Apple's Revenue Unlikely To Be Impacted By EU Regulatory Changes, Says JP Morgan

JP Morgan Chase & Co. JPM contends that the alterations made by Apple Inc. AAPL in compliance with new EU regulations will not significantly impact its App Store revenue.

What Happened: Apple has modified its operations in line with the EU’s Digital Markets Act. This includes a decrease in overall commission from 30% to 17% and a new fifty-cent fee on all apps downloaded post the developer exceeding one million downloads.

Despite these changes, JP Morgan believes that Apple’s bottom line won’t be largely affected. The new fifty-cent fee is anticipated to balance out the commission reductions, and the EU only provides around 6% of the company’s App Store revenue, reported AppleInsider. 

See Also: Apple’s iMessage To Follow WhatsApp In Opening Up To Third-Party Chats Amid EU Push?

Though these changes are EU-specific, global regulators may consider similar actions. For instance, an antitrust investigation into Apple’s App Store in the U.S. is reportedly in full swing.

The changes to Apple’s App Store in the EU will become effective with the launch of iOS 17.4. 

Why It Matters: The changes by Apple are a response to the new European Union competition law, set to go into effect on March 7. As per a Benzinga article, iPhone and iPad users in Europe will soon be able to use other app stores to download applications. 

Additionally, companies offering bank and shopping services will be able to compete with Apple by providing alternative payment methods within their apps.

In December last year, Apple made a concession to the EU by proposing to allow rivals access to its tap-and-go mobile payment technology. Cupertino's decision came after the EU charged it with limiting competitors’ access to its Near-Field Communication or NFC technology. 

Photo by Laurenz Heymann on Unsplash

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Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.