Introduction

Recent events pertaining to Apple in the European Unuion have been very exciting. The ongoing Antitrust legal case against Apple has been concluded forcing Apple to comply with the Digital Markets Act (DMA) in the EU. To comply with the DMA, Apple has announced some major changes to iOS and the App Store.  

The DMA, officially adopted by the European Union in November 2022, aims to establish fair competition and protect users in the digital market space. Apple was found in violation of the DMA as the iOS did not include options for apps to be downloaded through any channel other than the official app. This was creating a monopolistic situation as Apple was charging a 30% commission on all app purchases. 

The changes introduced to the iOS are to be implemented in March 2024 with the release of iOS 17.4. Most of these changes are focused on building a platform that allows a free-market for all. Some of the changes are global, while some are restricted to the users from the EU. 

Key Changes

1. Allowing new marketplaces and sideload for apps

Traditionally, iOS users have solely relied on the App Store for downloading and installing apps. Now, users in the EU will have the option to explore and use apps from third-party app stores. This creates a more open ecosystem as it allows developers to publish the mobile apps to non-apple platforms and still have it available for the apple devices. Furthermore, it would create a competition between the marketplace apps that would foster innovation.  

2. New options for Payment Gateways

The iOS has a limited scope when it comes to the processing of payments for the app purchases. That won’t be the case anymore since with the new applications coming in from different marketplaces, these apps will process payments with the payment gateway of their choice. This update gives the developers the option to process payments differently and choose their preferred payment service provider. 

3. Expanded Analytics (Global)

As part of the DMA, Apple is now required to provide expanded analytics to the app developers. Previously, app analytics provided basic data on downloads, engagement, and revenue. After the iOS 17.4 update, the developers in the EU region and across the world will be able to view expanded analytics. This will include the analytics with regard to:

• Acquisition

• Engagement

• Commerce

• App Usage

• Peer Benchmarks

Using these advanced analytics, app developers will be able to profoundly analyze the app performance and user behaviors. That will further allow app developers to improve app usability and bring in further innovation to make the platform compete better in the marketplace. 

4. Alternative Browser Engines

Since the early years of iOS the webkit browser engine has been the only available browser engine. That will not be the case after the iOS 17.4 update in the EU region. Apple operating system will be allowing the development of browser apps based on alternative browser engines. This would allow app developers to build standalone browser apps as well as integrated browsers within existing apps. Furthermore, with the latest update, users will be able to change their default browser as well which was not possible before. 

5. Interoperability Request Form

The implementation of such major updates on the iOS is something that would take the developers some time to explore. Apple will be introducing an interoperability request form that would allow developers to get in touch with the apple support team to request access to specific software or hardware information. The developers will then use this information to make their mobile apps perform better in all aspects and give the users a seamless experience. 

6. NFC Chips for 3rd Party Payment Processing

Apple mobile devices have been equipped with NFC Chips since 2014 with the launch of Apple iPhone 6. These NFC chips are used for reading NFC tags and making mobile payments. Apple has kept the NFC mobile payments specifically for Apple Pay but with the iOS 17.4 update, users will be able to make mobile payments using any payment application. 

7. Game Streaming Apps (Global)

The iOS 17.4 update brings good news for gamers as well. Game streaming apps like Geforce Now and Xbox game pass have been available on android devices since 2020 but remained unavailable at the iOS. Traditionally, iOS users had to open the game streaming platforms on the web browser as there was no app available. Interestingly, with the iOS 17.4 update, these game streaming apps would be available and can be downloaded from the App Store. 

8. Reduced App Store Commissions

The applications available on the Apple App Store include free, paid and ones with in app purchases. Apple charges a 30% commission on all payments made for applications. This has been reduced to a varying rate of 10% to 17% with a processing fee of 3% if the apple payment gateway is used. The commission reduction is good news for app developers as they will be able to retain a greater chunk of revenue for further innovations and development. 

Reactions and Analysis

App developers in the EU are really excited about this latest news and are eager to utilize the 600+ APIs available to implement the latest features for their mobile apps. Some of the larger players of the mobile app industry will be looking to build their own mobile app marketplaces where they will allow users to download mobile apps on their Apple devices. However, Apple has been really strict with their regulations on registering app marketplaces for their operating system. 

There are a lot of requirements that need to be fulfilled by mobile app marketplaces to register on the Apple operating system and some of these requirements can be tough to meet. Some of these requirements and costs are as follows: 

• Compliance with Apple's App Store Review Guidelines

• Security and Privacy Requirements

• Technical Specifications Requirements

• Content Moderation Requirements

• €1,000,000 stand-by letter of credit 

• €0.5 Core Technology Fee per user download per year after 1 million downloads 

Apple has declared that this update will have some risks involved as the availability of 600+ APIs do leave some level of vulnerability. They have stated that security protocols have been established and the users will be given fair warnings while sideloading applications and downloading from third party marketplaces. Likewise, they have also warned that users will not have the same seamless experience while using the apps from external sources. 

Conclusion

Apple's recent changes to iOS in the EU, driven by the DMA, mark a significant shift in the mobile app landscape. While opening doors for alternative marketplaces, sideloading, and expanded payment options, these updates come with complexities and uncertainties. Developers must navigate new requirements, costs, and potential security challenges. Users gain choices but face questions about compatibility, data privacy, and long-term app quality. Ultimately, the impact of these changes remains to be seen. Will they foster innovation and competition, or create fragmentation and confusion? Only time, user adoption, and developer response will tell the full story of this evolving app ecosystem in the European Union.