Apple to Charge Developers 20% Fee to Align with EU Regulations

In the European Union, Apple has modified its App Store rules following charges by regulators under the Digital Markets Act (DMA). Developers are now allowed to include links to external purchase options in their apps, promoting greater flexibility. However, these options come at a significant cost. A new "store services fee" mandates developers pay Apple a commission on any digital goods or services sold within one year of app installation across any platform. For apps solely on the App Store, this fee stands at 20%, while apps integrating third-party stores face a 10% fee plus additional costs. There’s also a 5% "initial acquisition fee" applied to transactions made within a year of the app’s installation, cumulatively allowing Apple to take up to a 25% commission. This is prepared by SSP.

This fee structure aims to reflect the value of the services Apple claims to provide via its App Store and is meant to comply with DMA findings that accused the company of violating anti-steering rules and preventing developers from showcasing cheaper alternatives. Apple insists these changes account for the value delivered by its ecosystem, but critics argue they unusually position developers against high costs, potentially stifling competition. Despite criticisms and minor concessions like waived fees for free apps, Apple's adjustments seem to strengthen its hold over the app distribution market.

Meanwhile, Apple's foray into AI, branded as Apple Intelligence, presents another substantial line of service upgrades. Analysts suggest Apple might charge $10 to $20 monthly for these premium AI functionalities, possibly integrated into the Apple One subscription bundle priced at $19.95. This move aims to enhance the lucrative services sector, which earned $24.2 billion in the past quarter. With advancements such as improved Siri capabilities, AI-generated emails, and images, Apple plans a staggered rollout, initially excluding regions like China and Europe.

The Cupertino-based firm faces tough market choices, balancing innovation with revenue strategies. While bundling AI services could attract users, it might dilute subscription revenues from individual Apple products - a concern voiced by industry analysts. Following the competitive footsteps of rivals like Samsung and established AI subscription models from OpenAI and Microsoft, Apple portrays its AI integration as a personalized tool to deepen user engagement, ensuring their foothold in its ecosystem grows firmer over time.