SAN FRANCISCO – Apple says that it will start showing paid ads when people search for apps in its popular mobile store.
It’s also encouraging app-makers to sell more apps on a subscription basis, by promising them a bigger cut of revenue when consumers maintain their subscriptions for at least a year.
Apple is hoping the changes starting this summer will bring in more money for itself as well as for independent software developers who make apps for the iPhone or iPad.
Consumers spent more than $20 billion in the App Store last year, but with more than 1.5 million apps available, developers say it’s getting more difficult to compete for attention.
Apple said Wednesday that the new ads could help app-makers get more visibility for their products. The company also said it will improve the search tool that helps users find new apps, while promising that wealthy advertisers won’t be able to dominate the results.
Apple said it will show no more than one ad, marked in blue, at the top of the list that appears when someone searches for apps by name or subject. Google started showing similar ads in its Play Store last year.
“If it’s done well, this could be very effective, because search is the number one way that consumers find the apps they are looking for,” said Julie Ask, an analyst with Forrester Research. She predicted Apple will make changes if consumers don’t like the way ads are presented.
Apple’s new emphasis on app subscriptions could provide the company and app-developers with a more reliable and longer-lasting stream of income, although it could lead to consumers paying more for some services over time.
Apple generally keeps 30 per cent of the purchase price that app-makers charge consumers. But Apple said it will reduce its share after a consumer has kept the subscription for a year, meaning the developer’s take will grow from 70 to 85 per cent of the subscription fee.