App Store

An app store is a digital shop for programs. Programs for phones are called apps for short, for example WhatsApp, Instagram, or a mobile game. Anyone who wants an app searches for it in the store, taps a button, and gets it installed automatically. The store doesn’t belong to the developer of the app, but to the company that built the device’s operating system. On iPhones that’s Apple, on most other phones it’s Google. These companies decide which apps are allowed to be offered at all.

The bottleneck between developers and billions of devices

Before 2008, installing phone software was cumbersome and insecure. You downloaded files from the internet and hoped nothing harmful was included. The App Store turned this into a single, clear place. That was convenient for users and a breakthrough for small developers, because suddenly they could reach customers worldwide.

But this exact bundling creates enormous market power. On an iPhone, in many countries there is practically only one legal way to install an app. Anyone excluded there instantly loses hundreds of millions of potential customers. Apple and Google thereby decide the fate of business models that don’t even belong to them.

That’s why app stores regularly show up in business news. Antitrust authorities in the EU and the US have been examining for years whether this control goes too far. The EU’s Digital Markets Act now forces Apple to also allow other stores on the iPhone in Europe. The dispute over this is not yet over.

Review, distribution, and the 30 percent commission

A developer uploads their finished app to the store operator. There, a review takes place, partly automated by software, partly by staff. It checks, for example, whether the app crashes, secretly collects data, or violates the operator’s rules. Only after approval does it appear in the catalog and become visible to users.

After that, the store takes over the entire logistics. It stores the files, delivers them to millions of devices, and later pushes out updates. Payment also runs through the operator. This is the economic core of the model: from every purchase and every subscription, the store traditionally keeps around 30 percent, often 15 percent for smaller providers.

A common misconception is that an app store is just a search engine for apps. In fact, it is simultaneously a bouncer, warehouse, cash register, and security service. And the ranking in search results and charts also determines which app gets found at all.

From the phone home screen to AI distribution

You encounter this principle in everyday life every time you install a game or confirm an update. Such shops also exist outside of phones: Steam for PC games, the Microsoft Store for Windows, extension directories for browsers. Everywhere the same logic applies: central review, central delivery, and a share of the revenue.

In the AI industry, this model is currently being copied. Chatbot providers run their own directories where you can activate additional tools and specialized assistants. The idea behind it is the same: whoever controls the platform also controls access to the customers.

In the news, you come across this term mainly in lawsuits and revenue figures. The dispute between Apple and game maker Epic Games was exactly about the commission and the obligation to use Apple’s payment system. When you read such reports, it’s rarely about technology, but almost always about the question of who owns access to the device.