, beyond highlighting individual apps, and rewarded those who built an ongoing track record and reputation. Not just developers, but App Store customers as well, to weight their reviews and ratings.

Regrets

Looking back, Apple’s missed opportunities to prevent disaster were such simple and quick fixes… and it’s a real tragedy how we squandered the wonderful thing we had in the App Store.

There are lessons to be learned and mistakes to be avoided. But unfortunately, no time machine on hand to hop into and put these lessons to good use, back when it mattered.

We’re just left to wonder, “What if things had played out differently?”