Apple’s iPhone needs a shakeup. New laws could help

The walled garden Apple has built around its technology is as synonymous with the iPhone maker as the iPhone itself, and it’s how Apple has locked people in by luring them to expensive headphones, watches and speakers that work seamlessly with the rectangular tablet in their pockets.

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

The change, which Apple has long resisted, could also benefit the company.

Many of Apple’s more than 1.2 billion iPhone users admired the tech giant’s minimalist approach over the years. But in doing so, the company shied away from greater innovation. As the mobile device market became increasingly saturated, the once-amazing iPhone began to look bland, and sales began to decline.

The situation has not been improved by Apple’s restrictions on developers’ access to many iPhone application programming interfaces and software tools that help them extend their apps’ functionality and make them more appealing.

But according to Bloomberg, Apple is now laying the groundwork for letting outside app developers use the company’s most secretive iPhone technology, including the camera and communications chip that enables contactless payments. This means iPhone users will soon be able to use their banking and financial apps (not just Apple Wallet) to make payments.

Apple’s plans also include: Businesses will be able to access the iPhone’s “Find My Web” system to create their own AirTags competitors. Makers of web apps and web browsers such as Firefox and Google Chrome will not be forced to use Apple’s browser engine, something they have long complained about. This could make their services less clunky on the iPhone.

Apple’s decision to allow alternative app stores on its iPhones and iPads is similar to the way Alphabet’s Google allows non-Google app markets on Android devices, which will also provide consumers with a wider range of app choices.

This isn’t the first time Apple has triumphed over forced openness. Steve Jobs once opposed installing apps on the iPhone that weren’t made by Apple, fearing they would infect the iPhone with viruses or “compromise its integrity,” according to Jobs biographer Walter Isaacson. When the Apple co-founder changed his mind, the market for third-party services flourished, and people began saying, “There’s an app for that.”

Today, using non-Apple apps to do everything from making travel plans, checking the news, shopping, and watching TikTok videos is so commonplace for iPhone users that it’s a big reason why the iPhone has become one of the most successful consumer products in history.

The European law that prompted Apple to make the change is the Digital Markets Act (DMA), which is designed to address the monopolistic behavior of large technology companies. In Apple’s case, the act was cited in several pending EU investigations into the company’s alleged abuse of its market dominance, including investigations into music streaming apps and the use of Apple Pay when shopping in the App Store. It was these cases that led to the DMA containing rules specifically targeting Apple, said Anne Witt, an antitrust scholar at EDHEC Business School and the Institute for Enhanced Law in Lille, France.

Apple would be wise to cooperate with the legislation, having learned from Microsoft’s famously bitter battle with U.S. and European antitrust officials in the early 2000s over bundling Internet Explorer with Windows. Microsoft was forced to allow other browsers like Firefox and Opera into Windows, which helped open the platform to third-party software.

Making its core products more interoperable could have helped Microsoft grow its then-nascent cloud business, where integration with other existing systems and building stronger relationships with other technology partners were critical to its success.

Consumers benefit, too. Without the lawsuit, “we might live in a world where only Microsoft designed software,” Witt said, and companies like Google and Facebook parent Meta Platforms might not even exist. Now, the same thing is happening with mobile operating systems.

For all that Apple preaches about the value and security of its walled garden, it has also been delaying opportunities to deliver newer, more interesting experiences on its platform. Being forced to open up a little may be a good thing in the long run.