Apple's walled garden cracks: The beginning of a new era for iPhone users
Apple's walled garden cracks: The beginning of a new era for iPhone users
Epic Games and Spotify lead the charge as regulatory pressures force Apple to open its ecosystem.
For decades, Apple had strong reasons for its tight control over its ecosystem, including the extensive restrictions it placed on developers and the limited access they had to various parts of devices like the iPhone. Safety, privacy, and user experience were the main arguments Apple used to justify its approach, and no counterargument was able to shift its position (it also helped that this policy significantly increased its revenue). However, last week, two significant events occurred that challenge the foundations of the "walled garden" policy that has long characterized the company. Although these changes are currently limited geographically, they could mark the beginning of a global shift—not only for the iPhone but also for Apple's overall image.
The more significant event took place on Friday in the European Union, where Fortnite developer Epic Games launched the first alternative app store for the iPhone—the first time since the smartphone's launch 17 years ago that users can download apps to a device without going through Apple's App Store (and without requiring questionably illegal actions like jailbreaking the device). Additionally, Spotify began providing iPhone users in Europe with a link to its website to purchase a paid subscription, something it could not do before.
At the same time, Apple announced that it would provide developers in the United States and other countries with direct access to the iPhone's NFC payment chip, allowing them to offer digital wallets that can compete with Apple Pay, and that users could also set as the default. This approach will enable developers to offer not only payment capabilities but also services such as digital keys for hotel rooms or storage of membership cards.
Apple did not make these moves by choice. It has always jealously guarded access to its devices. The official claim is that this control allows Apple to provide a safer and more private experience, preventing malicious apps from stealing personal information or carrying out cyber attacks, or even preventing legitimate apps from using personal data to display targeted advertising.
In practice, it is likely that this policy is influenced by the massive revenues it generates. In 2023, the services division, which includes the App Store, generated $85.2 billion in revenue, accounting for 22% of the company's total revenues.
If Apple had its way, nothing would have changed. The company is making changes in the European Union because the Digital Markets Act (DMA), which came into effect this year, forces it to open its platform to competitors. Apple did everything in its power to thwart the implementation of the law through limitations and unreasonable fees, but its efforts in the EU failed.
The changes in Apple's approach to NFC come in response to regulatory and legal pressures in the United States, particularly the antitrust lawsuit filed by the Department of Justice against Apple in March. According to the lawsuit, Apple's control of the iPhone created an illegal monopoly, with one of the claims being the restriction of access to NFC. It is no coincidence that Apple’s concession comes after Google's loss in a high-profile antitrust lawsuit brought against it by the U.S. Department of Justice. Apple understands that the legal climate is changing and is acting quickly to improve its position.
While the struggle between developers, regulators, and nations against Apple's walled garden has been long and fraught with emotion, the real battle is just beginning. The hottest arena is the European Union. For more than a decade and a half, Apple has claimed that its tight control over the iPhone is what allows it to create the unique experience that consumers love. Now, Epic Games has taken it upon itself to prove that this claim is false. Epic's goal is to show that it is possible to create a completely different experience on the iPhone—one that, on the one hand, allows developers greater freedom by freeing them from Apple's draconian App Store restrictions, and on the other hand, offers new experiences that the App Store cannot provide—while still maintaining a safe environment.
Epic certainly has the resources, knowledge, and experience needed for this. If it succeeds, it will bring significant change for users worldwide. Such a change would not only alter Apple's ecosystem but also Apple itself. Too much of its revenue depends on its monopoly in the App Store and other aspects of its device operations. In too many cases, Apple generates revenue not because it offers better services, but because users and developers have no real alternatives. A genuine opening of the platform—without gimmicks like unreasonable fees—will force Apple to find new and creative ways to convince developers to stay in the App Store and offer them real benefits, such as lower fees and wider access to various capabilities. In the end, this will benefit everyone, including Apple.
