Code found in the iOS 17.2 beta suggests that Apple is going to allow sideloading although it could be limited to the EU.

Code in iOS 17.2 beta reveals that Apple will allow iPhone to sideload apps - PhoneArena

Apple has always been against allowing iPhone users to sideload apps on the iPhone. Sideloading is when apps from a third-party app store are downloaded on a phone. Google allows Android users to do this, but Apple has not thus earning it the "walled garden" nickname. Apple claims that apps installed on the iPhone from a third-party app store could contain malware or other security issues and since Apple can't vet apps not downloaded from the App Store, it believes that it is better to just not allow it.

Another reason why Apple doesn't want to allow sideloading on the iPhone is to prevent developers from listing their iOS apps on a third-party app store as a way to get around paying Apple as much as 30% of their in-app revenue. Since the App Store is the only official iOS app storefront, there is no way to escape the so-called "Apple Tax" unless a developer stops accepting in-app purchases.

The EU's Digital Markets Act (DMA) says that mobile device users should be able to install apps from third-party stores. Earlier this year, Bloomberg's man on the Apple beat Mark Gurman said that Apple would allow sideloading but only in the 27 countries that are members of the EU which would limit any damage caused by malicious apps. It would also provide Apple with some real-life data to see whether it should allow sideloading in other markets.

9to5Mac has discovered that the iOS 17 .2 beta contains internal code that would give third-party apps permission to have other apps installed. With this capability, developers would be able to create their own third-party iOS app storefront. The code also has a region lock which would allow Apple to restrict sideloading to specific countries. This makes sense if Apple is forced to allow sideloading by the DMA.

Apple has until this coming March to get in line with the DMA but you can be sure that Tim Cook and his team will be trying anything to prevent sideloading from being forced onto Apple even if it is just in 27 EU countries. And the month before, in February, the DMA could change its mind and call iMessage a "gatekeeper" which would force Apple to add support for Rich Communication Services (RCS) to its messaging app . That too would be limited to the 27 EU member countries.

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