Why charge a customer once when you can do it multiple times?
It's a question that Apple is grappling with as it looks to make up for slowing iPhone sales.
The tech giant is set to introduce a new model for apps that encourages developers to make products that can be had on a subscription basis, rather than for a one-time fee, Bloomberg reported Wednesday.
The Apple Inc. logo is seen before the start of an Apple Inc. event, March 21, 2016. (Photo: David Paul Morris/Bloomberg via Getty Images)
The current arrangement sees Apple take a 30 per cent cut of apps sold in its App Store, according to The Verge.
The new model would see developers who make subscription-based apps take a bigger cut of the profits after one year — 85 per cent, instead of 70 per cent.
Apple would also charge developers to give their apps prominent display in the App Store — not unlike the paid search results you see on Google.
It's an idea that comes as Apple sees major returns from gaming. As much as 75 per cent of revenue from the iOS app store came from games up to April 2016. Most of the App Store's top-selling products can be had for free, with in-app purchases made along the way.
Phil Schiller, senior VP of worldwide marketing for Apple, introduces the iPad Pro with 9.7-inch display during an event at the Apple headquarters in Cupertino, Calif. on March 21, 2016. (Photo: Stephen Lam/Reuters)
Apple had previously resisted the idea of doing search ads.
But Phil Schiller, the company's vice-president of worldwide marketing, told The Verge that the tech giant is looking to "carefully do it in a way that, first and foremost, customers will be happy with."
He said search ads would be designed so that they're "fair to developers, and fair for indie developers, too." As Bloomberg noted, developers would only have to pay when App Store users actually clicked the ads.
Apple CEO Tim Cook speaks about the iWatch during an event at the Apple headquarters in Cupertino, California March 21, 2016. (Photo: Stephen Lam/Reuters)
But these aren't the only innovations that Apple is bringing to the App Store.
The company is also reducing product review times so that half of the apps submitted only take 24 hours to approve, while 90 per cent take 48 hours to receive a thumbs-up.
Reaction to Apple's plan was decidedly mixed. It drew some concern from Fraser Speirs, who works at the Scotland-based Cedars School of Excellence, an institution known as the home of the first "1:1 iPad programme."
Every student at the school has an iPad — and Speirs wonders whether Apple has considered the effects of its new arrangement on education.
I sincerely hope someone at Apple has thought about how all these subscription apps will deploy in schools. https://t.co/K8Y6PMkzcn— Fraser Speirs (@fraserspeirs) June 8, 2016
Others, such as programmer Miguel de Icaza, were more encouraged by the news.
Apple doing some announcements pre-WWDC, great news on subscription pricing for everyone: https://t.co/KOs1DkL2OZ— Miguel de Icaza (@migueldeicaza) June 9, 2016
The new system will be implemented starting June 13, on the first day of Apple's Worldwide Developer Conference, according to Bloomberg.
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