Apple Plans to Make New Changes to App Store to Increase Margins and Recurring Revenue: Report

Apple recently underwent a major management overhaul. At the beginning of this month, John Ternus took charge as the new Chief Executive Officer of the company, replacing Tim Cook. At the same time, Luca Maestri, former Chief Financial Officer, also announced that he will be stepping down from the rest of his corporate responsibilities at Apple. Meanwhile, Phil Schiller also tendered his resignation from the position of head of the App Store and Apple Events. According to a report, Schiller has left his role as Apple's new CEO is planning to make new changes to the App Store, which might help the company increase its margins and recurring revenue.

Cook and Cue Reportedly Want to Increase Margins and Recurring Revenue

In the latest edition of his weekly 'Power On' newsletter, Bloomberg's Mark Gurman writes that the Cupertino-based tech giant is planning to make certain changes to the App Store, allowing Apple to “make even more money” from the marketplace. Ternus and Cue are reportedly looking at ways to raise margins and increase the recurring revenue from the App Store. While the report does not highlight the exact changes that could be made, they could be implemented in the coming months or weeks, allowing the company to further increase its profits.

However, the outgoing App Store head, Schiller, reportedly believes that such decisions might further “irk” app developers, governments, and authorities. Interestingly, Gurman points out that there was no pushback from Schiller against the upcoming changes. Yet, he did not want to be part of what the new CEO has planned for the tech giant's apps and games marketplace. The report claims that this is why Schiller decided to vacate his position as the head of the App Store.

The App Store reportedly generates about $30 billion (roughly Rs. 2,83,225 crore) in revenue for the Cupertino-based tech giant, which is a substantial amount. The size of the operations and revenue makes Schiller's sudden exit a notable one. However, neither Schiller nor Apple has officially stated the reason behind the executive's exit. Reports suggest that while he has vacated his post, he remains associated with Apple in other capacities. Meanwhile, Eddy Cue has taken over as the head of the App Store from the executive.

This comes months after Apple's legal battle with Epic Games over the removal of Fortnite came to an end. The battle royale game was taken off the marketplace as Apple alleged that Epic Games was violating the company's platform rules. Apple was levying a 30 percent fee on in-game transactions, while disallowing developers from redirecting users to an external payment gateway, which would allow them to bypass the hefty charges.