Heavy! Apple is on the big story again! Or face a huge fine of 240 billion yuan

Against the backdrop of global inflation and tight supply chains, Apple delivered a bright earnings report after the US stock market on April 28 this year. But it also faces many challenges, such as the antitrust allegations that haunt Apple.

According to CCTV Finance reported on May 3, on the 2nd local time, the EU antitrust regulator formally accused the United States Apple of restricting competitors from using its mobile payment technology, so Apple may face a huge fine.

The European Union has issued antitrust charges against Apple over Apple Pay

The European Commission said on the 2nd that it has issued a written statement to Apple detailing how Apple abused its dominance in the field of mobile payment through Apple Pay. In recent years, Apple has restricted users from using other payment systems on Apple devices on the grounds of protecting user security and privacy, and said Apple's anti-competitive behavior dates back to at least 2015, the statement said.

The European Commission says there are signs that Apple has set up barriers that restrict third-party app developers from getting the key technology they need, namely NFC contactless payment technology when users use Apple Pay through Apple devices.

According to Reuters, if the allegation is established, Apple will face a hefty fine of up to 10% of its global annual turnover, estimated at about $36.6 billion (about 241.864 billion yuan) according to the turnover data of the previous fiscal year. However, the Reuters report also pointed out that the relevant penalties in the EU have rarely been implemented according to the upper limit penalty standard before. Apple said it would continue to engage with the European Commission on the issue.

The European Parliament, the European Council and the European Commission agreed on the Digital Marketplace Act in March this year, which aims to restrict technology giants such as Google, Apple, Amazon, and Facebook. If a business violates the Digital Market Act, it will face fines of up to 10% of its global annual turnover in the previous financial year, as well as a fine of up to 20% for repeat offenders.

According to the Financial Associated Press, citing media reports, in response to the EU investigation involving Apple Pay, Apple responded that the company designed Apple Pay to provide consumers with a safe and convenient contactless payment service using existing bank cards. Apple Pay is just one of the many payment options available to European consumers, setting industry-leading standards for privacy and security while ensuring equal use of NFC by different types of financial institutions.

Apple's simultaneous "pointing out" of Apple Pay may upset some of Europe's biggest banks. Because the company has access to 2,500 banks in Europe, in addition to large financial institutions, many small fintech companies and challenger banks have equal access to Apple Pay.

In addition, Interface News quoted the technology media The Verge as reporting on March 26 that for the Digital Market Act (DMA) of the EU to reach an interim agreement, Apple said that the provisions of the bill may bring unnecessary privacy and security vulnerabilities to users. In addition, Apple also said that some of the provisions will make it impossible for Apple to charge for intellectual property rights.

Apple CEO Tim Cook criticized the Digital Marketplace Act earlier this month, saying it would allow companies that "seek data" to bypass Apple's privacy rules to track users.

According to Reuters, the head of the EU Antitrust Agency, Margrethe Vestager, responded at a press conference that so far the investigation has not found any evidence of such a high security risk. "Instead, the evidence in our documents suggests that Apple's actions cannot be justified by security concerns."

Apple can request a closed-door hearing to defend the case, and it can also issue a written response before the committee makes a decision, which can take a year or more.

For example, the European Union punished Apple in 2016 for paying 13 billion euros in taxes, and the lawsuit has not ended today, and Apple has even obtained a favorable ruling from the European Court of Justice in the process.

Like U.S. internet giants like Google, the EU's antitrust investigation into Apple isn't alone. In addition to Apple Pay, the European Union also accused Apple Music last year of allegedly abusing its dominant market position to hinder competition. At the same time, Apple has also been censored by regulators around the world for "Apple tax" - for a long time, users buy applications in the App Store, Apple has to take a 30% cut.

Apple's Q2 revenue increased by 9% and the mobile phone business growth was eye-catching

On April 28, local time, Apple released the results of the second fiscal quarter of fiscal 2022 as of the end of March, which can be seen that even in the reality of supply chain challenges, Apple still handed over a financial report that exceeded market expectations - whether it is from the revenue situation, or the market performance of iPhones and Macs.

According to the data, Apple's total net revenue in Q2 was $97.278 billion, an increase of 9% year-on-year; net profit was $25.010 billion, an increase of 6% year-on-year. Apple's Greater China revenue for the fiscal second quarter was $18.343 billion, up 3.5 percent from $17.728 billion in the year-ago quarter.

The Wall Street Journal said the $97.3 billion fiscal quarter was the third-best quarter in Apple's history, but it was also one of the slowest growing quarters since the start of the coronavirus pandemic more than two years ago. Since the launch of the first 5G-enabled iPhone in October 2020, Apple has recorded double-digit year-over-year growth every quarter.

According to the financial report, the iPhone, which contributed more than half of Apple's revenue, had revenue of $50.57 billion, an increase of 5.5% year-on-year. This means that the iPhone is still the highlight of Apple's revenue as the entire smartphone sales growth slows.

Apple CEO Tim Cook said the iPhone business was a success last quarter because of more "converters", that is, users who previously used Android phones and now decided to buy an iPhone. He revealed: "We achieved a record number of upgrades in the second fiscal quarter and our conversion rate increased by double digits. ”

According to data released by the market research agency Canalys, global smartphone shipments fell by 11% in the first quarter of 2022. Among them, Samsung ranked first with a market share of 24%, Apple with a market share of 18%, Xiaomi followed by 13%, OPPO and vivo ranked fourth and fifth, with 10% and 8%, respectively.

In the first quarter, the iPhone 13 accounted for 38% of total iPhone sales. The iPhone 13 Pro and Pro Max, which are higher positioned and have an average price of 10,000 yuan, also account for 30% of the total sales of the iPhone. Due to strong sales performance, Apple also raised its total production target for the iPhone 13 Pro series in the second quarter to 10 million units.

According to the earnings report, Mac revenue was $10.44 billion, which is expected to be $9.25 billion, an increase of 14.73% compared to $9.1 billion in the same period last year;

Beyond the iPhone, Apple's second "growth engine" falls on value-added services including iTunes, Apple Music, App Store share and Apple subscriptions. Apple's services business revenue was $19.821 billion and is expected to be $19.72 billion, up 17.28% compared to the same period last year.

Revenue from "other" (wearables, home and accessories) products was $8.81 billion and is expected to be $9.05 billion, up 12.37% compared to $7.836 billion in the year-ago quarter.

Although Apple's performance this quarter has made the market think that it is "beyond expectations", there is still uncertainty about Apple's future in the face of the continuous disruption of the supply chain by the new crown epidemic. Cook said Apple's financial performance this quarter was "better than we expected," but also stressed that the company "can't be spared" from supply chain challenges.

It is worth mentioning that Apple is also the only listed company in the world with a market value of more than $3 trillion. For now, the total market capitalization of Apple's stock has fallen below $3 trillion, and its total market capitalization reached $2.56 trillion as of May 3.

According to 21st Century Business Herald, at buffett's shareholders' meeting held two days ago, Buffett's Berkshire Hathaway company released the first quarter of 2022 (Q1) financial report data, the data shows that Berkshire's position is very concentrated, the top four positions Apple, Bank of America, American Express and Chevron accounted for 66% of the position.

Among them, the first major heavy stock is Apple, up to 40% of the position, the market value is close to $160 billion, the cost is less than $60 billion, and only five or six years have contributed $100 billion to Buffett's profits.

When Buffett bought Apple stock, Apple was already the world's largest company by market capitalization, with a market value of more than $1 trillion. At that time, many people thought that buffett bought the price is too high, Buffett believes that the company he is sure of will have to reposition, so that he can get the maximum return, the stock is not how much it rises, but how much you buy.

(Daily Economic News)

Editor: Fang Fengjiao