[Global Network Technology Reporter Chen Jian] A few months ago, Apple officially announced new rules regarding rewards: any in-app purchases made by users for content creators would fall under Apple's in-app purchase policy and would result in Apple taking a 30% cut. Since these regulations were implemented, numerous apps have been impacted. Some have decided to comply, while others have expressed frustration and resistance. Recently, there have been rumors suggesting that Apple might be pressured into removing its share of rewards.
The news about Apple potentially dropping its share of rewards didn't come directly from Apple itself. Recently, many Chinese internet executives have told the press that Apple is considering allowing users to send "rewards" directly to content creators without going through the Apple App Store. This would bypass the traditional "In-App Purchase" mechanism that Apple has enforced.
Why did Apple decide to address the "rewards" issue?
On June 11, Apple updated its App Store Review Guidelines on its developer website. These guidelines specified that if developers want to offer certain features in iOS apps—such as user subscriptions, in-game virtual currencies, game levels, access to premium content, or full-feature versions—they must use in-app purchases.
Apple went further, stating that iOS apps can also use in-app purchases to let consumers tip digital content creators. These apps cannot use other buttons, external links, or alternative payment channels outside of Apple’s system.
Prior to this update, Apple had already required that all purchases of music, novels, or videos on iOS go through Apple's payment channels (known as "in-app purchases"). However, these rules did not previously apply to "rewards."
China's role as a global internet powerhouse has evolved, becoming a hub of innovation. The "rewards" feature can be seen as a localized function developed in China and later adopted by many international apps. For instance, Twitter’s Periscope, a video livestreaming service, allows users to tip streamers to generate income. Similarly, Twitch, the world’s largest livestreaming platform, launched a comparable feature called "Cheer." Before the "rewards" model was introduced, platforms like Facebook primarily allowed streamers to earn money through ad displays.
However, Apple disagrees with how Chinese developers view "rewards." Apple does not see tipping as a way for one person to show appreciation and compensate another financially. Instead, Apple considers this as a sales activity where readers pay to access content. According to Apple’s App Store policies, any app purchasing music, novels, or videos must do so via Apple’s payment channels (in-app purchases). While Apple Pay supports various payment methods in China, including China UnionPay and Alipay, it notably excludes WeChat Pay.
Following Apple’s new rules on "rewards," domestic developers were disgruntled. Apple would take a 32% cut from the total amount of rewards, leaving creators with only 68%. This significantly hurt the interests of local developers. Despite Apple’s strong market position, which enabled it to collect a share of rewards from platforms like the WeChat public platform, YingKe livestreaming, and others, some developers reluctantly complied. Today, Toutiao, Zhihu, and YingKe have adjusted their iOS payment methods for rewards, with Tencent WeChat making the boldest move by completely removing the tipping feature.
At that time, some analysts suggested that Apple's involvement in sharing rewards was linked to its domestic business pressures. According to Apple’s Q2 2017 earnings report, iPhone smartphone sales dropped to 50.76 million units, down from 51.19 million in the same period last year, failing to meet analysts' average expectation of 52 million. China was particularly hard hit. Apple’s revenue in Greater China fell 14.1% year-over-year to $10.73 billion, marking the fifth consecutive quarterly decline. Over the past five quarters, revenue fell by 26%, 33%, 30%, 12%, and 14% year-over-year, respectively. Although Apple released new products like the iPad and iMac, these were not its primary revenue drivers. With the rise of Chinese smartphone manufacturers, Apple's influence in the Chinese market is being gradually overshadowed by domestic brands like Huawei, OPPO, and Vivo. Even Apple's latest release of the red-colored iPhone models, which don't represent significant upgrades, has left consumers unimpressed. The upcoming 10th anniversary iPhone has also put consumers in a wait-and-see mode. With Apple's revenue under immense pressure, it had to resort to this shortcut.
Why did Apple’s stance change?
According to foreign media reports, an unnamed Apple executive mentioned that policy pressure was a key reason behind Apple’s decision to drop the rewards share. The World Wide Web reported that a company had begun informing the Ministry of Industry and Information Technology about this issue, questioning the fairness of Apple’s in-app purchase rules. However, the Ministry of Industry and Information Technology stated that it is not currently involved in this dispute. That said, multiple companies have reportedly raised concerns, bringing domestic regulatory pressure to bear on Apple.
On another note, the maturity of China’s smartphone market played a role. While Apple’s iOS platform enjoys a good reputation, Android dominates the market share in China, and many people here own multiple devices. Moreover, on the Android platform, the "rewards" feature remains intact. Whether it’s WeChat or other platforms, the "tip" function continues to exist, leading many developers and content creators to gravitate toward Android. This puts Apple at a disadvantage in the competitive ecosystem, which could harm its long-term position. Whether the revenue gained from taking a share outweighs these potential losses remains a critical consideration for Apple.
Currently, some media outlets have revealed that Apple is planning to update its developer guidelines. Apple may stop enforcing third-party services like WeChat and Weibo. However, if major streaming platforms or knowledge-based payment systems require additional fees, Apple might continue to charge its standard 30%.
"There’s no smoke without fire," and rumors often turn into reality. Apple’s "rewards" feature has faced opposition from numerous content creators and developers, with its rules being questioned as unreasonable given Apple’s dominant position. Although Apple remains a model in the tech industry, it has been criticized for its "strong irrationality" and various practices. I hope Apple can rely on continuous innovation to boost its profits rather than exploit its market dominance unfairly.
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