Big Time Changes Coming to the Apple App Store

If you happen to be launching new apps or updating apps in the Apple App Store on a daily basis like we are, you may have noticed a significant improvement in App Store Review Times over the past few months.  Reviews that used to take a week or two are now down to a couple of days!  Well, apparently this is not a random anomaly.  Rather, it is part of Apple’s intentional goals to further enhance the App Store experience for developers.  And it’s not just tactical review times that are improving…

Apple is also expected to roll out much broader and more comprehensive improvements to the App Store including a new subscription model to incentivize a recurring revenue business model and also the introduction of paid search ads within the App Store. It appears that Apple’s goal is to allow app developers to generate more revenue while creating greater value to the Apple platform so Apple can further monetize the gigantic installed base. Industry analysts are estimating that App Store revenues may double within three years if subscriptions increase as part of the mix.

While some subscription-based apps already exist, the Subscription Based Model is not currently available on all app categories.   In fact, as it stands today, app revenues are dominated by one-time purchases and only a few type of apps (news, dating, audio streaming) can offer users subscription pricing.  Further, developers who are able to keep a subscriber for more than a year will see their share of subscription revenue increase from 70% to 85% in year 2, which will create a significant multiplying effect over time and will surely be celebrated by many an app owner.  

App Store Paid Search also has the potential to have a material financial impact for Apple and open a realm of new possibilities for app developers.  For context, last year paid search in the US alone added up to more than $29 Billion (across desktop and mobile) with Google taking the lion’s share.  With so many captive App Store users, App Store Paid Search will surely be a financially boon for Apple while also giving developers the ability to pay to have their apps show up at the top of the result list when users search on certain keywords, which almost certainly will allow them to directly impact download volumes.  A play out of Google’s playbook or a step in the right direction toward improving Apple’s App Store discovery challenge?  For sure!  A win-win all the way around?  You bet.

Stay tuned for forthcoming details from Apple over the coming months.  Hopefully, we will get more scoop at the Apple’s WWDC (Worldwide Developers Conference) next week.

In the meantime, if you are currently contemplating the app subscription model for your app, let us know if we can help.

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