Why would anyone care what you think? They have the right to work with all people in EU, including those who happen to own iPhones. Did you know that 100% is better than 80%?
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Apple Makes Further Adjustments to Dating App Rules to Satisfy Dutch Regulatory Requirements
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Your logic makes little sense. If Apple left EU, people in EU would simply switch to Android. The app developers would have the same market and it would be event easier for them to operate since they would not need to develop for two OSes. The only loser in this scenario is Apple.
So Spotify is only available in the EU? That's news to me. Probably news to them as well.
Apple won’t leave the EU market, but if the EU passes new regulations that alter the core of how Apple does business such that they legally can no longer operate in the EU, then they have no recourse, they’d have been forced out. They can’t ignore the laws, they’d have to just stop doing business. It would be a significant hit to Apple’s financials and their stock price, but, as a company, they’d survive.
But, the EU IS the first place to attempt to alter, significantly, the business model that allowed Apple to set up business and operate in the EU in the first place. That 30% hit in revenue will hurt Apple a LOT, but they’ve got a healthy enough business elsewhere to keep operating and making products and services for folks living outside the EU.
It is not the job of the EU regulators to consider the adverse affects to the companies that are impacted by their decisions. If a decision leads to a company no longer being able to be profitable, then that company will have to go out of business OR leave the EU.
This change is hardly going to make the EU unprofitable for them. They're going to go from making astronomical profits to just-slightly-less-astronomical profits.
30% of App Store revenue will be somewhat compromised (they won't lose all developers from their appstore), but hardware sales should stay about the same - maybe even rise. And that is still where they make the bulk of their money. I don't think they will leave the market over this, but if it spills over and impacts hardware sales, there may be a problem. Especially if regulations start dictating hardware design that breaks their market-superior vertical integration. Apple could loose 100% of their services revenue and still be on a growth trajectory (just a slower one). Investors may not be happy and consumers may not like the overall ecosystem which could affect long-term sales, but it's survivable. The concern I have is the tendency to ratchet up of regulations to offset negative economic trends which creates downward spirals rather than positive outcomes.
If promoting competition was the main goal, something more like what India is doing where they’re creating a phone platform would promote competition. EU hardware companies interested in the venture would be tasked with design and assembly, developers in the EU would benefit from not paying any commission on sales within the EU, there are lots of ways where the end result could turn out something so surprisingly good that Google and Apple would have to change their products to compete.
Promoting competition ISN’T the goal though, it’s more about removing all competition and leaving Google and Apple as the defacto technologies for EU citizens.
I've long thought the more appropriate regulation would be to disallow the business model that allows android to thrive. That would result in more choices for consumers and developers. Make every smartphone company vertically integrated with it's own OS and ecosystem.
EU is engaged in protectionism because at the very lowest levels they have doubled-down on doing all the things that make their companies globally non-competitive. The irony is that while they believe they are giving their tech companies an equal footing, what they are really doing is removing the last barriers to being overrun by American, Asian, and even Eastern European companies that don't have the constraints on their structural, capital, and human resources that EU companies do.
It’s becoming clear that there is a different regulatory climate in every country and Tim Cook is the best person to navigate these uncharted waters.
Apple needs to stand their ground as much as possible within the law to make sure a different experience of apple is to be had based on the geography.
It doesn’t EVER have to become unprofitable, it could just be “not profitable enough”. If a dollar spent in the US would return 4 dollars on that investment, a dollar spent in Japan would return 3 dollars and a dollar spent in the EU would return .30, then shareholders would demand that Apple does business in regions that drive more profit.
What region is Apple not already doing business in that’s going to outperform the EU? And why would they have to pull out of Europe in order to do business elsewhere? They’re still making plenty on hardware, and apps are a digital good. They can sell them everywhere because they’re essentially infinite. What you’re saying makes absolutely no sense.
But, that slower growth would be a concern. I would imagine there would be a strong push within the company to focus on the regions that provide stronger growth.
Where did you see any reference to Spotify in my post? What does Spotify have to do with Apple violating the court ruling in Netherlands?
SO, this is an interesting idea… for the myriad of phone providers to be required to provide their own OS and ecosystems. That would actually increase the amount of real choice more than what they’re currently thinking of doing. It would also mean that entering the EU market would require more than just creating some hardware and tossing a cookie-cutter OS on top of it. There would be a decent potential for something better than Apple or Google to come out of it as each one would be developing the OS they thing would give them the edge. I like it!
I always get a huge amount of pushback on this idea but I can't see anything wrong with it from a consumer persecptive.
It is possible that complying with EU regulation could cut into revenue and profits in all markets. Not just the EU. There are a lot of products not sold in California because complying with California regulations would make their products less or unprofitable elsewhere because it’s too costly to provide products or service for one particular market that are significantly different from the others. Car manufacturers have had to deal with this for ages which is why all cars sold in the US either meet California standards no matter what state they are sold in or are not sold in California at all depending on what impact they believe meeting those standard will have on overall profitability of the model.
The EU may be a big market but it may not be larger in revenue than smaller markets where Apple has a greater installed base with more active consumers and preserving that EU revenue may not be in Apple’s financial interest if it means being less profitable in all their other markets.
I’m not saying Apple will do this, but it is not without precedent and there are many layers of logical rationalization that may make it justifiable business-wise than just looking at the top numbers.
It would make the EU the one place in the world where actually putting in the work to create a non-Google OS would be beneficial to set oneself apart from the crowd. The EU would be a science lab of OS innovation, where any device available would been created with it’s OS tightly coupled with it’s feature set.