Apple to allow third-party app stores on iPhones in European Union
appeal‘s rivals are positioning themselves as the best alternative to its dominant App Store as the iPhone maker prepares to allow others onto its devices in the European Union.
The bloc’s Digital Markets Act (DMA) will force Apple and fellow tech giants Google to provide space for third-party app stores on their respective iOS and Android devices.
Under the DMA, which will take effect on a rolling basis over the next two years, third-party alternatives will have an easier route to entry iPhones and Android devices.
And as components of the legislation take effect, competitors from smaller startups to giants like Amazon and Microsoft could try to lure consumers and app developers away from Apple and Google.
Ben Wood, chief executive of industry analytics firm CCS Insight, said he expects “an avalanche of app stores” in the near future.
“There is an emerging ‘coalition of the willing,’ and all of them have a vested interest in not having to pay what they see as a tax to Apple anymore,” Wood told Reuters.
Apple and Google did not respond to requests for comment.
Android users can currently install apps from alternative sources, a process known as “sideloading,” but this often requires them to turn off certain security settings.
Apple’s apparent concessions on sideloading are a victory for industry leaders such as Twitter owner Elon Musk and Spotify CEO Daniel Ek, both of whom bemoaned the company’s 30% surcharge on purchases made through its App Store.
Rivals plan to bring frustrated developers to their stores, promising lower commission fees and the potential for exclusivity deals with popular apps.
“Competition is a good way to improve services,” says Paulo Trezentos, CEO of Portugal’s Aptoide, which takes a 15% to 25% cut of in-app purchases.
Exclusive content deals could drive competition in app stores the same way it has in the “streaming wars” between Netflix and challengers like Disney+ and Amazon Prime, Trezentos said, adding, “Netflix has content that HBO doesn’t have … . App stores can be like that.”
Paddle, a payment processor for software companies, has built its own competitor to the App Store, which it hopes to launch in Europe once the DMA takes effect.
“A 30% fee is actually quite excessive when we look at it compared to how much it actually costs to process payments, and what Apple actually offers,” CEO Christian Owens said.
Owens said Paddle’s in-app payment system will charge developers between 5% and 10% on transactions.
“The biggest obstacle they are going to have to overcome is the consumer,” said Wood at CCS Insight.