Apple’s decision to change the App Store rules around Reader apps may open up new markets for the company.
With the new iPhone, AirPod and iPad approaching, Apple’s recent decision to make changes to the App Store and allow app readers to bypass the App Store payment system may not be altruistic. It allows Apple to compete.
Services for us
Think about this. We already know that Apple’s vision for services extends beyond its own platform. Key services, music, TV and iCloud work on multiple platforms.
Why not choose to offer News +, Arcade, and (potentially, but currently unlikely, given Apple Watch integration) Fitness across multiple platforms, not to mention other services you’ve planned? (Health? Podcasts? Payments?)
The problem with the existing rules in the App Store is that if you get a share of revenue from competitors in the same categories of services that offer services on their own platform, but you can not compete on an equal footing with others, Apple will be considered anti-competitive .
The solution? Exactly what the company did: start opening your own market to avoid such accusations.
What this means
I think this means that Apple could soon start offering additional Apple services on other platforms to compete with others.
The news seems like an obvious choice. The idea that a family can invest in the Apple One service to access News on any device and on any platform makes perfect sense. Since the news is an obvious «reading app», recent changes to the Apple App Store have probably set the stage for such a move. And the recent News Partner Program can help the company generate local news globally.
In a note from a customer who commented on my latest changes to the App Store, Morgan Stanley analyst Katy Huberty suggests this step, writing: «We also see the latest changes as a move by Apple to self-regulate to dampen legal / regulatory pressures «, he adds,» and / or to pave the way for being more competitive with their own brand reading applications, including Apple Music, Apple TV + and Apple News + «.
What is the cost of this change?
The cost of Apple’s move to open up when reading apps isn’t huge. Morgan Stanley estimates that the top 50 such apps account for 13% of App Store revenue. This includes entertainment applications, music, books and news.
The problem is that setting up your own payment systems does not make sense for all these applications, which led the analyst to say that only the «top 10» have the scale, brand, budget and loyalty to «absorb the friction of bypassing the application Payment Platform the store «.
In the worst case, analysts estimate that this move will amount to 4% of revenue from Apple services for such applications through the App Store.
Apple will definitely want to find a way to make up for lost revenue. And an obvious way could be to introduce new services on additional platforms and intensify your competitive momentum towards alternative platforms.
This means that existing services such as Music and TV + will be ruthlessly promoted on the platforms that Apple now supports. It also means that the company will look for new services that it can offer to the global public, which probably means its recent acquisition of Primephonic.
Of course, the anticipation of an intensification of Apple’s offer around its service packages is not particularly exaggerated. We know that the company wants to boost TV + sales, because it is trying to move from existing free subscribers to paid ones. And we know that the company is looking to increase revenue in its service segment, because that’s what it said it wants to do. In particular, if some of your plans involve abandoning your highly profitable search agreement with Google, it will reduce billions in your results.
And the games?
If Apple chooses to publish News on other platforms, it certainly makes sense to port Arcade in the same way. In the short term, maybe not.
Huberty writes: “Our audits indicate that Apple has no intention of making these changes to gaming applications. While apps that read collectively account for only 14% of T12M’s App Store developer revenue, game apps account for the App Store’s source of revenue and account for 63% of developer revenue. In T12M «.
Never say never, of course.
«That being said, given the importance of the gaming category, it will be a space we will be following closely, especially with the decision in Apple’s legal dispute with Epic Games to be announced at any time,» the analyst said. .
This may be true, but given that changes to the reader app aren’t expected to be available until early next year, and that Apple is also expected to make major announcements about augmented reality in 2022, it’s hard to we ignore the impulse.
I think this energy potentially translates into a multi-platform augmented reality gaming service as a reward. That, of course, would explain the current bad blood between Apple and Epic, given the latter’s determination to run the multiverse.
It is possible that things will become interesting in the coming months, as long as Apple does not lose confidence.