iOS 18: Apple’s upcoming release threatens $400M in app revenue

With the anticipated release of iOS 18 this fall, Apple’s updates may significantly impact several third-party apps, potentially affecting an estimated $393 million in annual revenue and approximately 58 million downloads over the past year. This insight comes from an analysis by Appfigures.

The term “sherlocking” dates back to the early 2000s when Apple introduced Sherlock 3, incorporating features from a third-party application called Watson. Over the years, Apple has integrated numerous functionalities from various third-party apps into its iOS and macOS platforms, effectively absorbing their utility and often diminishing their market presence.

In recent years, Apple has continued this trend by introducing built-in features such as Continuity Camera, medication tracking, sleep tracking, and mood tracking. New apps like Freeform and Journal also reflect this strategy. This year, iOS 18 targets another set of applications, including password managers, call recording and transcription apps, custom emoji creators, AI-powered writing tools, math helper apps, and trail mapping apps.

Trail apps, particularly those for running and hiking like AllTrails, are expected to face the most significant impact. iOS 18 will introduce similar functionality, including offline trail maps and recommendations, which could challenge these third-party apps. According to Appfigures, trail apps account for 78% of the potentially ‘sherlocked’ revenue and 40% of the downloads. In May alone, users spent an estimated $28.8 million on these apps, with 2.5 million downloads. This sector has seen user spending increase by 28% and downloads rise by 32% from the previous year.

Grammar helper apps, such as Grammarly, are another major category facing competition from Apple’s integrated AI-based tools in iOS 18. These apps collectively grossed $35.7 million over the past year, with 9.4 million downloads. In May alone, they generated $3.5 million in revenue, up 40% from the previous year, with downloads increasing by 23%.

Math-solving apps, which have garnered about $23 million in annual revenue and 9.5 million new installs, along with emoji makers earning $7 million annually from 10.6 million downloads, are also at risk of being overshadowed by Apple’s new features.

While password managers might not lose users directly to Apple’s AI advancements, they will face competition from traditional software features. iOS 18 will introduce a built-in Passwords app that seamlessly integrates across the Apple ecosystem. The popularity of password managers has been growing, with downloads increasing by 48% and gross revenue rising by 38% over the past year.