Apple is pushing suppliers/developers to move to subscription models instead of pay up front. Only 15% of purchases are paid leaving the remainder to be in-app purchases or subscriptions.
According to the report, however, Apple has quietly been pushing developers to convert one-time app purchases into recurring draws on customers’ accounts. Apart from filling its own bank accounts, Apple wants developers to “create sustainable business models, instead of selling high-quality software for a few dollars or monetizing through advertising.”
Why this matters ?
The Enterprise IT market follows the consumer market. Technology companies in the consumer space can change rapidly and move to new features and pricing models. Investors see the success and expect Enterprise IT vendors to move to the same model. Subscription models are an excellent revenue stream for vendors. Why ? Because subscriptions lead to increased price and more profits.
The report cites an example of a successful developer, Lightricks , which created a selfie photo-fixing app called FaceTune. Although FaceTune hit No. 1 on the App Store’s paid charts at a $4 price, its sequel FaceTune 2 costs $6 to unlock with a $32 annual subscription, or a lifetime price of $70
I’ve spoken with multiple people evaluating Cisco’s subscription pricing on multiple products and its roughly 20% higher over a 3 year ownership cycle than previous solutions. A tidy price increase for little effort and, I suspect, much improved profit margins.
What Are Customers Doing ?
What I find baffling is that customers aren’t pushing back against this ? I wonder if anyone else has thoughts ?
Apple reportedly asked devs to adopt subscriptions and hike app prices | VentureBeat : https://venturebeat.com/2018/08/13/apple-reportedly-asked-devs-to-adopt-subscriptions-and-hike-app-prices/