Apple has made significant concessions!
Apple announced on Tuesday that it will allow EU users to download iPhone applications from developer websites for the first time to comply with the EU's Digital Markets Act, which will take effect immediately for Apple users in the EU region. Prior to this, users could only download iPhone applications through the App Store.
The EU's Digital Markets Act, which came into effect last week, is considered a major turning point in regulating large technology companies, forcing Apple to open up its closed ecosystem. On March 4th, the European Union imposed a huge penalty of 1.84 billion euros on Apple for suppressing music streaming competitors on its platform. Apple subsequently stated that it will appeal this decision from the European Union.
In the secondary market, since the beginning of this year, Apple's stock has fallen by nearly 10%, with a total market value evaporating over 300 billion US dollars, and the latest market value is about 2.65 trillion US dollars. And Nvidia's market value is gradually approaching that of Apple. It is worth noting that Buffett's Berkshire sold approximately 10 million shares of Apple stock in the fourth quarter of 2023.
Apple Compromises with the European Union
Apple released a policy update on March 12th, which will allow EU users to download iPhone applications from developer websites for the first time. Developers can also provide their applications in third-party "alternative application markets" without having to go through the App Store, and can directly offer promotional activities to users in any way.
This is a significant reversal for Apple. For many years, Apple has opposed sideloading (i.e. installing applications outside the official app store), citing security concerns and Apple's right to determine its user experience.
This is the latest example of the European Digital Market Act (DMA) forcing Apple to change its App Store business. DMA requires technology giants, including Apple, to open their platforms to smaller competitors. According to DMA regulations, technology giants need to open the interfaces of application programs, allowing users to decide which applications to pre install on their devices. According to DMA regulations, if a company violates regulations, the fine will be as high as 10% of the company's global annual revenue, and for repeat offenders, it can be as high as 20%. The policy change by Apple is a significant concession made in this context.
In addition, at the end of January this year, in order to comply with the European Union's Digital Markets Act, Apple also announced an adjustment to the commission imposed on developers. Previously, Apple imposed a maximum commission of 30% on developers. According to the new policy, developers only need to pay a 17% commission to Apple in app sales, and after one year, the commission ratio will decrease to 10% for most developers and subscribers. Apple will also waive commission fees for installing apps through alternative app stores.
While lowering fees, Apple has also introduced two additional fees. One is to impose a 3% payment processing fee on applications that use the Apple in app system, and the other is to impose an installation fee of 0.5 euros per app for software that has been installed more than 1 million times. This fee applies regardless of whether it is installed through the Apple Store or a third party. This also means that app applications sold outside the Apple App Store do not require payment of any other commission, only a fee of 0.5 euros.
Apple tax refers to Apple's commission behavior on paid apps for the App Store, which has a fixed income of billions of dollars annually and is jokingly referred to as the "Apple tax" in the market. Although Apple has never released data on the "Apple tax," media estimates based on Sensor Tower data that the "Apple tax" revenue is expected to be between $11.7 billion and $23.4 billion in 2023, approximately 3% to 6.1% of Apple's total revenue during the same period.
On March 7th local time, the European Union's Digital Markets Act officially came into effect. As one of the anti-monopoly measures issued by the European Union against technology giants, the Digital Markets Act clarifies the responsibilities of digital service providers, curbs malicious competition on large online platforms, and ensures that consumers have more choices. The bill requires that applications under technology giants can "interoperate" with competitors, which means that these companies need to open application interfaces, interact with other applications, and share data, allowing users to decide which applications to pre install on their devices. In order to meet the requirements of the bill, six companies confirmed as "gatekeepers" by the bill, including Apple, Google, Amazon, Microsoft, etc., have announced compliance plans in the past few months.
Currently, Apple is the company most affected by the Digital Markets Act. Under the pressure of the Act, Apple has been forced to open up its closed ecosystem, such as allowing software developers to distribute applications to users in the EU region without having to go through Apple's own App Store.
Has the 'darkest moment' yet arrived?
Since February, Apple's stock price has been hit by multiple pieces of news.
On February 14th local time in the United States, data released after market hours showed that Buffett's Berkshire sold 10 million shares of Apple shares in the last three months of 2023, accounting for approximately 1% of the company's Apple stake, reducing its stake in Apple to 5.9%. However, Apple remains the largest holdings, accounting for 50.19% of disclosed assets.
On February 28th, Beijing time, another big news came out: Apple has cancelled a multi billion dollar electric vehicle project, some employees have been diverted or laid off, and some employees have been transferred to the artificial intelligence department.
On March 2nd local time in the United States, Goldman Sachs removed Apple from its best buy list due to poor stock performance and market concerns about weak demand for its main products. Prior to being removed, Apple had stayed on this list for over 270 days.
On March 4th local time in Europe, the European Union imposed a fine of 1.84 billion euros on Apple for blocking the streaming music platform Spotify and other music streaming services from providing users with payment options outside of the Apple App Store. Apple stated that it will appeal this ruling. Apple claims that the European Commission has not found credible evidence of consumer rights infringement.
On March 5th, Beijing time, market research firm Counterpoint Research showed that in the first six weeks of this year, Apple's iPhone sales in China decreased by 24% year-on-year, ranking fourth among Chinese smartphone suppliers. The market share decreased from 19% in 2023 to 15.7%. On the contrary, Huawei's sales surged by 64% in the first six weeks, with a market share rising from 9.4% to 16.5%, surpassing Apple. According to investment bank Jeffrey's prediction, Apple's shipment volume will continue to experience a double-digit decline in 2024.
Although Apple has experienced a decline of over 10% this year, some analysts have warned that the "darkest moment" for Apple may not have arrived yet. Recently, Mizuho wrote in a report that if Apple's largest non ETF shareholder, Buffett's Berkshire, further reduces its stake, Apple's stock price may be "slaughtered".
转播
