This Week in Apps: Apple argues for commissions, ‘Find My’ NDA, Alexa to open apps

Welcome back to This Week in Apps, the TechCrunch series* that recaps the latest OS news, the applications they support and the money that flows through it all.

The app industry is as hot as ever, with a record 204 billion downloads and $120 billion in consumer spending in 2019. People are now spending three hours and 40 minutes per day using apps, rivaling TV. Apps aren’t just a way to pass idle hours — they’re a big business. In 2019, mobile-first companies had a combined $544 billion valuation, 6.5x higher than those without a mobile focus.

In this series, we help you keep up with the latest news from the world of apps, delivered on a weekly basis.

* This Week in Apps was previously available only to Extra Crunch subscribers. We’re now making these reports available to all TechCrunch readers.  

Let’s dive in.

Headlines

Top Story: Apple doubles down on its right to take a 30% cut

Image Credits: TechCrunch

Ahead of Apple CEO Tim Cook’s testimony before Congress, Apple on Thursday again took to the press to fight back against claims of anti-competitive practices on its App Store.

Last month, the company detailed the results of a commissioned study that showed how Apple wasn’t receiving a cut of revenue on the majority of App Store transactions — $519 billion in commerce. This time, Apple is touting the results of another study by the same analyst group that is meant to demonstrate how Apple’s App Store commission rate is similar to those of other app stores and digital content marketplaces.

The study exhaustingly compares the App Store’s 30% commission to all other forms of storefronts, online and off. This includes other app stores, game stores, e-commerce marketplaces, digital platforms and even brick-and-mortar retail. Apple’s conclusion is that it’s not doing anything different from the others, so what’s the big deal?

Of course, this misses the point. The antitrust issues surrounding Apple’s App Store are not about whether Apple is charging more than other digital marketplaces. It’s about whether that commission structure is hindering competition, given Apple’s size, wealth and power.

As indie developer Brent Simmons (of NetNewsWire) put it this week, the cut limits developers’ ability to hire and retain talent.

To an app on the App Store it might mean being able to lower prices — or hire a designer or a couple junior developers. It might be the difference between abandoning an app and getting into a virtuous circle where the app thrives.

Quality costs money, and profitability is just simple arithmetic: anything that affects income — such as Apple’s cut — goes into that equation.

To put it in concrete terms: the difference between 30% and something reasonable like 10% would probably have meant some of my friends would still have their jobs at Omni, and Omni would have more resources to devote to making, testing, and supporting their apps.

Apple’s opening of ‘Find My’ to third-parties isn’t as nice as it seems

Image Credits: Apple

Apple announced at WWDC 2020 that third-party developers, like Tile, would be able to tap into Apple’s “Find My” technology platform to locate lost items and gadgets that aren’t made by Apple. The move was meant to counteract Tile’s ongoing complaints and testimony to U.S. antitrust investigators that Apple favored its first-party services at the expense of competitors’ businesses.

Tile was particularly concerned over Apple’s plans to announce a direct competitor, AirTags, which would be allowed to leverage the “Find My” technology at a deeper level. The move could potentially have wiped out Tile’s business with a better product — at least from a consumer standpoint.

The Washington Post reported this week that Apple’s opening of “Find My” is not the olive branch it seems, however. The publication acquired the 50-page confidentially agreement that all developers would have to sign, which indicates there are a lot of restrictions on how this integration works. For instance, Apple customers using “Find My” to locate a device will be barred from using competing services simultaneously, the document said. This is an unusual restriction — and one that makers of Bluetooth devices and smart home products don’t have to agree to for their own products.

Amazon turns Alexa into a mobile app launcher

Image Credits: Bryce Durbin

How often do you think Amazon kicks itself over its smartphone failures? Given that the company hasn’t been able to compete directly on mobile, it’s finding another angle by way of Alexa. Amazon this week announced a bevy of new developer tools for its Alexa virtual assistant, including one that will allow the digital helper to launch iOS and Android apps using voice commands.

For example, you’d be able to say things like, “Alexa, start recording a TikTok,” or “Alexa, ask Twitter to search for #BLM.”

It’s unclear how many developers would adopt just a feature, outside of those that already offer one of the more popular Alexa skills. After all, Siri and Google Assistant can already launch and control your apps.

While Amazon is likely hoping that tying Alexa to the world of mobile apps could give it some momentum in terms of building an app ecosystem of its own, consumers so far have seemed to largely prefer using Alexa for first-party activities, like playing music, listening to news, controlling the smart home, asking random questions, making lists, setting reminders and more.

The move, however, may hint that Amazon is thinking about building out a mobile app ecosystem for its Alexa devices with a screen, like forthcoming versions of its Echo Show, for example.

Apple releases beta 3 builds of iOS 14, iPadOS 14

Testers this week received their third set of iOS 14 developer betas, as the software moves closer to its fall launch date. Beyond the usual bug fixes and performance improvements, only small changes were spotted this time around. This includes a new Music app icon, widget and the ability to share music to Snapchat; a new widget from the Clock app; a new pop-up when organizing the home screen that explains how to hide pages; a new pop-up when you use widgets for the first time; an updated design for Memoji masks; and more.

Facebook takes on Zoom with its latest Messenger Rooms update

Image Credits: Facebook

Facebook this week announced a new feature that it hopes will give it a better shot at challenging Zoom’s dominance on web conferencing that came about due to the pandemic. The company upgraded its Messenger Rooms group calls platform to support the ability to live broadcast calls to platforms like Facebook, YouTube and Twitch — a move that effectively combined Facebook’s live-streaming capabilities with group video chat. Facebook turned around the feature in a relatively short time, given it has only been a matter of months since Zoom has really taken off. That indicates Facebook understands the threat of online chat and socializing exiting its platform.

The goal with the new addition is to make it simpler to broadcast to social platforms, to encourage users to return. Even if they arrive in order to broadcast to competitors’ sites, like YouTube, the company understands that adding Facebook to the list of destinations will increase the output of live broadcasts on its own platform.

In addition, Facebook also this week announced that Messenger now lets you secure your chats with Touch ID or Face ID on iOS. Why don’t more apps offer this feature?

TikTok unveils a $200M fund to back U.S. creators, as it scrambles for a “Plan B”

LOS ANGELES, CA – AUGUST 01: A general view of the atmosphere during the TikTok US launch celebration at NeueHouse Hollywood on August 1, 2018 in Los Angeles, California. (Photo by Joe Scarnici/Getty Images)

As the U.S. government weighs a ban on the Chinese-headquartered app over privacy concerns, the company announced plans to hire 10,000 employees across the U.S. over the next three years and launched a $200 million fund to invest in new creators. The new fund is aimed at helping top creators in the U.S. supplement their earnings, and potentially find the next big TikTok star in the process. The platform will begin accepting applications from U.S.-based creators starting next month and will then distribute the capital over the coming year.

Meanwhile, TikTok parent company ByteDance continues to discuss a range of other options to keep its popular and profitable app alive in the U.S. The latest, according to The Information, is one that would have a small group of the company’s U.S. investors joining forces to buy a majority stake in TikTok.

The U.S government — and particularly the Trump administration — continues to be skeptical about TikTok’s China ties. This week, the U.S. House voted to ban federal employees from using the app on government-issued devices. The vote passed 336-71, as part of a package of bipartisan amendments to the National Defense Authorization Act.

Robinhood ends plan for a U.K. launch

Image Credits: Andrew Harrer/Bloomberg via Getty Images

Mobile investing app Robinhood said this week it would not be launching in the U.K., as planned. The company said it was now going to hold off on its global expansion plans to instead focus its efforts in its home market, the U.S. The company had already received over 250,000 sign-ups on its U.K. waitlist, which it says will now be deleted in line with local privacy laws. The company said it will transfer 10 U.K. employees to the U.S., but others will be let go.

The app has been more recently facing criticism in the U.S. for how it lures in young, inexperienced traders who then buy and sell some of the riskiest financial products on the market — at rates higher than other retail brokerage firms. With its hip and youthful design and social app-like features, such as confetti and emoji, Robinhood can make investing feel more like a game, The NYT reported in a recent feature. But the reality is that these inexperienced users are taking more speculative risks, sometimes with devastating results. One Robinhood user killed himself after seeing his balance drop to negative $730,000 — a figure that was higher, in part, due to some of his incomplete trades.

Google has its own ‘Onavo’

Image Credits: David Paul Morris/Bloomberg via Getty Images

Google today already allows Android app developers to collect usage data from devices where their app is installed, so it comes as no surprise that Google was doing this itself, too. The Information revealed Google’s program that allows it to access usage data on any device that has its Google apps pre-installed. Similar to Facebook’s Onavo, the data wasn’t just used to make improvements to Android, but was also used as a competitive advantage.

According to the report, Google had used the data to show how Google’s own services compared to rivals. This is what Facebook had used Onavo for, too — even leveraging those learnings to inform its acquisition strategy. APIs aren’t the only way large tech companies collect data on smartphone user habits. App intelligence firms like App Annie and Sensor Tower provide similar data to customers, obtained through a number of apps that downplay their true purpose, but really serve as data collection machines.

Data collection like this has been underway for years, but with the antitrust investigations now underway, the time may have come for regulators to actually do something about it.

Funding and M&A

• Fintech startup Meemo came out of stealth and launched its social finance app with $10 million in seed funding. Investors including Saama Capital, Greycroft, Monashees and Sierra Ventures led the round with additional participation from Amit Singhal, Hans Tung and several former colleagues from Google and Snap.
• Swiss keyboard startup Typewise raises $1 million seed round to build its “privacy-safe” next word prediction engine that works entirely offline. The round consists of $700,000 from more than a dozen local business angels; and $340,000 via the Swiss government through a mechanism akin to a research grant.
• China’s Missfresh raises $495 million for its e-grocery app with deep WeChat integrations. The round was led by state-backed China International Capital Corporation. Other investors included ICBC International Securities, Tencent, Abu Dhabi Capital Group, Tiger Global and a fund managed by the government of Changshu county, home to Missfresh’s east China headquarters
• Levitate raises $6 million for its “keep-in-touch” email marketing solution for small business that works across web and mobile. Investors include Tippet Venture Partners, Durham, North Carolina-based Bull City Venture Partners and angel investor Peter Gassner, the co-founder and CEO of Veeva Systems and investor in Zoom

Downloads

Dilims

Image Credits: Dilims

This beautifully designed indie iOS app called Dilims lets you display different time zones on one screen, and even name them with aliases or view them as a widget. The simple single-purpose utility is useful for anyone who has to work with teams or clients across time zones, and wants an easier way to see what time it is and where. For $2, that’s kind of a steal, too.

Dark Noise 2

Image Credits: Dark Noise

If you like to play ambient noise to help you focus, sleep or just relax, you’ll want to check out Dark Noise 2. This ambient noise app for iOS just got a big update, which adds new sounds, new icons and introduces iCloud syncing. Plus, it now allows you to create your own custom mix of ambient sounds so you can chill to the sounds of rain at the beach, for example, or whatever else you want to blend. The app is $5.99 on the App Store. 

Further Reading (and Listening)

• Apple Kills IDFA: How Will the Fallout Really Affect Marketers?: Dig into the implications of the IDFA changes in the latest episode of the Mobile Presence podcast, in a discussion with Shamanth Rao, veteran growth marketer and CEO of RocketShip HQ, a full-service mobile user acquisition agency.
• What Ever Happened to Digital Contact Tracing?: Lawfare takes a look at how the contact-tracing app landscape is shaping up, given the disappearance of contact tracing apps from the headlines. Though Apple and Google’s API was meant to encourage each country to build their own apps, the U.S. has instead taken a patchwork approach due to its fractured response to COVID-19. Today, there are a handful states with their own apps, and only some that plan to use Apple and Google’s technology. Many states have no plans for an app at all, turning instead to human-led contract tracing efforts.
• Designed for iPad: What makes a good iPad app today? These things, says LookUp Design in a thoughtful post.

Tweets of the Week

Apple is debuting a "Summer Newsletter" to cover topics during the beta period: pic.twitter.com/j2vedSeQqx

— Kyle Seth Gray (@kylesethgray) July 22, 2020

But as Gruber noted, Steve Jobs said "We don’t intend to make any money off the App Store." Thus, if Apple *is* making a lot of money off the App Store, that's arguably a mistake, following a misguided path.https://t.co/NLg6oCDF1z

— Jeff Johnson (@lapcatsoftware) July 23, 2020

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Apple begins assembling iPhone 11 in India

Apple’s contract manufacturing partner Foxconn has started to assemble the current generation of iPhone units — the iPhone 11 lineup — in its plant near southern city of Chennai, a source familiar with the matter told TechCrunch.

A small batch of locally manufactured iPhone 11 units has already shipped to retail stores, but the production yield is currently limited, the person said, requesting anonymity as matters are private. Apple, in general, has ambitions to scale up its local production efforts in India, the person said.

The local production of current iPhone 11 models illustrates Apple’s further commitment to India, the world’s second largest smartphone market, as it explores ways to cut its reliance on China, which produces the vast majority of iPhone models today.

Apple’s contract manufacturing partner Taiwan-based Wistron first began assembling older iPhone models in 2017. But until now, Apple has not been able to have an assembly partner produce the current generation iPhone model in India.

Wistron, which has locally assembled older iPhone SE, iPhone 6s, and iPhone 7 models in the past in its Bangalore plant, currently assembles iPhone XR units in India. Apple discontinued the local production of iPhone SE and iPhone 6s last year, the person said.

Piyush Goyal, India’s Minister of Commerce and Industry, tweeted on Friday that Apple had begun assembling iPhone 11 models in India. Apple did not comment on this story.

Assembling handsets in India enables smartphone vendors — including Apple — to avoid roughly 20% import duty that the Indian government levies on imported electronics products.

Xiaomi, Vivo, Samsung, Oppo, OnePlus, and a range of other smartphone companies, have inked deals with contract manufacturers across India in recent years to produce much of their locally sold smartphones units in the country itself.

Xiaomi, which has been the top smartphone vendor in India since late 2018, said earlier this month that nearly every smartphone it sells in India is produced in the country.

Apple has been exploring ways to ramp up its production in India for years, but the company has struggled to find contract manufacturers that adhered to its safety and quality standards, people familiar with the matter have told TechCrunch.

News outlet The Information reported in March that some of Apple’s other contract manufacturers have attempted to enter — or expand in — India, but have run into regulatory and local laws issues. Pegatron, another assembly partner of Apple, plans to set up a local subsidiary in India and begin operations in the country, according to Bloomberg.

Foxconn, which counts India as one of its biggest markets, plans to invest $1 billion in its operations in the country, Reuters reported earlier this month. New Delhi announced a $6.6 billion plan to attract top smartphone manufacturers in June this year.

Apple plans to launch its online store in India in a few months and open its first brick-and-mortar retail store next year, chief executive Tim Cook announced earlier this year. The online store’s launch in India remains on track despite the pandemic, a person familiar with the matter said.

The iPhone-maker currently commands roughly 1% of the smartphone market in India, but is among firms that dominate the premium handset segment (phones priced at $4000 or above). Apple has also been the least impacted smartphone maker in the country amid the coronavirus pandemic.

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Apple begins assembling iPhone 11 in India

Apple’s contract manufacturing partner Foxconn has started to assemble the current generation of iPhone units — the iPhone 11 lineup — in its plant near southern city of Chennai, a source familiar with the matter told TechCrunch.

A small batch of locally manufactured iPhone 11 units has already shipped to retail stores, but the production yield is currently limited, the person said, requesting anonymity as matters are private. Apple, in general, has ambitions to scale up its local production efforts in India, the person said.

The local production of current iPhone 11 models illustrates Apple’s further commitment to India, the world’s second largest smartphone market, as it explores ways to cut its reliance on China, which produces the vast majority of iPhone models today.

Apple’s contract manufacturing partner Taiwan-based Wistron first began assembling older iPhone models in 2017. But until now, Apple has not been able to have an assembly partner produce the current generation iPhone model in India.

Wistron, which has locally assembled older iPhone SE, iPhone 6s, and iPhone 7 models in the past in its Bangalore plant, currently assembles iPhone XR units in India. Apple discontinued the local production of iPhone SE and iPhone 6s last year, the person said.

Piyush Goyal, India’s Minister of Commerce and Industry, tweeted on Friday that Apple had begun assembling iPhone 11 models in India. Apple did not comment on this story.

Assembling handsets in India enables smartphone vendors — including Apple — to avoid roughly 20% import duty that the Indian government levies on imported electronics products.

Xiaomi, Vivo, Samsung, Oppo, OnePlus, and a range of other smartphone companies, have inked deals with contract manufacturers across India in recent years to produce much of their locally sold smartphones units in the country itself.

Xiaomi, which has been the top smartphone vendor in India since late 2018, said earlier this month that nearly every smartphone it sells in India is produced in the country.

Apple has been exploring ways to ramp up its production in India for years, but the company has struggled to find contract manufacturers that adhered to its safety and quality standards, people familiar with the matter have told TechCrunch.

News outlet The Information reported in March that some of Apple’s other contract manufacturers have attempted to enter — or expand in — India, but have run into regulatory and local laws issues. Pegatron, another assembly partner of Apple, plans to set up a local subsidiary in India and begin operations in the country, according to Bloomberg.

Foxconn, which counts India as one of its biggest markets, plans to invest $1 billion in its operations in the country, Reuters reported earlier this month. New Delhi announced a $6.6 billion plan to attract top smartphone manufacturers in June this year.

Apple plans to launch its online store in India in a few months and open its first brick-and-mortar retail store next year, chief executive Tim Cook announced earlier this year. The online store’s launch in India remains on track despite the pandemic, a person familiar with the matter said.

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Typewise taps $1M to build an offline next word prediction engine

Swiss keyboard startup Typewise has bagged a $1 million seed round to build out a typo-busting, ‘privacy-safe’ next word prediction engine designed to run entirely offline. No cloud connectivity, no data mining risk is the basic idea.

They also intend the tech to work on text inputs made on any device, be it a smartphone or desktop, a wearable, VR — or something weirder that Elon Musk might want to plug into your brain in future.

For now they’ve got a smartphone keyboard app that’s had around 250,000 downloads — with some 65,000 active users at this point.

The seed funding breaks down into $700K from more than a dozen local business angels; and $340K via the Swiss government through a mechanism (called “Innosuisse projects“), akin to a research grant, which is paying for the startup to employ machine learning experts at Zurich’s ETH research university to build out the core AI.

The team soft launched a smartphone keyboard app late last year, which includes some additional tweaks (such as an optional honeycomb layout they tout as more efficient; and the ability to edit next word predictions so the keyboard quickly groks your slang) to get users to start feeding in data to build out their AI.

Their main focus is on developing an offline next word prediction engine which could be licensed for use anywhere users are texting, not just on a mobile device.

“The goal is to develop a world-leading text prediction engine that runs completely on-device,” says co-founder David Eberle. “The smartphone keyboard really is a first use case. It’s great to test and develop our algorithms in a real-life setting with tens of thousands of users. The larger play is to bring word/sentence completion to any application that involves text entry, on mobiles or desktop (or in future also wearables/VR/Brain-Computer Interfaces).

“Currently it’s pretty much only Google working on this (see Gmail’s auto completion feature). Applications such as Microsoft Teams, Slack, Telegram, or even SAP, Oracle, Salesforce would want such productivity increase – and at that level privacy/data security matters a lot. Ultimately we envision that every “human-machine interface” is, at least on the text-input level, powered by Typewise.”

You’d be forgiven for thinking all this sounds a bit retro, given the earlier boom in smartphone AI keyboards — such as SwiftKey (now owned by Microsoft).

The founders have also pushed specific elements of their current keyboard app — such as the distinctive honeycomb layout — before, going down a crowdfunding route back in 2015, when they were calling the concept Wrio. But they reckon it’s now time to go all in — hence relaunching the business as Typewise and shooting to build a licensing business for offline next word prediction.

“We’ll use the funds to develop advanced text predictions… first launching it in the keyboard app and then bringing it to the desktop to start building partnerships with relevant software vendors,” says Eberle, noting they’re working on various enhancements to the keyboard app and also plan to spend on marketing to try to hit 1M active users next year.

“We have more ‘innovative stuff’ [incoming] on the UX side as well, e.g. interacting with auto correction (so the user can easily intervene when it does something wrong — in many countries users just turn it off on all keyboards because it gets annoying), gamifying the general typing experience (big opportunity for kids/teenagers, also making them more aware of what and how they type), etc.”

The competitive landscape around smartphone keyboard tech, largely dominated by tech giants, has left room for indie plays, is the thinking. Nor is Typewise the only startup thinking that way (Fleksy has similar ambitions, for one). However gaining traction vs such giants — and over long established typing methods — is the tricky bit.

Android maker Google has ploughed resource into its Gboard AI keyboard — larding it with features. While, on iOS, Apple’s interface for switching to a third party keyboard is infamously frustrating and finicky; the opposite of a seamless experience. Plus the native keyboard offers next word prediction baked in — and Apple has plenty of privacy credit. So why would a user bother switching is the problem there.

Competing for smartphone users’ fingers as an indie certainly isn’t easy. Alternative keyboard layouts and input mechanism are always a very tough sell as they disrupt people’s muscle memory and hit mobile users hard in their comfort and productivity zone. Unless the user is patient and/or stubborn enough to stick with a frustratingly different experience they’ll soon ditch for the keyboard devil they know.  (‘Qwerty’ is an ancient typewriter layout turned typing habit we English speakers just can’t kick.)

Given all that, Typewise’s retooled focus on offline next word prediction to do white label b2b licensing makes more sense — assuming they can pull off the core tech.

And, again, they’re competing at a data disadvantage on that front vs more established tech giant keyboard players, even as they argue that’s also a market opportunity.

“Google and Microsoft (thanks to the acquisition of SwiftKey) have a solid technology in place and have started to offer text predictions outside of the keyboard; many of their competitors, however, will want to embed a proprietary (difficult to build) or independent technology, especially if their value proposition is focused on privacy/confidentiality,” Eberle argues.

“Would Telegram want to use Google’s text predictions? Would SAP want that their clients’ data goes through Microsoft’s prediction algorithms? That’s where we see our right to win: world-class text predictions that run on-device (privacy) and are made in Switzerland (independent environment, no security back doors, etc).”

Early impressions of Typewise’s next word prediction smarts (gleaned by via checking out its iOS app) are pretty low key (ha!). But it’s v1 of the AI — and Eberle talks bullishly of having “world class” developers working on it.

“The collaboration with ETH just started a few weeks ago and thus there are no significant improvements yet visible in the live app,” he tells TechCrunch. “As the collaboration runs until the end of 2021 (with the opportunity of extension) the vast majority of innovation is still to come.”

He also tells us Typewise is working with ETH’s Prof. Thomas Hofmann (chair of the Data Analytic Lab, formerly at Google), as well as having has two PhDs in NLP/ML and one MSc in ML contributing to the effort.

“We get exclusive rights to the [ETH] technology; they don’t hold equity but they get paid by the Swiss government on our behalf,” Eberle also notes. 

Typewise says its smartphone app supports more than 35 languages. But its next word prediction AI can only handle English, German, French, Italian and Spanish at this point. The startup says more are being added.

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via IFTTT

Typewise taps $1M to build an offline next word prediction engine

Swiss keyboard startup Typewise has bagged a $1 million seed round to build out a typo-busting, ‘privacy-safe’ next word prediction engine designed to run entirely offline. No cloud connectivity, no data mining risk is the basic idea.

They also intend the tech to work on text inputs made on any device, be it a smartphone or desktop, a wearable, VR — or something weirder that Elon Musk might want to plug into your brain in future.

For now they’ve got a smartphone keyboard app that’s had around 250,000 downloads — with some 65,000 active users at this point.

The seed funding breaks down into $700K from more than a dozen local business angels; and $340K via the Swiss government through a mechanism (called “Innosuisse projects“), akin to a research grant, which is paying for the startup to employ machine learning experts at Zurich’s ETH research university to build out the core AI.

The team soft launched a smartphone keyboard app late last year, which includes some additional tweaks (such as an optional honeycomb layout they tout as more efficient; and the ability to edit next word predictions so the keyboard quickly groks your slang) to get users to start feeding in data to build out their AI.

Their main focus is on developing an offline next word prediction engine which could be licensed for use anywhere users are texting, not just on a mobile device.

“The goal is to develop a world-leading text prediction engine that runs completely on-device,” says co-founder David Eberle. “The smartphone keyboard really is a first use case. It’s great to test and develop our algorithms in a real-life setting with tens of thousands of users. The larger play is to bring word/sentence completion to any application that involves text entry, on mobiles or desktop (or in future also wearables/VR/Brain-Computer Interfaces).

“Currently it’s pretty much only Google working on this (see Gmail’s auto completion feature). Applications such as Microsoft Teams, Slack, Telegram, or even SAP, Oracle, Salesforce would want such productivity increase – and at that level privacy/data security matters a lot. Ultimately we envision that every “human-machine interface” is, at least on the text-input level, powered by Typewise.”

You’d be forgiven for thinking all this sounds a bit retro, given the earlier boom in smartphone AI keyboards — such as SwiftKey (now owned by Microsoft).

The founders have also pushed specific elements of their current keyboard app — such as the distinctive honeycomb layout — before, going down a crowdfunding route back in 2015, when they were calling the concept Wrio. But they reckon it’s now time to go all in — hence relaunching the business as Typewise and shooting to build a licensing business for offline next word prediction.

“We’ll use the funds to develop advanced text predictions… first launching it in the keyboard app and then bringing it to the desktop to start building partnerships with relevant software vendors,” says Eberle, noting they’re working on various enhancements to the keyboard app and also plan to spend on marketing to try to hit 1M active users next year.

“We have more ‘innovative stuff’ [incoming] on the UX side as well, e.g. interacting with auto correction (so the user can easily intervene when it does something wrong — in many countries users just turn it off on all keyboards because it gets annoying), gamifying the general typing experience (big opportunity for kids/teenagers, also making them more aware of what and how they type), etc.”

The competitive landscape around smartphone keyboard tech, largely dominated by tech giants, has left room for indie plays, is the thinking. Nor is Typewise the only startup thinking that way (Fleksy has similar ambitions, for one). However gaining traction vs such giants — and over long established typing methods — is the tricky bit.

Android maker Google has ploughed resource into its Gboard AI keyboard — larding it with features. While, on iOS, Apple’s interface for switching to a third party keyboard is infamously frustrating and finicky; the opposite of a seamless experience. Plus the native keyboard offers next word prediction baked in — and Apple has plenty of privacy credit. So why would a user bother switching is the problem there.

Competing for smartphone users’ fingers as an indie certainly isn’t easy. Alternative keyboard layouts and input mechanism are always a very tough sell as they disrupt people’s muscle memory and hit mobile users hard in their comfort and productivity zone. Unless the user is patient and/or stubborn enough to stick with a frustratingly different experience they’ll soon ditch for the keyboard devil they know.  (‘Qwerty’ is an ancient typewriter layout turned typing habit we English speakers just can’t kick.)

Given all that, Typewise’s retooled focus on offline next word prediction to do white label b2b licensing makes more sense — assuming they can pull off the core tech.

And, again, they’re competing at a data disadvantage on that front vs more established tech giant keyboard players, even as they argue that’s also a market opportunity.

“Google and Microsoft (thanks to the acquisition of SwiftKey) have a solid technology in place and have started to offer text predictions outside of the keyboard; many of their competitors, however, will want to embed a proprietary (difficult to build) or independent technology, especially if their value proposition is focused on privacy/confidentiality,” Eberle argues.

“Would Telegram want to use Google’s text predictions? Would SAP want that their clients’ data goes through Microsoft’s prediction algorithms? That’s where we see our right to win: world-class text predictions that run on-device (privacy) and are made in Switzerland (independent environment, no security back doors, etc).”

Early impressions of Typewise’s next word prediction smarts (gleaned by via checking out its iOS app) are pretty low key (ha!). But it’s v1 of the AI — and Eberle talks bullishly of having “world class” developers working on it.

“The collaboration with ETH just started a few weeks ago and thus there are no significant improvements yet visible in the live app,” he tells TechCrunch. “As the collaboration runs until the end of 2021 (with the opportunity of extension) the vast majority of innovation is still to come.”

He also tells us Typewise is working with ETH’s Prof. Thomas Hofmann (chair of the Data Analytic Lab, formerly at Google), as well as having has two PhDs in NLP/ML and one MSc in ML contributing to the effort.

“We get exclusive rights to the [ETH] technology; they don’t hold equity but they get paid by the Swiss government on our behalf,” Eberle also notes. 

Typewise says its smartphone app supports more than 35 languages. But its next word prediction AI can only handle English, German, French, Italian and Spanish at this point. The startup says more are being added.

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Apple digs in heels over its App Store commission structure with release of new study

Apple today is again taking to the press to fight back against claims of anti-competitive practices on its App Store. Last month, the company detailed the results of a commissioned study that showed how Apple wasn’t receiving a cut of revenue on the majority of App Store transactions — $519 billion in commerce. This time, Apple is touting the results of a new study that is meant to demonstrate how Apple’s App Store commission rate is similar to those of other app stores and digital content marketplaces.

The new study also comes from the Analysis Group, the same analyst group Apple used for its most recent study. The fact that Apple has tasked the firm with rolling out a series of reports to argue its case via market data indicates how seriously Apple is taking the antitrust claims.

Today, Apple is facing antitrust investigations in both the U.S and the E.U. Regulators are not only looking at Apple, but also at other top tech companies — including Google, Amazon and Facebook — to determine whether they’ve used their size and power to limit competition. Apple CEO Tim Cook, in fact, is set to testify before the House Judiciary Antitrust Subcommittee on Monday, July 27, making the study’s release even more timely, not to mention an obvious attempt at shifting the narrative in Apple’s favor.

The case against the App Store is a complicated one.

The argument for anti-competitive behavior stems from a number of factors: that Apple requires developers to process payments through its payments system, giving it a cut of transactions, as opposed to permitting the use of third-party payment processors; that Apple competes with third-party developers on the same platform while profiting from its rivals’ businesses; that Apple doesn’t allow developers any other means of distribution on its iOS platform besides listing on the App Store, which limits all sorts of apps from publishing; that Apple gives its own first-party apps deeper and more granular access to its operating system’s controls and features; and finally, that the cost of doing business on the App Store — typically, a 70/30 split between Apple and developers — is simply too high for the services provided, and it’s not universally enforced.

This latter point is the one Apple wants to dive into today.

The new study details the commission rate of Apple’s App Store and compares that with other two-sided marketplaces. On the iOS App Store, Apple’s commission rate is 30% for paid apps, in-app purchases of digital content and services, and the first year for in-app subscriptions. It falls to 15% after the first year for subscriptions.

This study points out that most app stores and video game marketplaces have the same commission structure as Apple’s (30%). This includes the Google Play Store, Amazon Appstore, Samsung Galaxy Store, Microsoft Store, plus game marketplaces across Xbox, PlayStation, Nintendo and Steam platforms (Steam is 30% for sales below $10 million). Some stores drop the 30% commission rate in specific cases — for example, Steam drops it for higher sales; Amazon charges 20% commissions on video streaming subscriptions; Xbox charges 15% for nongame subscriptions, and so on.

Image Credits: Analysis Group

Epic Games, the makers of Fortnite and one of the larger companies arguing against the current App Store model, charges 12%, however. That company has also notably stated its belief that a lower commission can help to fuel developer innovation and increases competition.

Image Credits: Analysis Group

The new study additionally details the commission rates for a wide range of non-app store/game store platforms, including digital content platforms, e-commerce marketplaces and even brick-and-mortar retailers.

Among digital content platforms, the study looks at businesses like Roku, YouTube, Amazon Prime Video Direct, Spotify’s Anchor, Nook, Audible, Patreon and others — many of which are 30% or higher. It points out that e-commerce marketplaces will sometimes exceed the 30% commission rate. This part of the study tracked commissions at 17 large digital marketplaces, including Amazon, eBay, Etsy, Walmart, Poshmark, Airbnb, Uber, Lyft, Stubhub, Ticketmaster, TaskRabbit and others.

The study even notes that developers can make more money through digital distribution than through brick-and-mortar, which is an odd point of comparison, really.

The report is handy in terms of having all this commission data centralized for easy reference in one place, as often companies hide their commission structure deep in their Help documentation, if they openly publish it at all. But it’s also, broadly speaking, common knowledge — and entirely missing the point. The antitrust issues surrounding Apple’s App Store are not about whether Apple is charging more than other digital marketplaces. It’s about whether that commission structure is hindering competition, given Apple’s size, wealth and power.

Apple could have gotten ahead of this whole problem by simply lowering its commission rate and expanding its existing carve-out for what it calls “reader apps” — those that allow users to access previously purchased content or subscriptions. Today, reader apps include magazines, newspapers, books, audio, music, video, access to professional databases, VoIP, cloud storage and other approved services like classroom management apps. This is, for example, how streaming services like Netflix are allowed to distribute an app that doesn’t offer sign-up, only a login.

But instead, Apple is doubling down. That the company is battling over its 30% commission, arguing openly that the commission is both commonplace and fair, is an indication of the growing importance of Apple’s Services businesses to its bottom line.

That business is led by its Digital Content and Services segment, which includes the App Store. In Q2 2020, Apple’s Services revenue hit an all-time high of $13.35 billion, up from $11.45 billion in the same quarter last year. With every quarter, Services grows more critical to Apple’s overall growth as a company, particularly as the smartphone market itself becomes more saturated and newer economic pressures, like the pandemic, dampen iPhone sales.

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Apple starts giving ‘hacker-friendly’ iPhones to top bug hunters

For the past decade Apple has tried to make the iPhone one of the most secure devices on the market. By locking down its software, Apple keeps its two billion iPhone owners safe. But security researchers say that makes it impossible to look under the hood to figure out what happened when things go wrong.

Once the company that claimed its computers don’t get viruses, Apple has in recent years begun to embrace security researchers and hackers in a way it hadn’t before.

Last year at the Black Hat security conference, Apple’s head of security Ivan Krstic told a crowd of security researchers that it would give its most-trusted researchers a “special” iPhone with unprecedented access to the the device’s underbelly, making it easier to find and report security vulnerabilities that Apple can fix in what it called the iOS Security Research Device program.

Starting today, the company will start loaning these special research iPhones to skilled and vetted researchers that meet the program’s eligibility.

These research iPhones will come with specific, custom-built iOS software with features that ordinary iPhones don’t have, like SSH access and a root shell to run custom commands with the highest access to the software, and debugging tools that make it easier for security researchers to run their code and better understand what’s going on under the surface.

Apple told TechCrunch it wants the program to be more of a collaboration rather than shipping out a device and calling it a day. Hackers in the research device program will also have access to extensive documentation and a dedicated forum with Apple engineers to answer questions and get feedback.

These research devices are not new per se, but have never before been made directly available to researchers. Some researchers are known to have sought out these internal, so-called “dev-fused” devices that have found their way onto underground marketplaces to test their exploits. Those out of luck had to rely on “jailbreaking” an ordinary iPhone first to get access to the device’s internals. But these jailbreaks are rarely available for the most recent iPhones, making it more difficult for hackers to know if the vulnerabilities they find can be exploited or have been fixed.

By giving its best hackers effectively an up-to-date and pre-jailbroken iPhone with some of its normal security restrictions removed, Apple wants to make it easier for trusted security researchers and hackers to find vulnerabilities deep inside the software that haven’t been found before.

But as much as these research phones are more open to hackers, Apple said that the devices don’t pose a risk to the security of any other iPhone if they are lost or stolen.

The new program is a huge leap for the company that only a year ago opened its once-private bug bounty program to everyone, a move seen as long overdue and far later than most other tech companies. For a time, some well-known hackers would publish their bug findings online without first alerting Apple — which hackers call a “zero-day” as they give no time for companies to patch — out of frustration with Apple’s once-restrictive bug bounty terms.

Now under its bounty program, Apple asks hackers to privately submit bugs and security issues for its engineers to fix, to help make its iPhones stronger to protect against nation-state attacks and jailbreaks. In return, hackers get paid on a sliding scale based on the severity of their vulnerability.

Apple said the research device program will run parallel to its bug bounty program. Hackers in the program can still file security bug reports with Apple and receive payouts of up to $1 million — and up to a 50% bonus on top of that for the most serious vulnerabilities found in the company’s pre-release software.

The new program shows Apple is less cautious and more embracing of the hacker community than it once was — even if it’s better late than never.

Apple has a plan to make online ads more private

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