Apple (AAPL) has paid App Store developers $320 billion since the platform launched in 2008. According to a note from the vice president of
In a statement posted on Apple’s press site, Cue summed up its 2022 service performance, referring to everything from its Oscar wins for “CODA” to the number of songs currently available on Apple Music – 100 million.
But what stands out the most is $320 billion. That’s because Apple is looking at what could be a series of seismic changes for its App Store platform, including being forced to open up the iPhone to third-party app stores and payment options.
According to Bloomberg, Apple is preparing to cut a hole in its long-walled garden to comply with the European Union’s Digital Markets Act, which will require tech companies with 45 million or more users in the EU to open up their platforms to third parties. party app stores. The EU will start enforcing the law in 2024. However, there is no guarantee that Apple will transfer the regulations to the US.
For years, Apple has maintained that its App Store is the best way for customers to securely purchase apps for iOS and iPad OS devices. But growing backlash from high-profile developers, including Spotify, and calls from politicians for reform have forced the company to make significant changes to its App Store practices.
The Apple App Store is the only place where consumers can download apps for their iPhones and iPads. The problem for developers is that if they want to sell something through the App Store, they also have to use Apple’s in-app payment system. But using this system means developers have to pay Apple a 30% or 15% fee on every customer purchase.
The developers say this is what they often refer to as Apple’s consumer tax. The developers claim that without the fees in the App Store, they could offer their products and services for less.
Some countries have already taken action to force Apple to change its practices. South Korea, for example, requires Apple to allow developers to offer third-party payment methods for App Store apps. The EU’s Digital Markets Act goes a step further by requiring Apple to allow consumers to download apps from third-party app stores.
Lawmakers here in the US have talked about passing legislation that would force Apple and its main rival Alphabet’s Android to offer third-party app stores and payment options, but nothing has come of these moves.
Telling the world it paid out $320 billion to app developers could be Apple’s way of improving its image in the eyes of US politicians and regulators.
Apple’s services are the second largest business segment in terms of revenue after the iPhone. In 2022, services contributed $78.1 billion out of Apple’s total revenue of $394.3 billion. The iPhone brought in $205.4 billion.
In addition to the $320 billion figure, Cue also pointed to the success of various Apple apps, including Apple TV+, Apple Music, Apple Arcade and Apple Fitness+. According to Cue, Apple currently has 900 million paid subscriptions across various services.
If the App Store model is about to change, it’s clear that Apple still has plenty of cash-making options outside of App Store fees. That said, don’t expect the company to give up trying to maintain the status quo at least here in the US anytime soon.
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