The App Store is expected to generate more revenue. According to a report, Apple's new leadership and the head of its services division are looking for ways to increase the platform's profit margin and generate predictable revenue. The departure of a long-time manager from precisely this area of responsibility now appears in a different light.
Since September 1st, John Ternus has led Apple as CEO, and the first structural change under his leadership didn't concern hardware, but rather the App Store. A report from Bloomberg reporter Mark Gurman's weekly newsletter now describes the direction this shift is taking: Ternus and services chief Eddy Cue are reportedly exploring internal ways to increase the store's margins and generate additional recurring revenue from the platform. The newsletter is based on internal company sources; the personnel change, which was last described there, has been reflected in Apple's leadership structure since September 1st. The report does not specify concrete measures, a timeframe, or a target figure.
Key Facts at a Glance
- According to the report, Apple is looking for ways to increase margins and recurring revenue in the App Store.
- The project is reportedly being driven by CEO John Ternus and services chief Eddy Cue.
- Phil Schiller's departure from his role in the App Store is said to be related to this.
- The report does not specify which levers Apple intends to pull.
- The fee framework has already been set in the EU and will come into force on October 1st.
Profit margin and predictable revenues as a goal
Two separate metrics are mentioned. Firstly, the margin is expected to increase, meaning the percentage that Apple retains from every transaction processed through the store. Secondly, the focus is on recurring revenue – income that is not tied to individual purchases but is generated regularly.
The second metric is more interesting because Apple can influence it without altering the commission – and the commission is the item that courts and regulators have been targeting for years. However, complete avoidance isn't possible: even the installation-based Core Technology Fee, which wasn't tied to sales, didn't survive the pressure from Brussels.
A second reason for withdrawing from store management
At the end of August, Phil Schiller relinquished responsibility for the App Store and product events; the store was moved to the Services division under Cue. The report now attributes this move to the margin-cutting initiative: Schiller is said to have primarily viewed it as a way to further antagonize developers and regulators and wanted nothing to do with it. According to the report, there was no internal conflict.
This continues a stance already evident from the documents of the Epic case: Schiller had also internally opposed the 27 percent fee on purchases made outside the app. His resignation now coincides with the moment when the discussion is shifting in the opposite direction.
Where does the pressure on the services come from?
Apple's services division is its highest-margin business, but its growth is no longer unchecked. The earnings call for the June quarter revealed that services revenue declined for the first time since 2022 compared to the previous quarter – with an annualized rate expected to remain roughly the same for the current quarter.
Added to this is the shift within the store itself. The number of newly released apps has recently doubled, while downloads have stagnated; at the same time, Apple now counts 1.5 billion paid subscriptions via its own platform, including third-party providers. The growth, therefore, stems less from additional purchases than from existing contracts – precisely the metric the report identifies as a target.
What has already been done in this direction
The path to predictable revenue didn't begin with the leadership change. Since May, developers have been able to offer monthly subscriptions with a 12-month commitment: The customer pays monthly at the lower annual price but remains bound for a year. For Apple, this means a calculable contract term instead of a payment plan that can be canceled at any time.
Anyone who wants to see how much of this is added to their own account can find the current contracts and their costs in the purchase history of the Apple account.
The framework will be in place in the EU from October 1st
For German-speaking countries, the scope for change is smaller than the announcement suggests – at least in the short term. Apple has reached an agreement with the European Commission on new terms and conditions, which will take effect on October 1st. The Core Technology Fee will be replaced by a five percent commission on digital transactions outside the Apple Store, and two other fees from the 2025 model will be eliminated. Switzerland is neither in the EU nor the EEA and therefore does not fall under the Digital Markets Act – Apple's regular terms and conditions continue to apply there.
In the US, the trend is reversed. There, in mid-August, Apple presented a new fee model in response to a court order, which provides for lower rates for purchases outside the app.
| Market | Trigger | Core of the model | Status |
|---|---|---|---|
| EU | Agreement with the European Commission | Tiered commission per sales channel, five percent core technology commission, two fees eliminated | comes into effect on October 1st |
| USA | Order of the Federal Court in Northern California | 15 percent on purchases outside the app, 10 percent for partner programs and subscription renewals, 5 percent in the Small Business Program | Presented in mid-August |
Two forces pulling in opposite directions
What's remarkable about this plan is its timing. In May 2025, the same reporter described how Apple would have to lower its commissions sooner or later to keep developers on its payroll system. These two positions aren't necessarily contradictory: what's lost in commissions has to be made up for elsewhere.
This trend has been documented so far – in the US, a court-enforced model with lower rates, and in the EU, a framework fixed until October 1st. We therefore expect that the additional margin will not come from the percentage on sales, but from other sources: membership fees, advertising space, and contract durations. Looking at Ternus's previous approach suggests fine-tuning rather than a complete break.
For you as a user, nothing will change in the store initially – such a course would only be noticeable indirectly, through app prices, subscription conditions and the question of how often apps redirect you to external payment methods.
Would you opt for a monthly subscription with a yearly commitment if it offered a lower annual price – or is the option to cancel at any time worth the extra cost to you? Let us know in the comments how you calculate the cost for your current subscriptions.
