App store avalanche prediction as Apple bows to EU demands

By Martin Coulter

LONDON – Apple’s competitors are positioning themselves as an alternative to its dominant app store as the iPhone maker prepares to allow others on its devices in the European Union.

The Bloc’s Digital Markets Act (DMA) will force Apple and its tech giant Google to allocate space for third-party app stores on their respective iOS and Android devices.

Under the DMAcoming into effect progressively over the next two years, third-party alternatives will have an easier way of getting onto iPhones and Android devices.

And if bits of legislation go into effect, competitors ranging from smaller startups to giants like Amazon and Microsoft could try to lure consumers and app developers alike away from Apple and Google.

ben wood, CMO an industry analysis company CSS Insights said he expects “an avalanche of app stores” in the near future.

“There’s a ‘coalition of the willing’ emerging, and everyone has a vested interest in no longer having to pay what they see as a tax to Apple,” Wood told Reuters.

Apple and Google did not respond to requests for comment.

Android users can currently install apps from alternative sources, a process known as “sideloading,” but often this requires them to turn off certain security settings.

Apple’s apparent sideloading concessions are a win for industry leaders like Twitter owner Elon Musk and Spotify CEO Daniel Ek, both of whom have lamented the company’s 30 percent surcharge on App Store purchases.

Competitors plan to bring frustrated developers into their stores, promising lower commission fees and the potential for exclusive deals with popular apps.

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“Competition is a good way to improve services,” said Paulo Trezentos, CEO from Portugal’s Aptoide, which cuts in-app purchases by 15% to 25%.

Deals for exclusive content could fuel competition in app stores in the same way as the “streaming wars” between Netflix and challengers like Disney+ and Amazon Prime, Trezentos said, adding: “Netflix has content like that HBO didn’t … app stores can be like that.”

Paddle, a payment processor for software companies, has built its own competitor for the app store, which it hopes to launch in Europe soon DMA comes into effect.

“A 30% fee is actually pretty outrageous when we compare it to how much it actually costs to process payments and what Apple actually offers.” CEO said Christian Owens.

Owens said Paddle’s in-app payment system would charge developers between 5% and 10% on transactions.

“The biggest hurdle they have to overcome is the consumer,” says Wood CSS insights said.