Apple is changing its app store and it could shake up the whole industry for developers

APPLE IS REVAMPING its app store – cutting its take on long-term subscriptions, opening up the option to more developers and giving companies the option to pay to appear ahead of rivals.

The US tech giant currently takes a 30% commission on all app sales and subscriptions, but the company will now reward those with the most loyal users with a discount.

Developers that can retain a subscriber for at least a year will get a 50% discount on Apple’s take, with the company instead taking 15% of the income for long-term auto-renewals.

The company will also open up the option of offering subscriptions to all app developers where previously it was only available to those serving media like music, video or news.

While opening up an extra stream of revenue for Apple, which will obviously benefit from any extra money being funnelled through its store, it has also been flagged as a potential game-changer for those making the apps.

Now, instead of only charging for initial downloads and in-app purchasers, developers have the option of making money for major upgrades to their software or for its ongoing use – rather than hitting users with a large up-front cost they may baulk at.

Veteran apple watcher John Gruber wrote the change to subscription options could be what made the market for “professional-calibre” apps possible.

“Developers have been asking for a way to do free trials and to sustain long-term ongoing development ever since the app store opened in 2008. This is Apple’s answer. I think all serious productivity apps in the app store should and will switch to subscription pricing.”

The changes are, however, long needed, with the app store dominated by the few companies that have managed to get paid models up and running.

Research from Sensor Tower out last month claimed the top 1% of app publishers accounted for 94% off all revenue in the US app store, while the same bracket accounted for 70% of all downloads. At the same time, the number of downloads for the top apps has been dropping by double digits in recent years.

Another cash cow

The moves come as Apple’s sales of hardware, particularly its long-term cash cow the iPhone, appear to have plateaued.

Apple also said it would allow app makers to place search-related ads on the app store, another move that could create more revenue for the Californian tech giant.

Previously, those with the bestselling and top-rated apps were naturally favoured in search results, further skewing the market towards incumbents and making it harder for new players to break in.

For a price, developers will be able to jump ahead of rivals with the first paid ads for apps, which could be targeted based on search and other criteria.

“You pay only when a user taps on your ad, and our auction system ensures you will always pay a fair market price,” the company said on its website.

Apple senior vice president Phil Schiller, who previewed the changes in an interview with The Verge, said the initiative aims to promote the subscription model.

“The developers who do have access to the subscriptions have been very happy with them,” he said.

- With AFP