After Apple announced big changes to the App Store due to the European Union's Digital Markets Act (DMA) rules, the company said the marketplace represents 7% of its global App Store revenue.
The company's chief financial officer, Luca Maestri, said the monetary impact of these changes will depend on the decisions developers make to adopt different systems.
“Much will depend on the decisions that are made. Just for context, the changes applied to the EU market, which represents approximately 7% of our global app store revenue,” she said in response to an analyst question.
Because of DMA, Apple has to allow stores of alternative applications and allow developers to use third-party payment processors. The company plans to charge a basic technology fee if an app exceeds one million downloads annually in different app stores.
Amid these changes, Apple posted a record quarter in App Store revenue. The company's total services revenue was $23.100 billion, up 11% year-over-year.
Apple continued its narrative of defending the App Store and its commission ecosystem by saying that it offers the best privacy and security. CEO Tim Cook emphasized that the company will not be able to provide the best experience to users due to these changes.
“If you think about what we've done over the years, we've really specialized in privacy, security and usability. And we have done everything we can to get as close as possible to the past in terms of the things that people love about our ecosystem, but we are not going to be able to provide the maximum amount that we could supply, because we have to comply with the regulation, ”he said. .
In the EU, Apple also had to open up the browser ecosystem by allowing other browsers to use their own engine instead of WebKit. When users start their iPhones after updating to iOS 17.4, the company will display a splash screen that allows them to choose a default browser.
Apple is apparently exploring more avenues to increase App Store revenue. The company will allow streaming game stores for cloud gaming services to be distributed through the App Store globally. Additionally, it is expanding support for in-app purchasing systems to mini-games, mini-apps, add-ons, and chatbots. For example, Netflix could sell mini-games directly through the app. And OpenAI may have a mechanism to subscribe to paid GPT.
The industry reaction to Apple's changes has been harsh. Spotify called Apple's DMA plan "extortion," while Epic Games' CEO described it as "malicious compliance" that is full of "junk fees." On Thursday, Meta CEO Mark Zuckerberg joined the chorus during the company's earnings call and said Apple's DMA rules were "so onerous" that he would be surprised if developers chose to accept them. The Verge reported that several developers have noted that if programmers accept the new conditions, they would have to pay a substantial fee.
La Coalition for App Fairness (Coalition for App Fairness, CAF), an industry group with members including Epic Games, Spotify, Tile, Basecamp and Deezer, called Apple's changes a "blueprint for non-compliance."
“Apple clearly has no intention of complying with the DMA. Apple is introducing new fees on direct downloads and payments that it does not process, which violates the law. This plan does not achieve the DMA's goal of increasing competition and fairness in the digital market; it is not fair, reasonable or non-discriminatory,” said CAF Executive Director Rick VanMeter.
