Apps on iOS are sandboxed so no app has access to usage of other apps. They got around it by using a pretty forceful workaround of using VPNs to tunnel the data. The way they were tracking the app usage data was by making the user install a VPN profile so all the device's network traffic would be tunnelled through the developer's VPN servers. On the server, they would be able to track each network traffic and measure the device's app usage. Therefore the server cost which I am sure have to be very huge. Also a HUGE privacy and security issue. Apple was right to take these down as they were also against the app store guidelines for usage of MDM profiles for the wrong reasons.

Actually, this is not against Apple guidelines, they announced update on WWDC’19 in June, and now VPN apps can exist on Apple App Store again following these rules https://developer.apple.com/app-store/review/guidelines/#vpn... and https://developer.apple.com/news/?id=06032019j

It didn't actually directly track app usage locally, it tunneled all traffic through a VPN and tracked usage by monitoring network connections.

It's mind boggling that there is any good way for an app that just tracks your social media usage to make money when they have to tunnel all their user's internet usage. (Assuming they actually made any money on that $500k revenue...)

I really really doubt they made any money on $500k. Unless they developed the app themselves, hiring developers for such a complex app with backend itself would cost a few hundred thousand dollars.

Based on the story there are just 2 of them - founders, so not a lot of costs for devs.