It might be hard to remember a time before you could download apps and make purchases within them on your iPhone. In many ways, there would be no iPhone as we know it without the App Store, which is easily one of Apple's best innovations. It's also a virtual money-printing machine.
That's why it's almost shocking that on Wednesday, Apple confirmed to Bloomberg that it would no longer take a 30 percent cut from "qualifying premium subscription video" apps. At the same time, Amazon said that it plans to take advantage of the change for its Prime Video subscribers in the U.S., the U.K., and Germany. That will allow those users to buy or rent content directly within the Prime Video app instead of having to first make the purchase in a browser.
There's no question the change is better for users. It's borderline obnoxious to navigate through the Prime Video app, find a video you want to buy or rent, only to then have to visit Amazon's website to make your purchase. Then, you have to go back to the app to watch whatever you just bought. Now, you'll simply be able to do all of that within the Prime Video app with whatever payment information you already have on file with Apple.
Of course, the logical question is, what's next? As in, what about Netflix? How about Spotify? Those platforms both require you to subscribe to their services outside of their iOS to circumvent the cut Apple takes. How about purchasing e-books directly from the Kindle app? It would seem reasonable to think that we might see this change extend beyond just a group of video-on-demand apps.
The more important question is, what does it mean for Apple's overall strategy with the App Store? The reality is that, right now, everything has changed. Apple is rumored to be in discussions about delaying the launch of the iPhone 12 beyond the end of this year (though sources have pushed back on this). Apple is expected to release new MacBook Pros and a budget-friendly iPhone 9. When, or whether, we'll see either of those anytime soon is still up in the air.
The company's services division is one of its major growth areas, especially as sales of iPhones have cooled over the past few years. This new move won't likely make much of a revenue difference, since most of the relevant services avoided making purchases directly available to their users anyway, lest they have to pay what many saw as an "app tax."
It seems, at least, that Apple likely made the move largely for the benefit of users--which is a very good thing for all of us. Apple has long been known to put the user experience at the forefront of how it designs its products and services. With the App Store, however, it has long exerted extraordinary control over which apps it allows, and has taken a premium from every transaction.
That meant that app developers have had to create workarounds that weren't exactly the best customer experience, just to play according to Apple's rules. Like Netflix, which allowed users to sign up and subscribe through the app until it dropped that option in 2018 to avoid the 30 percent fee.
Those rules only served to benefit Apple. Yes, the company absolutely has a right to sell its products and services, and to monetize its platforms, but putting its own interests so blatantly before its customers' is very "un-Apple." If for no other reason, this change is both welcome--and exactly what we should expect.