Brief:

• Apple updated its App Store guidelines with language that suggests software developers will soon be able to create apps that let users buy in-app content and gift it to others, MacRumors reported. Previously, the iPhone maker explicitly prevented the gifting of in-app purchase content, features or consumable items to others.
• Apple already lets users buy paid apps to give to others with its "Gift App" feature, which shows a screen for sending store credits to a contact via email. It's unclear how Apple will handle the in-app gifting feature, but the company likely will provide more information to developers soon, per MacRumors.
• "Apps may enable gifting of items that are eligible for in-app purchase to others," the new App Store guidelines say. "Such gifts may only be refunded to the original purchaser and may not be exchanged."

Insight:

Apple's reported change to its policy of in-app gifting is another step in the App Store's shift from paid apps to ones that offer a free download, followed by in-app purchases and subscriptions that help app developers monetize their content. As TechCrunch points out, many video gamers have called for features that let them send or receive in-app currency or other virtual goods as gifts. The policy change could help Apple reach its goal of doubling services revenue by 2020, especially as iPhone sales growth stalls.

Mobile users were more likely this year to pay for app subscriptions than they were in 2017, according to a study by Liftoff and Leanplum. Apple's revenue-sharing with app developers has changed in the past couple of years to urge them to seek more subscription sales from the App Store. The company reportedly pushed app makers to raise prices and build out subscription revenue to help Apple boost its services business and foster a more vibrant app economy.

Apple's paid subscription revenue grew more than 60% in the past year to about $300 million as more than 30,000 of the two million apps in the App Store started charging recurring fees, CEO Tim Cook said in a July conference call with investors. Critics have said that most of that subscription revenue is concentrated among major streaming media providers like Netflix, Pandora, Spotify and HBO. The combined app revenues for the Apple App Store and Google Play rose 28% to $34.4 billion during the first half of 2018 from a year earlier, according to an estimate by researcher Sensor Tower.