In 2019, Apple has paid a total of $38.75 billion dollars for developers on the iOS Platform. In 2018 this number was around 34 billion dollars. Interestingly enough, despite all the challenges, a small piece from these paid dollars have been received by developers in Kosovo as well. But what are those challenges that they have faced to date and what are the new possible opportunities?
How does monetization work?
Before we dive into the conversation, we need to explain how apps work. If they are free, without any ads, they have been released on purpose for free by developers for potential customers.
If the app contains ads then this is one form of how the developer might make money to support his product. Another more stable income is through subscriptions or in-app purchases. This brings direct income to developers, in form of shared profit between Apple (30%) and Developer (70%).
How did this work in Kosovo?
If you want to make use of App Store features such as subscriptions or in-app purchases you need to have a business presence elsewhere, besides Kosovo. What we did with Frakton, we registered our company in the USA and registered for a US Bank account in order to get the chance to monetize our products and make money from potential customers. The generated revenue has to be declared accordingly and relevant taxes have to be paid in the US. Then when you have to make a transfer to Kosovo, you have to make relevant payments for the transfer and also take care of relevant taxation in the local country now, due to the income from aboard. Basically a complicated process, with a lot of expenses and not very rewarding or motivating.
There are also others how to make use of Albania or Macedonia for the same purposes. They have to pay taxes according to the country where they are present and pay other services such as accountants, rent, etc. Then again if a transfer is made to Kosovo, another cycle of extra chargers follows.
And I’m pretty sure there are other approaches as well. The reason why this was so, is that we had no chance to register on iTunes Connect with a local developer account and it’s not possible still. Kosovo is not on the list and you can’t register through another country. There seems to be some movement though! To date, I have sent a couple of emails and tweets and what not to Apple Support to try to get their attention to fix this big problem for the dev community but with no luck. Now with the recent launch of the App Store in Kosovo, I believe that the day has come! And I see some changes in the country list as well, with an item being named .xks something, but it’s a work in progress as it doesn’t process anything.
But what can and has changed with App Store in Kosovo?
First of all the hopes are much higher now that the issues mentioned above which impact developers directly will be finally solved. The upside is that for the first time after the launch for iPhone around the world, we get the chance to use our credit cards as well to pay for Apple Services or apps built by developers for it.
This also indirectly hints that local developers, startups, entrepreneurs, and companies will finally get a chance to generate revenue through local clients as well, who in the past had to use cards from other countries, and similar workarounds. However, the number of active users who used such ways was only a small group. So very limited income from locals, especially if you would serve them with your product, close to no income at all through subscriptions or in-app purchases!
With the launch of App Store, Apple Arcade, Apple Music, Apple Podcasts and iCloud, we will pretty soon see some exciting developments for the IT community, including:
- More Developers / More Jobs — Being an entrepreneur and employer on my own, I often face the challenges of finding local and talented iOS Developers. Sometimes the reason is that it’s more expensive to the developer to code for iOS, because you need a Mac or an iPhone, however certainly the limitations that I have mentioned above have contributed to this problem. Anyhow, with the launch of Apple’s services, we’ll see soon enough new apps coming up to the scene and new developers with them. Local customers can now use their credit cards to pay them as well, so instead of spending 1€ for a Macchiato, they can spend it on a developer built product.
- More Apps / More Creativity —There are many apps that have been built in Kosovo and are available on App Store, however they are available for global customers, which is not a bad thing and it’s a very good thing, but there’s a lack of data of what is in total locally made and available for global customers. With App Store in Kosovo, we’ll be pushed for more products, and this will mean that we’ll see more products and more apps being launched. These apps will help the country further push the digital transformation process and also provide better technological services for customers.
- Fewer expenses — The developers, companies, freelancers, etc. that I mentioned in the bringing will have fewer expenses. With a chance to use their own local bank account in Kosovo, they will not need to pay double taxes and other expenses that they have faced to date. This means that people with local bank accounts will pay more local taxes for the country and also contribute to the developing economy of the country.
- Kosovo promotion — Having an independent App Store, Kosovo has now the chance to see the real talent it has for apps that are built for the local users or for the global ones. We’ll also be able to see most downloaded apps, trending apps, most paid-apps, etc. Also, visitors will get to know more of the local apps when they come for a visit to the country, instead of having to struggle to find such tools on their own.
- Data, data, data — With all that data in the past that was scattered in different markets, Apple didn’t know what were the trends in Kosovo. Interestingly, 96% of Kosovo households are connected to the Internet, and people are crazy about iPhones when one would expect Android phones to have a strong presence in the market. Yet this information was not available to Apple to know in a more separate — entity manner, due to the usage of different App Stores from the local users.
- Localizations and locally used products — Maybe finally we’ll see Apple consider allowing the localization of apps in Albanian, which would bring apps in Albanian to a global estimated population of over 10 million Albanians. In Kosovo, there are about 2 million inhabitants, in Albania about 3 million, in Macedonia close to a million, and so on. Globally scattered there are a couple of other millions, so it’s a huge market to tap into for developers and Apple as well. Apple supports 40 languages to date, so language 41 could be Albanian.