Cupertino (dpa) - Apple's iPhone is considered the most successful electronic product in the history of the world. Since its market launch in 2007, Apple has sold well over a billion smartphones worldwide. It is true that more smartphones with the Android operating system are now sold worldwide by countless manufacturers than iPhones. However, Apple is regularly ahead in terms of turnover and even more so in terms of profit due to the higher average sales price of the iPhone.

The success story of the iPhone is inextricably linked to Apple's App Store. There are currently almost 1.8 million apps to choose from on the platform. In total, over 370 billion apps have been downloaded there in the past 15 years. However, this successful model is now under threat, at least in Europe, as current EU legislation will end the App Store's monopoly on the iPhone.

When the first iPhone was launched in 2007, Apple co-founder Steve Jobs did not yet have a coherent software strategy. There was no App Store back then either. Jobs' concept only envisaged app developers offering their applications as web programs that ran on the Safari browser. However, no healthy app ecosystem could be created on this technically shaky basis.

Software business model

However, Jobs quickly realized that there was a need for change: in October 2007, the then Apple boss announced that he would make it possible to program real apps for the iPhone. And on July 10, 2008 - 15 years ago - the time had come: Apple opened the App Store with more than 500 software applications, including games, educational programs, shopping apps and productivity tools for companies. Around a quarter of the apps were free, while the paid apps often cost less than a dollar. The new store even overshadowed the launch of the new iPhone 3G a day later, which, unlike the first iPhone, was able to support the more powerful UMTS (3G) mobile communications standard.

Even then, Jobs was certain that the App Store could become a billion-dollar business. In an interview with the 'Wall Street Journal' in August 2008, Jobs said that he could imagine annual sales of half a billion. "And at some point it might be a billion." In fact, it became many billions. In the 2022 financial year alone, the App Store's contribution to Apple's balance sheet is likely to be in the region of 70 billion dollars.

However, these sums were not yet in sight at the start in 2008. However, the competition also became aware of the concept: In October 2008, Google followed suit with its platform and introduced the Android Market, which is now known as the Google Play Store. A year later, Apple in turn made it possible for developers to initially offer apps free of charge in the store, but then to charge money for additional functions or to hide advertising within the apps. These in-app purchases rapidly boosted the computer games business in particular.

98 billion euros turnover with digital goods and services

Initially, app developers generally had to give Apple 30 percent of their revenue in the App Store. Following fierce protests from major players such as the games provider Epic Games ("Fortnite") and music services such as Spotify, Apple reduced the revenue share for subscriptions and smaller providers to up to 15 percent. Court proceedings are still pending in the dispute over the alleged "Apple tax".

Despite this controversy, sales within the app universe continued to soar. According to a study published in May 2023 by the market research company Analysis Group, almost 98 billion euros were generated directly from digital goods and services in the Apple App Store in 2022. In addition, 102 billion euros were generated from advertising within the apps.

If you look at all business that also runs indirectly via apps from the store, the threshold of the equivalent of one trillion euros in revenue was exceeded for the first time. Growth in online retail in China is primarily responsible for the boom. There alone, the Analysis Group recorded sales of goods and services via apps from the store of the equivalent of 490 billion euros. Europe achieved just under 112 billion euros across all sectors.

Supremacy in Europe to be broken

Apple's huge market power is criticized by competitors such as Microsoft. They complain that Apple has not yet allowed an alternative to its own App Store. But politicians are also critical of this quasi-monopoly. In the European Union, the Digital Markets Act (DMA) was passed at the beginning of July, which is intended to prevent anti-competitive behavior by large Internet companies. The DMA will come into full force this year and in 2024. After that, "gatekeepers" such as Apple can be forced to allow app stores from other companies.

This should also break Apple's resistance to alternative app installation options and billing options. According to US media reports, the company is preparing to allow alternative app stores for the iPhone and iPad in the EU as well as the direct purchase of apps without a store. This is set to begin with iOS 17, which is expected next fall.

Apple customers will then have more freedom of choice, at least in Europe. It is expected that several players such as Microsoft and Epic will open their app stores in the Apple environment without delay. It will also be possible to install programs directly - with the risk of picking up the odd piece of malware.