Apple makes dramatic changes to the iPhone and App Store

New rules are in response to sweeping new legislation from the European Union – though global users will also see changes

Apple will make some of the most fundamental changes to the way the iPhone and its apps work since it was launched, it has announced.

The company will allow users to download apps from other sources for the first time, it said, as well as letting developers offer new ways to pay for goods inside those apps. It represents a profound change in the control that Apple exerts over iOS, the operating system that powers the iPhone.

The new changes mean, for example, that another company can offer their own rival market for apps. Those apps might include content that Apple would otherwise ban, such as pornography.

In effect, the changes mean that iPhone users can download a rival app marketplace that gives them access to otherwise unavailable apps, and pay for services inside them using payment systems not controlled by Apple, for the first ever time.

iPhone users will also be able to download game streaming services such as Xbox Cloud Gaming, which were previously banned. While most of the new rules apply only to those in the European Union, the changes to games will take effect everywhere.

Apple has been forced to make the changes in response to the EU’s Digital Markets Act. It has long lobbied against those new rules, and as it announced the changes said that they subjected people in the EU to “many risks”.

The company has always said that only allowing apps from the App Store keeps iPhones safe, since it means that malware and other threats cannot install themselves on users’ phones. It has made much the same argument about its payment offerings: at the moment, apps can only use Apple’s platform, which it says ensures users stay safe from fraud.

Forcing Apple to add new options for payments and downloading apps “open new avenues for malware, fraud and scams, illicit and harmful content, and other privacy and security threats”, it said in its announcement. It said that it had taken measures to act against those threats, but that even with them in place, “many risks remain”.

Supporters of the new legislation have argued that the rules only give them more choice – and that customers can stay with the existing App Store and other technologies if they are convinced by Apple’s arguments about security. But Apple has said that customers could be forced to use other marketplaces to get to apps they need.

“In that case, those users don’t have a choice to get that software from a distribution mechanism that they trust,” Ivan Krstić, Apple’s head of security engineering and architecture, told The Independent late last year. “And so, in fact, it is simply not the case that users will retain the choice they have today to get all of their software from the App Store.”

Developers can start using the new tools now, with the release of the iOS 17.4 beta and supporting software and documents. The changes will come to users in the 27 EU countries – but not the UK – when iOS 17.4 is released fully in March.

The EU’s Digital Markets Act went into force last year, though companies have until 6 March to comply. It is intended as a way of limiting the power of large technology companies, with politicians arguing it will help promote competition on the continent.

It focuses on the largest companies – Alphabet, Amazon, ByteDance, Meta and Microsoft as well as Apple – and 22 of their products that are defined as “core platform services”. That includes iOS, the Safari browser and the App Store.

For Apple, the designation requires it not to prefer its own services and to highlight those of others. It must therefore allow customers to download apps outside of its own App Store, give them an offer to use other browsers, and offer alternative payment plans, for instance.

For developers, the changes also come with a host of new “business terms”, which change the commission that Apple takes from the sale of apps. It said that more than 99 per cent of developers would pay the same fees or less under the new plan.

While most of the new changes are limited to the European Union, Apple also announced some global changes to the way that games can be distributed. Apple will now allow streaming games – so that developers can offer one app that allows players to stream all games in their catalogue.

Apple had previously banned services such as Microsoft’s Xbox Cloud Gaming app, which lets gamers play titles streamed over the internet, arguing that it was unsafe because it could not check every game that was available through it. The changes have been made to “reflect feedback from Apple’s developer community”, Apple said.