Rival App Stores on iPhone Estimated to Have Limited Impact on Apple's Revenue
Bloomberg's Mark Gurman this week reported that Apple is preparing to allow alternative app stores on the iPhone and iPad in the European Union, as part of an effort to comply with the Digital Markets Act, which goes into full effect in 2024. The report said Apple is aiming for the changes to be introduced as part of iOS 17.
In a research note this week, a trio of analysts at investment bank Morgan Stanley argued that third-party app stores and sideloading would pose a "limited risk" to both App Store revenue and Apple's overall revenue given that iPhone users have "long prioritized the security, centralization, and convenience that the App Store brings."
Importantly, the proposed changes in the Digital Markets Act (DMA) are regulator-driven, not consumer-driven. From the consumer perspective, we see very little demand for alternatives to the App Store given the unmatched security, ease of use (centralization), and reliability the App Store provides. According to our Fall 2022 Smartphone survey, less than 30% of iPhone owners are extremely likely to purchase a mobile app directly from a developer website vs. the App Store.
In an implausible worst case scenario where Apple somehow lost the entirety of its App Store revenue in Europe as a result of competition from third-party app stores, the analysts estimated this would equate to just a 4% hit to Apple's services revenue and a 1% hit to Apple's total revenue. If third-party app stores are allowed globally, the analysts forecast around a 9% hit to services revenue and around a 2% hit to total revenue.
In reality, the impact on Apple's revenue could be far less, as the analysts believe it's likely Apple would still receive a commission on purchases made through third-party app stores. In the Netherlands, for example, Apple's standard 30% commission is reduced by only 3% for dating apps using third-party payment systems.
While there are still a lot of question marks surrounding third-party app stores and sideloading, Morgan Stanley believes that the reported changes do not present material risk to App Store revenue/growth or the long-term performance of Apple's stock.
Popular Stories
Apple is about to release iOS 26.2, the second major point update for iPhones since iOS 26 was rolled out in September, and there are at least 15 notable changes and improvements worth checking out. We've rounded them up below.
Apple is expected to roll out iOS 26.2 to compatible devices sometime between December 8 and December 16. When the update drops, you can check Apple's servers for the ...
Apple has ordered 22 million OLED panels from Samsung Display for the first foldable iPhone, signaling a significantly larger production target than the display industry had previously anticipated, ET News reports.
In the now-seemingly deleted report, ET News claimed that Samsung plans to mass-produce 11 million inward-folding OLED displays for Apple next year, as well as 11 million...
Apple is actively testing under-screen Face ID for next year's iPhone 18 Pro models using a special "spliced micro-transparent glass" window built into the display, claims a Chinese leaker.
According to "Smart Pikachu," a Weibo account that has previously shared accurate supply-chain details on Chinese Android hardware, Apple is testing the special glass as a way to let the TrueDepth...
Apple today seeded the second release candidate version of iOS 26.2 to developers and public beta testers, with the software coming one week after Apple seeded the first RC. The release candidate represents the final version iOS 26.2 that will be provided to the public if no further bugs are found.
Registered developers and public beta testers can download the betas from the Settings app on...
Google Maps on iOS quietly gained a new feature recently that automatically recognizes where you've parked your vehicle and saves the location for you.
Announced on LinkedIn by Rio Akasaka, Google Maps' senior product manager, the new feature auto-detects your parked location even if you don't use the parking pin function, saves it for up to 48 hours, and then automatically removes it once...
Apple's iPhone development roadmap runs several years into the future and the company is continually working with suppliers on several successive iPhone models at the same time, which is why we often get rumored features months ahead of launch. The iPhone 18 series is no different, and we already have a good idea of what to expect for the iPhone 18 Pro and iPhone 18 Pro Max.
One thing worth...
Apple's senior vice president of hardware technologies Johny Srouji could be the next leading executive to leave the company amid an alarming exodus of leading employees, Bloomberg's Mark Gurman reports.
Srouji apparently recently told CEO Tim Cook that he is "seriously considering leaving" in the near future. He intends to join another company if he departs. Srouji leads Apple's chip design ...
Apple's chipmaking chief Johny Srouji has reportedly indicated that he plans to continue working for the company for the foreseeable future.
"I love my team, and I love my job at Apple, and I don't plan on leaving anytime soon," said Srouji, in a memo obtained by Bloomberg's Mark Gurman.
Here is Srouji's full memo, as shared by Bloomberg:I know you've been reading all kind of rumors and...
Intel is expected to begin supplying some Mac and iPad chips in a few years, and the latest rumor claims the partnership might extend to the iPhone.
In a research note with investment firm GF Securities this week, obtained by MacRumors, analyst Jeff Pu said he and his colleagues "now expect" Intel to reach a supply deal with Apple for at least some non-pro iPhone chips starting in 2028....
Apple and Google are teaming up to make it easier for users to switch between iPhone and Android smartphones, according to 9to5Google. There is a new Android Canary build available today that simplifies data transfer between two smartphones, and Apple is going to implement the functionality in an upcoming iOS 26 beta.
Apple already has a Move to iOS app for transferring data from an Android...
