Apple's iPhone needs a shake-up. A new law might help to lose its grip

Apple Inc.’s walled garden around its technology is as synonymous with the iPhone maker as the iPhone itself. It is how Apple lures consumers into buying expensive earphones, watches and speakers that work seamlessly with that rectangular slab in their pockets, and ultimately what locks people in to Apple products.
 

That has been great for Apple’s business, but not always so great for consumers. Now, a European law is forcing the company to loosen its iron grip on its products. That ultimately could lead to a more dynamic experience on the iPhone as developers create more and feature-rich apps for the platform that capitalize on more of Apple’s technology. 

The change, long resisted by Apple, could be a boon for the company, too.  

Many of Apple’s more than 1.2 billion iPhone users appreciate how the tech giant has kept things simple over the years. But in doing so, the company has shied away from bigger innovations. In an increasingly saturated market for mobile devices, the once-astonishing iPhone has begun to feel humdrum, and sales have faltered.    

The situation isn’t helped by the way Apple has restricted developers from accessing many of the iPhone’s application programming interfaces, software tools that would help them expand app capabilities to make them more compelling.

But according to Bloomberg News, Apple is now laying the groundwork to let outside app makers use some of the company’s most tightly held iPhone technology, including its camera and a communications chip enabling contactless payments. That means iPhone users could soon tap to pay for things using their banking and financial apps, rather than just Apple Wallet. 

Also in Apple’s plans: Businesses will be able to access the iPhone’s Find My Network system to create their own rivals to AirTags. Makers of web apps and web browsers like Firefox and Google’s Chrome won’t be forced to use Apple’s browser engine, something they have long complained about. That could make their services less clunky on iPhones.

Apple’s decision to allow alternative app stores on its iPhones and iPads, similar to the way Alphabet Inc.’s Google has allowed non-Google app marketplaces on Android devices, also would give consumers  a wider array of app choices.   

It wouldn’t be the first time Apple has won big from being forced open. Steve Jobs famously opposed having apps on the iPhone that weren’t built by Apple itself, fearing they would infect the device with viruses, or “pollute its integrity,” according to Jobs biographer Walter Isaacson. When the Apple co-founder changed his mind, that set the stage for a thriving marketplace of third-party services, ushering in the phrase, “There’s an app for that.”

Today, the use of non-Apple apps to do everything from making travel plans to checking the news to shopping and watching TikTok videos is something iPhone users take for granted. And it’s a huge part of what made the iPhone one of the most successful consumer products in history.

The European law stoking the changes at Apple is the Digital Markets Act or DMA, which aims to address monopolistic practices by big tech firms. In Apple’s case, it draws from several pending European Union investigations into the company’s alleged abuse of dominance, including over music streaming apps and the use of Apple Pay for purchases made in the App Store. These cases are why the DMA includes rules that specifically affect Apple, according to Anne Witt, an antitrust scholar with EDHEC Business School, Augmented Law Institute, in Lille, France. 

Apple is wisely preparing to cooperate with the legislation, having learned from Microsoft’s famously painful tussles with both American and European antitrust officials in the early 2000s over the way it bundled Internet Explorer into Windows. Microsoft was forced to allow other browsers like Firefox and Opera onto Windows, which helped open up the platform to third-party software. 

Making its core products more interoperable likely helped Microsoft grow its then-nascent cloud business, for which integrating with other existing systems and building stronger relationships with other technology partners would be critical for its success.   

Consumers benefited, too. Were it not for that litigation, “we might be living in a world of Microsoft-designed software only,” says Witt, and the likes of Google and Facebook parent Meta Platforms Inc. might not even exist. Now the same is happening for mobile operating systems. 

For all its touting of the walled garden’s value and security, Apple has also been putting off the opportunity for newer, more interesting experiences on its platform. Being forced to open up a little could be a blessing in the long run.