What do the new App Store changes mean for developers?

Apple’s Phil Schiller has told media that App Store’s supported pricing mechanics will be changing soon and they will also be introducing paid visibility in search results. These will be leading to significant changes to app designs. My first thoughts:

  1. Subscription pricing becoming widely available will make it easier to produce several types of apps which produce incremental user value over a longer period. Think many current SaaS products on the web, which might today have a free app, despite the app being what users actually value. Those could change to have free web service, subscription app. Despite Apple’s higher commission (compared to web subscriptions, eg Stripe), the distribution balance could easily favor mobile native subscription. On the other hand, nickel and diming users with in-app purchases for multiple relatively minor features will no longer be necessary to make profit.
  2. App Store advertising will move some of the current cross-promotion and in-app advertising budgets to the store. However, I don’t see it making discovery significantly easier. Already trends are looking quite hard for most new apps, whether games or utilities, as people are increasingly resistant to install more on their overflowing devices. App Store itself is not where that visibility will help a lot.
  3. Finally, the reduced commission for second-year payments will bring a benefit to apps which already enjoy a significant user retention and lifetime value (LTV). It’s a further incentive for publishers to prefer charging subscriptions over Apple’s channel instead of on the web, but will not be benefiting majority of apps, as those high retention cases are rare, though well known.

Of course, most developers will also need to balance this with their offering on the other major platform, Android. A cross-platform solution will need a bit of careful design.

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