Phil Schiller is stepping down as head of the App Store, and the reason revealed by Bloomberg’s Mark Gurman is far more intriguing than an official press release: beyond wanting to spend time with family and engage in philanthropic activities, it stems partly from reservations about the new leadership’s plans.
First, consider Apple’s current backdrop: Tim Cook has just stepped down as CEO, and John Ternus has taken over the position. This leadership transition has triggered a series of senior departures, including Schiller, the executive longest associated with the App Store. According to the report, he will remain at Apple as an Apple Fellow, contributing to unannounced projects.
New CEO John Ternus and Services head Eddy Cue want to improve App Store profit margins and generate more recurring revenue from the division. However, Schiller believes squeezing more profit out of the App Store will further strain relations with governments and the developer community, leading him to step aside rather than oversee the changes directly.
This is seen as a safe retreat for Schiller, given that Apple’s management of the App Store and its commission rates have long been a persistent source of developer criticism and the center of major lawsuits.
Schiller leaving his role while staying at Apple in a different capacity sends a less-than-positive signal to developers, as a more aggressive strategy to squeeze services revenue may very well be on the horizon.
For product builders reliant on the App Store, there are two key factors to monitor moving forward. First, whether the revenue-sharing cut Apple demands on each transaction changes. Second, whether relations between Apple and developers deteriorate further, especially as legal battles over app stores remain ongoing.