Apple's Alternative App Store Model In The EU Could Potentially Cost Meta, Others 'Millions' Of Dollars In Yearly Payments To The iPhone-Maker
Portfolio Pulse from Rounak Jain
Apple Inc. (AAPL) has announced an 'Alternative App Store' model for the EU, which includes a 'Core Technology Fee' for developers using third-party app stores or payment providers. This could cost Meta Platforms Inc. (META) and others millions annually. Meta's Threads app alone could result in a $1.089 million yearly fee for over three million downloads, compared to $250 per month if distributed exclusively through the App Store. The EU represents 6% of Apple's App Store revenue, and while Apple may see a decrease in revenue, the impact is expected to be limited.
January 26, 2024 | 5:01 pm
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Meta Platforms Inc. could face millions in 'Core Technology Fees' annually for its apps like Threads if using third-party app stores or payment providers in the EU, significantly increasing operating costs.
Meta's potential payment of $1.089 million annually for Threads app downloads in the EU represents a substantial increase in costs compared to the current $250 per month, which could negatively impact META's short-term financials.
CONFIDENCE 80
IMPORTANCE 70
RELEVANCE 90
NEUTRAL IMPACT
Apple's new EU 'Alternative App Store' model with a 'Core Technology Fee' may slightly decrease App Store revenue but is expected to have a limited impact due to the fee structure and the EU's small contribution to total revenue.
Although Apple's App Store revenue in the EU might decrease due to the new model, the 'Core Technology Fee' and the fact that the EU only contributes 6% to total App Store revenue suggest a limited impact on AAPL's financials in the short term.
CONFIDENCE 75
IMPORTANCE 60
RELEVANCE 80