Phil Schiller on App Store Upgrade Pricing

Kunal Dua, interviewing Phil Schiller:

Phill Schiller: The reason we haven’t done it is that it’s much more complex than people know, and that’s okay, it’s our job to think about complex problems, but the App Store has reached so many successful milestones without it because the business model makes sense to customers. And the upgrade model, which I know very well from my days of running many large software programmes, is a model from the shrink-wrapped software days that for some developers is still very important, for most, it’s not really a part of the future we are going.

I think for many developers, subscription model is a better way to, go than try to come up with a list of features, and different pricing for upgrade, versus for new customers. I am not saying it doesn’t have value for some developers but for most it doesn’t, so that’s the challenge. And if you look at the App Store it would take a lot of engineering to do that and so would be at the expense of other features we can deliver.

Subscription models are fine for a very limited number of apps. If every app had subscription pricing, I’d probably be using five applications at most. I would however endorse in-app purchases to unlock new functions, added by developers. This isn’t always possible unfortunately, especially in scenarios where most of the apps code changes from version to version.