Image credits: Bryce Durbin/TechCrunch
Nearly a week after Apple announced major changes to the App Store due to EU Digital Markets Act (DMA) rules, the company said the marketplace represents 7% of global App Store revenue.
The monetary impact of these changes will depend on the choices developers make to adopt different systems, said Luca Maestri, the company's chief financial officer.
“A lot will depend on the choices that are made. Just to keep it in context, the changes have been applied to the EU market, which represents approximately 7% of our global App Store revenue,” he said in response to an analyst's question.
Because of DMA, Apple has to allow alternative app stores and allow developers to use third-party payment processors. The company plans to charge a basic technology fee if the app exceeds one million annual downloads across various app stores.
Amid these changes, Apple reported a record quarter for App Store revenue. The company's total services revenue reached $23.1 billion with an 11% jump year over year.
Apple went on to defend the App Store and its commission system by saying it offers better privacy and security. CEO Tim Cook confirmed that the company will not be able to provide the best user experience due to these changes.
“If you think about what we've done over the years, it's that we've really specialized in privacy, security, and ease of use. We've done our best to get as close to the past in terms of the things that people love in our ecosystem as possible, but we won't be able to provide the maximum amount that We can provide it, because “We need to adhere to the regulation,” he said.
In the European Union, Apple has also had to open up the browser ecosystem by allowing other browsers to use its own engine instead of WebKit. When users turn on their iPhones after updating to iOS 17.4, the company will display a splash screen to let them choose the default browser.
Apple appears to be exploring more ways to increase App Store revenue. The company will allow streaming game stores to distribute cloud gaming services through the App Store globally. Additionally, it expands support for in-app purchase systems to include mini-games, mini-apps, plugins, and chatbots. So, for example, Netflix could potentially sell mini-games directly through the app. OpenAI could have a mechanism to subscribe to paid GPTs.
Industry reaction to Apple's changes has been harsh. Spotify called Apple's DMA plan “extortion” while Epic Games' CEO called it “malicious compliance” and full of “unwanted 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 do so. the edge Reportedly, many developers have pointed out that if developers agree to the new terms, they will have to pay hefty fees.
Alliance for App Fairnessan industry group whose members include Epic Games, Spotify, Tile, Basecamp and Deezer, called Apple's changes a “noncompliance scheme.”
“Apple clearly has no intention of complying with the DMA. Apple is charging new fees for direct downloads and payments that it does nothing to process, which violates the law. This plan falls short of the DMA’s goal,” said Rick VanMeter, executive director of the CAF. Increased competition and fairness in the digital market – it is not fair, reasonable and non-discriminatory.
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