Bank Of America Praises Apple's Recent Changes To App Store

Bank of America thinks two new changes to the Apple Inc. AAPL App Store will have a positive impact on the company’s bottom line.

This week, Apple announced a new subscription model for its App Store and the launch of paid search ads.

According to analyst Wamsi Mohan, both changes should prove beneficial for Apple shareholders.

“Apple is trying to allow App developers to generate more revenue, creating greater value to the platform so it can then monetize its over 1 billion active installed base across products,” Mohan explained.

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Bank of America projects Apple could double its App Store revenue within three years if subscriber growth is part of the equation.

The subscription model for apps, which was previously only available to apps classified as news, cloud services, dating apps or streaming, will now be available to all developers.

“If Apps can successfully transition from a one-time download fee to a subscription based model, developers could potentially bring in significantly more App store revenue, making the platform much more valuable to the content creators,” Mohan noted.

Bank of America is anticipating more details on the new App Store initiatives at WWDC on June 13.

The firm has a Buy rating on Apple and a $120 price target for the stock.

Disclosure: The author holds no position in the stocks mentioned.