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apple is offering a disguised discount called "apple tax" as the app store launches a "returning customer discount"

2024-09-16

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"science and technology innovation board daily" september 16th (special correspondent chen junqing)recently, apple introduced a feature in app store connect called "set up repeat customer discounts for auto-renewable subscriptions", which allows developers to provide discounts to users who have stopped subscribing, in order to attract customers who have previously canceled their subscriptions to re-subscribe on the app store, helping developers alleviate the problem of user loss for subscription apps.

according to apple, if the app provided by the developer has an auto-renewal subscription, the developer can select the incentive type to define the scope of users eligible for preferential subscriptions, such as providing six months of preferential monthly fees or discounted annual fees to old users who have canceled their subscriptions. developers can create up to 350 recall offers for each subscription.

as for the apple store, it will carry out a series of promotions for users who meet the discount conditions. users can find repeat customer discounts in multiple locations in the apple store, including app product pages and editors' picks in the "today", "games" and "apps" tabs.

in ios 14.3, ipados 14.3, and macos 14 or later, users can view relevant offers on the "manage subscription" page. users of ios 18, ipados 18, and macos 15 will see the "retention offer" page in the app.

in 2018, apple decided to open the subscription model to all apps. in the first year, the previous 3/7 split model with developers was continued. if users continue to subscribe after the first year, apple will adopt a 15/85 split model for this part of the subscription fee. in the month after adopting this model, the user retention rate of subscription apps dropped from the original 61% to 41%. the purpose of providing developers with the "returning customer discount" function is to improve the user retention rate of subscription apps.

in addition to helping developers improve the problem of subscriber churn, apple has also introduced relevant measures to help developers increase the number of subscription app users.

in december 2023, apple launched a feature called "contingent pricing" for developers. according to reports, this feature allows developers to offer discounted prices to subscribers, provided that they are currently subscribing to another subscription service. for example, "ocean journal" paid users can subscribe to the "mountain climber" app at a discounted price of $4.99 per month instead of the original price of $5.99.

in addition, apple also provides the storekit api to help developers obtain more information about user subscriptions, such as auto-renewal status, auto-renewal tendency, and reasons for canceling subscriptions.

helping others is also helping yourself. as we all know, apple charges a commission of 15% to 30% for purchases in its app store. for apple, developers gaining more subscription app users and higher subscription app user retention rates will have a positive impact on apple's revenue.

in addition to helping developers, apple is also committed to increasing the number of subscriptions and user stickiness of its own application products. in 2020, apple launched the apple one plan. the plan packages and sells multiple services such as icloud+, apple music, and apple tv+, providing more cost-effective subscription plans to attract customers.

this series of operations also had a positive impact on apple's revenue. the latest report released by market research firm counterpoint research pointed out that the success of the apple one package will make apple's service revenue the second largest source of revenue after the iphone.

analysts predict that apple's software subscription service market has great potential, and it is expected that service revenue will account for 25% of apple's total revenue by 2025. this marks the first time that apple's service business annual revenue will exceed the $100 billion mark.

specifically, apple store's revenue in the first quarter of 2024 reached us$24.6 billion, a year-on-year increase of 11.5%. although the specific revenue of apple store in the second and third quarters has not been disclosed, judging from the 14.2% growth rate of service revenue in the third quarter of this year, apple store still maintained a good year-on-year growth rate.

according to the "2024 q2 apple app store delisting report" released by pixalate, a total of 57,000 apps were removed from the app store this quarter, the lowest record since the first quarter of 2021. the delisting rate is only 3%. the reduction in the delisting rate shows the high stability of the platform from the side, which is conducive to reducing the risk of subscriber loss, thereby improving the retention rate of subscription app users.

(cailian news reporter huang xinyi)