According to a report in the Verge, It looks like Apple has decided to get into the paid-search business. During net weeks WWDC, the company is going to unveil paid search ads for the App Store, as well as introduce a new app-subscription revenue sharing model.
Regarding the App Store SEM, the possibility of it was first raised in a Bloomberg report back in April. The product itself is set to launch in the fall, but invitations are being sent to developers to join the beta today. According to copy on the Apple site:
Search Ads is an efficient and easy way for you to promote your app within the U.S. App Store search results, helping people discover or reengage with your app at the very moment they are searching for apps like yours. Designed to give users a safe search experience, Search Ads sets a new standard for delivering relevant ads while respecting user privacy.
With paid search ads solution could help solve the app-discovery problem for iOS developers, but right now, there isn’t any information on bidding or ranking. There will probably be more information on it next week during WWDC.
Apple will be encouraging developers to use a subscription model to generate recurring revenue by giving them a larger cut of the pie after the first year. During the first year, Apple will take 30 percent of the revenue in the first year, but for every subsequent year, that will drop to 15 percent. Developers will be keeping 85 percent of the earnings after the first year.
It was announced last year that Apple had roughly $6 billion in “services” revenue, and that includes the App Store revenues. In 2015, Apple said they saw $20 billion in App Store revenue. Not only will these moves benefit developers, but they could help benefit Apple’s bottom line.