Apple's Contracts With European iPhone Carriers Examined for Potential Antitrust Issues

[Rocco83]

why do posts like this always bring out pro capitalism and Pro American comments. your economy is garbage and it will remain that way because of this. capitalism encourages garbage products with short life cycles and minimum warranty and an uneven distribution of wealth. in my opinion anyone who defends a large corporation is furthering your economic downfall

I'm sorry, your post made me see the light. I didn't realize until now that Apple was putting out garbage products. Guess I'll stop buying from them and start buying better foreign products?

Woe be us Americans to be proud of our country and goods. Patriotism is completely overrated...

 

[Stella]

since when has Apple ever compromised or revised? they know they are popular enough to set whatever rules they want.

Hmm... plenty of times, Apple are not above the law

How about the recent AppleCare saga, for one.

Or how about when Apple did a U-turn insisting all applications in the iOS AppStore were written purely in ObjectiveC, due to push back from developers?

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Any company has to be careful not to abuse their market position when going about their business... and this is what got microsoft - it wasn't due to their 90%+ marketshare alone - it was due to their business practices. One such example: for every PC a store sold, the store had to buy a copy of windows, even if that PC didn't ship with windows...

 

[0098386]

In UK, there are 565 retail units and 32 supercenters.

Are you counting Asda stores as Walmart stores? It may be their name up there, but nothing has changed since they took over.

 

[Vip]

Walmart would never survive in Europe.

Duh! They own Asda in the UK

 

[BC2009]

They will probably investigate and they will probably fine them. The EU is all about fining corporations to help fund the governments.

Somehow I don't see how carriers can argue that a product with less than 20% market share in Europe can demand unreasonable terms from the carriers. This seems like the carriers wanting additional negotiating leverage so they can be anti-competitive. If the carriers are giving in to stricter terms it is because they are making money.

 

[Vip]

Its always good for every large corporation to get a good kick-in every now and then to keep it in check. IBM, Microsoft and now Apple. As you get bigger your fists grow and you keep punching because you can, until you come across a group of people that know how to kick the **** out of you.

History repeating itself.

Apple does need to learn "Think Globally, Act Locally"...

 

[Stella]

They will probably investigate and they will probably fine them. The EU is all about fining corporations to help fund the governments.

What a load of utter crap.

 

[Tanax]

I'm always amazed how much the Americans have to say about EU and EU's regulations. EU and US are run differently. Both ways have advantages and disadvantages. Since I've grown up accustomed to the EU way, I always find it a better way. US is a mess, IMO. But like I said, they are run differently.

Apple(and all other companies) are forced to play by the rules of the region they want to sell their products in. I don't think it's unfair or weird at all. Then if Apple decides it's not worth the hassle to be able to sell products in EU then that's our loss.. but I still think all rules and laws of whatever region they're selling in should apply to every company.

 

[macfacts]

since when has Apple ever compromised or revised? they know they are popular enough to set whatever rules they want.

Take a look at the ipod sales in the beginning when they only worked on Macs. They were terrible. Once they worked on Windows PCs, sales were in the millions.

That sounds like compromise to me.

 

[Kebabselector]

Noooooooo one expects the Spanish Inquisition!

Bring me ... the comfy chair!

Everybody expected the Spanish Inquisition - they were legally obliged to give 30 days notice.

 

[nepalisherpa]

Thats ASDA and it runs itself like it always has, it is nothing like walmart in the USA.

Per Walmart's website, that number is not counting ASDA but you are from there so you may know better than me.

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Are you counting Asda stores as Walmart stores? It may be their name up there, but nothing has changed since they took over.

Per this website: http://corporate.walmart.com/our-story/locations/united-kingdom (scroll down towards the bottom) It has separate numbers for total and ASDA.

 

[Stella]

being forced by the govt is very different then dealing with retailers.

Correct, but the statement made was very ambiguous:

since when has Apple ever compromised or revised? they know they are popular enough to set whatever rules they want.

And yes, they've been forced to change their rules many times, be it retailers, 3rd party developers etc.

If the statement was being aimed at Retailers - Apple have to be careful about their business practices... like I mentioned above. Apple cannot do anything they want.

 

[samcraig]

Take a look at the ipod sales in the beginning when they only worked on Macs. They were terrible. Once they worked on Windows PCs, sales were in the millions.

That sounds like compromise to me.

I think you're mistaking compromise with good business decision. It wasn't a compromise.

 

[paul4339]

The reason why Apple has quota is:

1) to ensure that seller of their products do not pull a bait and switch.
That is, for example, if Hauwei pays higher incentives, a seller can say, carry the iPhone, then convince the customer to buy another product.
Basically, they use Apple's popularity and ad budget to attract customer, without being serious about selling their product. By implementing a quota, it forces the re-seller to put their products front and center, not hide the product at the back of store. (I believe Coke and Pepsi does this alot)


2) To regulate prices. Apple wants to keep the prices mostly constant (they don't want their products to go 'on sale').

So they sell the product only at a slight discount to the re-seller. (So for example, a retail $699 iPhone may be sold at a discount of $650, hardly any profit). This maximizes Apple profits and the re-seller gets hardly any profits until they reach a specific quota; or in the case of carriers, you get to carry the phone (to attract customers) only if you buy a large amount.

The carrier cannot have inventory sitting around, so they must sell at near cost or slight loss forcing them to promote the iPhone. Similarly with the retailer, will sell at near cost/loss to reach their quota.
The result is most iPhones end up sold at almost the same price $650-$699 (in this, example).

No idea if it's any of this legal or illegal, but it's used by alot of companies.
.

 

[Gaspode67]

Everybody expected the Spanish Inquisition - they were legally obliged to give 30 days notice.

Someone's been watching QI!

 

[Tayobi]

So basically, Apple has been telling the EU carriers "We offer to sell you X numbers of iPhone 5, take it or leave it."

Any business can make similar offer to another business and the "offeree" can always reject or make a counter offer. Isn't that what free economy is all about?

The EU, except for a few of its members, has been in deep **** for years. Their governments must have issued a money grabbing order to their regulators to try to get cash from foreign businesses.

 

[iphoneclassic]

since when has Apple ever compromised or revised? they know they are popular enough to set whatever rules they want.

Google Maps on iOS 6.

 

[MatthaiosSaraj]

A strongly disagree with eu regulators. I slovenia i get feeling that it's oposite. We are bombarded with samsung promotions and back in decembar when i ask about iphone supplies they sent me promotion for samsung phablet. Not to mention the fact that there are ton of samsung glaxy tab promotions and not a single ipad. I've no idea about situation in other countries

 

[Vip]

Wait there are no Walmarts in Europe? I was going to move to France soon, where will i buy my stuffs?

Best stay at home mate! There are no stuffs in France, only stuff

 

[glap1922]

Google Maps on iOS 6.

Cool. Can you explain how do I set that as my default app, again?

 

[lkrupp]

"Apple's practice of telling carriers how many phones they must sell and threatening to penalize them shows just how powerful the iPhone has become as a bargaining chip."

"Carriers are of course not required to carry the iPhone, but customer demand for the device means that most carriers believe they have little choice and must agree to Apple's terms in order to remain competitive in the marketplace."

Kinda flies in the face of the 'facts' we are reminded of daily by the resident MacRumors trolls, doesn't it? Those 'facts' being that Apple is doomed, the iPhone is losing market share hand over fist, Samsung/Android is killing Apple, iOS is old and stale, Apple isn't cool anymore. And the list of troll 'facts' goes on and on.

 

[marksman]

Lol Europe.

Other handset makers offer rebates, discounts and create fifty different models. All designed to impact what the companies sell.

Of course in roflmao Europe this will likely end up punishing apple.

 

[marksman]

If Apple is confident about iPhones then why is it threatening to penalize carriers if they don't meet the sales quota? Rather than threatening them, make your OS and devices even better. Sales will happen automatically. I guess all those higher sales number of iPhones is partly explained by this.

Honestly, I want Apple to be hit hard so that they learn their lesson and starting working on making their OS/products even better rather than spending time on all these nonsense stuffs like monopolizing or suing or stupid ads.

Graduate from Wharton I assume

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Minimum purchase orders are fairly normal in the business world. Even carriers do this with consumers, only they call it "contracts."

Yeah I find it hard to believe even in lol Europe that they don't allow for order minimums.

Of course Europe is mad they lost the cellphone market to apple and Samsung so perhaps they are trying to create an environment where inferior European phonemakers can compete.

 

[Rocco83]

im very white and my wife is italian so i try to distance us from italian foot longs.

Sometimes the Sweet Chicken Teriyaki is $5. Rarely, but when it is oh boy is it a treat!

America can be proud of the fact that we had Steve Jobs. Sure Ivey may have come from Britain and made some stuff too, but if you look hard enough through old patents I'm sure there is one in there of Jobs patenting Ivey. Thereby making him an American product.

 

[IJ Reilly]

Any company has to be careful not to abuse their market position when going about their business... and this is what got microsoft - it wasn't due to their 90%+ marketshare alone - it was due to their business practices. One such example: for every PC a store sold, the store had to buy a copy of windows, even if that PC didn't ship with windows...

More or less. The "CPU tax" scheme was imposed on the hardware makers. They were charged for a copy of MS-DOS (it goes back that far) for every CPU they sold, whether it was loaded with a copy of a Microsoft operating system or someone else's. However this scheme was not the basis of US v. Microsoft. They had settled with the government to stop that practice long before. Although they complied with the letter of the Consent Decree prohibiting the CPU tax, they detoured around its intent. They found news ways to strong-arm their partners into doing their bidding, and those methods were partially in play in US v. Microsoft.