Newsletter
A hot topic in the tech space over the past year has been the EU’s DMA, which is set to go into effect in March of 2024. The Digital Markets Act is responsible for bringing USB-C to the iPhone in 2023, and it’s also responsible for some pretty big changes that Apple is undertaking.
According to Bloomberg, Apple is starting a historic overhaul of its iOS, Safari, and App Store offerings in Europe. This is aimed at appeasing regulators in the European Union. The biggest part of this is, allowing customers to download software from outside of the Appe Store. Also known as sideloading. This is going to be made available for the first time as part of iOS 17.4, and the first beta went live today.
But that’s not all; users will be able to use alternative payment systems, and it’ll be easier to choose a new default web browser. These are two frequent complaints of developers and lawmakers. You could already change the default web browser, but the setting was hidden pretty deep in the settings. Apple is now going to make that easier to do.
Apple is charging €0.50 for each App Install
In a wild move, Apple is actually going to be charging €0.50 for each app install. This is on top of the 3% payment processing charge for apps that use Apple’s in-app purchase system. This is the same for apps from Apple’s own App Store or other third-party app stores. But only for apps that are installed more than 1 million times.
Apple says that more than 99% of developers in the EU will see their payments to Apple decrease, and fewer than 1% will need to pay the app install fee. However, what this does mean is that apps installed from outside of the App Store won’t have any other commissions due beyond the €0.50 fee.
Obviously, this move is likely going to hurt Apple’s services revenue, which has been one of the few areas of growth for Apple over the last few years especially as people are keeping their hardware (iPhones, iPads, Macs, etc) longer and longer.
Apple is also opening up the NFC chip for payments on iPhone
Since adding NFC to the iPhone, Apple hasn’t done a whole lot with the chip. And in fact, it has been pretty locked down. Really only being used for Apple Pay and a few features with its own cases. But as part of this overhaul, Apple is also going to allow developers to create tap-to-pay apps using the NFC chip, as well as browsers with third-party engines and extensive game streaming services.
So what about the App Store Tax? Well, the 30% commission rate is gone. Now, developers will pay Apple a cut of 17% on app sales and that will decline to 10% for most developers and subscriptions after the first year. However, this is only changing in the EU. Outside of the EU, app developers will still need to pay the 30% App Store Tax.