Competitor offers $9.99/mon sub. You counter at $8.99. Another competitor lowers even further at $6.99. A few years later, market saturated with copy cat apps offering .49-.99/mo apps.
This only works if you assume perfect fungibility and thus price is the only differentiator. That obviously is not true outside of the most trivial apps, rather there is a spectrum of price, features, UX, privacy and other considerations. A price discount might be helpful in terms of marketing to get people to take a look at your product in the first place vs a competitor, since even if it was far superior there's always some cost to switching. However, it's generally not sufficient to get everyone to stay either. The reason I'm paying money at all is because it's delivering value to me that is higher then the price I pay. If the original application is 50% more expensive but delivers 2-3x (or 10x+, a lot of apps are so cheap that if it costs me even a single digit number of extra hours per year in time it utterly drowns out the purchase price) the value, I'm not going to move to something inferior just because it's cheaper.
Offering more tools to let devs convince people to give something a shot is an interesting move, but to actually beat out competitors and have customers stay still requires being, well, competitive right?
As much as the article paints this as being a way to “steal” customers, I dont think that’s what its about at all.
I think it’s about: “Hey you have a subscription to Super X from Foo Co, you can get a discounted subscription to Super Y from Foo Co, and/or W Plus from Bar Inc”.
Think of it as a way to bundle subscriptions, but the bundle isn’t limited to a single developer.
A while ago Nebula had a deal with Curiosity Stream (I don’t know if either offer subs via the App Store, it’s just an example): this could facilitate that kind of deal.
Apple is going to be selling targeted ads to users of your app in the only place where apps can be bought for competitors at a special cheaper price targeted to your users only
This seems to help out newer apps, which otherwise might not be able to break into a market that is dominated by existing players. If Apple wants to encourage new entrants to such markets, then they would want to allow this sort of targeted competition.
That said, it does seem like a pretty niche thing for Apple to have developed and rolled out. My guess is that as an outsider I don't understand this, but there are some pressures internally to change the dynamics of the App Store.
I'd say an easier way to fix this would be to make search actually work in the App Store. I have typed in the exact name of an app and been forced to scroll through tens of apps — many quite unrelated — before reaching the one I was looking for. The brokenness of search really hurts upstarts.
My first guess is that they want to do this with their own subscription offerings and opening it to everyone makes it look less bad. I guess we'll see if Spotify users start getting Apple Music offers soon.
Using this as competition against an existing subscription makes very little sense. Bundling together complimentary (as in they compliment each other, not that they are free) subscriptions for a reduced price is already a concept that businesses use - this just allows the same concept in the App Store.
