Apple reveals that the EU accounts for 7% of global App Store revenue | TechCrunch

Credit: Bryce Durbin / TechCrunch Around a week after Apple’s announcement of significant changes to the App Store in response to the European Union’s Digital Markets Act (DMA), the company disclosed that the EU makes up 7% of its overall App Store revenue. Luca Maestri, the company’s chief financial officer, stated that the impact of the changes will be determined by the choices made by developers in implementing various systems. “The outcomes will largely depend on the decisions that are made. Consequently, the changes in the EU market, constituting approximately 7% of our global revenue,” he responded to a query from an expert. As a result of the DMA, Apple is obliged to permit third-party app stores and enable developers to utilize third-party payment processors. The company intends to levy a commission if the app surpasses a million downloads annually across different stores. Amidst these modifications, Apple observed a 25% increase in App Store revenue. The company’s net operating income stood at $23.1 billion, marking an 11% year-over-year rise. Apple reiterated its commitment to upholding the App Store and its ecosystem by emphasizing its provision of privacy and top-notch security. CEO Tim Cook underscored that the company’s ability to deliver an exceptional user experience would be hindered by these changes. “If we consider our track record over the years, we have consistently prioritized privacy, security, and usability. We have made extensive efforts to maintain as much as possible the aspects of our environment that users appreciate. However, we will be unable to meet the same standards as before due to our obligation to adhere to the regulations,” he remarked. In the EU, Apple has also been required to open up the browser landscape by enabling alternate browsers to utilize its engine rather than WebKit. Upon upgrading to iOS 17.4, users will be prompted to select a default browser when they start their iPhones. Apple seems to be exploring additional avenues to boost App Store revenue. The company will allow cloud gaming platforms to be distributed globally via the App Store. Furthermore, it is expanding support for in-app purchases for small games, micro-applications, plugins, and chatbots. For instance, Netflix will be able to directly sell mini-games within its app, and OpenAI may introduce paid GPTs. The adoption of Apple’s changes by the industry has been challenging. Spotify labeled Apple’s DMA strategy as an “overreach,” while Epic Games’ CEO characterized it as “treacherous” and “ineffective.” During the company’s earnings call, Meta CEO Mark Zuckerberg joined the critique, remarking that Apple’s DMA regulations are “excessively stringent,” suggesting that developers would be unlikely to opt in due to the hefty costs associated with the new terms. The Coalition for App Fairness, an industry group consisting of members such as Epic Games, Spotify, Tile, Basecamp, and Deezer, criticized Apple’s actions as “a non-compliant policy.” The CAF’s director, Rick VanMeter, remarked, “Apple has no intention of complying with the DMA. Apple is introducing new fees for direct downloads and payments but remains unwilling to make any changes, which violates the law. This system does not align with the DMA’s objective of enhancing competition and fairness in the digital market; it is unjust, unreasonable, and discriminatory.”

Author: OpenAI