Apple's latest news app which allow users to read the news through the app rather than passing users to the publication's website is under review by the company itself. This is after the tech giant was reported to have been underestimating its number of users using the news app.
The miscalculation done by the Apple's team could potentially hurt its revenue as its news partner will not be able to set the correct ad rates for their advertisement on the app. According to CNBC, the app, although it did not direct the user to the publisher's website, the publisher can still profit from the news app.
This comes after an agreement with Apple that helps put the advertisement on their app, and in return, the publishing company will have the right to 70 percent of the ads revenue if Apple sells the ads on their behalf. However, the publishing company will also be able to obtain 100 percent of revenue when they sell it by themselves.
The problem has been passed to the company's top executive and its team of engineers were reported to have been working on the case. The Wall Street Journal reported that Apple's senior vice president of Internet Software and Services, Eddy Cue said that the miscalculation occurred as the company has been to focused on another aspect of the app.
Cue also added that "We're in the process of fixing that now, but our numbers are lower than reality. We don't know what the right number is." The senior vice president also added that the problem is not serious as it is better to undercount rather than overcount the number of traffic as it could result in a loss for both sides.
According to the data obtained by The Verge, Cue claims that there are 40 million users that have tried the news app. However, due to the miscalculation, the company unable to find out the exact figures of users' returning rate.
Lots of publishers are disappointed with the latest news as it shows Apple's lack of commitment to properly develop the app and market it properly. One of Apple's publishing partner, Business Insider through its president, Julie Hansen told reporters that the app visitors count is "modest relative to the enormous install base of iOS devices."
Besides the number of visitors count, publishers also have expressed their concern for Apple's requirement to use the iAd system for publishers to sell their own ads. The ad system does not contain a great analysis tool that publishers are familiar with such as comScore.
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