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Apple (AAPL) allows Reader apps to include an in-app link – March 31, 2022

Apple (AAPL Free Report) recently announced an update to its App Store that will allow reader app developers to include links to their own websites for account creation and other management purposes.

Reading apps can be categorized as apps that provide digital content in the form of magazines, newspapers, books, audio, music, or video.

Per Apple’s App Store review guidelines, developers will need to request access to the external link account entitlement to benefit from this feature. This allows reader apps to link their website to the App Store so users can use and manage their products outside of the app.

Apple decided to make the changes in accordance with the agreement reached with the Japan Fair Trade Commission. Although the agreement was reached with the Japanese authorities, Apple decided to apply the updates globally.

Apple App Store Update to Help Fend Off Competition

Changes to Apple’s App Store policies follow its peers Alphabetit’s (GOOGL Free report) Google and Spotify Technologyit’s (SQUARE free report).

Spotify has always mocked tech giants Google and Apple’s demand to pay up to 30% transaction fees for payment proceeds through their platforms.

However, Google and Spotify have reached common ground through their multi-year deal. The new agreement will allow users who downloaded Spotify through the Google Play Store to pay using Google Play billing or Spotify’s internal payment systems.

According to the recent deal, Spotify will still have to pay Google, but less than the 15% transaction fee that Google collects through its Google Play subscription fees.

In the aftermath, Apple made changes to its strict App Store policies.

Prior to this decision, Apple had complied with a ruling by the Dutch Authority for Consumers and Markets (ACM) by allowing app developers to use third-party payment services in its App Store for the first time in its history. story.

This rule is specifically for dating apps like Tinder, owned by Matching group (MTCH free report).

Match Group’s Tinder is the #1 dating app in the world. The app will benefit from the new updates allowing it to accept payments through Apple’s App Store third-party payment system.

However, the recent updates will not reduce Apple’s revenue from transaction fees. Apple will always charge dating app developers a 27% commission, regardless of the payment mechanism used.

Apple has benefited from the continued momentum of the App Store ecosystem. Recent updates should attract even more developers to their App Store, helping Apple’s revenue from its services business.

In the first quarter of fiscal 2022, Apple’s Services revenue increased 23.8% from the prior year quarter to $19.52 billion and accounted for 15.7% of sales.

Apple, which holds a Zacks No. 2 (Buy) ranking, was up 0.1% in the year-to-date period compared to the Zacks Computer-Mini industry’s 0.8% return Computers. Meanwhile, Zacks’ IT and technology sector fell 7.9%. You can see the full list of today’s Zacks #1 Rank (Strong Buy) stocks here.