Just now, Apple has a big news!
The U.S. Department of Justice and many states have filed antitrust lawsuits against Apple, and Apple has been hit by antitrust attacks in the United States and Europe, and the global "regulatory storm" has hit technology giants.
No one expected that when Apple CEO Tim Cook visited China in a high-profile manner, Apple suffered a heavy blow from the United States!
In the past few days, Cook has been happily enjoying his fulfilling journey in China, smiling brightly, constantly conveying confidence and friendship everywhere;
Unfortunately, in the United States, the Department of Justice and several states are suing Apple for violating antitrust laws. And in Europe, Apple is also facing an investigation for compliance with the region's Digital Markets Act.
Over the past 20 years, Apple has been arguably one of the most valuable technology companies in the world, and this is fundamentally inseparable from the success of the iPhone.
Today, Apple's share of the entire U.S. smartphone market is more than 65%!
Apple says that complying with the regulations costs a lot of money, could prevent it from launching new products or services, and could hurt customer demand.
In fact, in addition to Apple, many leading companies in the United States are also facing the same problem;
After all, monopoly is the original sin of tech giants, and it is the focus of regulators!
In short, a menacing anti-monopoly case of the century is kicking off!
01
Apple Burst!
The antitrust lawsuit has finally arrived, involving Apple's "lifeblood" - the iOS platform.
According to Reuters, as the U.S. government cracked down on tech giants, the U.S. Department of Justice and 16 states sued Apple on the 21st, accusing the phone manufacturer of monopolizing the mobile phone market and causing damage to the interests of consumers, developers and competitors, and Apple's anti-competitive behavior went beyond the normal business scope of its mobile phones and watches.
It is worth mentioning that not only is this the largest technology company in the recent antitrust lawsuit filed by the U.S. government, but Apple is also the only large U.S. technology company that has not been prosecuted by the government for monopoly.
The magnitude of its movement can be imagined!
Sure enough, as soon as the news came out, Apple's stock price fell by more than 4% on the same day, at $171.37 per share, and its market value evaporated by more than $110 billion (about 800 billion yuan) overnight, with a total market value of $2.6 trillion, which is also Apple's largest one-day decline since August 4 last year.
Since the beginning of 2024, Apple's troubles have come one after another:
First, the "unspeakably expensive" headset VisionPro users were exposed to a large number of returns, and then announced the cancellation of the electric vehicle project that had been explored for ten years, and the team turned to generative AI, and now it has suffered from the "anti-monopoly backstabbing" of the United States and Europe!
Apple's latest quarterly financial report shows that Apple's revenue in Greater China in the first quarter of fiscal year 2024 (Q4 2023) was $20.8 billion, compared with $23.9 billion in the same period last year, a year-on-year decrease of 13%, far lower than expected.
"The return of the king" of Huawei, is relying on the powerful Mate 60 series, step by step to regain the high-end market share of Chinese mobile phones, Huawei P70 If it is listed, it is estimated that Apple will lose the throne of the king of the high-end market of Chinese mobile phones!
Apple, which has experienced ups and downs in the business world, is returning to mediocrity, and has recently suffered a lot of troubles: its products have fallen into innovation bottlenecks, its asset-liability ratio is high, and it has been subject to antitrust investigations...... Life is getting harder and harder!
02
The U.S. Department of Justice's 88-page indictment document is aimed at the iPhone operating system and a closed ecosystem.
Apple's business model has always been based on charging users a premium for technology products, and even charging various business partners and competitors in the background;
Apple's reliance on exclusivity, anti-competition, ultimately drove up prices for consumers and pushed up Apple's profits.
First, by imposing contract terms and fees, restricting the features that developers can offer to iPhone users. Second, selectively limit the connection points between third-party apps and the iPhone operating system, reducing the functionality of non-Apple apps and accessories.
No wonder, the U.S. Attorney General said: "Apple maintains a monopoly in the smartphone market, not only by staying ahead of the competition, but also by violating federal antitrust laws." ”
Of course, Apple denied the government's accusations and responded that complying with the regulations would cost a lot of money, could prevent it from launching new products or services, and could hurt customer demand.
Apple has previously defended its policy of controlling the download of software through app stores, saying it is necessary to keep the iPhone free from viruses and fraud.
Ironically, Apple's rise benefited in part from Microsoft's antitrust case in 1998, and now they need another landmark antitrust action to drive new technological innovations!
After three years, the "Microsoft antitrust case" ended with Microsoft paying $1.8 billion in settlement fees, a ban on exclusive transactions that could harm competitors, and the cost of opening up parts of the source code.
An antitrust case against American technology giants will reach a climax in 2024, in addition to Apple, Google, Amazon, and Meta have all been in the dock!
In Europe, American tech giants are also in trouble.
Earlier this month, the European Union's antitrust regulator just fined Apple 1.8 billion euros.
Apple, Meta and Google will be investigated for violating the EU's Digital Markets Act (DMA) and could be fined hefty by the end of the year, according to people familiar with the matter.
For the US tech giants, the alleged antitrust will be a long marathon, Apple, Google, Amazon, Meta are facing the biggest challenge in decades, which may lead to Apple and Alphabet's Google Inc. being ordered to spin off, the impact is huge!
03
Over the past 20 years, Apple has become one of the most valuable publicly traded companies in the world, thanks in large part to the success of Apple's iconic smartphone, the iPhone.
But the glory of the past only belongs to the past, and today's iPhone series of mobile phones are no longer the "Britney" in the original market, and have even become the "Mrs. Niu" in the eyes of consumers in the Chinese market, and the price reduction promotion has not been able to save Apple's weak sales in the Chinese market.
According to statistics, in the first six weeks of 2024, China's smartphone sales fell by 7% year-on-year, Apple's sales fell by 24% year-on-year during this period, and Huawei's sales increased by 64% year-on-year.
In early March, a $3.5 billion class-action settlement revealed Apple's scars, and Cook was accused of concealing the fact that demand for iPhones in the Chinese market had fallen in the early years.
Although Europe and the United States are Apple's largest markets, Apple's high growth in the past three years has a lot to do with the Chinese market!
At the beginning, Huawei mobile phones were forced to withdraw from the high-end market, and Apple picked up a big bargain in those three years.
According to the data, Apple's share of the high-end market has risen from 55% in 2021 to 60%, and in 2022 it will be as high as 75%. In 2023, affected by Huawei's return, Apple's share will drop to 71%, but it will still dominate.
In the first quarter of fiscal 2021, Apple's revenue in Greater China was US$21.313 billion, a year-on-year increase of 57%, making it Apple's third largest market in the world. In the next three fiscal quarters, Apple's revenue growth in Greater China reached 87%, 58% and 83% respectively.
In the first quarter of fiscal 2022, Apple's growth rate in Greater China reached 21%, which was nearly twice the growth rate of total revenue, although the growth slowed.
In fiscal year 2023, affected by the overall downturn in the consumer electronics market, the data of all mobile phone brands declined;
The most terrifying thing is that Huawei, which has the greatest impact on Apple, has come back with thousands of troops to "kill"!
In 2024, the business outside of Apple's mobile phone has suffered a lot of setbacks, and Cook, who has always had extremely high expectations for the Chinese market, has to travel to China in a hurry, constantly participate in public events, accept various interviews, and constantly convey confidence in China, express love for China, and convey Apple's attention to China.
"I don't think there's anything more important to Apple's supply chain than China!" He said with a smile that was professional, friendly and sincere, and if he wasn't Apple's CEO, just a foreign friend, we might really believe it.
But who would have expected that when Cook had just celebrated the opening of a new retail store in China, the news of "being sued by antitrust" came from the headquarters on the other side of the ocean.
It's like, you are besieging other people's highlands, but you didn't expect your "hometown" to be stolen...
Building a friendly and friendly brand image, establishing a good relationship between government and business, and stabilizing the supplier system are of great significance behind Cook's visit to China.
Now, Apple has suffered a heavy blow from Europe and the United States, and how to boost the declining revenue in the Chinese market is the biggest challenge for Apple!
Don't forget to click "watching"
Resources:
"Behind Cook's China Tour", 21st Century Business Herald
"Apple Inc. Accused of Monopoly in the United States", Xinhua News Agency
"Milestone antitrust, market value evaporated 790 billion overnight, will Apple be spun off?", Wall Street news