Maya Robertson
Apple is reportedly exploring changes to the App Store aimed at increasing margins and generating additional recurring revenue, as responsibility for the marketplace shifts to the company’s services organization under new CEO John Ternus.
According to Bloomberg’s Mark Gurman, the effort is being driven by Ternus and services chief Eddy Cue, and was also a factor in longtime Apple executive Phil Schiller’s recent decision to step away from leading the App Store.
Apple has not disclosed what specific changes it is considering. Gurman reports that the company wants to find ways to raise App Store margins and extract additional recurring revenue from the platform, placing a greater focus on the marketplace’s financial performance under its new leadership structure.
The potential strategy comes at a time when the App Store’s existing business model is already being reshaped by regulatory and legal decisions around the world. Apple has been required to loosen restrictions around alternative payments and distribution in several markets, putting pressure on the commission structure that has historically generated revenue from digital transactions.
In the United States, a court order has allowed developers to direct users to external purchasing options, reducing Apple’s ability to collect its traditional commission on some transactions. Apple said in July that App Store business model changes in markets including the U.S., alongside a slowdown in mobile gaming, were among the factors affecting Services growth during its fiscal third quarter. Services generated $30.74 billion in revenue during the period, below Wall Street expectations of $31.22 billion.
Apple has also recently reworked its App Store terms in the European Union in response to the Digital Markets Act, including changes to commissions, alternative app distribution and external payment options. Against that backdrop, any effort to increase App Store margins would need to operate alongside growing regulatory constraints on how Apple monetizes developers and digital transactions.
Gurman’s reporting suggests this tension contributed to Schiller’s decision to relinquish his App Store responsibilities. Schiller, who had overseen the marketplace since 2015, reportedly believed that attempts to generate more profit from the platform could further strain Apple’s relationships with developers and regulators.
There was reportedly no major internal confrontation over the strategy. Instead, Schiller did not want to participate in the proposed direction and chose to step away, with a desire to spend more time with his family and focus on philanthropy also contributing to the decision.
Schiller has not left Apple entirely. He remains an Apple Fellow and will work on unspecified initiatives, although his departure from App Store and Apple event leadership has been described internally as a significant step toward an eventual retirement.
His exit is accompanied by a broader organizational change. Apple has transferred responsibility for the App Store from its marketing organization to the Services division led by Eddy Cue, returning the marketplace to the organization that oversaw it before Schiller assumed responsibility in 2015.
Day-to-day management of the App Store is now being handled by Carson Oliver, an Apple veteran who has spent more than 14 years at the company and has worked within the App Store organization throughout that period. Oliver now reports directly to Cue.
The restructuring also coincides with a broader leadership transition at Apple. John Ternus took over as CEO on September 1, succeeding Tim Cook, while Cue is reportedly assuming a more influential role under the new chief executive.
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