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 today released iOS 16.3, the third major update to the iOS 16 operating system that first came out in September. iOS 16.3 comes over a month after the launch of iOS 16.2, an update that added the Freeform app, Apple Music Sing, Advanced Data Protection, and more.
iOS 16.3 can be downloaded on eligible iPhones and iPads over-the-air by going to Settings > General > Software Update....
In a recent press release, Apple confirmed that iOS 16.3 will be released to the public next week. The software update will be available for the iPhone 8 and newer and includes a handful of new features, changes, and bug fixes.
Below, we've recapped bigger features in iOS 16.3, including support for physical security keys as a two-factor authentication option for Apple ID accounts, worldwide ...
Apple's next-generation iPhone 15 Pro and iPhone 15 Pro Max are expected to be announced in September as usual. Already, rumors suggest the devices will have at least seven exclusive features not available on the standard iPhone 15 and iPhone 15 Plus.
An overview of the seven features rumored to be exclusive to iPhone 15 Pro models:A17 chip: iPhone 15 Pro models will be equipped with an A17...
Apple today released watchOS 9.3, the third major update to the watchOS 9 operating system that first launched in September. watchOS 9.3 comes over a month after watchOS 9.2, an update that added new Workout functionality and Crash Detection optimizations.
watchOS 9.3 can be downloaded for free through the Apple Watch app on the iPhone by opening it up and going to General > Software Update. ...
After announcing new Mac and HomePod models last week, Apple adjusted its trade-in values for select devices in the United States.
iPhone trade-in values decreased by up to $80, and most Android smartphones also went down. Mac trade-in values remained unchanged or increased by up to $40 depending on the model, while some Apple Watch models increased in value and others decreased. Trade-in...
Apple today released macOS Ventura 13.2, the second major update to the macOS Ventura operating system initially released in October. macOS Ventura 13.2 comes more than a month after macOS Ventura 13.1, an update that added the Freeform app and other changes.
The macOS Ventura 13.2 update can be downloaded for free on all eligible Macs using the Software Update section of System...
While the new Mac mini with the M2 chip has a lower $599 starting price, the base model with 256GB of storage has slower SSD read and write speeds compared to the previous-generation model with the M1 chip and 256GB of storage.
A teardown of the new Mac mini shared by YouTube channel Brandon Geekabit reveals that the 256GB model is equipped with only a single 256GB storage chip, while the...
Apple today released tvOS 16.3, the third major point update to the tvOS 16 operating system that originally came out in September. Available for the Apple TV 4K and Apple TV HD, tvOS 16.3 comes six weeks after tvOS 16.2, an update that added Apple Music Sing.
The tvOS 16.3 update can be downloaded over the air through the Settings app on the Apple TV by going to System > Software...
Top Rated Comments
Apple without control is nothing.
Yank something from the Apple app store, and it’s getting yanked from my phone.
Period.
b&