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Epic Games and Spotify Say Apple's Latest DMA Changes Are 'Illegal' and 'Deliberately Confusing'

AppliedMicro said:
Accidentally misspoke or was misheard.
That’s not a criminal offence.
Click to expand...
It actually is illegal to do that on an investor call in the US and not correct it as soon as it is discovered. It’s not often prosecuted, but it would open them up to Shareholder lawsuits at the very least.

So I’m going to assume it is correct that the EU makes up 7% of App Store revenue, especially since Gruber reported on it and Apple didn’t correct the record.

So again, why do Europeans make a larger percentage of iPhone revenue than App Store revenue?
 
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surferfb said:
I’m going to assume it is correct that the EU makes up 7% of App Store revenue, especially since Gruber reported on it and Apple didn’t correct the record.
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Gruber is an internet blogger. And you missed (or didn’t?) that he corrected himself once already about what was transcribed.

Apple’s 2023 revenue was $383 billion.
Their “Europe“ region accounted for 94 and Japan for 24.

Even including India, the Middle East and Africa, and excluding the U.K., the EU doesn’t account for less than 30% of the “Europe“ region. Not given the population, purchasing power and iOS market share.
 
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surferfb said:
So your accusation is Apple misspoke/lied on an investor call, and hasn’t corrected it, opening themselves up to criminal liability in the US for defrauding investors?

It’s certainly a take.
Click to expand...

What happened is Six Colours made an error in transcribing Apple's CFO who said the EU accounts for 7% of Apple's global App Store revenue, Gruber took it and ran with it reporting EU was 7% of total revenue.


Six Colors have corrected this on their site

1723501396403.png


surferfb said:
Again. Why do Europeans buy fewer apps than their North American counterparts?
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I don't know that they do.

The iPhone is a much bigger source of revenue than the App Store.

I don't know the exact numbers but I think Europe normally accounts for about 25% of Apple revenue, with iPhone and roughly half of Apples revenue i would imagine EU member states probably account for 10-12% or somewhere like that (of iPhone revenue that is).
 
Mrkevinfinnerty said:
What happened is Six Colours made an error in transcribing Apple's CFO who said the EU accounts for 7% of Apple's global App Store revenue, Gruber took it and ran with it reporting EU was 7% of total revenue.


Six Colors have corrected this on their site

View attachment 2405399

I don't know that they do.

The iPhone is a much bigger source of revenue than the App Store.

I don't know the exact numbers but I think Europe normally accounts for about 25% of Apple revenue, with iPhone and roughly half of Apples revenue i would imagine EU member states probably account for 10-12% or somewhere like that (of iPhone revenue that is).
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I am aware what happened. I was following in real time. I just don’t think the error changes anything. Gruber makes the point in his follow up

It’s unclear whether Maestri was saying that the EU accounts for 7 percent of Apple’s worldwide App Store revenue, or 7 percent of all revenue, but I suspect it doesn’t matter, and that both are around 7 percent. App Store revenue ought to be a good proxy for overall revenue — there’s no reason to think EU Apple users spend any less or any more in the App Store than users around the world.
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It’s certainly possible that EU citizens account for significantly more (or even less) than 7 percent of Apple’s overall global revenue, but it strikes me as very unlikely that the EU’s share of Apple’s overall revenue is significantly different from its share of App Store revenue. I struggle to come up with any explanation for why the EU might account for only 7 percent of App Store revenue but significantly more (or less) of Apple’s overall revenue. Why would overall revenue from any region differ significantly from the App Store revenue from the same region, on a percentage basis?
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“Maestri once again reiterated that the App Store is responsible for seven percent of the total revenue that Apple earns in the European Union.”

https://www.macrumors.com/2024/08/01/apple-q3-2024-earnings-takeaways/

I agree with his assumption that percentage of App Store revenue will not differ greatly from percentage of overall sales revenue (though I do suspect that European users spend slightly less on Services revenue per phone sold than some other regions). But as Gruber put it himself: „I struggle to come up with any explanation for why the EU might account for only 7 percent of App Store“.

He struggles cause he heard/read something and has a hard time coming up with reasonable explanations - instead of questioning the veracity/accurateness of the original statement.
 
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surferfb said:
I understand my source without your correction - I know the difference in total bookings and direct bookings - I have significant experience in hotel business operations. If hotels are having to pay significantly more commissions to booking.com and Travelocity and the like, that’s significantly impacting their revenue.
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You didn't explain it very well if you did understand it correctly.

Where's your link that suggests Google Hotels was a charitable venture that was making life profitable for hotels? The same Google that accepts payments from the big hotel booking companies to effectively bury a hotel's own website miles down in the search results??
 
ric22 said:
Oh yeah, they suck too. 10% to Google or 15% to Booking.com etc, and it's still not great. The biggest reason Google could undercut Booking.com is because they didn't have to pay themselves a huge fee to top the search results....
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3-4 BILLLON per year from Booking.com to Google, apparently 👀
 
surferfb said:
I am aware what happened. I was following in real time. I just don’t think the error changes anything. Gruber makes the point in his follow up
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Yeah Gruber is saying that App Store revenue and total revenue are the same for the EU. That sounds like nonsense.

A quarter of Apple's revenue comes from Europe (see below from Bloomberg) does Gruber think that only 7% of that is from EU member states?

fe1a61d8526efa998f7148764c369817
 
AppliedMicro said:
“Maestri once again reiterated that the App Store is responsible for seven percent of the total revenue that Apple earns in the European Union.”

https://www.macrumors.com/2024/08/01/apple-q3-2024-earnings-takeaways/

I agree with his assumption that percentage of App Store revenue will not differ greatly from percentage of overall sales revenue. But as Gruber put it himself: „I struggle to come up with any explanation for why the EU might account for only 7 percent of App Store“.

He struggles cause he heard/read something and has a hard time coming up with reasonable explanations - instead of questioning the veracity/accurateness of the original statement.
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The direct quote from the transcript is “Just to keep it in context, the changes apply to the EU market, which represents roughly 7% of our global App Store revenue.”

And you’re either losing something in translation or willfully misquoting what Gruber wrote for those who won’t click through the link. The full quote from Gruber you cite is:

I struggle to come up with any explanation for why the EU might account for only 7 percent of App Store revenue but significantly more (or less) of Apple’s overall revenue.

That doesn’t mean Gruber struggled to understand why the EU makes up only 7% of App Store revenue. It means he struggles to understand why the percentage of global iPhone revenue that comes from the EU would be significantly different than the percentage of global App Store revenue that comes from the EU.
 
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Mrkevinfinnerty said:
Yeah Gruber is saying that App Store revenue and total revenue are the same for the EU. That sounds like nonsense.
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No, he is saying the percentage of global App Store revenue that comes from the EU seems like it would be equivalent to the percentage of global iPhone revenue that comes from the EU. And I haven’t heard anything that makes me think that wouldn’t be the case.

Again, “Europe” for Apple includes the UK, Russia, Turkey, Switzerland, Norway, Ukraine, and the entire Middle East. So even if I am wrong, I don’t think it’s anywhere close to 22% of Apple’s global revenue, which is what the original comment I was correcting.
 
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surferfb said:
It means he struggles to understand why the percentage of iPhone revenue would be significantly different than the percentage of App Store revenue.
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Because it (most likely) isn’t.

surferfb said:
Again, “Europe” for Apple includes the UK, Russia, Turkey, Switzerland, Norway, Ukraine, and the entire Middle East. So even if I am wrong, I don’t think it’s anywhere close to 22% of Apple’s global revenue, which is what the original comment I was correcting.
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That still doesn’t make the EU less than 30% of the ”Europe” region (in overall revenue).
The numbers just don’t add up with any other market share or income metrics.
It would be very misleading to call it something else than EMEA or something.
 
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surferfb said:
No, he is saying the percentage of global App Store revenue that comes from the EU seems like it would be equivalent to the percentage of global iPhone revenue that comes from the EU. And I haven’t heard anything that makes me think that wouldn’t be the case.

Again, “Europe” for Apple includes the UK, Russia, Turkey, Switzerland, Norway, Ukraine, and the entire Middle East. So even if I am wrong, I don’t think it’s anywhere close to 22% of Apple’s global revenue, which is what the original comment I was correcting.
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We will never know 100% because Apple doesn't break the numbers down enough on the reporting. What we do know is that Europe is 25% of Apple's total revenue.

If Gruber wants to believe that the vast majority of that is coming from the countries below, that is up to him but it sounds very unlikely to me.


Non EU member states
  • Norway
  • Switzerland
  • Iceland
  • Liechtenstein
  • United Kingdom (left the EU in 2020)
  • Albania
  • Bosnia and Herzegovina
  • North Macedonia
  • Montenegro
  • Serbia
  • Kosovo
  • Ukraine (as of 2024, it's an EU candidate country, but not a member)
  • Moldova (also an EU candidate country)
  • Turkey (candidate country, negotiations have stalled)
  • Andorra
  • Monaco
  • San Marino
  • Vatican City
  • Georgia (an EU candidate country)
  • Russia
 
“our results for the Services business and for the App Store have been pretty good until now.

Again to just provide you a frame of reference, the percentage of revenue that we generate from the European Union on the App Store is about 7% of the total.”

https://finchat.io/company/NasdaqGS-AAPL/investor-relations/

👉 European Union App Store revenue accounting for 7% of global services revenue - that’s reasonable and believable.
 
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Mrkevinfinnerty said:
We will never know 100% because Apple doesn't break the numbers down enough on the reporting. What we do know is that Europe is 25% of Apple's total revenue.

If Gruber wants to believe that the vast majority of that is coming from the countries below, that is up to him but it sounds very unlikely to me.


Non EU member states
  • Norway
  • Switzerland
  • Iceland
  • Liechtenstein
  • United Kingdom (left the EU in 2020)
  • Albania
  • Bosnia and Herzegovina
  • North Macedonia
  • Montenegro
  • Serbia
  • Kosovo
  • Ukraine (as of 2024, it's an EU candidate country, but not a member)
  • Moldova (also an EU candidate country)
  • Turkey (candidate country, negotiations have stalled)
  • Andorra
  • Monaco
  • San Marino
  • Vatican City
  • Georgia (an EU candidate country)
  • Russia
Click to expand...
You’re forgetting THE ENTIRE MIDDLE EAST.

And Gruber is quoting Apple’s CFO, who said this on an investor guidance call. So again. Is Apple’s CFO lying that the EU makes up 7% of Apple’s global App Store revenue? If he’s not, what is a plausible explanation for the EU’s percentage of Apple’s global App Store revenue being significantly different from the EU’s percentage of global iPhone revenue.
 
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surferfb said:
You’re forgetting THE ENTIRE MIDDLE EAST.

And Gruber is quoting Apple’s CFO, who said this on an investor guidance call. So again. Is Apple’s CFO lying that the EU makes up 7% of Apple’s global App Store revenue? If he’s not, what is a plausible explanation for the EU’s percentage of Apple’s global App Store revenue being significantly different from the EU’s percentage of global iPhone revenue.
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Isn't Europe.
 
AppliedMicro said:
Because it (most likely) isn’t.
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Exactly. Which would directly refute your point.

Mrkevinfinnerty said:
We will never know 100% because Apple doesn't break the numbers down enough on the reporting. What we do know is that Europe is 25% of Apple's total revenue.

If Gruber wants to believe that the vast majority of that is coming from the countries below, that is up to him but it sounds very unlikely to me.


Non EU member states
  • Norway
  • Switzerland
  • Iceland
  • Liechtenstein
  • United Kingdom (left the EU in 2020)
  • Albania
  • Bosnia and Herzegovina
  • North Macedonia
  • Montenegro
  • Serbia
  • Kosovo
  • Ukraine (as of 2024, it's an EU candidate country, but not a member)
  • Moldova (also an EU candidate country)
  • Turkey (candidate country, negotiations have stalled)
  • Andorra
  • Monaco
  • San Marino
  • Vatican City
  • Georgia (an EU candidate country)
  • Russia
Click to expand...
You left off the Middle East, Africa and India. Which are also included in Apple's European numbers.

AppliedMicro said:
That still doesn’t make the EU less than 30% of the ”Europe” region (in overall revenue).
The numbers just don’t add up with any other market share or income metrics.
It would be very misleading to call it something else than EMEA or something.
Click to expand...
What "numbers" are you referring to? Certainly adds up population-wise.
 
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surferfb said:
Is Apple’s CFO lying that the EU makes up 7% of Apple’s global App Store revenue?
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Again (slightly expanded)

Question:
Luca the Services growth momentum seems very strong. Are you seeing any impact from changes made to comply with the DMA rules?

Luca Maestri:
Well, as you know we have introduced some changes to the way we run the App Store in Europe already in March[…] It is obviously early stage, but in general, our results for the Services business and for the App Store have been pretty good until now.

Again to just provide you a frame of reference, the percentage of revenue that we generate from the European Union on the App Store is about 7% of the total.

👉 European Union App Store revenue accounting for 7% of all (global) services revenue - that’s reasonable and believable.

And no, “of the total” doesn’t refer to App Store only revenue. That doesn’t make sense when you’re asked about “services“ growth (and since they don’t disclose App Store revenue as a part of services revenue). Neither would it make much sense grammatically (if it referred to App Store revenue only, it’s totally unnecessary and only adds confusion).
 
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BaldiMac said:
Exactly. Which would directly refute your point.


You left off the Middle East, Africa and India. Which are also included in Apple's European numbers.


What "numbers" are you referring to? Certainly adds up population-wise.
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Well known for their insatiable demand for expensive smartphones.
 
Nuno Lopes said:
It’s impossible to have a rational discussion when the other side resorts to alternative orthographies for well known business concepts.
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Maybe you heard about epic vs apple where epic tried to define a market as one way but the market was ultimately decided to be another way. The definition of a market is malleable.
Nuno Lopes said:
I’m sure the rest of the post would follow a similar intellectual approach so I did not bother.

All these tactics for storyline building are irrelevant to regulators. In fact, may make some more weary.

One can fool some people some time but not all, all the time.

This is where I leave this wagon.

Cheers.
Click to expand...
Cheers.
 
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Mrkevinfinnerty said:
Well known for their insatiable demand for expensive smartphones.
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You think India doesn't have large demand for expensive smartphones? The Middle East doesn't? Ok - I mean, that's certainly a take.

AppliedMicro said:
Again (slightly expanded)

Question:
Luca the Services growth momentum seems very strong. Are you seeing any impact from changes made to comply with the DMA rules?

Luca Maestri:
Well, as you know we have introduced some changes to the way we run the App Store in Europe already in March[…] It is obviously early stage, but in general, our results for the Services business and for the App Store have been pretty good until now.

Again to just provide you a frame of reference, the percentage of revenue that we generate from the European Union on the App Store is about 7% of the total.

👉 European Union App Store revenue accounting for 7% of all (global) services revenue - that’s reasonable and believable.

And no, “of the total” doesn’t refer to App Store only revenue. That doesn’t make sense when you’re asked about “services“ growth (and since they don’t disclose App Store revenue as a part of services revenue). Neither would it make much sense grammatically (if it referred to App Store revenue only, it’s totally unnecessary and only adds confusion).
Click to expand...
I think something is getting lost in translation, because you keep saying things that I agree with and then saying that proves I am wrong.

While I disagree with your statement that EU App Store revenue accounts for Services Revenue (as a native (American) English speaker (assuming you're not one, although that is just an assumption) - I interpret his statement is 7% of the total of App Store revenue, but agree it is slightly ambiguous (Maestri isn't a native speaker either, FWIW) so I'll say you're right and that it is 7% of global services revenue, not App Store revenue.

What possible reason is there that the percentage of global services revenue that EU App Store Revenue represents (again, we agree 7%) would be significantly lower than the percentage of global iPhone revenue that EU iPhone Revenue represents? Last time I asked this question, you said "it most likely isn't."

Seriously EU, it's ok that you're not as big as you thought you were - happens to lots of guys. It isn't the size of the market that matters, but how you use it. 🤣
 
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