Apple iOS 17.4 Beta Release with Major Changes for iPhone and App Store in Europe
In a surprising move, Apple has announced the release of the first developer beta for iOS 17.4, which includes significant changes for iPhone users in Europe. This update comes as a response to the upcoming deadline of March 7, set by the European Union for companies to comply with the Digital Markets Act. Let’s dive into the details of these changes and why they are important not only for European users but also for those in the United States.
Apple’s Decision to Release iOS 17.4 Beta
Apple’s decision to release the iOS 17.4 beta was showcased in a post on Apple Newsroom. One of the major changes is that iPhone users in the European Union will now have the freedom to download and install apps from sources outside the App Store. This is a notable shift as Apple had previously opposed such actions, restricting users to only App Store downloads, unless their devices were jailbroken.
Opening Up to Other App Stores
Starting from March, other app stores will be allowed, marking a significant development. Any developer can now establish their own app marketplace, as long as it adheres to Apple’s guidelines for customer experience and fraud prevention. Apple will be developing Application Programming Interfaces (APIs) to facilitate this process, enabling an external app marketplace to function as an iOS app installer.
Making iOS More Like the Mac
With these changes, the iPhone operating system will become more akin to the Mac, where users can download apps from various sources outside the Mac App Store. Apple’s strict emphasis on maintaining the user experience and preventing potential security issues resulting from direct downloads will still be upheld.
Notarization Process and Commission Fees
Apps sourced from alternative app stores will undergo a notarization process, which includes safety and security checks. Additionally, one significant change is that such apps will not be subject to the 30% commission fee that most apps currently incur. Instead, Apple will implement a Core Technology Fee of 0.5 Euros per install per account per year, but only after 1 million installs have taken place. This could result in a greater number of apps at potentially lower prices for users.
App developers will retain the option to distribute their apps through the App Store with a substantially reduced commission rate of 17%. Furthermore, any apps utilizing Apple’s payment system, rather than alternative payment options, will attract an additional 3% commission fee. The new rules will also introduce NFC payments that do not rely on Apple Pay or the Wallet app, thanks to the introduction of Host Card Emulation.
Potential Impact Outside the EU and Criticism of the Changes
While the changes are primarily targeting European markets, the impact may extend beyond the EU. The United States government, already closely monitoring Apple and its App Stores, will likely observe the outcomes to consider similar reforms in the American market.
If the changes prove successful in Europe, it is highly probable that U.S. authorities will push for sweeping reforms akin to those happening in Europe. The U.S. government’s interest in this matter can be traced back to their scrutiny of Apple and its App Stores, making it likely that they will follow suit in implementing changes to empower consumers and app developers.
Unpacking Apple’s Compliance with the Digital Markets Act
Apple’s complex and detailed announcement regarding its compliance with the European Union’s Digital Markets Act has brought forth several considerations.
Concerns were raised about whether these changes would also apply to British users. Despite the U.K.’s departure from the EU, Apple has clarified that the alterations will solely impact the European Economic Area, encompassing the 27 EU countries, Iceland, Liechenstein, and Norway. Switzerland, being part of the single market but not the EEA, is exempt from the new regulations.
Apart from alternative app stores, developers will have the option to integrate alternative payment options into their apps. Furthermore, iPhone users within the EU will now have the ability to select a default browser, adding to the existing choices of Chrome, Firefox, and Microsoft Edge. Additionally, the inclusion of NFC payments that do not require Apple Pay or the Wallet app represents a significant advancement.
Critics have voiced concerns about the proposed Core Technology Fee, asserting that it may prove burdensome for apps with millions of users, potentially even bankrupting some smaller apps. Although the new changes bring exciting developments, there is still much to learn and analyze about their implications.
Reactions and Analysis of Apple’s Changes
Reactions to Apple’s efforts to comply with the Digital Markets Act for European Union users have been mixed, with some expressing skepticism about its overall impact.
Prominent tech commentator John Gruber has labeled the DMA as anti-U.S. big business, suggesting that certain aspects of the law seem tailored specifically for companies like Spotify. He further criticizes the DMA as a “terrible law,” predicting minimal positive outcomes for iOS users in the EU.
Gruber delves into the Core Technology Fee, interpreting it as Apple asserting that its fair share of the App Store distribution amounts to 17/10 percent, with an additional 3 percent for the value of its payment processing. By exempting apps from marketplaces outside the App Store, the new EU regulations will only require the Core Technology Fee, thereby monetizing the value provided by iOS itself.
According to Gruber, Apple’s primary concern lies in maintaining control over the iOS platform. Compliance with the DMA necessitates relinquishing some of this control, potentially impacting factors such as revenue and user experience. Users switching from Safari or other WebKit-based browsers to alternative options, like Google Chrome or Mozilla Firefox, may encounter drawbacks such as reduced battery life.
Potential Future Adjustment of Apple’s Implementation
While the current commentary and analysis may not immediately influence the initial release of Apple’s changes in early March, future adjustments might be possible as the landscape evolves.
Further developments and insights are anticipated in the coming months. Stakeholders will keenly follow how Apple’s implementation fares and whether any alterations are made in response to user feedback and industry demands.
Analyst comment
Positive news: Apple’s iOS 17.4 beta release includes major changes for iPhone and App Store in Europe, allowing users to download apps from sources outside the App Store and reducing commission fees. This move is important for European users and may lead to similar reforms in the US market.
As an analyst, the market is likely to see increased competition as developers establish their own app marketplaces. It may result in a greater number of apps at potentially lower prices for users, while Apple maintains control over the iOS platform. The impact may extend beyond the EU, with potential reforms in the American market. Adjustments to Apple’s implementation may be made based on user feedback and industry demands.
