KazPost

Kazakhstan News
Thursday, Apr 25, 2024

Europe’s latest Apple bite is close to the core

Europe’s latest Apple bite is close to the core

Big Tech investors have historically brushed off the threat from Margrethe Vestager, the European Commission’s antitrust tzar who wants to reduce U.S. behemoths’ digital dominance. The combined market value of Apple, Amazon.com, Facebook and Google owner Alphabet has risen more than threefold to $4.4 trillion since the Dane’s first term started in 2014. Two new probes into Apple, launched on Tuesday, suggest that it’s time to start taking her more seriously.
Vestager is concerned that the rules for Apple’s preponderant app store distort competition. Music-streaming rival Spotify Technology complained that Apple levies a 30% “tax” on purchases made within apps by smartphone users, while simultaneously stopping app developers from steering customers to cheaper options.

The second probe centres on Apple Pay, which allows customers to buy things using an iPhone. Vestager worries that Apple makes it hard for competing payments systems to work smoothly with its popular smartphones. Apple said it was disappointed that the European Commission “is advancing baseless complaints from a handful of companies who simply want a free ride”.

But Chief Executive Tim Cook – and the company’s investors – should be worried. The smartphone market is mature, and that’s a problem for Apple, as it accounts for roughly half of revenue. Sales of iPhone handsets fell 7% in the first quarter of 2020.

Apple has compensated by selling more apps, and subscriptions to its gaming and music services. These services are closing in on a quarter of all revenue thanks to rapid growth. Citi analysts reckon that the app store accounts for 30% of all services revenue.

That has convinced the market to revalue Apple, as investors prefer recurring services revenue to one-off hardware sales. The company’s shares are valued at 24 times estimated earnings over the next 12 months, using Refinitiv data. That’s nearly twice as high as the multiple from 2015 until the end of 2018.

If the commission forces Apple to cut App Store fees and promote competing systems to Apple Pay, its revenue growth would slow, probably meriting a lower multiple, and jeopardising its $1.5 trillion market capitalisation.

In other words, Vestager is getting serious – unlike with past probes into Google’s shopping website and Android operating system, which made little difference to the company’s core business. Cook’s shareholders, and those in other tech behemoths, ought to be worried.
Newsletter

Related Articles

KazPost
0:00
0:00
Close
It's always the people with the dirty hands pointing their fingers
Paper straws found to contain long-lasting and potentially toxic chemicals - study
FTX's Bankman-Fried headed for jail after judge revokes bail
Blackrock gets half a trillion dollar deal to rebuild Ukraine
America's First New Nuclear Reactor in Nearly Seven Years Begins Operations
Southeast Asia moves closer to economic unity with new regional payments system
Today Hunter Biden’s best friend and business associate, Devon Archer, testified that Joe Biden met in Georgetown with Russian Moscow Mayor's Wife Yelena Baturina who later paid Hunter Biden $3.5 million in so called “consulting fees”
Singapore Carries Out First Execution of a Woman in Two Decades Amid Capital Punishment Debate
Google testing journalism AI. We are doing it already 2 years, and without Google biased propoganda and manipulated censorship
Unlike illegal imigrants coming by boats - US Citizens Will Need Visa To Travel To Europe in 2024
Musk announces Twitter name and logo change to X.com
The future of sports
Unveiling the Black Hole: The Mysterious Fate of EU's Aid to Ukraine
Farewell to a Music Titan: Tony Bennett, Renowned Jazz and Pop Vocalist, Passes Away at 96
Alarming Behavior Among Florida's Sharks Raises Concerns Over Possible Cocaine Exposure
Transgender Exclusion in Miss Italy Stirs Controversy Amidst Changing Global Beauty Pageant Landscape
TikTok Takes On Spotify And Apple, Launches Own Music Service
Global Trend: Using Anti-Fake News Laws as Censorship Tools - A Deep Dive into Tunisia's Scenario
Arresting Putin During South African Visit Would Equate to War Declaration, Asserts President Ramaphosa
Hacktivist Collective Anonymous Launches 'Project Disclosure' to Unearth Information on UFOs and ETIs
Typo sends millions of US military emails to Russian ally Mali
Server Arrested For Theft After Refusing To Pay A Table's $100 Restaurant Bill When They Dined & Dashed
The Changing Face of Europe: How Mass Migration is Reshaping the Political Landscape
China Urges EU to Clarify Strategic Partnership Amid Trade Tensions
Europe is boiling: Extreme Weather Conditions Prevail Across the Continent
The Last Pour: Anchor Brewing, America's Pioneer Craft Brewer, Closes After 127 Years
Democracy not: EU's Digital Commissioner Considers Shutting Down Social Media Platforms Amid Social Unrest
Sarah Silverman and Renowned Authors Lodge Copyright Infringement Case Against OpenAI and Meta
Why Do Tech Executives Support Kennedy Jr.?
The New York Times Announces Closure of its Sports Section in Favor of The Athletic
BBC Anchor Huw Edwards Hospitalized Amid Child Sex Abuse Allegations, Family Confirms
Florida Attorney General requests Meta CEO's testimony on company's platforms' alleged facilitation of illicit activities
The Distorted Mirror of actual approval ratings: Examining the True Threat to Democracy Beyond the Persona of Putin
40,000 child slaves in Congo are forced to work in cobalt mines so we can drive electric cars.
Historic Moment: Edgars Rinkevics, EU's First Openly Gay Head of State, Takes Office as Latvia's President
An Ominous Shift in Warfare: Western Powers Risk War Crimes and Violate International Norms with Cluster Bomb Supply to Ukraine
Bye bye democracy, human rights, freedom: French Cops Can Now Secretly Activate Phone Cameras, Microphones And GPS To Spy On Citizens
The Poor Man With Money, Mark Zuckerberg, Unveils Twitter Replica with Heavy-Handed Censorship: A New Low in Innovation?
The Double-Edged Sword of AI: AI is linked to layoffs in industry that created it
US Sanctions on China's Chip Industry Backfire, Prompting Self-Inflicted Blowback
Meta Copy Twitter with New App, Threads
The New French Revolution
BlackRock Bitcoin ETF Application Refiled, Naming Coinbase as ‘Surveillance-Sharing’ Partner
Corruption in the European Parliament - Business as usual
UK Crypto and Stablecoin Regulations Become Law as Royal Assent is Granted
Paris Suburb Grapples with Violence as Curfew Imposed: Saint-Denis Residents Express Dismay and Anger
A Delaware city wants to let businesses vote in its elections
Alef Aeronautics Achieves Historic Milestone with Flight Certification for World's First Flying Car
Google Blocked Access to Canadian News in Response to New Legislation
French Politicians Advocate for Pan-European Regulation on Social Media Influencers
×