×

This Ukrainian Mac product has a cult following — and could hint at Apple's future

  • Setapp — a monthly subscription to Mac apps — has been called the "Netflix of apps."
  • Setapp is gaining steam at a time when Apple's future is increasingly in subscriptions, education and enterprise — three areas where Setapp thrives.
  • Setapp's rave reviews — and different way of thinking about apps as a bundle — could be indicative of Apple's future plans, as the iPhone company revamps its software and services sales to double by 2020.
Macs used in the classroom.
Source: Apple Inc.
Macs used in the classroom.

It's less than 2 years old, but Setapp — a monthly subscription service to Mac apps — has been called the "Netflix of apps," credited with "filling a hole that needs to be filled."

Compared to Apple's 1.3 billion active devices, Setapp's reach is miniscule: It has 17,000 paid users and recurring revenue of $1.5 million.

But those who use the service can't stop talking it up. In fact, the previous owner of Setapp's Twitter handle accepted a lifetime membership in lieu of payment. Setapp has also received kudos from Product Hunt and SXSW.

Setapp is gaining steam at a time when Apple's future is increasingly in subscriptions, education and enterprise, three areas where Setapp thrives. The subscription service also supplements an area where some people think Apple is lacking — MacOS.

Setapp's rave reviews and its different way of thinking about apps as a bundle could be a map to Apple's future plans, as the company tries to double its software and services sales by 2020. While Apple's services include things like Apple Pay and Apple Music, the App Store is likely the most profitable service, estimates Macquarie Research analyst Benjamin Schachter.

How it works

For $9.99 a month, users get access to Setapp's catalog of apps, which includes everything from file organization apps to translation apps and study aids for the periodic table of elements. You might have to pay thousands to buy any of these apps on their own, but for the flat monthly fee, you can access as many as you want through the Setapp icon on your Mac.

There are no in-app purchases, paid upgrades or ads, and all the apps included are fully updated. The only catch? Stop paying the subscription, and the apps stop working.

Oleksandr Kosovan runs Kyiv-based Macpaw, the company behind Setapp, which also makes other products.

He said Setapp is partly inspired by the idea that Mac users were neglected compared to the innovations happening on iPhones.

He also said many independent software makers had complained about declining revenues in the Mac App Store, and Setapp provided recurring revenue and a way to promote apps to new users.

Since Setapp launched in beta at the end of 2016, it's more than doubled its app offerings to 110, and is now available in German, French, Portuguese, Spanish and Italian. It also has a student account (50 percent discount) and is planning a family plan and Setapp for business.

Kosovan compared the business model to Adobe, which has also moved to cloud-based subscriptions, although its products tend to be much more expensive than the individual Mac apps offered by Setapp. He said that products like Setapp make it easier for small organizations with a handful of IT staff to keep all the software updated.

Kosovan pointed out that Apple has moved to a more "general" audience over time, updating the iPad and iPhone more frequently than high-end desktops like the Mac Pro. But earlier this month, Apple told TechCrunch it was planning a new Mac Pro for 2019 with a totally new workflow.

That's just one sign that Apple's focus may return to power users — the kind of users that could benefit from Setapp.

Subscriptions and enterprise

Apple is tight-lipped and rarely reveals plans for future products, and like many companies, Apple's ideas and prototypes don't always make it to shelves.

But there are other signs that services like Setapp — software subscriptions aimed at Mac-powered businesses and students — may get more common.

For one, Apple recently acquired magazine subscription app Texture, and started allowing iOS app subscriptions in 2016, both potential sources of recurring services revenue.

At the end of March, Apple hosted an education-themed event that focused on new software and cloud offerings. While many education apps are designed for the iPad instead of the Mac, Kosovan said Apple may be looking toward a more universal operating system in the future, which would make its Mac app model more relevant. (Bloomberg has reported that Apple is considering a universal user experience across devices, but Apple has never confirmed it.)

A subscription service like Setapp might also help the Mac grab more business users. A group of Barclays analysts led by Mark Moskowitz speculated in February that Apple could start offering an enterprise-grade cloud file sharing under its iCloud brand. Apple has also integrated apps into Apple Business chat.

Apple analyst Horace Dediu has already suggested that all these elements could come together under a subscription bundle product like "Apple Prime."

"Services has been growing relentlessly for over a decade," he wrote in February. "This steadiness of growth makes is a juggernaut. Apple is increasingly speaking about subscriptions as the key metric."