Apple indirectly offers discounts with "Apple Tax" App Store introduces "loyalty discounts"

Recently, Apple introduced a feature called "Win Back Offer for Auto-Renewable Subscriptions" in App Store Connect, allowing developers to offer discounts to users who have stopped their subscriptions in order to attract them back to subscribe on the App Store, helping developers alleviate the issue of subscription churn. According to Apple's official introduction, developers can define the user scope eligible for discounted subscriptions by selecting incentive types, such as offering six months of discounted monthly fees to previously unsubscribed users, or discounted annual fees. Developers can create up to 350 recall offers for each subscription. For the Apple Store, it will promote users who qualify for the discount in various ways. Users can discover the win-back offers in multiple locations in the Apple store, including app product pages and the "Today," "Games," and "Apps" tabs in the editorial selections. In iOS 14.3, iPadOS 14.3, and macOS 14 or later versions, users can view the relevant offers on the "Manage Subscriptions" page. For users on iOS 18, iPadOS 18, and macOS 15, the offers will be displayed on the "Retention Offers" page within the app. In 2018, Apple decided to open up the subscription model to all apps. In the first year, they continued the 30/70 revenue split with developers. If users continue to subscribe after the first year, Apple will adopt a 15/85 revenue split for those subscriptions. Within a month of implementing this model, the retention rate of subscription app users dropped from 61% to 41%. The introduction of the "Win Back Offer" feature for developers aims to improve the retention rate of subscription app users. In addition to helping developers address subscription churn, Apple has previously introduced measures to help developers increase the number of subscription app users. In December 2023, Apple launched a feature for developers called "Contingent Pricing." This feature allows developers to offer discounted prices to subscription users if they are currently subscribed 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 $5.99. Furthermore, Apple also assists developers in obtaining more information about user subscriptions through the StoreKit API, such as auto-renewal status, auto-renewal tendencies, and reasons for subscription cancellations. Helping others is also helping oneself. It is well known that Apple charges a commission of 15% to 30% on in-app purchases within its App Store. For Apple, increasing the number of subscription app users and higher retention rates will have a positive impact on Apple's revenue. In addition to assisting developers, Apple is also committed to increasing the subscription numbers and user stickiness of its own app products. In 2020, Apple launched the Apple One plan. This plan bundles services such as iCloud+, Apple Music, and Apple TV+ to provide more cost-effective subscription options to attract customers. These initiatives have had a positive impact on Apple's revenue. According to the latest report from market research company Counterpoint Research, 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 huge potential. It is estimated that by 2025, service revenue will account for 25% of Apple's total revenue. This marks the first time that Apple's service business revenue will exceed $100 billion annually. Specifically, Apple's Apple Store revenue reached $24.6 billion in the first quarter of 2024, an 11.5% year-on-year increase. Although the specific revenue of the Apple Store for the second and third quarters of the year was not disclosed, judging from the 14.2% growth in service revenue in the third quarter of this year, the Apple Store still maintains a good year-on-year growth rate. According to Pixalate's report on the removal of apps from the Apple App Store in the second quarter of 2024, a total of 57,000 apps were removed from the App Store this quarter, the lowest since the first quarter of 2021. The removal rate was only 3%. The decrease in the removal rate indirectly demonstrates the platform's high stability, which helps reduce the risk of subscription user churn and improve the retention rate of subscription app users