iOS 17.4 will allow sideloading & third party app stores in EU – Epic Game Store incoming

iOS 17 header iPhone Apple

Apple has announced that iOS and iPadOS 17.4 will introduce support for developer app sideloading and third party app stores in the EU, complying with the incoming Digital Markets Act (DMA). But there’s an awful lot of caveats to this, with the iPhone maker determined to keep as much control and make this as awkward, fussy, and costly as possible.

Epic has already confirmed that the Epic Game Store will arrive to distribute Fortnite, and AltStore is exploring if they can possibly launch as well.

When iOS 17.4 is released in March 2024, users in the EU will have access to new “alternative app marketplaces”. You’ll be able to download an approved marketplace from that company’s website and explicitly give it permission to download apps to your device. After that point you can make further downloads through those app stores, they will be in charge of providing updates and conducting app reviews, and you can even set a non-Apple store to be the default. They’re also allowing third party payment processing. All apps will still be approved by Apple in a way through a notarisation process similar to Gatekeeper on MacOS.

From the user perspective, that kind of sounds perfect, doesn’t it? Well, from a developer and app seller perspective this could be a massive pain.

A big part of the change is a new fee structure that Apple is putting in place for the EU. Instead of a flat 30% or 15% (for small business developers) cut, Apple will take a 17% or 10% cut respectively, regardless of whether an app came through the Apple App Store or another marketplace. Developers will optionally be able to use Apple’s payment systems for a further 3% on top of that. However, there will be an additional €0.50 Core Technology Fee  for every first install of an app, per user, per year after the first 1 million installs.

Apple states that this will lead to developers making more money across the board, but the per-install fee  means that there could be a massive upfront costit to a breakout app or game if the average monetisation per user is too low. An app making $10 million of 10 million installs would see Apple charge $6.2 million, but if that’s $10 million off 1 million installs? Well, then it’s around $1.3 million. Basically, Apple’s found a way to charge the likes of Meta, Google or Netflix when they launch free apps – the rush to download Twitter competitor Threads last year, for example.

New app marketplaces can’t just be thrown up overnight by anyone. Apple insist that they must be able to “guarantee support for developers and customers.” That means that there’s a technical burden of showing that they can provide human review, just like the App Store does, and have a letter of credit from a reputable financial institution to back them for at least €1 million.

As you would expect, Epic’s Tim Sweeney is bouncing off the walls that Apple is still trying to make money off sideloading and cut into their margins, and there’s similar statements of dismay for the Coalition for App Fairness, calling Apple “shameless”. And… well yes, they are. Apple is complying with the letter of the law, which does not prevent fees for sideloaded apps and marketplaces, but states that they must be reasonable. Apple contests that as they must pay for the continued development of devices, APIs and more, they have a right to monetise them.

We’ll obviously have to wait and see if the EU demands any further changes, but Apple has likely run their new rules past them before making this announcement.

Elsewhere, Apple is also complying with a need to allow for other web browser engines on iOS, and has made a worldwide policy change to allow for game streaming apps.

Source: Apple

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