Apple's "Sherlocking" Practice Continues to Impact Third-Party Developers

Apple’s habit of integrating features from third-party apps into its iOS and Mac systems is under scrutiny, with a recent report highlighting the financial impact on developers. As Apple prepares to release iOS 18 this fall, changes could affect apps generating an estimated $393 million in revenue and downloaded around 58 million times in the past year, according to app intelligence firm Appfigures.

Every June at the Worldwide Developers Conference (WWDC), Apple previews upcoming software and operating systems, often showcasing features initially developed by third-party apps. This practice, now commonly referred to as “sherlocking,” originated in the 1990s with Apple’s search app Sherlock, which incorporated features from the third-party app Watson. Today, when Apple introduces a feature that was previously the domain of a third-party app, it’s said to have “sherlocked” the app.

Initially, sherlocking seemed reasonable. For instance, the iPhone’s flashlight feature, which began as a third-party app, is now a built-in function. By observing popular third-party apps, Apple has been able to enhance its software to better meet consumer needs.

However, this raises concerns about whether Apple uses proprietary data to decide which features to develop next, and whether it provides a level playing field for competing apps. An example of this issue is when Apple launched its parental controls system. Before its release, Apple shut down several third-party parental control apps for non-compliance with its policies and didn’t provide access to a developer API for managing the built-in controls, leading to an antitrust investigation.

In recent years, Apple has sherlocked various third-party features, including Continuity Camera, medication tracking, sleep tracking, mood tracking, and apps like Freeform and Journal. This year, Apple’s focus has shifted to password managers, call recording and transcription apps, custom emoji creators, AI-powered writing tools, math helpers, trail apps, and more.

Appfigures analysed third-party apps with over 1,000 annual downloads and identified several genres targeted by Apple in 2024. These categories have generated significant revenue globally over the past year. Trail apps led with $307 million annually, spearheaded by AllTrails, the 2023 Apple “App of the Year.” Grammar helpers like Grammarly generated $35.7 million, math helpers $23.4 million, password managers $20.3 million, and custom emoji apps $7 million.

Trail apps accounted for the bulk of the potentially sherlocked revenue (78%) and 40% of the downloads. In May 2024 alone, these apps saw an estimated $28.8 million in gross consumer spending and 2.5 million downloads.

Many app categories were experiencing rapid growth, with math solvers seeing a 43% increase in revenue year-over-year, followed by grammar helpers (+40%), password managers (+38%), and trail apps (+28%). Conversely, emoji-making apps saw a decline of 17%.

By download volume, grammar helpers had 9.4 million installs in the past year, followed by emoji makers (10.6 million), math solvers (9.5 million), and password managers (457,000).

While these apps have loyal user bases that might not immediately switch to Apple’s built-in alternatives, Apple’s “good enough” solutions could hinder their growth potential. Casual users may find Apple’s integrated features sufficient and avoid seeking alternatives.

Nevertheless, apps that continue to innovate and enhance their features beyond Apple’s offerings, while leveraging new opportunities like Apple’s improved Siri, may stand a better chance of maintaining their user base and growing despite the competition from Apple’s first-party solutions.

Main Image: PC-Tablet India