October 22, 2025 • 12 mins
UK CMA Declares Apple & Google Have Strategic Market Status (SMS): The Future of Mobile Competition and Security
In this pivotal episode of "Upwardly Mobile," we break down the monumental decision by the UK Competition and Markets Authority (CMA) to officially designate Apple and Google with Strategic Market Status (SMS) in their respective mobile platforms. This move is set to reshape digital markets across the UK and has massive implications for app developers, businesses, and mobile security worldwide. Key Takeaways from the CMA's Decision (Published 22 October 2025): The CMA launched its investigations in January 2025 under the Digital Markets, Competition and Consumers Act 2024 (DMCCA), aiming to address the "unprecedented market power" held by a few large digital firms.
In this pivotal episode of "Upwardly Mobile," we break down the monumental decision by the UK Competition and Markets Authority (CMA) to officially designate Apple and Google with Strategic Market Status (SMS) in their respective mobile platforms. This move is set to reshape digital markets across the UK and has massive implications for app developers, businesses, and mobile security worldwide. Key Takeaways from the CMA's Decision (Published 22 October 2025): The CMA launched its investigations in January 2025 under the Digital Markets, Competition and Consumers Act 2024 (DMCCA), aiming to address the "unprecedented market power" held by a few large digital firms.
- SMS Designation Confirmed: Following consultation with over 150 stakeholders, the CMA confirmed that both Apple and Google meet the legal tests for having Substantial and Entrenched Market Power (SEMP) and a Position of Strategic Significance (POSS) in their mobile platforms.
- Scope of Mobile Platforms: The designation applies to the holistic Mobile Platform provided by each company, grouping together highly interconnected digital activities:
- Apple: Smartphone Operating System (iOS), Tablet Operating System (iPadOS), Native App Distribution (App Store), and Mobile Browser and Browser Engine (Safari and WebKit).
- Google: Mobile Operating System (Android), Native App Distribution (Play Store), and Mobile Browser and Browser Engine (Chrome and Blink).
- Market Dominance: CMA findings confirmed that almost all UK mobile device holders use either Apple or Google's platform. Users are unlikely to switch between them, reinforcing their dominance. Furthermore, to reach both user bases, businesses must distribute their content through both platforms, effectively making them "must-have" channels.
- Market Entrenchment: The CMA concluded that competitive constraints are currently limited. Despite the rapid deployment of technologies like Artificial Intelligence (AI), these developments are deemed unlikely to eliminate Apple or Google’s market power over the five-year designation period.
- Economic Impact: The designation acknowledges the crucial role of these platforms, noting that the UK app economy generates an estimated 1.5% of the UK’s GDP and supports about 400,000 jobs, encompassing sectors like FinTech and mobile gaming.
- CMA Final Decision on Apple’s Mobile Platform (22 October 2025): [www.gov.uk/cma]
- CMA Final Decision on Google’s Mobile Platform (22 October 2025): [www.gov.uk/cma]
- CMA Press Release: CMA confirms Apple and Google have strategic market status in mobile platforms: [www.gov.uk/cma]
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
Welcome back to upwardly Mobile API and app security.
Speaker 2 (00:03):
Great to be here.
Speaker 1 (00:04):
So today we're looking at something pretty significant, the UK's
Competition and Markets Authority, the CMA, designating Apple and Google
with strategic market status SMS.
Speaker 2 (00:17):
Yeah, this is big news. I mean for anyone developing
apps iOS, Android cross platform like Flutter, React Native. This
isn't just some dry regulatory thing. It's basically the CMA
mapping out the competitive environment you're working at.
Speaker 1 (00:31):
Right. They're saying these two companies have what was the phrase,
substantial entrenched market.
Speaker 2 (00:35):
Power gatekeepers exactly, strategic gatekeepers and that finding, well, it
sets the stage for potential interventions down the line.
Speaker 1 (00:42):
Okay, so let's clarify what they actually designated. It wasn't
just iOS or Android as operating systems, was it.
Speaker 2 (00:47):
No, And that's key. They bundled several things together into
one mobile platform activity for each company.
Speaker 1 (00:53):
What did that include?
Speaker 2 (00:54):
So for each it's the mobile OS itself iOS for Apple,
Android for Google. Then it's native app distribution so the
app store and the play store makes sense, and crucially
it also includes the mobile browser and the browser engine.
That means Tofari with its WebKit engine for Apple and
Chrome with its Blink engine for Google.
Speaker 1 (01:13):
Ah, so they're looking at that whole stack, from the
OS right up to how web content is rendered precisely.
Speaker 2 (01:20):
It's that integrated view that gives the designation its teeth, really,
and you can see why they're focused on it. The
UK app economy is well, it's massive.
Speaker 1 (01:28):
What kind of numbers are we talking?
Speaker 2 (01:30):
The CMA estimates it generates about one point five percent
of the UK's entire GDP supports something like four hundred
thousand jobs.
Speaker 1 (01:38):
Wow.
Speaker 2 (01:38):
Okay, so you know, when you have potentially limited competition
in a market that large, the CMA sees a need
for what they call proportionate targeted interventions, which this SMS
status enables.
Speaker 1 (01:51):
Got it. So let's start where most developers feel the
pinch first, getting their app to users. App distribution, Yeah,
the gateway. The CMA sources seem pretty clear on this.
They found developers basically have to be on both the
Playstore and the App Store to reach everyone in the UK.
They call them mustap channels.
Speaker 2 (02:06):
Absolutely, you can't really choose one or the other if
you want brad reach. They serve distinct user bases. It's
effectively a duopoly at the distribution level.
Speaker 1 (02:15):
And on Apple's side, it's even tighter, isn't it.
Speaker 2 (02:17):
It's total control. Basically, the app Store is the only
way Apple allows native apps onto iPhones and iPads in
the UK period.
Speaker 1 (02:25):
So a one hundred percent share of supply for native
apps through an app store on iOS.
Speaker 2 (02:30):
Correct, and the scale is just staggering. Think about this.
In twenty twenty two, the UK App Store handled around
forty eight billion dollars in billings and sales.
Speaker 1 (02:40):
Forty eight billion. That's quite a walled garden, it is.
Speaker 2 (02:43):
And developers need access to that garden obviously. Now Google's
situation is slightly different technically, but the outcome is similar.
Speaker 1 (02:50):
How so they don't block other stores technically, do they.
Speaker 2 (02:53):
No, they don't block them in the same way Apple does,
But practically the play Store still dominates. The CMA puts
its share of native app downloads on Android in the
UK at ninety to one hundred percent.
Speaker 1 (03:03):
So even with alternatives technically possible, the vast majority of
users and downloads go through the play Store.
Speaker 2 (03:09):
That's the reality. So for developers, the bottom line is
you're playing by the rules of these two giants. If
you want widespread distribution in the UK.
Speaker 1 (03:17):
Which brings us to the cost of playing by those rules.
Speaker 2 (03:20):
The fees, right, the commission fees.
Speaker 1 (03:21):
We know a lot of app revenue comes from ads,
which avoids the commission, but for paid apps or especially
in app purchases iaps, those fees are a big factor.
What did the CMA find there.
Speaker 2 (03:33):
Well, the free structures are let's say complex, but yes,
for paid apps and iaps, commissions apply. Google pointed out
that most developers, apparently ninety nine percent of those paying
fees on the Playstore pay fifteen percent or less.
Speaker 1 (03:46):
How does that work?
Speaker 2 (03:47):
That's usually because of reduced rates, like on the first
million dollars of revenue or for subscriptions after the first year,
that kind of thing.
Speaker 1 (03:53):
Okay, so there are tiers, but for successful apps, the
standard rate, which used to be thirty percent, is often
still significant. Kicks in eventually does.
Speaker 2 (04:03):
And even fifteen percent is a substantial chunk of revenue,
especially when you consider the platform holder isn't necessarily providing
direct value proportional to that cut for every transaction.
Speaker 1 (04:14):
It makes you wonder about alternatives again. On Android, there's sideloading,
installing apps from outside the Playstore. Does that provide any
real competitive pressure.
Speaker 2 (04:23):
That's a great question, and the CMA data is really
interesting here. Technically, yes, you can sideload on Android, but
the user experience is full of friction, warning screens, permission steps.
It scares users off. How badly the sources mentioned user
drop off rates sometimes over fifty percent. Imagine losing half
your potential installs right at the last step because of
(04:45):
OS warnings.
Speaker 1 (04:46):
Ouch. Yeah, that's not viable for most businesses exactly.
Speaker 2 (04:50):
And the usage numbers reflect that only about twenty six
percent of UK Android users said they'd ever sideloaded an app.
Compare that to ninety two percent using the Playstore.
Speaker 1 (04:59):
Big difference.
Speaker 2 (05:00):
Huge. It shows that technical possibility does an equal effective
competition the default settings, the warning messages. They shape user
behavior far more. Sideloading just isn't constraining the place or
in a meaningful way.
Speaker 1 (05:12):
Okay, let's switch gears a bit. Another really technical constraint
the CMA looked at was the browser engine, especially on iOS.
Speaker 2 (05:19):
Ah, Yes, the WebKit mandate. This is I think one
of the most critical technical findings.
Speaker 1 (05:24):
Explain that what exactly is the mandate.
Speaker 2 (05:26):
On iOS and I Pad os Apple simply forbids Any
browser engine other than its own WebKit. So even if
download Chrome or Firefox or Edge from the app Store.
Speaker 1 (05:37):
It's just a different interface, a different.
Speaker 2 (05:39):
Shell exactly under the hood, it's all running on WebKit.
Apple forces this, so WebKit has a one hundred percent
share of browser engine usage on his mobile platform.
Speaker 1 (05:48):
What does that mean practically for developers? Even if I'm
building a native app, why should I care?
Speaker 2 (05:53):
Because it stifles web technology innovation across the entire platform.
If you want to use a cutting edge web feature
in it component of your app, or if you rely
on web views, or if you're building web apps, you're
limited to what WebKit supports.
Speaker 1 (06:06):
Even if Chrome's engine Blink or Firefox's get Goo can
already do it.
Speaker 2 (06:10):
Doesn't matter on iOS, you wait for Apple to implement
it in WebKit. It means rival browsers can't differentiate themselves
on features, performance, or standard support. It also increases their
costs because they have to maintain this separate webcit version
just for iOS, and.
Speaker 1 (06:24):
It slows down the web for everyone on iPhones and iPads.
Speaker 2 (06:28):
Pretty much now on Android, Google doesn't have the same.
Speaker 1 (06:31):
Mandate, right you can use other engines technically.
Speaker 2 (06:34):
You can, but in practice Google's Blink engine the one
used in Trome. Most other third party browsers on Android,
like Edge, Brave, Samsung Internet It has around ninety nine
percent market share there.
Speaker 1 (06:47):
So dominance through adoption rather than restriction correct.
Speaker 2 (06:51):
The end result is still very little engine diversity in
practice on mobile overall.
Speaker 1 (06:56):
This leads straight into the whole idea of progressive web
apps PWAs. The hope was that web apps could become
a real alternative bypassing the app stores. Did the CMA
find that's happening?
Speaker 2 (07:07):
Sadly no. The data suggests web apps just aren't competing
effectively with native apps right now.
Speaker 1 (07:12):
Why not? What's holding them back?
Speaker 2 (07:13):
It mainly comes down to functionality and discoverability. Web apps
generally can't access all the device hardware features that native
apps can, things like certain background processes, push notification, sometimes
advanced camera APIs. It varies, but there are gaps.
Speaker 1 (07:28):
And users just don't use them as much.
Speaker 2 (07:30):
Especially on iOS the usage is tiny. The CMA found
only three percent of ukios users identified web apps as
their main way of accessing content. Native apps are just
far more integrated, easier to find, and generally more capable.
Speaker 1 (07:45):
So PWAs aren't the escape route. Some developers hoped for.
Speaker 2 (07:50):
Not currently, No, they're not putting meaningful competitive pressure on
the native app ecosystems controlled by Apple and Google. The
technical and platform limitations are too significant.
Speaker 1 (08:00):
Okay, so we have control over distribution, control over core
web tech on iOS. The CMA calls this market power entrenched.
What's the core reason it's so hard to break in?
Speaker 2 (08:11):
It really boils down to indirect network effects.
Speaker 1 (08:14):
Strong ones explain that two sided markets exactly.
Speaker 2 (08:17):
Mobile platforms connect two groups, users and developers. The more
users on a platform, the more attractive it is for
developers to build apps for it.
Speaker 1 (08:24):
The more good apps there are, the.
Speaker 2 (08:26):
More attractive the platform becomes for users. Is a self
reinforcing cycle, a positive feedback.
Speaker 1 (08:31):
Loop, the classic chicken and egg problem.
Speaker 2 (08:33):
But one where the incumbents already have millions of chickens
and eggs. This loop creates what the CMA calls a
particularly strong barrier to anyone new trying to enter, or
even an existing player trying to significantly expand share.
Speaker 1 (08:48):
You need a huge upfront investment to even try.
Speaker 2 (08:51):
Astronomical The CMA report mentions that just developing and maintaining
a new mobile OS likely costs billions of dollars. That's
not just our indeed's infrastructure, security, marketing, developer relations.
Speaker 1 (09:03):
Everything, and even using open source Android as a base
doesn't solve the problem. Right. We've seen attempts like Amazon's
fire OS. Right.
Speaker 2 (09:11):
Fire OS is a fork of Android, but building the
OS is only part of the battle. A huge challenge
is getting access to the crucial proprietary bits, especially Google
Mobile Services GMS.
Speaker 1 (09:22):
That's the bundle with the Playstore, Maps, Gmail, all those
core Google apps and APIs.
Speaker 2 (09:27):
Yes, and without GMS, an Android base phone is significantly
less appealing to most users outside of China. Look what
happened to Huawei internationally when they lost GMS access, Their
market share plummeted.
Speaker 1 (09:37):
So the ecosystem itself, including those proprietary services, is another
massive barrier, a huge one.
Speaker 2 (09:44):
It shows the power isn't just in the open source code,
it's in the complete package and the network effects around it.
Speaker 1 (09:50):
Okay, so the position seems very stable, very entrenched, but
technology moves fast. What about the future? AI, ARVR, cloud gaming?
Could these disrupt the status quo in the next say
five years.
Speaker 2 (10:04):
The CMA looked closely at this and their conclusion was
basically probably.
Speaker 1 (10:08):
Not really, even with AI becoming so central.
Speaker 2 (10:11):
Well, AI is becoming a key battleground for sure, things
like Apples siricate intents or androids app intense frameworks. They
let third party apps integrate with the OSSAI. That's becoming
a major area of competition within the platforms.
Speaker 1 (10:25):
But not a threat to the platforms themselves.
Speaker 2 (10:27):
The analysis suggests, No, not the next five years anyway.
Same for things like ARVR or cloud gaming. While these
technologies are evolving, they often still depend on the existing
mobile ecosystems for distribution, connectivity, core.
Speaker 1 (10:39):
Services, so they have to operate within the existing structure largely.
Speaker 2 (10:43):
Yes, take cloud gaming. It has potential, but right now
the CMA sees it as a limited constraint. User numbers
are still tiny.
Speaker 1 (10:51):
What were those numbers again?
Speaker 2 (10:52):
For the UK Back in January twenty twenty four, major
cloud gaming services on Android had only about sixty eight
thousand monthly active users combined.
Speaker 1 (11:02):
Okay, that's not a lot compared to the overall mobile
user base exactly.
Speaker 2 (11:06):
So, while these new technologies are important, the assessment is
they aren't likely to dislodge Apple or Google's fundamental gatekeeper
positions soon. The existing barriers and network effects are just
too strong.
Speaker 1 (11:18):
So the big takeaway here for developers mapping out their
strategies seems pretty stark. This SMS designation basically confirms the
structure we're all working within.
Speaker 2 (11:27):
Yeah, it confirms that for the foreseeable future, likely the
next five years at least, you're dealing with these two
dominant platforms. Their fundamental control over distribution key technologies like
the browser engine on iOS isn't expected to change dramatically
just from technological shifts alone.
Speaker 1 (11:42):
The stability of the platform structure itself seems locked in
barring regulatory action.
Speaker 2 (11:47):
That seems to be the CMA's assessment. Developers need to
plan for stability in the core platform dynamics, not expect
some sudden upheaval from a new technology sweeping them aside.
Speaker 1 (11:58):
Which leaves us with a final thought than really, for
you listening, If competitive pressure on the core platforms the OS,
the app store, the browser engine is limited, where will
the most important innovation actually come from.
Speaker 2 (12:11):
Is it going to be driven by regulators using tools
like this SMS designation to force changes, or will disruptive
tech like AI find ways to create value despite the
constraints working within the ecosystems ruled by Apple and Google.
Speaker 1 (12:25):
Something to think about as you plan your next move.
Speaker 2 (12:27):
Definitely defines the strategic choices ahead.
Speaker 1 (12:29):
Okay, that wraps up our look at the CMA decision.
Thanks for joining us. This content was created using human
expertise and insights, assisted by artificial intelligence.
Welcome back to upwardly Mobile API and app security.
Speaker 2 (00:03):
Great to be here.
Speaker 1 (00:04):
So today we're looking at something pretty significant, the UK's
Competition and Markets Authority, the CMA, designating Apple and Google
with strategic market status SMS.
Speaker 2 (00:17):
Yeah, this is big news. I mean for anyone developing
apps iOS, Android cross platform like Flutter, React Native. This
isn't just some dry regulatory thing. It's basically the CMA
mapping out the competitive environment you're working at.
Speaker 1 (00:31):
Right. They're saying these two companies have what was the phrase,
substantial entrenched market.
Speaker 2 (00:35):
Power gatekeepers exactly, strategic gatekeepers and that finding, well, it
sets the stage for potential interventions down the line.
Speaker 1 (00:42):
Okay, so let's clarify what they actually designated. It wasn't
just iOS or Android as operating systems, was it.
Speaker 2 (00:47):
No, And that's key. They bundled several things together into
one mobile platform activity for each company.
Speaker 1 (00:53):
What did that include?
Speaker 2 (00:54):
So for each it's the mobile OS itself iOS for Apple,
Android for Google. Then it's native app distribution so the
app store and the play store makes sense, and crucially
it also includes the mobile browser and the browser engine.
That means Tofari with its WebKit engine for Apple and
Chrome with its Blink engine for Google.
Speaker 1 (01:13):
Ah, so they're looking at that whole stack, from the
OS right up to how web content is rendered precisely.
Speaker 2 (01:20):
It's that integrated view that gives the designation its teeth, really,
and you can see why they're focused on it. The
UK app economy is well, it's massive.
Speaker 1 (01:28):
What kind of numbers are we talking?
Speaker 2 (01:30):
The CMA estimates it generates about one point five percent
of the UK's entire GDP supports something like four hundred
thousand jobs.
Speaker 1 (01:38):
Wow.
Speaker 2 (01:38):
Okay, so you know, when you have potentially limited competition
in a market that large, the CMA sees a need
for what they call proportionate targeted interventions, which this SMS
status enables.
Speaker 1 (01:51):
Got it. So let's start where most developers feel the
pinch first, getting their app to users. App distribution, Yeah,
the gateway. The CMA sources seem pretty clear on this.
They found developers basically have to be on both the
Playstore and the App Store to reach everyone in the UK.
They call them mustap channels.
Speaker 2 (02:06):
Absolutely, you can't really choose one or the other if
you want brad reach. They serve distinct user bases. It's
effectively a duopoly at the distribution level.
Speaker 1 (02:15):
And on Apple's side, it's even tighter, isn't it.
Speaker 2 (02:17):
It's total control. Basically, the app Store is the only
way Apple allows native apps onto iPhones and iPads in
the UK period.
Speaker 1 (02:25):
So a one hundred percent share of supply for native
apps through an app store on iOS.
Speaker 2 (02:30):
Correct, and the scale is just staggering. Think about this.
In twenty twenty two, the UK App Store handled around
forty eight billion dollars in billings and sales.
Speaker 1 (02:40):
Forty eight billion. That's quite a walled garden, it is.
Speaker 2 (02:43):
And developers need access to that garden obviously. Now Google's
situation is slightly different technically, but the outcome is similar.
Speaker 1 (02:50):
How so they don't block other stores technically, do they.
Speaker 2 (02:53):
No, they don't block them in the same way Apple does,
But practically the play Store still dominates. The CMA puts
its share of native app downloads on Android in the
UK at ninety to one hundred percent.
Speaker 1 (03:03):
So even with alternatives technically possible, the vast majority of
users and downloads go through the play Store.
Speaker 2 (03:09):
That's the reality. So for developers, the bottom line is
you're playing by the rules of these two giants. If
you want widespread distribution in the UK.
Speaker 1 (03:17):
Which brings us to the cost of playing by those rules.
Speaker 2 (03:20):
The fees, right, the commission fees.
Speaker 1 (03:21):
We know a lot of app revenue comes from ads,
which avoids the commission, but for paid apps or especially
in app purchases iaps, those fees are a big factor.
What did the CMA find there.
Speaker 2 (03:33):
Well, the free structures are let's say complex, but yes,
for paid apps and iaps, commissions apply. Google pointed out
that most developers, apparently ninety nine percent of those paying
fees on the Playstore pay fifteen percent or less.
Speaker 1 (03:46):
How does that work?
Speaker 2 (03:47):
That's usually because of reduced rates, like on the first
million dollars of revenue or for subscriptions after the first year,
that kind of thing.
Speaker 1 (03:53):
Okay, so there are tiers, but for successful apps, the
standard rate, which used to be thirty percent, is often
still significant. Kicks in eventually does.
Speaker 2 (04:03):
And even fifteen percent is a substantial chunk of revenue,
especially when you consider the platform holder isn't necessarily providing
direct value proportional to that cut for every transaction.
Speaker 1 (04:14):
It makes you wonder about alternatives again. On Android, there's sideloading,
installing apps from outside the Playstore. Does that provide any
real competitive pressure.
Speaker 2 (04:23):
That's a great question, and the CMA data is really
interesting here. Technically, yes, you can sideload on Android, but
the user experience is full of friction, warning screens, permission steps.
It scares users off. How badly the sources mentioned user
drop off rates sometimes over fifty percent. Imagine losing half
your potential installs right at the last step because of
(04:45):
OS warnings.
Speaker 1 (04:46):
Ouch. Yeah, that's not viable for most businesses exactly.
Speaker 2 (04:50):
And the usage numbers reflect that only about twenty six
percent of UK Android users said they'd ever sideloaded an app.
Compare that to ninety two percent using the Playstore.
Speaker 1 (04:59):
Big difference.
Speaker 2 (05:00):
Huge. It shows that technical possibility does an equal effective
competition the default settings, the warning messages. They shape user
behavior far more. Sideloading just isn't constraining the place or
in a meaningful way.
Speaker 1 (05:12):
Okay, let's switch gears a bit. Another really technical constraint
the CMA looked at was the browser engine, especially on iOS.
Speaker 2 (05:19):
Ah, Yes, the WebKit mandate. This is I think one
of the most critical technical findings.
Speaker 1 (05:24):
Explain that what exactly is the mandate.
Speaker 2 (05:26):
On iOS and I Pad os Apple simply forbids Any
browser engine other than its own WebKit. So even if
download Chrome or Firefox or Edge from the app Store.
Speaker 1 (05:37):
It's just a different interface, a different.
Speaker 2 (05:39):
Shell exactly under the hood, it's all running on WebKit.
Apple forces this, so WebKit has a one hundred percent
share of browser engine usage on his mobile platform.
Speaker 1 (05:48):
What does that mean practically for developers? Even if I'm
building a native app, why should I care?
Speaker 2 (05:53):
Because it stifles web technology innovation across the entire platform.
If you want to use a cutting edge web feature
in it component of your app, or if you rely
on web views, or if you're building web apps, you're
limited to what WebKit supports.
Speaker 1 (06:06):
Even if Chrome's engine Blink or Firefox's get Goo can
already do it.
Speaker 2 (06:10):
Doesn't matter on iOS, you wait for Apple to implement
it in WebKit. It means rival browsers can't differentiate themselves
on features, performance, or standard support. It also increases their
costs because they have to maintain this separate webcit version
just for iOS, and.
Speaker 1 (06:24):
It slows down the web for everyone on iPhones and iPads.
Speaker 2 (06:28):
Pretty much now on Android, Google doesn't have the same.
Speaker 1 (06:31):
Mandate, right you can use other engines technically.
Speaker 2 (06:34):
You can, but in practice Google's Blink engine the one
used in Trome. Most other third party browsers on Android,
like Edge, Brave, Samsung Internet It has around ninety nine
percent market share there.
Speaker 1 (06:47):
So dominance through adoption rather than restriction correct.
Speaker 2 (06:51):
The end result is still very little engine diversity in
practice on mobile overall.
Speaker 1 (06:56):
This leads straight into the whole idea of progressive web
apps PWAs. The hope was that web apps could become
a real alternative bypassing the app stores. Did the CMA
find that's happening?
Speaker 2 (07:07):
Sadly no. The data suggests web apps just aren't competing
effectively with native apps right now.
Speaker 1 (07:12):
Why not? What's holding them back?
Speaker 2 (07:13):
It mainly comes down to functionality and discoverability. Web apps
generally can't access all the device hardware features that native
apps can, things like certain background processes, push notification, sometimes
advanced camera APIs. It varies, but there are gaps.
Speaker 1 (07:28):
And users just don't use them as much.
Speaker 2 (07:30):
Especially on iOS the usage is tiny. The CMA found
only three percent of ukios users identified web apps as
their main way of accessing content. Native apps are just
far more integrated, easier to find, and generally more capable.
Speaker 1 (07:45):
So PWAs aren't the escape route. Some developers hoped for.
Speaker 2 (07:50):
Not currently, No, they're not putting meaningful competitive pressure on
the native app ecosystems controlled by Apple and Google. The
technical and platform limitations are too significant.
Speaker 1 (08:00):
Okay, so we have control over distribution, control over core
web tech on iOS. The CMA calls this market power entrenched.
What's the core reason it's so hard to break in?
Speaker 2 (08:11):
It really boils down to indirect network effects.
Speaker 1 (08:14):
Strong ones explain that two sided markets exactly.
Speaker 2 (08:17):
Mobile platforms connect two groups, users and developers. The more
users on a platform, the more attractive it is for
developers to build apps for it.
Speaker 1 (08:24):
The more good apps there are, the.
Speaker 2 (08:26):
More attractive the platform becomes for users. Is a self
reinforcing cycle, a positive feedback.
Speaker 1 (08:31):
Loop, the classic chicken and egg problem.
Speaker 2 (08:33):
But one where the incumbents already have millions of chickens
and eggs. This loop creates what the CMA calls a
particularly strong barrier to anyone new trying to enter, or
even an existing player trying to significantly expand share.
Speaker 1 (08:48):
You need a huge upfront investment to even try.
Speaker 2 (08:51):
Astronomical The CMA report mentions that just developing and maintaining
a new mobile OS likely costs billions of dollars. That's
not just our indeed's infrastructure, security, marketing, developer relations.
Speaker 1 (09:03):
Everything, and even using open source Android as a base
doesn't solve the problem. Right. We've seen attempts like Amazon's
fire OS. Right.
Speaker 2 (09:11):
Fire OS is a fork of Android, but building the
OS is only part of the battle. A huge challenge
is getting access to the crucial proprietary bits, especially Google
Mobile Services GMS.
Speaker 1 (09:22):
That's the bundle with the Playstore, Maps, Gmail, all those
core Google apps and APIs.
Speaker 2 (09:27):
Yes, and without GMS, an Android base phone is significantly
less appealing to most users outside of China. Look what
happened to Huawei internationally when they lost GMS access, Their
market share plummeted.
Speaker 1 (09:37):
So the ecosystem itself, including those proprietary services, is another
massive barrier, a huge one.
Speaker 2 (09:44):
It shows the power isn't just in the open source code,
it's in the complete package and the network effects around it.
Speaker 1 (09:50):
Okay, so the position seems very stable, very entrenched, but
technology moves fast. What about the future? AI, ARVR, cloud gaming?
Could these disrupt the status quo in the next say
five years.
Speaker 2 (10:04):
The CMA looked closely at this and their conclusion was
basically probably.
Speaker 1 (10:08):
Not really, even with AI becoming so central.
Speaker 2 (10:11):
Well, AI is becoming a key battleground for sure, things
like Apples siricate intents or androids app intense frameworks. They
let third party apps integrate with the OSSAI. That's becoming
a major area of competition within the platforms.
Speaker 1 (10:25):
But not a threat to the platforms themselves.
Speaker 2 (10:27):
The analysis suggests, No, not the next five years anyway.
Same for things like ARVR or cloud gaming. While these
technologies are evolving, they often still depend on the existing
mobile ecosystems for distribution, connectivity, core.
Speaker 1 (10:39):
Services, so they have to operate within the existing structure largely.
Speaker 2 (10:43):
Yes, take cloud gaming. It has potential, but right now
the CMA sees it as a limited constraint. User numbers
are still tiny.
Speaker 1 (10:51):
What were those numbers again?
Speaker 2 (10:52):
For the UK Back in January twenty twenty four, major
cloud gaming services on Android had only about sixty eight
thousand monthly active users combined.
Speaker 1 (11:02):
Okay, that's not a lot compared to the overall mobile
user base exactly.
Speaker 2 (11:06):
So, while these new technologies are important, the assessment is
they aren't likely to dislodge Apple or Google's fundamental gatekeeper
positions soon. The existing barriers and network effects are just
too strong.
Speaker 1 (11:18):
So the big takeaway here for developers mapping out their
strategies seems pretty stark. This SMS designation basically confirms the
structure we're all working within.
Speaker 2 (11:27):
Yeah, it confirms that for the foreseeable future, likely the
next five years at least, you're dealing with these two
dominant platforms. Their fundamental control over distribution key technologies like
the browser engine on iOS isn't expected to change dramatically
just from technological shifts alone.
Speaker 1 (11:42):
The stability of the platform structure itself seems locked in
barring regulatory action.
Speaker 2 (11:47):
That seems to be the CMA's assessment. Developers need to
plan for stability in the core platform dynamics, not expect
some sudden upheaval from a new technology sweeping them aside.
Speaker 1 (11:58):
Which leaves us with a final thought than really, for
you listening, If competitive pressure on the core platforms the OS,
the app store, the browser engine is limited, where will
the most important innovation actually come from.
Speaker 2 (12:11):
Is it going to be driven by regulators using tools
like this SMS designation to force changes, or will disruptive
tech like AI find ways to create value despite the
constraints working within the ecosystems ruled by Apple and Google.
Speaker 1 (12:25):
Something to think about as you plan your next move.
Speaker 2 (12:27):
Definitely defines the strategic choices ahead.
Speaker 1 (12:29):
Okay, that wraps up our look at the CMA decision.
Thanks for joining us. This content was created using human
expertise and insights, assisted by artificial intelligence.
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