Sneaky subscriptions are plaguing the App Store

Subscriptions have turned into a booming business for app developers, accounting for $10.6 billion in consumer spend on the App Store in 2017, and poised to grow to $75.7 billion by 2022. But alongside this healthy growth, a number of scammers are now taking advantage of subscriptions in order to trick users into signing up for expensive and recurring plans. They do this by intentionally confusing users with their app’s design and flow, by making promises of “free trials” that convert after only a matter of days, and other misleading tactics.

Apple will soon have an influx consumer complaints on its hands, if it doesn’t reign in these scammers more quickly.

However, the company’s focus as of late has been more so on getting developers to give subscriptions a try – even holding “secret” meetings where it evangelises the business model that’s earning developers (and therefore Apple itself) a lot of money. In the meantime, a good handful of apps from bad actors have been allowed to flourish.

Utilities Top Grossing Apps are worst offenders 

Today, the majority of the Top Grossing apps on Apple’s App Store are streaming services, dating sites, entertainment apps or games. But when you get past the market leaders – apps like Fortnite, Netflix, Pandora, Tinder, Hulu, etc. – and down into the top hundreds on the Top Grossing chart, another type of app appears: Utilities.

How are apps like QR code readers, document scanners, translators, and weather apps raking in so much money? Especially when some of their utilitarian functions can be found elsewhere for much less, or even for free?

This raises the question as to whether some app developers are trying to scam App Store users by way of subscriptions.

We’ve found that does appear to be true, in many cases.

After reading through the critical reviews across the top money-making utilities, you’ll find customers complaining that the apps are too aggressive in pushing subscriptions (e.g. via constant prompts), offer little functionality without upgrading, provide no transparency around how free trials work, and make it difficult to stop subscription payments, among other things.

Here are a few examples. This is by no means a comprehensive list, but rather a representative one, just to illustrate the problem. A recent Forbes article listed many more, if you’re curious.

Scanner App – This No. 69 Top Grossing app is raking in a whopping $14.3 million per year for its document scanning utility, according to Sensor Tower data. It has an unbelievable number of customer reviews, as well – nearly 340,000 as of today, and a rating of 4.7 stars out of 5. That will lead most customers to believe this is a good and trustworthy app. But when you parse through the critical reviews, you’ll see some valid complaints.

Tap around in the app and you’ll be constantly prompted to subscribe to a subscription ranging from $3.99 a week to $4.99 per month, or start a free trial. But the subscription following the free trial kicks in after only 3 days – something that’s detailed in the fine print, but often missed. Consumers clearly don’t understand what they’re agreeing to, based on their complaints. And many of the negative reviews indicate customers feel they got duped into paying.

QR Code Reader – Forbes recently found that TinyLab’s QR Code Reader was tricking users into a ridiculously priced $156 per year subscription. This has now earned the app the rank of No. 220 Top Grossing across the App Store, and annual revenue of $5.3 million.

QR Code Scanner, via Forbes 

Again, this “free” app immediately starts pushing you to upgrade by starting a “free trial.” And again, this trial converts to a subscription after only 3 days. Can you imagine paying $156 per year for QR code scanning – something the iPhone camera app now does natively?

Weather Alarms – With a 4-star rating after hundreds of reviews, this weather alerting app seems to be handy. But in reality, it’s been using a “dark pattern” to trick users into pushing a button that will start a free trial or sign them up for subscription. And it’s working – to the tune of over a million in annual revenue.

A full screen ad appears in the app, offering two buttons – try for free or pay. The small “X” to close the ad doesn’t even immediately appear! Users then end up paying some $20/month for weather alerts. That seems…excessive?

Legitimate developers have complained about this app for months but Apple even featured it on its big screen at WWDC. (Watch the video embedded below. It’s incredible.)

This dark pattern is the best (stolen from full screen ads). The (x) close button animates in after a few seconds so that people don’t see they have a way to get off the page. Watch the upper left of the subscription page: pic.twitter.com/DaRJPvdu5Q

— David Barnard (@drbarnard) April 17, 2018

*After speaking to Apple about this app, Weather Alarms was removed from the App Store over the weekend. 

Translate Assistant – The same developer behind Weather Alarms offers this real-time translation app promising instant translations across over 100 languages and has 4.7 stars after nearly 4,000 ratings.

But the app is also super aggressive about pushing its subscriptions. With every app launch, a splash screen appears with three different boxes – 1 month ($12.99/mo), 12 months ($44.99/year), or the “free trial,” which converts users to a pricey $7.99/week plan after only 3 days.

Meanwhile, the option to “continue with a limited version” is in small, gray text that’s intentionally been designed to be hard to see.

The app is making $1.3 million a year, per Sensor Tower data.

As you can tell, the issue with many of these scammy apps is that they capitalize on people not reading the fine print, or they allow an app’s design to guide them to the right button to tap. Trickery like this isn’t anything new – it’s been around on the web as long as software has been sold. It’s just that, now, subscriptions are the hip way to scam.

These developers also know that most people – especially if they’ve just downloaded a new app – aren’t going to immediately subscribe. So they push people to their “free trial” instead. But that “free trial” is actually just an agreement to buy a subscription unless you visit the iTunes Settings and cancel it right away.

Many of these “free trials” convert almost immediately, too, which is another way developers are cashing in. They don’t give you time to think about it before they start charging.

“It’s incredibly frustrating how little has been done to thwart these scams,” says Contrast founder and longtime developer David Barnard, who apps include Weather Atlas and Launch Center Pro. “It erodes trust in the App Store which ultimately hurts Apple and conscientious developers who use subscriptions,” he says.

Apple also buries Subscription management 

The issue of scam apps may not always be the failure of App Store review. It’s possible that the scammy apps sneak in their tricks after Apple’s App Review team approves them, making them harder to catch.

But for the time being, users have to take it upon themselves to cancel these sneaky subscriptions.

Unfortunately, Apple isn’t making it as easy for users to get to their subscriptions as it could be.

Compare Apple’s design with Google Play, where the option to manage Subscriptions is in the top-level navigation:

On the iPhone, it takes several more taps and a bit of scrolling to get to the same area in iOS Settings:

 

Above: Getting to subscriptions in the iPhone Settings (click images to view larger)

“I firmly believe this is not the future we should be aspiring for in terms of user experience,” says Denys Zhadanov, VP at Readdle, makers of Scanner Pro, Spark, PDF Expert and other productivity apps, speaking about these scam apps. “Apple as a platform, as an ecosystem, has always been a symbol of trust. That means people can rely on it for personal life and work needs,” he continues.

“The App Store has always been a great place, overseen and curated by highly intelligent and ethical people. I believe the App Store can stay as it always has been, if the right measures are taken to deal with those developers who trick the system,” Zhadanov adds.

Today, most subscription-based businesses thriving on the App Store come from legitimate developers. But they know how scammers could easily ruin the market for everyone involved. If allowed to continue, these scams could lead to consumer distrust in subscriptions in general.

In a worst-case scenario, consumers may even go so far as to avoid downloading apps where subscriptions are offered as in-app purchases in order to protect themselves from scams.

For now, Apple is largely relying on user and developer reports via reportaproblem.apple.com – a site most probably don’t know exists – to help them fight scammers. It needs to do more.

In addition to making access to your subscriptions easier, it also needs better police “Top Grossing” utilities and productivity apps – especially if the service’s value is questionable, and the 1-star reviews are specifically calling out concerns like “sneaky billing” or mentions other subscription tricks.

Apple declined to comment on the matter, but its Developer Guidelines clearly prohibit fraudulent behavior related to subscriptions, and insist that apps are clear about pricing. In other words, Apple has grounds to clear out these scammy subscription apps, if it chose to focus on this problem more closely in the future.

 

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No, Apple didn’t acquire music analytics startup Asaii, it hired the founders to work on Apple Music

On the heels of news of not one but two acquisitions from Apple last week, a report surfaced yesterday that Apple had picked up yet another company, the music analytics startup Asaii, for under $100 million; the report led to a “confirmation” from a shareholder in a separate report. But as it turns out, neither appear to be correct.

But we asked and Apple has declined to confirm the deal, and it gave no green light to use its usual statement — the one it often issues when smaller startups are acquired. (You can see a sample of it in this story about Apple buying computer vision startup Spektral last week, which we did get Apple to confirm.) That is, the company has not acquired the assets of the startup.

What it has done is hire a few employees of the company — specifically the three founders, Sony Theakanath, Austin Chen and Chris Zhang — who are all now working at Apple at Apple Music. (Apple has done this before: for example, it hired a team from the mapping app PinDrop in the UK; at the time it was also misreported as an acquisition.)

It’s not clear if the three will be working on similar technology, or other kinds of tools to affect how music is discovered on Apple Music. Apple has already launched a beta of its own analytics service called Apple Music for Artists.

Asaii announced in September that it would shut down its service October 14 (yesterday). It also provided music analytics, but it focused on a wider picture across multiple platforms (not just a single silo like Apple Music or Spotify).

Spotify — the music streaming business that is currently Apple’s biggest rival — has added a number of features over the years (some built in-house, some by way of acquisition) to improve the services that it offers to artists to have more transparency on how well their music, and their “brands,” are performing on Spotify. For Spotify, it’s part of a suite of services to help them leverage Spotify as a distribution platform to improve their overall business as artists.

Some believe that Spotify will continue to ramp up these services over time to take on more of the functions of a traditional label in a bid to improve its margins, and also provide more utility to artists. It’s making those moves at a time when many musicians and songwriters have grown disillusioned with the music industry and how they can (or can’t, as the case may be) make money in it.

So it stands to reason that Apple, too, might be considering how it can build similar features into Apple Music — although the company has not confirmed that it will, nor will it be using Asaii’s existing tools to do so.

To be clear, Apple already has some features in place to help promote and understand how music performs on its platform. The beta of Apple Music for Artists, which launched in June of this year, currently provides details on plays, radio spins, song purchases and album purchases.

It also lets you look into trends around your music, control how your artist profile looks, and get insights into how and where your music gets discovered. Separately, it also provides various widgets you can use to promote your Apple Music tracks elsewhere, as well a guidelines on best practices.

But there is still a lot of ground to cover for Apple when it comes to music, both in terms of what it can provide artists as tools to improve their experience on there; and also in terms of how consumers discover and use music on the service. Both of these are potential areas that you might see getting developed over time.

Theakanath and Chen had both worked at Apple previously. PitchBook lists SkyDeck, an accelerator based at UC Berkeley, as its only investor. Meanwhile, Crunchbase lists The House Fund as its only investor, with no details on the amount raised.

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Truphone, an eSIM mobile carrier that works with Apple, raises another $71M, now valued at $507M

Truphone — a UK startup that provides global mobile voice and data services by way of an eSIM model for phones, tablets and IoT devices — said that it has raised another £18 million ($23.7 million) in funding; additionally securing £36 million ($47 million) more “on a conditional basis” to expand its business after signing “a number of high-value deals.”

It doesn’t specify which deals these are, but Truphone was an early partner of Apple’s to provide eSIM-based connectivity to the iPad; and it will also be offering a service for new iPhone XS and XR models, taking advantage of the dual SIM capability. Truphone says that strategic partners of the company include Apple (“which chose Truphone as the only carrier to offer global data, voice and text plans on the iPad and iPhone digital eSIM”); Synopsys, which has integrated Truphone’s eSIM technology into its chipset designs; and Workz Group, a SIM manufacturer, which has a license from Truphone for its GSMA-accredited remote SIM provisioning platform and SIM operating system.

The company said that this funding, which was made by way of a rights issue, values Truphone at £386 million ($507 million at today’s rates) post-money. Truphone told TechCrunch that the funding came from Vollin Holdings and Minden Worldwide — two investment firms with ties to Roman Abramovich, the Russian oligarch who also owns the Chelsea football club, among other things — along with unspecified minority shareholders. Collectively, Abramovich-connected entities control more than 80 percent of the company.

We have asked the company for more detail on what the conditions are for the additional £36 million in funding to be released and all it is willing to say is that “it’s KPI-driven and related to the speed of growth in the business.”

For some context, Truphone most recently raised money almost exactly a year ago, when it picked up £255 million also by way of a rights issue, and also from the same two big investors. The large amount that time was partly being raised to retire debt. That deal was done at a valuation of £370 million ($491 million at the time of the deal). Going just on sterling values, this is a slight down-round.

Truphone, however, says that business is strong right now:

“The appetite for our technology has been enormous and we are thrilled that our investors have given us the opportunity to accelerate and scale these groundbreaking products to market,” said Ralph Steffens, CEO, Truphone, in a statement. “We recognised early on that the more integrated the supply chain, the smoother the customer experience. That recognition paid off—not just for our customers, but for our business. Because we have this capability, we can move at a speed and proficiency that has never before seen in our industry. This investment is particularly important because it is testament not just to our investors’ confidence in our ambitions, but pride in our accomplishments and enthusiasm to see more of what we can do.”

Truphone is one of a handful of providers that is working with Apple to provide plans for the digital eSIM by way of the MyTruphone app. Essentially this will give users an option for international data plans while travelling — Truphone’s network covers 80 countries — without having to swap out the SIMs for their home networks.

The eSIM technology is bigger than the iPhone itself, of course: some believe it could be the future of how we connect on mobile networks. On phones and tablets, it does away with users ordering, and inserting or swapping small, fiddly chips into their devices (that ironically is also one reason that carriers have been resistant to eSIMs traditionally: it makes it much easier for their customers to churn away). And in IoT networks where you might have thousands of connected, unmanned devices, this becomes one way of scaling those networks.

“eSIM technology is the next big thing in telecommunications and the impact will be felt by everyone involved, from consumers to chipset manufacturers and all those in-between,” said Steve Alder, chief business development officer at Truphone. “We’re one of only a handful of network operators that work with the iPhone digital eSIM. Choosing Truphone means that your new iPhone works across the world—just as it was intended.” Of note, Alder was the person who brokered the first iPhone carrier deal in the UK, when he was with O2.

Truphone has not released numbers detailing how many devices are using its eSIM services at the moment — either among enterprises or consumers — but it has said that customers include more than 3,500 multinational enterprises in 196 countries. We’ll update this post as we learn more.

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Apple rebukes Australia’s “dangerously ambiguous” anti-encryption bill

Apple has strongly criticized Australia’s anti-encryption bill, calling it “dangerously ambiguous” and “alarming to every Australian.”

The Australian government’s draft law — known as the Access and Assistance Bill — would compel tech companies operating in the country, like Apple, to provide “assistance” to law enforcement and intelligence agencies in accessing electronic data. The government claims that encrypted communications are “increasingly being used by terrorist groups and organized criminals to avoid detection and disruption,” without citing evidence.

But critics say that the bill’s “broad authorities that would undermine cybersecurity and human rights, including the right to privacy” by forcing companies to build backdoors and hand over user data — even when it’s encrypted.

Now, Apple is the latest company after Google and Facebook joined civil and digital rights groups — including Amnesty International — to oppose the bill, amid fears that the government will rush through the bill before the end of the year.

In a seven-page letter to the Australian parliament, Apple said that it “would be wrong to weaken security for millions of law-abiding customers in order to investigate the very few who pose a threat.”

“We appreciate the government’s outreach to Apple and other companies during the drafting of this bill,” the letter read. “While we are pleased that some of the suggestions incorporated improve the legislation, the unfortunate fact is that the draft legislation remains dangerously ambiguous with respect to encryption and security.”

“This is no time to weaken encryption,” it read. “Rather than serving the interests of Australian law enforcement, it will just weaken the security and privacy of regular customers while pushing criminals further off the grid.”

Apple laid out six focus points — which you can read in full here — each arguing that the bill would violate international agreements, weaken cybersecurity and harm user trust by compelling tech companies to build weaknesses or backdoors in its products. Security experts have for years said that there’s no way to build a “secure backdoor” that gives law enforcement authorities access to data but can’t be exploited by hackers.

Although Australian lawmakers have claimed that the bill’s intentions are not to weaken encryption or compel backdoors, Apple’s letter said the “the breadth and vagueness of the bill’s authorities, coupled with ill-defined restrictions” leaves the bill’s meaning open to interpretation.

“For instance, the bill could allow the government to order the makers of smart home speakers to install persistent eavesdropping capabilities into a person’s home, require a provider to monitor the health data of its customers for indications of drug use, or require the development of a tool that can unlock a particular user’s device regardless of whether such tool could be used to unlock every other user’s device as well,” the letter said.

Apple’s comments are some of the strongest pro-encryption statements it’s given to date.

Two years ago, the FBI sued Apple to force the technology giant to build a tool to bypass the encryption in an iPhone used by one fo the the San Bernardino shooters, who killed 14 people in a terrorist attack in December 2015. Apple challenged the FBI’s demand — and chief executive Tim Cook penned an open letter called the move a “dangerous precedent.” The FBI later dropped its case after it paid hackers to access the device’s contents.

Australia’s anti-encryption bill is the latest in a string of legislative efforts by governments to seek greater surveillance powers.

The U.K. passed its Investigatory Powers Act in 2016, and earlier this year the U.S. reauthorized its foreign surveillance laws with few changes, despite efforts to close warrantless domestic spying loopholes discovered in the wake of the Edward Snowden disclosures.

The Five Eyes group of governments — made up of the U.K., U.S., Canada, Australia and New Zealand — further doubled down on its anti-encryption aggression in recent remarks, demanding that tech companies provide access or face legislation that would compel their assistance.

‘Five Eyes’ governments call on tech giants to build encryption backdoors — or else

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Facebook’s gaming hub Fb.gg arrives in beta on Android

This summer, Facebook launched Fb.gg, its online gaming hub and Twitch competitor, designed to attract game streamers and their fans to watch videos on Facebook instead of on rival sites. The destination shows videos based on which games and streaming celebrities users follow, plus Liked Pages and Groups, and other featured suggestions of what to watch. Now, Fb.gg is expanding to mobile with its launch on Android.

The new app, first spotted by Sensor Tower, arrived just a few days ago and is currently in beta testing.

According to its description on Google Play, the app allows gamers and fans to discover a “universe of gaming content,” connect with creators and join communities, and play instant games like Everwing, Words with Friends, Basketball FRVR, and others.

From the screenshots, you can see how the Fb.gg app lets users tap navigation buttons at the top to find streamers to watch, or to view those streamers they’re already following, among other things. They can also participate in live conversations during gameplay with other viewers. Here, they can react to the stream using Facebook’s standard emoticon set of likes, hearts, haha’s and others.

Another section lets gamers jump into simple and popular mobile games. These titles are among those who were early participants in Facebook’s other gaming efforts in the past, like Instant Games on Facebook and Messenger.

Facebook has been trying to woo the gaming community for some time, to better compete against Amazon’s Twitch and Google’s YouTube. There’s a large and growing market for game streaming and viewing, with young viewers tuning in an average of 3+ hours a week to watch, as TechCrunch previously noted.

Facebook’s efforts to directly challenge Twitch and others kicked off in earnest this year, with the launch of its own version of Twitch’s Partner Program. Facebook’s  gaming creator pilot program, as it’s called, allows viewers to tip their favorite gamers. And with the arrival of Fb.gg in June, the virtual currency involved in those tips was being referred to as Facebook Stars, with each star equating to $0.01.

Facebook said it takes a cut of fans’ purchases of stars, ranging from 5%-30%, depending on what size pack is bought.

Facebook also recently began testing a monthly subscription option with game streamers, similar to what’s offered by YouTube and Twitch.

Of course, to truly compete with Twitch and YouTube, Facebook needs to go mobile as well – especially since the upcoming Messenger redesign will hide away extraneous features, like mobile gaming. That’s where Fb.gg’s app comes in.

The Android version of the Fb.gg beta app launched on October 9, and already has over 10,000 installs, according to Google Play.

We’ve reached out to Facebook for comment on the launch.

 

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Half of all devices now run iOS 12

Half of all devices are now running the latest version of the iOS mobile operating system, iOS 12, according to figures shared by Apple. On devices introduced in the last four years, that number is as high as 53 percent. And iOS 12 adoption is taking place more quickly than the last release did, Apple also notes.

As we previously reported, it took until November 6, 2017 for iOS 11 reach 52 percent of all current iPhones and iPads. iOS 12 achieved that milestone in mid-October.

Apple’s new figures, available here on its Apple Developer website, also confirm a third-party report released last week, which claimed to show a similar trend. According to Mixpanel’s findings, then roughly 47.6 percent of all iOS devices were running iOS 12, while 45.6 percent were running iOS 11. The remaining devices were running an older version, it had said.

Apple’s data backs this up, too, showing iOS 12 at 53 percent on all devices introduced since September 2014, followed by iOS 11 at 40 percent, then the remaining 7 percent running an earlier version of iOS.

In terms of all iOS devices, Apple’s figures are: iOS 12 at 50 percent, iOS 11 at 39 percent, with 11 percent running an earlier iOS version.

The adoption rates related to the new version of Android look far different, by comparison. The latest release, Android Oreo (8.0 and 8.1), runs on just 19.2 percent of devices. Nougat, Marshmallow, Lollipop, and KitKat still have large install bases as well, at 20.3 percent, 21.6 percent, 18.3 percent, and 7.8 percent, respectively.

But Apple has an advantage when it comes to distributing its mobile OS. While Google pushes out updates to its own supported Pixel, Nexus and Android One devices, Android updates, for the most part, are handled by OEMs and carriers.

The new data on iOS 12 adoption rates follow another third-party report, this one from CIRP, which claims Apple is catching up to Android loyalty rates in Q3 and is seeing retention rates that are at an all-time high. CIRP’s reporting is based on survey data, however, not direct measurements like Mixpanel and Apple’s figures are.

 

 

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Half of all devices now run iOS 12

Half of all devices are now running the latest version of the iOS mobile operating system, iOS 12, according to figures shared by Apple. On devices introduced in the last four years, that number is as high as 53 percent. And iOS 12 adoption is taking place more quickly than the last release did, Apple also notes.

As we previously reported, it took until November 6, 2017 for iOS 11 reach 52 percent of all current iPhones and iPads. iOS 12 achieved that milestone in mid-October.

Apple’s new figures, available here on its Apple Developer website, also confirm a third-party report released last week, which claimed to show a similar trend. According to Mixpanel’s findings, then roughly 47.6 percent of all iOS devices were running iOS 12, while 45.6 percent were running iOS 11. The remaining devices were running an older version, it had said.

Apple’s data backs this up, too, showing iOS 12 at 53 percent on all devices introduced since September 2014, followed by iOS 11 at 40 percent, then the remaining 7 percent running an earlier version of iOS.

In terms of all iOS devices, Apple’s figures are: iOS 12 at 50 percent, iOS 11 at 39 percent, with 11 percent running an earlier iOS version.

The adoption rates related to the new version of Android look far different, by comparison. The latest release, Android Oreo (8.0 and 8.1), runs on just 19.2 percent of devices. Nougat, Marshmallow, Lollipop, and KitKat still have large install bases as well, at 20.3 percent, 21.6 percent, 18.3 percent, and 7.8 percent, respectively.

But Apple has an advantage when it comes to distributing its mobile OS. While Google pushes out updates to its own supported Pixel, Nexus and Android One devices, Android updates, for the most part, are handled by OEMs and carriers.

The new data on iOS 12 adoption rates follow another third-party report, this one from CIRP, which claims Apple is catching up to Android loyalty rates in Q3 and is seeing retention rates that are at an all-time high. CIRP’s reporting is based on survey data, however, not direct measurements like Mixpanel and Apple’s figures are.

 

 

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