While Apple's services division makes a fraction of the money that its iPhone division does, it's all relative, because the iPhone remains one of the most successful consumer devices of the modern era. Thanks in large part to its 15 to 30 percent revenue cut on the App Store, the smaller unit still raked in about $10 billion just in the fourth fiscal quarter of 2018.
iOS apps that offer subscriptions must pay Apple a 30 percent cut for one year, then 15 percent after that, assuming the account is still active. Given the popularity of subscribing just long enough to binge on a show, it's not clear how often these apps actually reach the 15-percent threshold.
Meanwhile, an iOS app maker's ability to entice return customers has been limited -- until now. MacRumors has just spotted an update to Apple's support pages that detail how a developer can market subscription discounts to both current and former customers.
Apple now says that developers can pitch three different types of subscription offers: a free trial, a discounted promotional period or a reduced price if you pay for longer subscription durations upfront.
For all three types of offers, Apple does not mandate a specific maximum or minimum duration. It provides examples like a 30-day trial followed by a "standard renewal price," so app developers are apparently free to set their own trial lengths. Apple calls a discounted promotional period "Pay As You Go," wherein a developer could, for example, offer three months of service for $1.99 a month, followed by the standard renewal price.
The third type, Pay Up Front, differs from the kind that we usually see elsewhere. Instead of allowing the developer to offer a lower per-month price according to how long of a duration you're willing to sign up for -- like $100 for one year, or $150 if you sign up for two years -- Apple requires this offer to be fashioned as a promotional discount where the regular monthly price will kick in as soon as the promotional period ends.
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In all cases, Apple asserts the importance of the standard renewal price, which must kick in at some point, rather than allowing perpetual discounts. However, being able to offer discounts to both lapsed and current subscribers should still help create new opportunities for app makers. Because it's generally much easier to keep and bring back current and former customers than to hunt down new ones.
- Apple now allows app developers to pitch trials and discounts to current and former subscribers. The company does not mandate a minumum or maximum length for these deals.
- Apple collects 30 percent of all iOS app subscription revenue for the first year, then 15 percent after that. The company has not indicated any plans to change that part of the bargain.
- Apple updates App Store guidelines to compel clearer subscription fee explanations
- Netflix officially ends in-app subscriptions on iPhones and iPads to bypass Apple fees
- Apple vows to crack down on apps that record your screen activity without your permission
- Apple Music makes its debut on Google Home (CNET)
- His iPad Pro was bent. An Apple Genius found a sneaky way to get it replaced (ZDNet)
- Apple's exchange, repair, recall programs: 14 issues that are covered (TechRepublic)