Apple Permits Third-party App Stores On iPhones For The First Time

Under the significant influence of the EU’s Digital Markets Act, Apple has introduced substantial changes that will reshape the iOS landscape, the App Store, and browser functionality within the platform. These transformative modifications are scheduled for implementation in the European Union with the forthcoming iOS 17.4 update, set to be released in March.

One of the key changes revolves around web browsing. Currently, iOS users can select a default browser other than Safari, but such browsers are obligated to use Safari’s WebKit rendering engine. This limitation is being lifted, allowing any browser on iOS to use its preferred rendering engine, providing developers with increased flexibility.

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As iOS 17.4 becomes available to EU iPhone users, Safari itself will undergo a significant alteration. Users will now have the option to choose browsers other than Safari at startup, offering users a pivotal choice in their browsing experience.

The most notable change is Apple’s decision to allow alternative app stores within the iOS ecosystem, marking a departure from its previous stance. However, the company, expressing concerns about potential risks to users, has established a stringent “baseline review” process applicable to all apps, irrespective of their distribution channel.

This review process will involve a combination of automated checks and human evaluations, resulting in concise app descriptions and functionality insights prominently displayed to users before downloading.

Additionally, NFC capabilities on iPhones will be unlocked within the EU region, enabling alternative wallet and banking applications to leverage tap-to-pay functionality and establish themselves as preferred options for mobile payments.

The App Store is set to undergo further transformative enhancements, with new options for integrating payment service providers directly within a developer’s app. Developers will gain the ability to facilitate payments via external links, allowing users to complete transactions for digital goods and services on the developer’s external website, introducing a new level of flexibility within the iOS ecosystem.

Looking ahead, app developers in the EU will be subject to a revised commission scheme. For most developers and subscriptions beyond their first year, a 10% commission rate will apply. However, transactions related to digital goods and services will incur a slightly higher rate of 17%.

In addition to these commission adjustments, iOS apps opting to use the App Store’s payment processing services will face a 3% payment processing fee. This fee applies to apps choosing to stay within the existing payment framework provided by the App Store.

A notable element of this fee restructuring is the introduction of a “Core Technology Fee.” iOS apps distributed through either the App Store or an alternative app marketplace will be required to pay a fee of €0.50 for each initial annual installation once surpassing the threshold of 1 million installations. These changes reflect a significant evolution in Apple’s approach to app distribution, payment processing, and fees within the EU region.