Last week, Apple lost the executive who had defended its App Store rules through the industry’s longest-running fights, and the company let him go with little public explanation. This week, a fuller picture emerged. Phil Schiller’s departure was tied to a disagreement over how far Apple should go in making money from the store it built, according to Bloomberg’s Mark Gurman, writing in his Power On newsletter. Apple’s new chief executive, John Ternus, and Eddy Cue, the senior vice president in charge of services, are leading a review of App Store rules intended to raise revenue and profit margins, the newsletter said.
The specific changes under consideration remain unclear, and Apple has not commented. People familiar with the matter said the review is early and the goal is broad: drawing more income from a business that already ranks among the most profitable in the company. The App Store has collected commissions of 30 percent on digital purchases since its founding, with a reduced rate of 15 percent for small developers and for subscriptions after their first year, and those fees have helped finance Apple’s services growth as iPhone sales matured.
Any adjustment will run into the accumulated history of the store’s disputes. Epic Games sued Apple over the commission in 2020, and while a federal judge mostly sided with Apple in 2021, later rulings forced the company to allow developers to link to outside payment systems. Apple responded with its own fee on purchases made through those links, a structure that developers have challenged and that regulators continue to examine. In Europe, the Digital Markets Act required Apple to permit rival app stores on its devices, and the company attached a separate fee to downloads made through them. The Justice Department’s antitrust case against Apple, filed in 2024, remains pending.
Mr. Schiller watched every one of those fights from the seat closest to the store. He ran the App Store’s rules for years, through congressional hearings, developer protests and court filings, and people familiar with his thinking said he worried that aggressive commercialization would anger the developers whose apps make the store valuable and hand regulators more reasons to intervene. His exit removes one of the loudest internal voices for restraint at the moment the company appears to be considering the opposite course.
The backdrop is a changing of the guard. Mr. Ternus, a hardware executive who oversaw the teams behind Apple’s own Mac processors, recently took over as chief executive, and the App Store review is one of his first visible strategic moves. Apple’s event on Sept. 9, an occasion the company has branded “Surprise and shine,” will double as his introduction to the public. Tim Cook will be present but will not appear on camera, according to the newsletter, and Apple has made a point of putting Mr. Ternus forward as the narrator for its foldable iPhone and the products expected to follow it.
The stagecraft and the store review are two sides of the same transition. Apple’s hardware business still produces most of its revenue, but growth and profit margins are increasingly found in services, and a new chief executive looking for levers will find the App Store the largest one available. Analysts who follow the company said the review probably reflects that arithmetic: with iPhone upgrades slowing and regulators circling the hardware business, the store is where Apple can move its own revenue without shipping a single new device.
The store has also been Apple’s main instrument for enforcing the privacy rules the company sells as a feature. App Tracking Transparency, which forced other companies’ advertising trackers to ask permission, reshaped the digital ad market and drew complaints from Meta and others. The same review process that decides commissions also decides what apps are allowed, and the rules have become a weapon in Apple’s competition with rivals who depend on data. Any plan to raise revenue will have to avoid appearing to sell what the store previously guarded.
The risks are as familiar as the opportunity. Developers have spent a decade arguing that Apple’s commission is a tax on their work, and the loudest of them have taken the argument to courts and parliaments. Every percentage point of additional revenue Apple captures lands, in practice, on the prices developers charge or the money they keep, and an ecosystem that feels squeezed can drift toward other platforms or toward the web, where Apple collects nothing. Outside analysts speculate about options ranging from expanded advertising inside the store to new fees tied to AI features, but people familiar with the matter caution that the specifics are not settled.
The review also lands in a regulatory environment with a long memory. European authorities are watching how Apple complies with the Digital Markets Act, United States courts are watching the fallout of the Epic case, and any change that looks like a workaround of an existing order would invite the kind of challenge Apple has already lost once. Timing makes it delicate: the company is expected to show off its first foldable iPhone this week, and it does not want its opening event under a new chief executive dominated by developer grievances or antitrust questions.
The store review will proceed regardless of the stagecraft, and its outcome will say a good deal about the direction of the company. Apple has spent years arguing that its fees pay for a secure, curated marketplace; the question inside the company now is how much more that marketplace can yield. The answer will define whether the new era of Apple grows by building new products or by making more from the ones it already controls.
