Apple’s proposed App Store modifications, according to investment bank JP Morgan, will have only a little impact on the company’s services division and revenue.
Lead JP Morgan analyst Samik Chatterjee provided his comments on the latest App Store adjustments that Apple revealed to resolve a lawsuit brought by developers in a note to investors viewed by AppleInsider. In 2019, a class action lawsuit was filed.
Developers will be able to communicate with consumers about payment choices outside of the App Store, among other improvements. Although the settlement has nothing to do with the Epic Games v. Apple litigation, it does address a concern voiced by U.S. District Court Judge Yvonne Gonzalez Rodgers.
Apple also stated that the reduced 15 percent commission rate for Small Business Program members will be maintained for at least another three years. The current structure of App Store Search is the same. As part of the deal, Apple also established a $100 million fund for small U.S. developers.
Because of two factors, Chatterjee believes that the App Store adjustments will have a “minimal” impact.
Consumers may be more likely to buy pricey memberships outside of the App Store than one-time purchases, according to the researcher. This might restrict the anti-steering change’s impact to a small percentage of Apple’s 660 million subscriptions.
Despite the fact that the move may have an impact on gaming-related in-app purchase revenues, Chatterjee believes that customer behavior will still be influenced by transaction costs. Consumers would likely stay to the App Store for cheaper purchases because of its ease and security, he added.
The need that users consent to out-of-app messages may have an impact on developers, since users may be less eager to share their information with a large group.
The App Store Search and Small Business Program announcements, according to Chatterjee, will have a little impact, albeit the search partnerships may limit Apple’s App Store advertising ambitions.
Apple’s announcements have been dubbed a “sham” by the Coalition for App Fairness. The group, which is advocating for App Store reform, says that the changes are minor and do not reflect a significant concession to developers’ requirements.