[ctdonath]

Probably developers who want to make money off a "free" sales model. In an age of widely-known popular logos, might not take much space at all to render an "ad".

The exclusion of ads from the Watch could (wild speculation here) point to a future without ads in the Apple ecosystem. Ads are typically obnoxious, tolerated only because the host app is free. Given their very un-Apple-like feel, maybe there's a plan to wean them out of the walled garden.

[MCRed]

Such a plan, I think, would require another method of monetization.

Paid apps as a monetization strategy has failed. Advertising I think is failing too.

Free with in-app purchase is making a lot of money but people don't like it.

This is a big challenge for apple.

[Kurtz79]

Some data to back your assertions up ?

App store revenue has been increasing constantly since its launch.

http://www.macrumors.com/2015/04/15/app-store-google-play-re...

http://www.macrumors.com/2015/04/27/app-store-record-growth-...

I agree that it has problems (visibility of quality apps, abundance of trashy apps, high competition) but profitability does not seem to be one of them.

EDIT: (Answer to TorKlinberg below) I guess so, I don't see why it should not figure. "People don't like it" it's just an opinion which I don't see being backed up by data, in the end people "like" with their wallets.

[TorKlingberg]

App store revenue includes in-app purchases, right? Does Apple publish the percentage of revenue that is from in-app purchases, and specifically game microtransactions?

[BinaryIdiot]

This is a pretty important summarization of Apple's biggest issues in my opinion (even if you were a little too strong with the word 'failed').

- Ads are intrusive. No one likes ads and they don't pay very well anyway (Google for instance has had their ad money per ad go down year over year). I feel like their days may be numbered.

- Paid apps don't give a user a chance to try an application and if the price is too high, even if the app is truly worth it, it may never get a shot with the user's. Granted Apple still makes a ton of money with these but the app developers have spoken: they make more money with the freemium model.

- Free apps with in app purchases make the most money for developers. Unfortunately the whole thing is kind of an ethics conundrum; is it okay to give someone something but they can't use parts of it until they pay you for it? What about schemes that are actually hinder the product just to try and make the user give the app more cash (e.g. buying "energy" or whatever games will use to make things go slow). This model seems to be getting a lot of backlash lately.

- The other important one you missed is subscriptions; they are probably more fair but who wants to pay something every month when they probably already have 20 other bills to pay each month? Especially when you look at services who tie little things to paying for a subscription like adding the ability to use subtasks in an application requires a subscription.

It's hard to figure out how to sort all of this mess out. Personally I like the option of being able to try an application and if I like it pay for it outright. No ads or in app purchases or subscriptions. Granted subscriptions are sometimes necessary too especially if you're consuming external resources on a constant basis (e.g. "cloud backup" or sync, etc).

I'd love to entertain alternatives even if they sound worse at first just to go through the exercise of exploring them and trying to find better ways to make this all work.

[s73v3r]

"Personally I like the option of being able to try an application and if I like it pay for it outright. No ads or in app purchases or subscriptions."

This goes directly against your criticism of IAP, though. The trial is usually implemented by having a "lite" version downloaded, with an IAP to unlock the real version.

[BinaryIdiot]

> This goes directly against your criticism of IAP, though. The trial is usually implemented by having a "lite" version downloaded, with an IAP to unlock the real version.

Fair; I don't think I articulated that well enough. My distinction between the two was a trial would allow me to test the app before paying one fee for unlocking everything whereas I always see IAP are being multiple items I have to pay for. Though that isn't a huge distinction and I don't think it's ultimate the best solution anyway.