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Telcos could cheer new payment options in Apple App Store

Apple may soon allow developers to direct customers to other payment methods outside of its purview. That could cheer telecom providers big and small looking to avoid Apple's 15%-30% cut.

Mike Dano

January 16, 2024

4 Min Read
People holding iPhones in Mumbai Apple Store
(Source: Apple)

The Supreme Court on Tuesday refused to consider an appeal from Apple regarding its legal battle with Epic. As a result, the iPhone maker may begin allowing developers – including telecom providers big and small – to direct customers to other payment methods outside of Apple's App Store purview.

If Apple does indeed allow app vendors to link to other payment methods inside their iOS apps, the move could pave the way for telecom providers to more easily eke out revenues from their customers. That's because Apple today takes a 15%-30% cut of all transactions inside apps built for its gadgets. MVNOs, messaging providers and others likely will celebrate the chance to sidestep that surcharge.

In a series of social media posts, Epic CEO Tim Sweeney urged iOS developers to "begin exercising their court-established right to tell US customers about better prices on the web."

According to The Verge, Apple did not immediately respond to requests for comment on the Supreme Court's decision.

A long-running court case

The latest move by the Supreme Court stems from the high-profile 2021 court battle between Apple and video game company Epic. In its complaint, Epic alleged that Apple violated antitrust laws by levying fees on in-app purchases. The judge in the case rejected some of Epic's claims but also ordered Apple to remove its "anti-steering" rules – the rules prevent App Store developers from pointing users to alternative payment mechanisms outside Apple's walled garden.

Now, by refusing to hear Apple's appeal on that issue, the Supreme Court appears to have paved the way for App Store developers to bypass Apple's transaction fees. Companies with apps in the App Store range from Helium Mobile to Dish Network.

Further, as 9to5Mac pointed out, the Supreme Court's decision may not be the only issue affecting the Apple App Store. In the European Union, the Digital Markets Act is set to require Apple to support apps outside its App Store. Those "sideloaded" apps would not fall under Apple's purview at all.

The moves are clearly a blow to Apple, which has worked to retain tight control over its App Store. Indeed, just this week the company continued to move against Beeper, according to TechCrunch. The Beeper app helps smooth the messaging differences between iOS and Android.

From smartphones to VR goggles

The Supreme Court's latest ruling comes at an important time for Apple. According to two top research companies, Apple shipped more smartphones than Samsung across 2023 for the first time ever.

"Not only is Apple the only player in the Top 3 to show positive growth annually, but also bags the number 1 spot annually for the first time ever," said Nabila Popal, research director with IDC's Worldwide Tracker team, in a release. "Apple's ongoing success and resilience is in large part due to the increasing trend of premium devices, which now represent over 20% of the market, fueled by aggressive trade-in offers and interest-free financing plans."

Meanwhile, Apple is also working to address a legal challenge from Masimo. The company alleges some of Apple's smartwatches infringe on its patents, and it has won several rulings against Apple based on that complaint. The latest: Apple reportedly removed a blood-oxygen measurement feature from its newest smartwatches to circumvent a US sales ban related to Masimo's legal victories.

Finally, Apple is also working to generate interest in its latest gambit: VR goggles that are scheduled to go on sale next month. The company this week announced a range of new virtual reality movies and other experiences that will be available to customers who purchase its $3,500 Vision Pro VR goggles.

The release of the Vision Pro is important to Apple. The company's shares have been sliding in recent weeks, allowing Microsoft to dethrone Apple as the world's most valuable company.

About the Author(s)

Mike Dano

Editorial Director, 5G & Mobile Strategies, Light Reading

Mike Dano is Light Reading's Editorial Director, 5G & Mobile Strategies. Mike can be reached at [email protected], @mikeddano or on LinkedIn.

Based in Denver, Mike has covered the wireless industry as a journalist for almost two decades, first at RCR Wireless News and then at FierceWireless and recalls once writing a story about the transition from black and white to color screens on cell phones.

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