Recently, Apple introduced a feature called "Set Return Customer Offers for Automatic Renewal Subscriptions" in AppStoreConnect, which allows developers to provide discounts to users who have stopped subscribing to attract customers who have previously canceled their subscriptions to re-subscribe on the AppStore, helping developers alleviate the problem of user churn in subscription applications.
According to Apple’s official introduction, under the premise that the App provided by the developer has an automatic renewal subscription, the incentive type can be selected to delineate the range of users who are eligible for preferential subscriptions, such as providing six months of preferential monthly fees or a discounted annual fee to old users who have canceled their subscriptions. Developers can create up to 350 recall offers per subscription.
As for the Apple Store, it will carry out a series of promotions for users who meet the preferential conditions. Users can find repeat customer discounts in multiple locations in the Apple Store, including application product pages and editor selections in the "Today", "Games" and "App" tabs.
In iOS14.3, iPadOS14.3 and macOS14 or higher, users can view relevant offers on the "Manage Subscriptions" page. Users of iOS18, iPadOS18 and macOS15 will be displayed on the "Retention Offer" page in the app.
In 2018, Apple decided to open a subscription model to all apps. The first year continues the previous 3/7 sharing model with developers. If users continue to subscribe after the first year, Apple will adopt a 15/85 sharing model for this part of the subscription fee. In the month after adopting this model, the user retention rate for subscription applications dropped from 61% to 41%. The purpose of providing developers with a "returning customer discount" function this time is to improve the retention rate of subscription application users.
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 if they are currently subscribing to another subscription service. For example, "OceanJournal" paid users can subscribe to the "MountainClimber" app at a discounted price of $4.99 per month instead of the original price of $5.99.
In addition, Apple also provides StoreKit API to help developers obtain more information about user subscriptions, such as automatic renewal status, automatic renewal tendencies, and reasons for canceling subscriptions.
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 AppleOne plan. This plan packages and sells iCloud+, AppleMusic, AppleTV+ and other services, providing a more cost-effective subscription plan to attract customers.
A series of operations have also produced positive feedback on Apple's revenue. The latest report released by market research company Counterpoint Research pointed out that the success of the Apple One package will make Apple's service revenue become the second largest revenue source after the iPhone.
Analysts predict that Apple's software subscription service market has huge potential, and service revenue is expected to account for 25% of Apple's total revenue by 2025. This marks the first time that annual revenue from Apple’s services business will exceed the $100 billion mark.
Specifically, Apple's Apple Store revenue reached US$24.6 billion in the first quarter of 2024, 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 maintains a good year-on-year growth rate.
According to the "Apple App Store Removal Report for the Second Quarter of 2024" released by Pixalate, a total of 57,000 applications were removed from the App Store this quarter, which is the lowest record since the first quarter of 2021. The removal rate is only 3%. The reduction in the removal rate demonstrates the platform's higher stability, which helps reduce the risk of subscriber loss, thereby improving the retention rate of subscription application users.