The Sum Of All Fears For Apple’s App Business
Back in November I posted an article about the SCOTUS agreeing to hear a lawsuit from a group of consumers against Apple over allegations that it’s running a software monopoly through its App Store. For some background Apple forces all app developers who want to sell iOS apps to go through their App Store. Then Apple takes a 30% commission of all revenue generated from app installs. Since there’s no way to get the apps on your iPhone without going through the App Store, consumer groups are accusing Apple of running a monopoly and unfairly forcing up the prices we all pay for purchased iOS apps.
On Monday the SCOTUS ruled that Apple can in fact be sued for monopolistic business practices by consumers if it continues to force app developers to pay-to-play in the App Store. While the ruling is not a judgement on the claim itself, the decision exposes Apple to endless lawsuits over the practice unless it makes its app marketplace free. As you can see in the graph below. Apple is becoming more and more dependent on app install revenue as its core device business begins to soften.
No word yet on how Apple will react to the decision, but you get the feeling they’re really boxed in on this one. Should be interesting to see their next move.