Apple admits third-party App Stores in Europe are inevitable
Apple's latest financial filings show that the company expects to be forced into allowing third-party App Store across Europe, starting in 2024.
Following the passing into law of its Digital Markets Act, the European Union has previously told Apple that it must open up its App Store to rivals. Apple has tried arguing against the ruling, or at least significant parts of it, but now expects App Store changes to be inevitable.
"The Company expects to make further business changes in the future, including as a result of legislative initiatives impacting the App Store," says Apple in a Form 10-K, "such as the European Union ("EU") Digital Markets Act, which the Company is required to comply with by March 2024."
This notice comes in a section of the 10-K which describes risks to the company and its expected profitability.
"Future changes could also affect what the Company charges developers for access to its platforms, how it manages distribution of apps outside of the App Store," it continues, "and how and to what extent it allows developers to communicate with consumers inside the App Store regarding alternative purchasing mechanisms."
Overall, this "could reduce the volume of sales, and the commission that the Company earns on those sales, would decrease." Apple says that if the commission Apple gets on App Store sales is reduced, "the Company's business, results of operations and financial condition could be materially adversely affected."
Apple has not commented since making this filing. However, it has previous strenuously argued against allowing third-party app stores and what's called sideloading of apps.
As spotted by TechCrunch, analysts Morgan Stanley believe that the new wording in the 10-K form confirms the fact that third-party access is coming. Apple will "likely begin 3rd party app stores on device in Europe," say the analysts.
"We believe Apple is well positioned to compete should these changes take place," continued Morgan Stanley, "due to the App Store's security, centralization, and convenience, limiting the potential user experience and/or P&L impact.
Separately, Morgan Stanley has been taking a longer-term view of Apple's stock price than some analysts. Nonetheless, in October 2023 it dropped its price target to $210.
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Comments
Most enterprises have a good grasp on security, even BYOD: I suspect Apple with have new MDM capability that will block 3rd party app stores, however they manifest themselves
Google's PlayStore is not the only Android game in town, but it's the only viable one for app success, and where nearly all Google Android owners get their app fixes. (Unless you're in China).
#2 See #1 because malware will be written by the government controlled communications departments so they can see everything than happens on every government-controlled phone. I call it malware because it's something I wouldn't normally install. The malware will be injected through government apps under the guise of something similar to the US IRS or another government agency everyone has to use to file documents, like taxes.
#3 Apple won't have the ability to shut anything down approved by the EU, they'll only have control where the Apple App Store is the only one available (along with at least USA corporate and government app stores and their ability to install apps--luckily I don't work for the government anymore and they couldn't touch my personal phone anyway, only government phones, which I agree with.
#4 Everyone might still go back to the real Apple App Store but damage will already have been done with government-sponsored malware installed.
#5 The EU will NEVER admit this failed.
The change will also provide access to apps that Apple currently won't allow. For customers in EU having a gatekeeper from California is far from perfect. I'm sure some Americans feel the same. And yes... it will introduce new problems, but installing apps on Mac has been drag'n'drop for 39 years. It is possible.
Can’t wait!
Malware etc not a worry for me
i only ever use mainstream apps - Netflix , Spotify, YouTube and the like
it will be an absolute pleasure to pay outside the AppStore!
whohooooo f u Apple 🍏
Right now such a switch would mean that you need to pay for all the apps a second time.
When politicians and the government bureaucracies say they’re doing you a favor, run in the other direction.
Not always "really easy". A lot of vendors deliberately make reaching their support channels a challenge just to keep the traffic down.
Trying to be a playground rebel? Or do you genuinely hate Apple?
Just wait until these alternative app stores hit the marketplace, and you'll see the true abuse the human being is capable of dishing out. We saw it on Windows. You think it's bad now with Apple getting a 30% commission... just wait... costs will go up for everyone.
This is more about distributing Apps without needing Apple's approval. This is about distributing Apps that are not blocked because of business reasons...Apple's business reasons. This is about being able to distribute an app, free or not, right on your own website, directly to your users.
If Apple had been more flexible and less unrealistic with their control, no one would have ever asked for this.