the key reasons why Apple still retains a lead when it comes to apps (there's
currently 350,000 iOS apps) -- despite having been passed by Android in market
share -- is that it offers industry-leading monetization for its developers.
From direct sales to in-app
purchases and ad-driven apps, Apple offers developers a number of ways to
make the almighty dollar.
Now it's giving them one more.
Today Apple announced [press
release] that it would be giving developers access to in-app subscriptions.
The move is designed to placate disgruntled magazine and newspaper
companies, who were upset by Apple's enforcement of a prohibition on external
storefronts (Apple requires those who submit apps to conduct all business that
flows through the app within Apple's ecosystem.
Now periodical publishers can let Apple do the dirty work for a small cut.
Apple CEO Steve Jobs, who is currently on medical leave, but actively
involved with the company's day-to-day operations, states:
Our philosophy is simple — when Apple brings a
new subscriber to the app, Apple earns a 30 percent share; when the publisher
brings an existing or new subscriber to the app, the publisher keeps 100
percent and Apple earns nothing. All we require is that, if a publisher is
making a subscription offer outside of the app, the same (or better) offer be
made inside the app, so that customers can easily subscribe with one-click
right in the app. We believe that this innovative subscription service will
provide publishers with a brand new opportunity to expand digital access to
their content onto the iPad, iPod touch and iPhone, delighting both new and
The tricky part will be that Apple is allowing developers to
offer subscriptions on their own portals outside their iPhone app.
Users who sign up in this fashion for services will have to go through a
separate in-app authentication process. But businesses that sign up users
in this fashion will not have to pay service fees.
Developers are still banned from putting links to their off-site purchase
portal in their app. They're also required to provide an in-app
subscription option for any off-app subscription options they've made
Interestingly publishers are allowed to ask for additional personal information
as long as they make it clear that the user will be adhering to the publisher’s
key to the success of subscription-based apps.
So to recap for developers: