EU accounts for 7% of global App Store revenue, Apple says

Apple has revealed that the European Union (EU) accounts for approximately 7% of its overall global App Store revenue, a disclosure that comes in the wake of significant changes made to the App Store due to the European Union’s Digital Markets Act (DMA) rules. 

Luca Maestri, Apple’s Chief Financial Officer, highlighted that the financial impact of these changes would hinge on developers’ choices to adopt different systems. The DMA mandates Apple to permit alternative app stores and allow developers to utilize third-party payment processors. Apple plans to impose a core tech fee for apps surpassing a million annual downloads across various app stores.

Despite these changes, Apple reported a record quarter for App Store revenues, with the company’s overall services revenue reaching $23.1 billion, reflecting an 11% YoY increase. While defending the App Store and its commission structure, Apple emphasized its commitment to providing the best privacy and security. However, CEO Tim Cook acknowledged that compliance with regulations might lead to certain compromises in delivering the optimal user experience. 

In addition to the DMA, Apple had to open up the browser ecosystem in the EU, allowing other browsers to use their engines instead of WebKit. The company is exploring avenues to boost App Store revenue, including allowing streaming game stores for cloud gaming services and extending support for in-app purchases to mini-games, mini-apps, plug-ins, and chatbots. 

The industry’s response to Apple’s changes has been critical, with Spotify labeling the DMA plan as “extortion,” Epic Games denouncing it as “malicious compliance,” and the Coalition for App Fairness calling it a “non-compliance plan.” The future implications of these regulatory changes remain a subject of ongoing industry debate and scrutiny.