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With new operating system, Apple revamps its money-making App Store

FILE PHOTO: An Apple logo is seen at an Apple store in Pudong, the financial district of Shanghai, China February 29, 2012. REUTERS/Carlos Barria/File Photo
PHOTO: An Apple logo is seen at an Apple store in Pudong, the
financial district of Shanghai, China

Thomson Reuters

By Stephen Nellis

(Reuters) – Apple Inc’s newest operating system for iPhones and
iPads introduces changes to its marketplace for third-party
software to satisfy app developers and add new so-called
augmented reality apps.

The system, called iOS 11, is being released on Tuesday ahead of
its two newest phone handsets, the iPhone 8 and iPhone X, set to
start shipping to customers on Friday and Nov. 3, respectively.

The most visible changes will come to App Store. The App Store is
the backbone of Apple’s services segment, which brought in $21.5
billion in revenue in the past nine months, a 19 percent increase
over the previous year and a bright spot as overall sales grew
only 5 percent.

The store has been redesigned to give app developers more space
for images and text to describe their software. Developers have
long grumbled that their software is hard to find in Apple’s
store unless users type in the precise name of the app or follow
a link to it.

“The redesign make it much cleaner and speaks to the pain point
of the store: You had so many apps that if you didn’t know
exactly what you were looking for, it was really hard to find
anything,” said Carolina Milanesi, an analyst with Creative

The new store also gives prominent display to games. Games are
expected to make up 75 percent of all revenue for Apple’s App
Store, according to App Annie, which collects and analyzes market
data on mobile apps.

Most of that revenue comes in the form of so-called in-app
purchases, where gamers make purchases of tokens, gems and other
digital items to unlock new parts of the game. “It’s really the
gift that keep on giving from the developer perspective,”
Milanesi said.

But perhaps the biggest change in iOS 11 will the debut of
augmented reality apps, or AR, in which digital images float over
the real word. Apple has made much of those a capabilities, but
an ostensibly minor feature may help AR apps spread: Screen

In testing, Adam Debreczeni, maker of an app that lets users see
a three-dimensional map of a fitness activity like a bicycle ride
or run they’ve gone on, was surprised at how enthusiastically
users took to sharing screen recordings of AR apps like his.

“I think that’s going to help AR games go viral and get better
distribution,” he said.

(Reporting by Stephen Nellis; Editing by Cynthia Osterman)

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