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Apple dominates the search results of the app store, frustrating competitors



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According to the Wall Street Journal badysis, these mobile applications appear first in the search results ahead of competitors in their App Store, a powerful advantage that does not meet the company's rules in such rankings.

The company's applications ranked first in more than 60% of basic searches, such as for maps, the badysis showed. Apple applications that generate revenue through subscriptions or sales, such as Music or Books, first appeared in 95% of searches related to those applications.

This domain gives the company an advantage in a market that generates $ 50 billion in annual expenses. The revenue from services related to application performance is that the center of Apple's strategy is to diversify its profits as iPhone sales can.

While many of Apple's products are undoubtedly popular, they are a standard in the App Store. Apple tells developers that downloads, user reviews and ratings are factors that influence search results. However, more than two Apple application boxes are preinstalled on iPhones and are protected from revisions and clbadifications.

Apple says it does not offer its own products an advantage over others in the App Store. The company has its own tests this month in response to the magazine's questions and some searches yielded different results in which its applications did not take first place, a spokesman said. The company uses an algorithm that is based on machine learning and preferences of previous consumers, and application ratings fluctuate. Apple does not reveal details about how it works.

Top of the world

Apple's own applications dominate basic search rankings in many categories, as they compete in the App Store, as seen in searches for "music," "maps," and others in the past year, according to App Annie, a firm Third party badysis.

"Apple customers have a very strong connection to our products and many of them use the search to find and open their applications," Apple said in a statement. "This customer use is the reason that Apple has a strong search ranking, and it is the same reason that Uber, Microsoft and many others often also have a high ranking."

Technology companies have long faced regulatory scrutiny on how they use their software platforms to promote their other products or expand the reach of new companies.

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Google was penalized by regulators for that reason.

"When you become large and widespread, the promotion of self-interest is in conflict with antitrust laws," said David Yoffie, a professor of business at Harvard University and author of the book "The Business of Platforms."

Complaints by rival companies about self-promotion are helping to drive a reaction against technology giants. Companies are seeking to allay fears in Washington and Europe that have quickly concentrated economic power to the detriment of smaller companies.

On July 16, Apple and three other heavyweights of the technology were interrogated by members of the Judicial Committee of the House of Representatives during a hearing on the power of online platforms. The politicians of both parties demanded greater regulatory control.

Executives from Facebook Inc., Amazon.com Inc. and Apple Inc., are preparing to testify at a congressional hearing on July 16. The technology faces regulatory scrutiny in the United States. and Europe on the growing market power of its platforms.

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A day later, European Union regulators announced an antitrust investigation in

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That will examine whether the e-commerce giant is abusing its dual role as a seller of its own products and market operator.

Legal challenges are accumulating in the App Store. The United States The May Supreme Court ruled against Apple's attempt to file claims against consumers. Two application developers are also suing a federal court, including the app store amounts to a monopoly on distribution. The company previously declined to comment on the lawsuit.

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In March, it filed an antitrust lawsuit in Europe against Apple, claiming that Apple has made it difficult for rival subscription services to be marketed in the App Store, which the company denies.

Apple says it uses 42 factors to determine where applications are located in the search, but keeps the formula secret to keep the game level for developers and avoid manipulating the results.

The four factors that most influence rankings are downloads, ratings, relevance and user behavior, according to the company. User behavior, which Apple says is the most important factor, including the number of times users select an application after a query and also download it, a spokesperson said.

Search results rankings in the Apple store can make or break an application. The company says that searches lead to 65% of all application downloads. There are more than 900 million iPhones worldwide.

Above the competition

The WSJ tested about 40 Apple applications, observing how they were ranked in the App Store. Using six iPhones, the Search Journal with three popular keywords for each application category to see if an Apple application first emerged. For the music category, for example, the WSJ searched for & # 39; music & # 39 ;, & # 39; songs & # 39; and & # 39; playlist & # 39 ;.

Apple applications ranked first:

Audiobooks.com, a RBmedia company, largely held the No. 1 ranking in "audiobook" searches in the App Store for almost two years. Then, last September it was surpbaded by Apple Books. The Apple app only recently began marketing audiobooks directly for the first time.

"It was literally overnight," said Ian Small, general manager of Audiobooks.com. He said the change caused a 25% decrease in daily downloads of Audiobooks.com applications. The application at that time had 35,000 customer comments and 4.8 in the 5-star ranking of the App Store. The pre-installed Apple Books app, without opinions or ratings, has ranked as no. 1 in the search for "audiobooks". It also ranks first in searches for "books" and "reader."

Apple says that the No. 1 position for books in the search for "books" is reasonable, since it is an exact name match. The application was also the first for "audiobooks" due to "user behavior data" and the inclusion of "audiobooks" as a keyword badociated with the application, and the spokesman said.

Apple's role as creator of the App Store search engine and the beneficiary of its results has left developers in a difficult situation. They argue that Apple is essentially setting its No. 1 applications, forcing anyone looking for alternatives to consider Apple applications first. Such a tactic would help preserve Apple's mobile operating system loyalty, a key to future iPhone sales, and the use of revenue-generating applications, such as Apple TV and News developers, for example.

(Dow Jones & Co., editor of The Wall Street Journal, has a commercial agreement to provide news through Apple News).

"It's definitely unfair," said Sam Liang, co-founder of Otter Voice Meeting Notes, a live transcription recording application that competes with Apple's voice memos. "People always look at the first, thinking they are the best."

Sam Liang, who co-founded a recording application with live transcripts that competes with Apple's voice notes, at Otter.ai's headquarters in Los Altos, California.

Photo:

Jason Henry for The Wall Street Journal

An Apple spokesman said its search algorithm works the same way for all applications, including its own.

Technology giants have millions of loyal users who are potential customers for auxiliary companies. Google has used its leadership in the search to sell its Nest thermostats in its online store, and Amazon has capitalized its domain of electronic commerce to market a large number of products under its own Amazon brand, such as batteries.

methodology

The WSJ conducted more than 600 searches for two days in mid-June to review where Apple applications are located in the App Store.

The Journal used at least three keyword searches related to approximately 40 Apple applications and other competitor applications. The badysis was based on the terms of AppTweak, which suggest keywords to help developers optimize their search results. In the category of maps, WSJ tested "maps", "directions" and "navigation".

Apple applications that can be detected in the App Store, such as Camera and Safari, were excluded. Some applications included in the company's operations, such as Apple Support and Apple Events, were also excluded.

The searches were conducted on six iPhone models in the US. UU. using the latest iOS 12.3.1. Three operating system were customized and three were not linked to a specific owner. The magazine found minimal variability between phones, except for some small differences, such as applications linked to Apple Watch.

On the iPhone, the app store generally shows two applications after each search: a paid ad followed by the most relevant application for the query. A recent search for "music" offered by Apple Music followed by the Apple Music application.

Apple applications that generate sales for the company appear more frequently in No. The magazine found its productivity and utility applications in its tests conducted in June. For example, searches for categories related to the Apple TV application (videos, "TV" and "movies") are linked to both Apple TV and the iTunes Store, applications that offer subscriptions and sales or video content.

Competitors like Amazon Prime Video, with over 1 million reviews and almost perfect ratings, are among the top 10 for "movies." The Netflix Inc. iPhone application has an average rating of 22 in the last year, according to App Annie, an application-focused badytics firm.

Many common searches threw multiple Apple applications over competitors. A search for "maps" first offered Apple's maps, followed by two other Apple applications: Find My iPhone and Indoor Survey. The most used Google Maps came in fourth place with more than 2 million revisions and a rating of 4.7. It was followed by Google Waze, which had more than 1 million comments and a rating of 4.8. Apple maps also appeared first in navigation and address searches.

Indoor survey, used by companies to map an interior space, was Apple's only application of the three with a rating: seven reviews for a rating of 3.9.

A company spokesman said Apple often shows applications badociated with a package developer. Because of this, it seemed to others that Apple was no longer applying this technique to its own applications. The company began eliminating this practice a year ago, a spokesman said.

The Journal, at least three basic keyword searches in almost 40 categories, determine which applications appear first. The tests were performed with six iPhone models using Apple's latest operating system and showed minimal variability in the rankings.

Apple applications did not always appear. 1 in searches. For example, in a "spreadsheet" search, Google Sheets appeared first, while Apple's competitor, Numbers, appeared eighth. Your preinstalled Reminders application did not appear in the top 10 searches for "to-do list" or "to-do".

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In the online guides available to the public for developers, Apple emphasizes that "ratings and reviews influence the ranking of your application in search results." The app store.

However, Apple includes reviews and ratings of applications that are automatically downloaded with its operating system. Recently started users to remove some of those preinstalled applications. To give users the opportunity to recover applications that they may have deleted, the company added them to the App Store.

A spokesman said that preinstalled applications do not need to be clbadified because they are already integrated into the iPhone. Some applications, such as books, were not integrated into the mobile operating system. After that changed, Apple eliminated the ratings of those applications, a spokesman said.

In some cases, Apple applications were poorly rated. According to Apple Tower, a marketing and research firm in the application industry, Apple obtained Apple ratings and earned a 2.7-star rating before Apple eliminated them.

Another Apple app, Podcasts, previously averaged at a 1.7-star rating before the reviews, was removed, according to Sensor Tower. It seems that no 1 in a search for "podcasts".

Phillip Shoemaker, who led the App Store review process until 2016, said Apple executives were aware of Podcasts' low ratings. Around 2015, his team proposed to senior executives to eliminate all applications with a rating lower than two stars to ensure overall quality.

"That would kill our Podcasts application," said the Apple executive, according to Mr. Shoemaker, who has advised some independent applications in the App Store review process since leaving Apple. The proposal was finally rejected, Mr. Shoemaker said.

An Apple spokesman said Apple executives do not remember Mr. Shoemaker's comments.

Apple says that most searches in the App Store are for the exact titles of the applications and that it is designed to produce those results.

But some competitor application title searches first served Apple applications. A search for "the podcast application" in the Journal tests came up in Apple Podcasts, Find My Friends and Apple Books instead of a popular alternative called The Podcast App. That application appeared in no. 4 with more than 88,000 reviews and a rating of 4.8.

Apple says its search for "the podcast application" ranked its own Podcasts no. 1 due to "user behavior data" in the US UU. In the United Kingdom, the Podcast application ranks No. 1, a spokesman said.

Apple has always argued that it does not have a monopoly on applications or other products. It has a 14% stake in the global smartphone market and a 35% stake in the US. UU. Market, according to Strategy Analytics. Your App Store controls 100% of applications downloaded on more than 900 million iPhones worldwide and 100 million iPhones in the US. UU. That makes it different from Google's Android, the other important mobile operating system, which allows people to download applications without having to go through their store.

The 30% discount on Apple's digital sales in the App Store last year generated an estimated revenue of $ 14 billion for the company. He added more than $ 1 billion in digital advertising revenue from the ads he sells against search terms in the store, according to people familiar with the business. The advertising search business started in 2016.

The only way for competitors to be visible above is that Apple's applications in some searches are to pay for the advertising space that precedes the first result in the rankings.

Otter CEO Sam Liang shows the machine learning capabilities of his voice recording application on Friday, July 19, 2019.

Photo:

Jason Henry for The Wall Street Journal

Almost a year and a half after launching the Otter voice recording application, Liang's service to capture and share conversations has won over 2,000 5-star comments and has been named Apple's App of the Day, but has not reached 50 best searches for "voice recorder," according to the Annie app.

Otter has paid tens of thousands of dollars to announce its application in searches for "voice memos" and "voice recorder," Mr. Liang said. The cost of marketing helps the transcription application surface before Apple's voice notes, but the company also has less money for its artificial intelligence experts to improve the product.

"I hope to finish the day when the best product wins for precision, for innovation," said Liang. "However, we want to invest more in that aspect, instead of hiring two other AI Ph.D., we have to use that money to get a better rating."

—Abigail Summerville contributed to this article.

Write to Tripp Mickle at Tripp.Mickle@wsj.com

Copyright © 2019 Dow Jones & Company, Inc. All rights reserved. 87990cbe856818d5eddac44c7b1cdeb8


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