Welcome back to This Week in Apps, the Extra Crunch 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 Extra Crunch series, we help you keep up with the latest news from the world of apps, delivered on a weekly basis.

This week, one story completely took over the news cycle: Hey vs. Apple. An App Store developer dispute made headlines not because Apple was necessarily in the wrong, per its existing rules, but because of a growing swell of developer resentment against those rules. We’re giving extra bandwidth to this story this week, before jumping into the other headlines.

Also this week we look at what’s expected to arrive at next week’s WWDC20, the TikTok clone Zynn getting banned from both app stores (which is totally fine, I guess!), Facebook’s failed attempts to get its Gaming app approved by Apple, as well as some notable Android updates and other app industry trends.

Main Story: Hey vs. Apple

One story dominated this week’s app news. Unless you were living under the proverbial rock, there’s no way you missed it. After Basecamp received App Store approval for its new email app called Hey, the founders, David Heinemeier Hansson and Jason Fried, turned to Twitter to explain how Apple had now rejected the app’s further updates. Apple told Basecamp it had to offer in-app purchases (IAP) for its full email service within the app, in addition to offering it on the company website. They were not happy, to say the least.

This issue came to a head at a time when regulators are taking a closer look at Apple’s business. The company is facing antitrust investigations in both the U.S. and the E.U. which, in part, will attempt to determine if Apple is abusing its market power to unfairly dominate its competitors. In Hey’s case, the subscription-based app competes with Apple’s built-in free Mail app, which could put this case directly in the regulators’ crosshairs.

But it also brings up the larger concerns over how Apple’s App Store rules have evolved to become a confusing mess which developers — and apparently even Apple’s own App Store reviewers — don’t fully understand. (Apple reportedly told Basecamp that Hey should have never been approved in the first place without IAP.)

Apple has carved out a number of conditions where apps don’t have to implement IAP, by making exceptions for enterprise apps that may have per-seat licensing plans for users and for a set of apps that more directly compete with Apple’s own. These, Apple calls “reader” apps, as they were originally directed making an exception for Amazon’s Kindle. But now this rule offers exceptions to the IAP rule for apps focused on magazines, newspapers, books, audio, music, video, VoIP, access to professional databases, cloud storage, and more.

That leaves other digital service providers wondering why their apps have to pay when others don’t.

Apple didn’t help its argument, when earlier in the week it released a report that detailed how its App Store facilitated $519B in commerce last year. The company had aimed to prove how much business flows through the App Store without Apple taking a 30% commission, positioning the portion of the market Apple profits from as a tiny sliver. But after the Hey debacle, this report only drives home how Apple has singled out one type of app-based business — digital services — as the one that makes the App Store its money.

Apple’s decision to squander its goodwill with the developer community the week before WWDC is an odd one. Heinemeier Hansson, a content marketing expert, easily bested the $1.5 trillion dollar company by using Apple’s hesitance to speak publicly against it. He set the discussion on fire, posted App Store review email screenshots to serve as Apple’s voice, and let the community vent.

Amid the Twitter outrage, large publishers’ antitrust commentary added further fuel to the fire, including those from Spotify, Match, and Epic Games.

For more reading on this topic, here are some of the key articles:

• TechCrunch’s exclusive interview with iOS App Store head, Phil Schiller. The exec said Apple’s position on the Hey app is unchanged and no changes to App Store rules are imminent. “You download the app and it doesn’t work, that’s not what we want on the store,” he argued. (Except of course, at those times when such an experience is totally fine with Apple, as in the case of “reader” apps.) Schiller also said Basecamp could have avoided the problems if Hey had offered a free version with paid upgrades, or if it offered IAP at a higher price than on its own website.
• Daring Fireball’s comments on the “flimsiness” of Business vs. Consumer as a justification for Apple’s rejection of Hey. John Gruber points out that the line between what’s a business app and a consumer app is too blurred. Apple allows some business apps to forgo IAP if they sell enterprise plans (e.g. per seat plans) that often involve upgraded feature sets that aren’t even iOS-specific. But in this day and age, who’s to say that an email service doesn’t deserve the same ability to opt out of IAP in order to serve its own business user base? After all, what if it upgrades its paid service with web-only features — why should Apple get a cut of that business, too?
• App Store policy criticism from The Verge. Nilay Patel sat down with Rep. David Cicilline (D-RI) and Basecamp CTO David Heinemeier Hansson to discuss the plight of Hey for its The Vergecast podcast. Cicilline said Apple’s fees were “exorbitant” and amounted to “highway robbery, basically.” He said Apple bullied developers by charging 30% of their business for access to its market — a decision which crushes smaller developers. “If there were real competition in this marketplace, this wouldn’t happen,” he added. The Verge’s Dieter Bohn also argued that Apple’s interpretation and enforcement of its App Store policies is terrible.
• Basecamp CEO’s take on Apple’s App Store payment policies: Basecamp, the makers of the Hey app, put out a company statement about the App Store rules. The statement doesn’t add anything new to the conversation that wasn’t already in the tweetstorm, except the Basecamp response to Schiller’s suggestions which was something along the lines of . The bottom line is that Hey wants to make the choice for its own business whether it needs the benefit of being able to acquire its users through the App Store or not. One way requires IAP and the other does not.
• Vox’s Recode examines the antitrust case against Apple. The article doesn’t reference Hey, but lays out some of the other antitrust arguments being leveraged against Apple, including its “sherlocking” behavior,

Headlines

Apple has denied Facebook’s Gaming app at least 5 times since February

The Hey debacle is only one of many examples of how Apple exerts its market power over rivals. It has also repeatedly denied Facebook’s Gaming app entry to its App Store, citing the rule (Apple Store Review Guidelines, section 4.7) about not allowing apps whose main purpose is to sell other app, The NYT revealed this week.

Facebook’s Gaming app, which launched on Android in April, isn’t just another app store, however. The app offers users a hub to watch streamers play live, social networking tools, and the ability to play casual games like Zynga’s Words with Friends or Chobolabs Thug Life, for example. The latter is the point of contention, as Apple wants all games sold directly on the App Store, where it’s able to take a cut of their revenues.

One of the iterations Facebook tried was a version that looked almost exactly like how Facebook games are presented within the main Facebook iOS app — a single, alphabetized, unsortable list. The fact that this format was rejected when Apple already allows it elsewhere is an indication that even Apple doesn’t play by its own rules.

Zynn gets kicked out of App Store

Image Credits: Zynn

Zynn, the TikTok clone that shot to the top of the app store charts in late May, was pulled from Apple’s App Store on Monday. Before its removal, Sensor Tower estimates Zynn was downloaded 5 million times on iOS and 700,000 times on Google Play.

This one goes out to all the early-stage startup founders. Whether you’re overwhelmed by the state of the world, overworked — or procrastination is simply an intrinsic part of your DNA — it matters not. Here’s reason to smile. We’re giving you an extra week to apply to compete in Startup Battlefield during Disrupt 2020. Fill out your application before the new deadline expires on June 26 at 11:59 pm (PT).

This is your moment to grab a double fistful of opportunity and step into a global spotlight. The virtual Disrupt 2020 represents our largest viewing audience and our biggest launch platform ever — more investors, more media and more, well, everything. If you’re chosen to compete in our premier pitch-off, you’ll go up against some of the best early-stage startups around the world.

Here’s what’s at stake: Massive exposure that can — whether you win the battle or not — change the trajectory of your startup, a launch article on TC.com, a 6 week mini-training program with TC editorial, all the perks of a Digital Disrupt Digital Pro pass (and then some) and a shot at $100,000, the Disrupt cup and all the bragging rights.

You’re eligible to apply if your company is early stage, has an MVP with a tech component (software, hardware or platform) and hasn’t received much, if any, major media coverage. Note: TechCrunch does not charge any application or participation fees or take any equity. We accept founders from all backgrounds, geographies and industries.

Veteran TechCrunch Battlefield editors (such a picky bunch) review every application and select startups that meet their discerning standards for innovation and growth potential. The virtual competition takes place during Disrupt 2020, which runs from Sept. 14 – 18.

Feel that flop sweat building up? Don’t stress. All competing founders receive weeks of free expert coaching from TechCrunch. Your pitch, demo and business model will shine like never before on game day.

Startup Battlefield consists of two rounds. Each team has six minutes to pitch and demo to our panel of TC editors, expert VCs and top entrepreneurs. Each team also faces a six-minute Q&A. Out of the original cohort, a handful of teams will move to the finals — on the last day of Disrupt — and pitch again to a new set of judges. They’ll choose one team to take home the title, the cup and the $100,000 prize.

Let’s take a peek at what other opportunities Battlefield competitors enjoy.

• Exhibit in Digital Startup Alley and demo your product to hundreds of people
• Network with CrunchMatch, our AI-powered platform. Use it to set up virtual 1:1 meetings with investors, media, potential customers or any other startup influencers
• Exclusive access to Leading Voices Webinars: Hear top industry minds share their strategies for adapting and thriving during and after the pandemic
• A launch article featuring your startup on TechCrunch.com
• A YouTube video promoted on TechCrunch.com
• Free subscription to Extra Crunch
• Free passes to future TechCrunch events

You’ll also join the likes of Vurb, Dropbox, GetAround, Mint, Yammer, Fitbit and other members of the Startup Battlefield Alumni community. This impressive group, comprised (so far) of 902 companies, has collectively raised $9 billion and generated 115 exits.

Rejoice, you have one extra week to apply to compete in Startup Battlefield at Disrupt 2020. The new deadline expires on June 26 at 11:59 pm (PT). Don’t wait another minute. Make the most of this extended opportunity.

Is your company interested in sponsoring or exhibiting at Disrupt 2020? Contact our sponsorship sales team by filling out this form.

The economic lockdown resulting from the coronavirus pandemic has had an immediate negative impact on renewable energy projects and electric vehicles sales, but the sustainable trends are still in place and may even be strengthened over the longer term.

For the first time in four decades, global installation of solar, wind and other renewable energy will be less than the previous year, according to the International Energy Agency, which is projecting a 13% reduction in installations in 2020 compared to 2019. Woods Mackenzie projects an 18% reduction for global solar installations in 2020. Morgan Stanley is projecting declines in U.S. solar PV installations from 48% in second quarter to 17% in the fourth quarter of 2020.

This is due to a combination of construction delays, supply chain disruptions and a capital crunch.

Installation of rooftop solar has been hit particularly hard. Access to homes and businesses was generally halted in March 2020 for several months. Installers have indicated that as much as half the workforce had to be furloughed. The supply chain was also disrupted as PV manufacturing in China was temporarily suspended. Installations and the supply chain will resume, and most contracts are still in place, but the robust projected growth in rooftop PV for 2020 will not be met, and it may take more than a year to catch up. Also, some businesses that planned installations may have higher priorities for cash and investment now as they reopen. Many of the small businesses planning solar installations may not return at all.

On the other hand, utility scale electricity generation from renewable energy continues to grow and take market share. In the first part of this year, renewable energy has produced more electricity than coal for the first time since the late 19th century, when hydropower started the power industry. Wind and solar are the cheapest alternatives for new electric generation in the U.S. The pandemic and collapse in oil prices will not change that. The closure of coal plants has been accelerating this year, and wind and solar will continue to be competitive with gas.

Furthermore, most solar and wind farms were already financed and construction underway in rural areas not affected by the lockdown. About 30 GW of new solar capacity have already been contracted, and as long as interest rates remain low, financing should not be a problem. In fact, many solar and wind projects in the U.S and China are rushing to completion this year to qualify for government incentives.

But supply chains for utility scale renewables were still disrupted. Solar panel manufacturing in China was halted during the first quarter and has now reopened, but facing reduced orders. At one point, 18 wind turbine manufacturing facilities in Spain and Italy were stopped while social distancing and sanitation measures were put in place. Mining operations in Africa and other countries were also temporarily halted and now face reduced demand.

The replacement of oil and gas electricity generation with renewables in developing countries is not going to seem as attractive as a few years ago. Emerging economies need to expand electricity as cheaply as possible, which means coal, gas and even diesel plants. New fossil fuel plants in developing nations could lock in carbon emissions for years.

Electric vehicle sales globally have also been severely impacted. The transition to electric vehicles takes place as people purchase new vehicles. The price of oil has collapsed, used-car prices are dropping and unemployment has soared to levels not seen since the Great Depression. Cheap gas, cheap cars and high unemployment will dramatically lower the expectations for multipassenger EV sales in 2020. Wood Mackenzie has projected a 43% global decline in EV sales in 2020 from 2019. Furthermore, many new electric models from the automakers are not expected until 2021.

However, the long-term transition to EVs will continue and may even accelerate. It still costs less to drive a mile on electricity compared to gasoline, and when the upfront cost of electric vehicles becomes competitive with internal combustion vehicles in a few years, the market should quickly move to EVs. Now that the battery range is adequate for the average driver, the last barrier seems to be the availability of fast charging stations between cities.

Before the collapse in oil demand this year, the oil majors were expecting peak oil demand to occur sometime during the 2040s. Now peak oil demand is expected earlier, perhaps in the mid-2020s. Some even think that 2019 might turn out to be the highest level of oil consumption historically. At any rate, it seems that it will be at least a few years until the 2019 levels are reached again, if ever.

However, the recent collapse in oil prices means the oil and gas industry will be able to supply fuel at very competitive prices for decades. This will at least make it more difficult for electric vehicles to take market share in the short term, and very difficult for alternative liquid fuels to be competitive. For biofuels and synthetic fuels, it seems to be a repeat of earlier decades when cheap oil crushed those industries. Replacing gas and diesel-powered cars is certainly going to be unattractive in the impoverished economies of developing nations.

But there are also bright spots for clean transportation alternatives emerging. Electric bicycles, for example, are a hot item. As people look for alternatives to mass transit and want something to move outdoors in the fresh air, electric-assisted bikes are a great solution and are no longer looked down upon as a vehicle for older (or lazy) cyclists.

Telecommuting struggled for years to take hold, but the pandemic seems to have finally changed that. The recent national lockdown has spurred many large businesses to set up their employees to work from home. They have found that it works fairly well, and many will not return to packed downtown offices.

Several experts have cited the potential for cleaner energy alternatives because the public is seeing cleaner air and the environmental benefits of a 30% reduction in daily oil consumption. Some consumer surveys have indicated a greater interest in electric vehicles.

There is certainly the hope that we will take the opportunity to revive the economy with cleaner technologies than before the lockdown. However, the reality is that workers and businesses need to start up again with the infrastructure they have, and investment in cleaner technology requires capital. Since many business operations are struggling to find cash and loans to just remain open, new clean technology may be delayed.

Yet the major infrastructure changes for a sustainable future are well underway. Solar and wind are rapidly replacing fossil fuels for electricity. Automakers and governments are committed to electrification of the transportation sector. The pandemic may be a near-term obstacle, but the transition to a sustainable economy is just delayed and may even be accelerated in the coming years.