Apple has announced a comprehensive plan to eliminate some of the competitive hurdles it has created around its lucrative iPhone franchise.
The announcement on Thursday comes as it moves to comply with European regulations aimed at giving consumers the option to use alternative app stores.
The overhaul, scheduled to take effect in early March, will include concessions Apple has previously refused to make on its app store, including reducing the fees it collects from developers in Europe.
Most importantly, for the first time, Apple will allow iPhone users in Europe to use app stores other than those operated by the company and installed on mobile devices. This will also allow developers to offer alternative payment systems that can help them make more money while lowering their prices.
But Apple says it believes that opening up the iPhone to outsiders would also increase the likelihood that consumers who step outside its proprietary system will be exposed to hackers and other security issues. He says he took what he sees as a risky step only to comply with European rules that come into force on March 7.
The fixes will also include reducing the commission Apple plans to continue charging for in-app transactions made on iPhone in the rest of the world, from 15% to 30%.
In Europe alone, Apple is dropping its in-app transaction commission to 10% to 17% for developers who choose to stay with the company’s payment processing system. Apple will not charge any commission for in-app transactions made through alternative payment systems.
This is in stark contrast to the way Apple is complying with a court order that took effect last week requiring it to allow iPhone apps to provide links to different payment options in the US. In the US, the company plans to collect commissions from 12 percent to 27 percent to prevent free downloads of iPhone software. Apple will continue to charge 15% to 30% on in-app transactions made through its payment system in the US.