Zhitong Finance APP has learned that, according to people familiar with the matter, Apple (AAPL.US) is preparing to introduce an external app store on its iPhone and iPad as part of a comprehensive reform to meet the strict requirements of the European Union in 2024.
Users will eventually be able to download third-party software to iPhones and iPads without using Apple’s App Store, allowing developers to avoid Apple’s restrictions and cuts of up to 30 percent, according to people familiar with the matter.
The moves, which reverse Apple’s long-standing policy, are a response to EU law designed to level the playing field for third-party developers. For years, regulators and software makers have complained that Apple and Google (GOOG.US), which run the two largest mobile app stores, have too much power as gatekeepers.
If more countries pass similar laws, Apple’s reforms could lay the groundwork for policy adjustments in other regions, the people said. The changes will only take effect in Europe initially, though.
This isn’t the first time Apple has made major changes to comply with local laws. Apple also plans to use the USB-C port instead of the Lightning port on its next-generation iPhone in 2023, also to comply with EU regulations. In fiscal 2022, Apple generated about $95 billion in revenue in Europe (including the European Union and the United Kingdom). If developers can avoid paying the 30% cut, it will make the App Store less profitable.
The news boosted shares of a range of app companies. Spotify (SPOT.US) rose nearly 10% at one point, Match Group (MTCH.US) rose more than 7%, Meta Platforms (META.US) rose nearly 5%, and Bumble (BMBL.US) rose nearly 2%.