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 not expected to release a standard iPhone 18 model this year, according to a growing number of reports that suggest the company is planning a significant change to its long-standing annual iPhone launch cycle.
Despite the immense success of the iPhone 17 in 2025, the iPhone 18 is not expected to arrive until the spring of 2027, leaving the iPhone 17 in the lineup as the latest...
Language learning app Duolingo has apparently been using the iPhone's Live Activity feature to display ads on the Lock Screen and the Dynamic Island, which violates Apple's design guidelines.
According to multiple reports on Reddit, the Duolingo app has been displaying an ad for a "Super offer," which is Duolingo's paid subscription option.
Apple's guidelines for Live Activity state that...
The company behind the BlackBerry-like Clicks Keyboard accessory for the iPhone today unveiled a new Android 16 smartphone called the Clicks Communicator.
The purpose-built device is designed to be used as a second phone alongside your iPhone, with the intended focus being communication over content consumption. It runs a custom Android launcher that offers a curated selection of messaging...
Apple plans to introduce a 12.9-inch MacBook in spring 2026, according to TrendForce.
In a press release this week, the Taiwanese research firm said this MacBook will be aimed at the entry-level to mid-range market, with "competitive pricing."
TrendForce did not share any further details about this MacBook, but the information that it shared lines up with several rumors about a more...
Apple is planning to release a low-cost MacBook in 2026, which will apparently compete with more affordable Chromebooks and Windows PCs. Apple's most affordable Mac right now is the $999 MacBook Air, and the upcoming low-cost MacBook is expected to be cheaper. Here's what we know about the low-cost MacBook so far.
Size
Rumors suggest the low-cost MacBook will have a display that's around 13 ...
Apple today announced a number of updates to Apple Fitness+ and activity with the Apple Watch.
The key announcements include:
New Year limited-edition award: Users can win the award by closing all three Activity Rings for seven days in a row in January.
"Quit Quitting" Strava challenge: Available in Strava throughout January, users who log 12 workouts anytime in the month will win an ...
Apple hasn't updated the Mac Pro since 2023, and according to recent rumors, there's no update coming in the near future. In fact, Apple might be finished with the Mac Pro.
Bloomberg recently said that the Mac Pro is "on the back burner" and has been "largely written off" by Apple. Apple apparently views the more compact Mac Studio as the ideal high-end pro-level desktop, and it has almost...
