Apple to Allow Third-Party Stores In iOS 17 To Comply With EU’s DMA
Apple is reportedly eliminating barriers to entry for third-party app stores, at least in the European Union.
Apple is reportedly planning to allow third-party app stores on iPhones and iPads in the European Union. The latest is seen as a preemptive move from the company to adhere to new antitrust regulations under the 27-member nation block’s Digital Markets Act (DMA).
In what is seen as one of the most contentious issues between Apple and small developers, the former is reportedly reconsidering its stance, at least in the EU. Apple opening the doors to third-party app stores may become a reality as soon as late 2023, months before compliance with DMA becomes a requirement in March 2024.
According to a report by Bloomberg’s Mark Gurman, the new changes to Apple’s app store policies will enable developers to avoid paying the company a 30% (or 15% depending on revenue) cut on app downloads or in-app charges. The iPhone maker has fought several lawsuits against the charges, commonly known as Apple Tax, the most well-known being the one by Epic Games.
Compliance by late 2023 means Apple could allow third-party app stores on the next iteration of iOS, which would be iOS 17.
The announcement likely means users will also be able to sideload mobile applications not available on the App Store, which Apple has flagged as a security and privacy risk. However, Apple allows sideloading on macOS.
That’s not all, though. Sources familiar with the matter told Gurman that Apple is dedicating “significant amount of resources to the companywide endeavor” to comply with the DMA, which opens up a bunch of iOS features, including Apple near-field communication or NFC, AirTag, camera, etc., to external developers.
Changes would also come to NFC chip and camera access, Find My network for rivals to the AirTag, web browsing engines and other areas of Apple’s software. The company still plans to charge developers for access to iOS even with side loading.
— Mark Gurman (@markgurman) December 13, 2022
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DMA also mandates iMessage interoperability with other similar services and requires the presence, or at least the option, of having a third-party payment system on devices. Apple recently agreed with the Japanese government to allow users to pay through web-based gateways for cloud-based apps.
Allowing users to pay through third-party gateways, sideloaded apps, or download through third-party app stores would dent Apple’s revenue. However, the world’s most valuable company (a current market cap of $2.31 trillion), which, unlike other tech companies, seems immune to the global economic cues, has a plan to ensure the dent is as little as possible.
The Bloomberg report added that Apple would mandate “certain security requirements,” an app vetting process of sorts, by instituting verification charges for external apps.
“However, we’d be remiss not to mention that Google Play Store, according to NordVPN, is more susceptible to mobile malware.” Also, users have the option of running third-party app stores on Android. However, the percentage share of such app stores in the app economy, which is worth hundreds of billions of USD, remains dubious at best.
The only place where third-party app stores have thrived is China (75% of all app downloads from third-party stores), but that is because the CCP regime banned Google’s Play Store in 2011. Play Store is the second largest app store by revenue ($49.21 billion in 2021) and currently has a near duopoly over mobile apps outside of China along with the Apple App Store, despite Android allowing third-party app stores.
It remains to be seen if changes mandated by the DMA on the App Store, which has earned $83.79 billion or 63% of the $133 billion app revenue in 2021, will break the duopoly on the app economy and spur competition. The European mobile app spending was $18.8 billion in 2021, of which $10.1 billion went to Apple through the App Store. This is expected to rise to $23.5 billion ($12.6 billion to Apple) in 2022.
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