Key Takeaways:
- iOS 18 could impact $393M in app revenue.
- Trail apps face the biggest threat, accounting for 78% of potential losses.
- Third-party apps must innovate to survive Apple’s built-in features.
What Happened?
Apple’s upcoming iOS 18 release could significantly impact third-party app developers. According to Appfigures, these changes may affect apps generating $393 million in revenue and downloaded 58 million times over the past year. Apple’s practice of integrating popular third-party app features into its operating system, known as “sherlocking,” continues with iOS 18.
This year, Apple targets password managers, call recording apps, custom emoji creators, AI-powered writing tools, and more. Trail apps lead the pack with $307 million in annual revenue, followed by grammar helpers at $35.7 million and math helpers at $23.4 million.
Why It Matters?
For investors, understanding Apple’s influence on the app market is crucial. When Apple integrates popular third-party features, it often disrupts existing app revenue streams. This practice raises questions about competition fairness and the sustainability of third-party app businesses. For example, Apple’s previous moves in parental controls sparked antitrust investigations.
The latest sherlocking targets apps showing significant revenue growth: math solvers (+43% YoY), grammar helpers (+40%), and password managers (+38%). Apple’s built-in solutions could satisfy casual users, potentially reducing the market for these third-party apps.
What’s Next?
Third-party developers must innovate to stay relevant. Apps need to offer features beyond what Apple includes and leverage new user engagement methods, like improved Siri integration. Investors should monitor how these apps adapt and whether they can maintain or grow their user base despite Apple’s competition.
Additionally, watch for regulatory responses to Apple’s market influence, as previous sherlocking instances led to antitrust scrutiny. As iOS 18 rolls out, evaluate how these changes impact consumer behavior and app adoption rates, especially for high-risk categories like trail and grammar helper apps.
