A festive mood at Apple's conference for app makers, even as storm clouds gather

Apple CEO Tim Cook speaks during Apple's annual Worldwide Developers Conference in San Jose, California, June 3, 2019.

Mason Trinca | Reuters

As Apple CEO Tim Cook took the stage in San Jose, California, on Monday, dark clouds were forming over the company in Washington, DC.

The Justice Department was given jurisdiction for a potential antitrust probe of Apple, according to a Reuters report on Monday, and CEO Tim Cook went on national television to defend the company a day later. The main antitrust arguments against Apple involve its control over developers who sell on the App Store, which is the only way for most people to install apps on an iPhone.

But you couldn't tell that from the festive mood at Apple's annual developer conference, WWDC. The 5,000-plus attendees were mostly programmers who make apps for Apple's platforms, and they were there to meet up with colleagues, get tutorials from Apple employees, and party with like-minded people.

Antitrust was the farthest thing from most people's minds.

Viewed from WWDC, the state of Apple's developer ecosystem remains strong, with a large number of talented programmers who are clamoring to make software for Apple's platforms, including iPhones, iPads, and Mac computers. Apple's developer ecosystem is critical for the company, because one key selling point for the iPhone is its access to high-quality, often exclusive applications and games.

Apple also takes 30% of the price of any app sold through its App Store platforms, which converts this thriving developer ecosystem a growing revenue stream for the company as it focuses investor attention on its growing stable of online services.

Apple's developers are generally excited about Apple software. They say that Apple's tools are the best-in-class, that its iPhone App Store provides easy access to billions of paying customers, and that they personally prefer to use Apple products — as you have to do to make iPhone apps.

$1,599 tickets

WWDC was a difficult ticket to get.

Some developers won a lottery to buy $1,599 tickets to attend the weeklong celebration of Apple's products and software. Others were sent by their companies, which paid their way. Some talented high school and college kids attended the conference on Apple's dime, with the idea that they might work for Apple or build a killer app one day.

All attendees got a custom reversible jacket when they arrived.

Many programmers in San Jose this week expressed enthusiasm over several new Apple announcements. One popular feature was Sign in with Apple, which replaces Google's and Facebook's systems for signing into apps, but with a greater emphasis on privacy.

Another popular announcement was SwiftUI, a new programming framework that drastically reduces the amount of boilerplate code needed to write a new app.

SwiftUI is still in an early stage, with many developers saying they didn't plan to use it for years, but one programmer has already published an online tutorial book about the two-day old technology.

Many developers believe Apple's developer tools and devices enable them to make apps for iOS that aren't possible on other platforms.

"When it comes to new user experiences, and particularly creative user experiences that require user experience innovation, we always start at iOS. The main reason is that the platform is much more curated and you're dealing with a more refined set of APIs and devices, so you can drive for a higher performance point there," WeTransfer Chief Innovation Officer Georg Petschnigg told CNBC before the show started. He's developed a lot of iOS apps, but recently launched a new app to tap into Android's larger user base.

Simpler to develop for

Apple's platforms target a much smaller variety of devices and have fewer versions in use than Google Android, making them easier to develop for.

Even Apple CEO Tim Cook mentioned this advantage during a speech on Monday when he said the "other guys" — Google — only has 10% of users on the most recent version of Android.

Stacey Lisik, Apple senior director of OS program management, speaks during Apple's annual Worldwide Developers Conference in San Jose, California, June 3, 2019.

Mason Trinca | Reuters

"Ultimately, I felt that iOS had fewer form factors. Android, you have a huge amount of hardware, and even on the minimum OS version, it's like, what do you choose? Those are the kind of trade-offs you have to think about," said Jesse Chor, the head of mobile for Splunk. He recently headed up the development of a Splunk Connected Experiences set of apps which are available for iPhone and Apple Watch, but not Android.

"When you are on iPhone and you push a new app, 97% of your user base is on the newest version within 48 hours," Mammoth Media founder Benoit Vatere told CNBC. His company develops two main apps, Wishbone and Yarn, for both Android and iOS.

By way of response, Google said that it released new cross-platform developer tools at its developer conference earlier this year, and that it's improving Android to make it easier to developers to target a wider range of versions of Android without doing extra work.

Still the cash king

One reason why Apple's platform remains popular among developers is that its audience is willing to pay.

Apple App Store users spent $46.6 billion around the world in 2018, app analytics firm Sensor Tower estimates. That's 1.9 times what Google Play did last year. In the U.S. specifically, iPhone users spent $79 per device compared to the average Android user who bought $56 of apps, in-app purchases, and online services through Google Play.

"According to our estimates, the world's App Store users spent nearly twice as much in apps last year as Google Play's did, despite the latter's considerably larger market global market share," Sensor Tower cofounder Alex Malafeev told CNBC.

On a website launched the week before WWDC, Apple noted that it had paid over $120 billion to developers over the past 10 years. On that website it said that "even though other stores have more users and more app downloads, the App Store earns more money for developers."

"Revenue per user remains way stronger on Apple compared to Android," Vatere agreed.

Burbling issues beneath the surface

Despite the positive atmosphere in San Jose, some developers expressed concerns about Apple's dominance in hushed tones at the conference or at unofficial side-events held in adjoining hotels.

Governments are placing more attention than ever on Apple's control of its platforms and how it might compete with its own developers. The European Union is investigating a claim from Spotify that Apple disadvantaged it in favor of its own Apple Music service. Some developers who made parental control apps felt targeted by Apple's App Store review process called "App Review" when Apple released a competing feature called Screen Time.

Several developers said that the phenomenon of Apple making apps that compete with its own developers so old it has name: Sherlocking, after an obsolete piece of Apple software from the early 2000's that competed with an app called Watson. The Verge put together a list of 9 apps that were Sherlocked at WWDC this year.

One developer who saw Apple announce a competitive feature at WWDC said that he had no warning about the move, despite an existing relationship with Apple's developer relations group. He said he asked his contact at Apple multiple times if Apple was going to compete with him and didn't get a response.

Still, he said he wanted to continue making apps for Apple's platforms, but that he might think about expanding into areas where big tech companies are unlikely to compete with him in the future. He didn't want to be named because he has an ongoing relationship with Apple.

Craig Federighi, Apple's senior vice president of Software Engineering, speaks during an announcement of new products at the Apple Worldwide Developers Conference Monday, June 4, 2018, in San Jose, Calif.

Marcio Jose Sanchez | AP

Developers also expressed confusion with the App Review process, which can take a long time and often provides unhelpful boilerplate feedback when apps are rejected.

"We're a sizable publisher, so we have an account manager we can talk to. They're responsive and we can talk to the review team. Apple doesn't share everything, but they are still communicating," Vatere said.

"Don't get me wrong, it's frustrating from time to time because you get rejected and you don't know why. But I don't mind, because there is communication," he continued.

Apple declined to comment beyond its published materials and public statements.

Ultimately, the biggest complaint among developers is probably the price Apple charges for access to its App Store platform — 30%, which is the same price charged by Google's Play Store.

Developer frustration with Apple's 30% cut broke out in unexpected ways. In a panel discussion at a conference held in a Marriott hotel next to WWDC, one man stood up during a panel for software makers to discuss subscription pricing on the App Store.

"As a developer I hate the subscription model, because Apple's cut is so stiff, it's worse than organized crime," he said.

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