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With CloudKit, Apple Inc. Fires a Small Shot at Facebook

Evan Niu, CFA
June 6, 2014

At Apple's (NASDAQ: AAPL) WWDC presentation this week, the company unveiled a slew of tools meant to make life easier for developers. One of those tools, CloudKit, represents Apple's first foray into backend services for apps. Backend services are critical for many apps today, with one of the most popular services being push notifications.

CloudKit is available to developers for free subject to certain limits, and Apple has not yet outlined pricing for developers that want to use CloudKit beyond those limits. So who stands to lose as Apple enters the Backend-as-a-Service, or BaaS, arena?

Parse is the dominant BaaS vendor right now, with an estimated 28% market share as of early 2013. Social networking giant Facebook (NASDAQ: FB) scooped up the company in April of last year for an estimated $85 million. Parse is a cross-platform BaaS player, supporting iOS, Google (NASDAQ: GOOGL)(NASDAQ: GOOG) Android, Microsoft Windows Phone, and more.

The CloudKit free limits are quite generous compared to Parse's free limits, which are really just meant for developers to test apps. Once developers begin to scale on Parse's platform, that's when the costs start to scale as well. That's why CloudKit may prove to be a powerful incentive to get developers to switch from Parse -- at least for developers willing to focus on iOS.

CloudKit is really just one aspect of Apple's big push for exclusive iOS developers. Apple and Google have both been aggressively trying to win over exclusive content, especially mobile games. Apps built on Apple's new programming language, Swift, will be harder to port to Android. The same will be true for games built using Apple's new Metal