Apple could finally allow third-party app stores and sideloading apps on iPhone. The change could come into effect as soon as next year with iOS 17’s release. But how much would it affect Apple’s revenue? Analysts at Morgan Stanley believe that the third-party app stores on iPhone would have a very “limited risk” to both Apple App Store revenue and the company’s overall revenue.
According to Morgan Stanley, less than 30% of iPhone owners are “extremely likely” to purchase a mobile app directly from a developer’s website instead of the App Store. It adds that most iPhone users would continue to use the official App Store for app downloads, even if they had the option of downloading from other sources. This is because the App Store offers a high level of security, centralization, and convenience that users value.
Even in a worst-case scenario, the impact of alternative app stores on Apple’s revenues would likely be limited. The research note estimates that if such app stores were allowed in Europe, they would result in a 4% reduction in Apple’s services revenue and a 1% reduction in total revenue. If alternative app stores were available globally, the impact on revenues would increase to a 9% reduction in services revenue and around a 2% reduction in total revenue.
Apple Could Still Receive Commission on Third-Party App Store Purchases
Moreover, in reality, the impact could be even minimal. The analysts believe that Apple would still receive a commission on purchases made through third-party app stores. For example, in the Netherlands, the company currently charges a 3% commission (down from 30%) on dating apps that use a third-party payment system.
On the whole, it remains to be seen whether Apple will ultimately decide to allow alternative app stores on its devices, but it seems that the financial impact of such a change would be relatively modest.