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Apple pushing subscriptions for apps; introduces ads on App Store search


Apple is revamping its App Store by allowing developers to earn 15% more share in revenue when they complete a one-year subscription per customer. It has also added a new feature called ‘Search Ads’ to display ads on search results, reports The Verge. Traditionally, Apple takes 30% of revenue and the remaining 70% goes to the developer. Starting 13 June 2016, developers with subscription-based apps will get a higher (85%) share of revenue when they are able to maintain a subscription for more than a year with a customer.

Changes in Subscription model:

Apple is also opening up the subscription model for apps to all developers to attract them into using the model; previously it was available for a certain categories of apps only.

Distinct prices based on countries: Apple will allow developers to set different prices for their apps based on country/territory. A new iTunes Connect pricing tool will help developers to take decision on pricing, based on current exchange rates. If there is a tax increase or currency adjustment in a country, the price of subscriptions will not be affected unless the developer decide to make adjustments on prices.

Different prices for new subscribers: New subscribers can be charged differently from the older ones—either at a higher or lower price. However, subscribers who have already enabled the auto-renewable subscription model will be charged at earlier prices quoted by the developer. In July last year, Apple introduced new pricing tiers for India that will let developers charge as low as Rs 10 for their apps.

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Levels of subscriptions: Developers will also be able to offer subscription based on basic, premium and pro level memberships. In addition, users will have the freedom to choose between service levels—upgrade to pro level, or downgrade to basic level, etc.

Ads in iOS app store

Ads within App Store search results will be sold to developers through an auction system with no minimum costs so that both bigger and small developers can purchase ads without worrying about budget constraints. Moreover, developers can set a limit on how much they can spend on search ads; after they reach that limit, ads will stop appearing on search results. Search ads will run on a beta test during this summer, developers can sign up here.

Non-tracking ads: Apple said that it is trying to make ads more ‘transparent’ (literally) by marking them with a light blue background so that users can identify them as a paid ad. The company also claims that the search ads system will not track its user’s search queries or data being generated from within the app. Individual user data is not given to developers, Apple instead provides “aggregate” insights to developers to make campaign decisions based on specific keyword selection, audience targeting, and campaign management.

Ads will not be shown to users whose Apple IDs are registered under the age of 13 years.

Apple financials: Apple posted a net profit of $10.5 billion for the quarter ended March 26, 2016 (Q2FY16) and generated revenues of $50.6 billion. Apple CEO Tim Cook said that iPhone sales were up 56% this quarter. He added that “I view India as where China was maybe seven to ten years ago from that point of view, and I think there’s a really great opportunity there.”

Our Apple coverage here.

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Image Credit: Flickr user Photo Giddy under CC BY-NC 2.0

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