Apple CEO Tim Cook takes a selfie with a participant during a special event on September 10, 2019 at the Steve Jobs Theater on Apple’s campus in Cupertino, California.
Justin Sullivan Getty Images
Apple will host the first product launch event of the year on Tuesday.
On board: The new iPads Pro are expected to be the main new hardware products unveiled by Apple. While Apple’s iPad showed unusual growth in the middle of the decade, it has experienced a boom in the past year as consumers turned to tablets while working and playing from home during a pandemic.
But in addition to the new gadgets, Apple is facing a decade of increased competition and courtroom battles in many areas, such as Facebook, Epic Games, Spotify, and legislators and regulators around the world. You may think it’s just another iPad event, but beneath the surface is a lot of tension that could most threaten Apple’s next wave of growth as it expands into more digital services and new forms of computer technology.
Here’s a brief look at where things stand ahead of Tuesday’s Apple event:
Apple v. Facebook
Facebook has waged a nationwide PR war against Apple over the impending change to iPhone software that will allow users to prevent apps from tracking targeted ads. Facebook said the move would hurt small businesses that rely on advertising to provide free digital services and software. Apple said the change will give iPhone owners a better understanding of how apps track them, and give customers the ability to block that tracking.
But the bitterness between the two companies goes much deeper than that.
Both companies are working on technology that they believe will start the next computer wave after the computer, thanks to computer glasses that use augmented reality. Facebook is expected to release the first pair of AR glasses as early as this year. Apple could unveil its first headset in 2022. If the platform takes off, Facebook and Apple will drop out to dominate AR, much like Apple battled Microsoft in the PC age and Google and Samsung (Android) in the current smartphone . age.
This fight is far from over. In fact, it is just beginning.
Apple vs. Epic Games and other major application developers
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On May 3, Apple and Epic Games, maker of the popular Fortnite game, set out to test a dispute over how Apple manages payments from iOS apps. Last fall, Epic Games deliberately changed the version of Fortnite for iOS to allow users to pay Epic directly, bypassing Apple’s App Store rules. Apple eventually removed Fortnite from the App Store, and Epic had a lawsuit ready.
Epic’s complaint against Apple echoes what we’ve heard from several iOS app makers over the past decade: Apple itself generally accepts a 30 percent reduction in in-app digital transactions and paid app sales. Developers at Camp Epic argue that the so-called “Apple tax” gives Apple too much leverage, as it only allows users to download software from their own store. Apple does not allow other app stores like Google does on Android.
Major app makers such as Spotify and dating company Match Group support the Epic lawsuit. Many of these developers have also formed a group called the Coalition for Application Justice, which recently encouraged state legislators in Arizona and North Dakota to pass laws that keep Apple in control of the App Store. If Apple loses the legal battle or is forced to make concessions to Epic and other app developers, this could slow the revenue growth of Apple’s App Store. (The App Store generated about $ 64 billion in gross sales in 2020, compared to about $ 50 billion in 2019.)
Apple said it charges fees in part to maintain the security and protection of the App Store so customers can make sure of the software they download. The company recently changed its fee structure to reduce it by just 15% for apps that generate less than $ 1 million in a year.
Apple v. Lawmakers
Apple’s control of the App Store was also the focus of a congressional antitrust report last year, which found that Apple uses its control “to create and enforce competitive barriers and discriminate and exclude competitors while prioritizing its own offering.” Apple denied the report’s findings and said its fees were in line with other digital software stores.
In addition to legislation in Arizona and North Dakota, regulators in the U.S. are also investigating Apple for a formal antitrust complaint.
Apple’s vulnerability in China
Apple’s dependence on China is a vulnerability that rivals could exploit. Most Apple products, including the iPhone, are assembled in China before being shipped to customers around the world.
While Apple has a small manufacturing presence in the U.S., most happens in China. Apple’s reliance on supply chains and assembly in the country is something rivals could point out amid growing geopolitical tensions between the U.S. and China.
And it’s already happening.
Earlier this month, Peter Thiel, a billionaire, technology investor and board member of Facebook, said Apple is less likely to clash with China because of its deep ties in the country. (He similarly criticized Google’s efforts in China.)
″ Apple is probably the one that is structurally a real problem, as the entire iPhone supply chain is made from China, “Thiel said.” Apple is the one that has real synergies with China. “