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Morgan Stanley thinks Apple could allow third-party app stores and side-loading and only take a 2% hit in total revenue

By Kenny Yeo - on 15 Dec 2022, 4:04am

Morgan Stanley thinks Apple could allow third-party app stores and side-loading and only take a 2% hit in total revenue

(Image source: Unsplash / James Yarema)

Apple is reportedly preparing to allow third-party app stores on and side-loading on iOS. This is to comply with the European Union's newly-enacted Digital Markets Act.

And while this might sound like terrible news for Apple, Morgan Stanley thinks this move won't affect Apple's bottom line much, if at all.

According to Morgan Stanley, even in a "worst-case scenario," it thinks that Apple's services revenue would only take a 4% hit and its total revenue would only take a 1% hit in FY24.

It also estimates that even if Apple were to allow third-party app stores and side-loading globally, it would only lose 9% in services revenue and take a 2% hit to total revenue in FY24

Morgan Stanley said that these estimates are based on a worst-case analysis and would require 30% of iPhone owners to abandon the App Store, something that it thinks is very unlikely based on surveys that it has conducted.

(Image source: AppleInsider)

According to these surveys, most iPhone owners love the simplicity and security of the App Store and do not want their payment information to be stored on too many places on the internet.

In addition, the survey also found that users would only consider buying from an alternative source if the app was priced up to 35% less.

In fact, the move to allow third-party app stores and side-loading could end up being beneficial to Apple as it could appease regulators and "remove a long-standing overhang on Apple's stock."

Source: AppleInsider, MacDailyNews

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