Alternative app stores on the iPhone won’t mean much to Apple, say analysts
While Apple has been avoiding allowing alternative app stores on the iPhone since its inception, the financial impact of such a reality might be quite insignificant to the company.
In a research note from Morgan Stanley, analysts at the investment bank said that the financial impact of alternative app stores on devices like the iPhone and iPad would be something that the company could basically shrug off.
The research note, which was seen by MacRumors, said that most iPhone users, even with the option of downloading apps elsewhere, would still choose Apple’s App Store due to the “security, centralization, and convenience that the App Store brings.”
The report noted that “Importantly, the proposed changes in the Digital Markets Act (DMA) are regulator-driven, not consumer-driven. From the consumer perspective, we see very little demand for alternatives to the App Store given the unmatched security, ease of use (centralization), and reliability the App Store provides. According to our Fall 2022 Smartphone survey, less than 30% of iPhone owners are extremely likely to purchase a mobile app directly from a developer website vs. the App Store.”
Alternative app stores could be coming as soon as next year
The analysts estimate that, if alternative app stores are allowed in Europe, it would only result in a “4% hit to Apple’s services revenue and a 1% hit to Apple’s total revenue.” If such app stores existed globally, the note increases those numbers to a “9% hit to services revenue and around a 2% hit to total revenue.”
While that represents a worst-case scenario for Apple, analysts believe that the reality would be much less.
The research note came to light shortly after it was reported that Apple is preparing to support third-party app stores and the ability to sideload apps on the iPhone and iPad for the first time. The move would come in response to the Digital Markets Act in Europe and be limited to users in the region.