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MemberSeptember 14, 2021 at 4:16 am
The cost of Apple’s move to open up for reader apps isn’t huge. Morgan Stanley estimates that the top 50 such apps account for 13% of App Store revenue. That’s across entertainment, music, books, and news apps.
The thing is, instituting their own payment systems doesn’t make sense for all these apps, prompting the analyst to say that only the “top 10 or so” have the scale, brand, budget, and loyalty to “absorb the friction of circumventing the App Store payments platform.”
At worst, the analysts estimate the move will equate to a 4% reduction in Apple Services revenue for such apps via the App Store.
Apple will certainly want to find some way to claw back such lost income. And one obvious way might be to introduce new services across additional platforms — and to intensify its competitive push into alternative platforms.
That means existing services such as Music and TV+ will be mercilessly promoted across platforms Apple now supports. It also means the company will be seeking new services it can offer to global audiences, which perhaps is what its recent Primephonic purchase is all about.
Of course, anticipating an intensification in Apple’s offer around its services packages isn’t particularly far-fetched. We know the company wants to juice TV+ sales as it seeks to transition existing free subscribers to pay. And we know the company seeks to push revenue in its services segment higher as that’s what it has said it wants to do. Particularly if part of its plans involve abandoning its highly profitable search deal with Google, which will shave billions off of its bottom line.