Image credits: Bryce Durbin/TechCrunch
Nearly a week after Apple announced major changes to the App Store under the European Union’s Digital Markets Act (DMA) rules, the company said the market accounts for 7% of its global App Store revenue. announced.
Luca Maestri, the company’s chief financial officer, said the financial impact of these changes will depend on developers’ choice of adopting a different system.
“A lot depends on the choices that are going to be made. For context, this change was applied to the EU market, which accounts for about 7% of our global app store revenue,” the analyst said. he said in response to a question.
Because of DMA, Apple must allow alternative app stores and allow developers to use third-party payment processors. The company plans to charge a core technology fee if an app exceeds 1 million downloads annually across various app stores.
Amid these changes, Apple noted a record quarter of App Store revenue. The company’s overall services revenue was $23.1 billion, up 11% year over year.
Apple went on to defend its App Store and its fee ecosystem, saying it offers the best privacy and security. CEO Tim Cook stressed that these changes will prevent the company from providing the best experience for users.
“If you think about what we’ve done over the years, we’ve focused on privacy, security, and ease of use. And we’ve focused on what people love about our ecosystem. “We have done our best to get as close to the past as possible, but we will not be able to provide the maximum amount that we can supply. We need to comply with regulations,” he said.
In the EU, Apple also needed to open up its browser ecosystem by allowing other browsers to use its own engine instead of WebKit. When users start up their iPhones after updating to iOS 17.4, the company will display a splash screen where they can select their default browser.
Apple appears to be exploring additional avenues to increase App Store revenue. The company will enable its cloud gaming service’s streaming game store to be distributed worldwide through the App Store. Additionally, we extend support for in-app purchase systems to mini-games, mini-apps, plugins, and chatbots. So, for example, Netflix could sell mini-games directly through its app. OpenAI could also provide a mechanism to subscribe to paid GPT.
The industry’s reaction to Apple’s changes was harsh. Spotify called Apple’s DMA plan “extortion,” and Epic Games’ CEO called it “bad compliance” full of “junk fees.” On Thursday, Meta CEO Mark Zuckerberg joined the chorus during the company’s earnings call, saying Apple’s DMA rules are “so onerous” that he would be surprised if developers opted in. . The Verge According to reports, several developers have pointed out that they will have to pay large fees if they agree to the new terms.
Coalition for App FairnessThe industry group, whose members include Epic Games, Spotify, Tile, Basecamp and Deezer, called Apple’s changes a “non-compliant plan.”
“It is clear that Apple has no intention of complying with the DMA. Apple is introducing new fees for direct downloads and payments that do nothing, which is against the law. “It does not achieve the DMA’s goal of increasing competition and fairness in the United States and is not fair, reasonable, or non-discriminatory,” said Rick VanMeter, executive director of CAF.