Apple's Planned App Store Changes Will Barely Affect the Company's Bottom Line, Says Analyst

As a result of legal and regulatory pressures, Apple recently announced some upcoming changes to its App Store policies, such as letting developers email customers about payment options available outside of their iOS app and allowing "reader" apps like Spotify and Netflix to include an in-app link to their website for account signup.

app store vs developers
Apple said the changes "will help make the App Store an even better business opportunity for developers," but Morgan Stanley analyst Katy Huberty believes there will be "minimal financial impact" to Apple. In a research note, she said the changes would result in just a 1-2% hit to Apple's earnings per share in the 2022 fiscal year in a worst case scenario.

For example, while "reader" apps will be able to provide a single link to their website to help users set up and manage their account, which could result in more customers subscribing to an app directly instead of through Apple's in-app purchase system, Huberty notes that Spotify and Netflix already disabled the ability for new users to subscribe to their services through Apple's in-app purchase system since 2016 and 2018 respectively, meaning Apple hasn't collected a commission on new subscriptions to either app for at least three years.

Huberty added that App Store revenue from the top 10 "reader" apps accounts for less than 8% of overall App Store revenue, suggesting the financial risk to Apple from these developers circumventing the in-app purchase system is "fairly small."

"We view the top 10 or so apps as those that are most likely to have the scale, brand, marketing budget, and customer loyalty to absorb the friction of circumventing the App Store payments platform," she wrote. "Assuming a worst case scenario in which Apple stopped collecting economics from all of the top 20 reader apps translates to downside risk of 4% of Services revenue, 1% of total company revenue, and about 2% of FY22 EPS forecast."

"In other words, we believe the recent App Store headlines are more attention grabbing than the ultimate financial impact to Apple's revenue or profitability," she concluded.

Huberty believes Apple has no intention to bring these changes to gaming apps either, despite having faced a lawsuit from Fortnite maker Epic Games, which accused Apple of having a monopoly over the sale of apps and in-app purchases through the App Store. A decision in that lawsuit is expected to be announced soon.

Popular Stories

iOS 18

Here Are Apple's Full iOS 18.5 Release Notes

Tuesday May 6, 2025 2:17 pm PDT by
Apple today seeded the release candidate version of iOS 18.5 to developers and public beta testers, giving us a look at the final version of the update that will be provided to the public next week. With the release candidate, Apple provided release notes, so we have a more complete look at the new features that are included in the update, including those that weren't found during the beta...
siri glow

iPhone Users Now Able to Submit Claims in $95 Million Siri Spying Lawsuit

Wednesday May 7, 2025 11:40 am PDT by
If you owned a Siri-compatible device and had an accidental Siri activation between September 17, 2014 and December 31, 2024, you could be eligible for a payment from Apple as part of a class action lawsuit settlement. Apple in January agreed to pay $95 million to settle a class action lawsuit involving Siri spying accusations, and a website to distribute the funds has now been set up and...
iPhone 17 Pro Blue Feature Tighter Crop

iPhone 17: What's New With the Cameras

Friday May 2, 2025 3:52 pm PDT by
We've still got months to go before the new iPhone 17 models come out, but a combination of dummy models and leaks have given us some insight into what we can expect in terms of camera changes. Apple is adding new camera features, and changing the design of the camera bump for some models. You might be skeptical of dummy models, but over the years, they've proven to be a highly accurate...
iOS 18

Apple Says iOS 18.5 Coming Soon, Here is What's New

Monday May 5, 2025 8:19 am PDT by
In its press release for the new Pride Band today, Apple said that iOS 18.5 is "upcoming," following more than a month of beta testing. We expect the iOS 18.5 Release Candidate to be released this week, and this should be the final beta version, barring any last-minute bugs or changes. The software update should then be released to the general public next week. iOS 18.5 is a relatively...
Foldable iPhone 2023 Feature Homescreen

Foldable iPhone Said to Have Two Key Advantages

Monday May 5, 2025 6:41 am PDT by
Apple plans to release its first foldable iPhone next year, according to several reporters and analysts who cover the company. In his Power On newsletter today, Bloomberg's Mark Gurman said the foldable iPhone will offer two key advantages over other foldable smartphones. First, he said the foldable iPhone will have a "nearly invisible" crease when unfolded. This means the device's...
Nineth iOS 19 Feature

iOS 19 Beta is a Month Away With These New Features for Your iPhone

Thursday May 8, 2025 7:37 am PDT by
The first iOS 19 beta is just one month away, and there are already many new features and changes that are expected with it. Apple should seed the first iOS 19 beta to developers immediately following the WWDC 2025 keynote, which is scheduled for Monday, June 9. Following beta testing, the update should be released to the general public in September. Below, we recap the key iOS 19 rumors...
Foldable iPhone 2023 Feature Homescreen

Apple's Foldable iPhone Display Tech May Set New Industry Standard

Thursday May 8, 2025 3:29 am PDT by
Apple's upcoming foldable iPhone will feature a new type of display panel developed by Samsung that has never been used in a foldable product, claims a source with links to Apple's supply chain. According to the account yeux1122 on the Korean Naver blog, the foldable iPhone will use a custom display process for which Apple will hold branding trademark rights, and that meets Apple's stringent ...
AirPods Pro 3 Mock Feature

AirPods Pro 3 Just Months Away – Here's What We Know

Tuesday April 29, 2025 1:30 am PDT by
Despite being more than two years old, Apple's AirPods Pro 2 still dominate the premium wireless‑earbud space, thanks to a potent mix of top‑tier audio, class‑leading noise cancellation, and Apple's habit of delivering major new features through software updates. With AirPods Pro 3 widely expected to arrive in 2025, prospective buyers now face a familiar dilemma: snap up the proven...

Top Rated Comments

Wildkraut Avatar
48 months ago

Those poor devs Making tens of millions
Poor Apple making trillions
Score: 8 Votes (Like | Disagree)
Infinite Vortex Avatar
48 months ago

Apple said the changes "will help make the App Store an even better business opportunity for developers,"
That's all well and good to say that now but the number of times they've been in court to prevent it along with all of their long standing "justifications" to never have offered it without a court order makes Apple's statement ring a little bit hollow.
Score: 8 Votes (Like | Disagree)
dguisinger Avatar
48 months ago

How should Apple charge for access to the Xcode developer's tool and the Apple App Store if not thru a commission on sales? Or recognizing that, within the product's sale space, there is a monopoly so Congress should pass a law setting all online commission rates the same. This would include Google and XBox etc.
How could Apple charge for Xcode, a tool it needs internally to build its own operating system, that ships on its massively successful and profitable iPhone which would die off if there were no 3rd party apps-for-that. How could Tim Cook ever possibly afford to eat without double-dipping on recouping costs?
Score: 7 Votes (Like | Disagree)
PC_tech Avatar
48 months ago

How should Apple charge for access to the Xcode developer's tool and the Apple App Store if not thru a commission on sales? Or recognizing that, within the product's sale space, there is a monopoly so Congress should pass a law setting all online commission rates the same. This would include Google and XBox etc.
Isn’t that what the 99 people pay them a year is for?
Score: 6 Votes (Like | Disagree)
Wildkraut Avatar
48 months ago

I have to say, as someone who's used Visual Studio for 20 years.... the few times I've tried to use Xcode, .... I HATE XCode. The IDE just doesn't behave the way I expect an IDE to behave.
Same here, I use it because there is no 100% way around it "yet".
It should be called Xpuzzler and not Xcode, good for noobs but bad for coders.
Score: 6 Votes (Like | Disagree)
Wildkraut Avatar
48 months ago

oh, another example why we need to spend way more money on basic education. No company ever has made a trillion dollars, probably not even cumulatively. that is a really big number, like it is a 1000 billions, which is 1000 millions, which is a 1000 thousands.
Just like not every dev makes tens of millions. :p
Score: 6 Votes (Like | Disagree)