Apple to allow outside app stores and other changes in major transformation of how iPhone works, report claims
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.Apple is planning to significantly transform how the iPhone works as part of sweeping new rules, according to a report.
The company will allow alternative app stores on its iPhones and iPads in Europe, so that it can comply with competition law that it has previously objected to.
The changes could come as soon as late next year, according to Bloomberg, which first reported the story.
Opening up to outside app stores could present a major threat to Apple‘s fast-growing services business, but rivals would first have to surmount the hurdle of convincing consumers to leave the security and simplicity of using Apple‘s own store.
The magnitude of consequences depends on how the US company complies with additional mandates in the European law, known as the Digital Markets Act (DMA).
Microsoft, Meta Platforms, Amazon and other companies with app stores could receive boosts to sales as a result of Apple‘s planned change on rival storefronts.
Apple declined to comment, and Meta, Amazon and Microsoft did not immediately respond to requests for comment.
As part of the changes, Apple customers could ultimately install apps without using the company’s App Store, according to the report. But Apple has not made decisions on whether to comply with other provisions of the law, such as allowing for alternative payment systems to its own.
Permitting its payment tool to be bypassed would threaten billions of dollars in revenue Apple collects from charging a commission of up to 30 per cent on App Store purchases.
About $10 billion worth of transactions flowed through the App Store last year, according to estimates from Sensor Tower, a mobile analytics company. At least 70 per cent of the funds go to app makers.
Angelo Zino, a stock analyst at CFRA, said he expects under 0.2 per cent of Apple‘s total sales to be affected by competing app stores in Europe.
“The ultimate impact will be minimal as most consumers are creatures of habit and are very satisfied with the platform,” he said. “We expect a majority of consumers will keep the status quo by utilizing (Apple‘s) existing app store.”
Enforcement of the European Union’s Digital Markets Act is expected to begin in mid-2024. The law requires big tech companies to open their systems to competitors in hopes of increasing consumer choice. The big gatekeepers, as the law describes them, face fines of up to 10% of annual global revenue for violations.
The iPhone maker has said that allowing sideloading, bypassing its App Store, exposes users to security and privacy dangers. But some regulators and critics, such as “Fortnite” maker Epic Games, have said those concerns are overblown.
Alphabet Inc’s Google has allowed sideloading on phones powered by its Android operating system for years. But to take advantage, users must adjust settings and swipe past security warnings, meaning 90% of downloads still come from Google’s official app store, Epic has alleged in court.
Additional reporting by Reuters
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies
Comments