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I wonder if it would make more financial sense for Apple to withdraw from EU market, rather than complying. The numbers for 2021 are pretty much in line: $89B

by 988747 4y ago

I wonder if it would make more financial sense for Apple to withdraw from EU market, rather than complying. The numbers for 2021 are pretty much in line: $89B - Apple sales in Europe (including some non-EU countries, most notably UK) $85B - Apple AppStore revenue worldwide. The question is: which one has more potential for growth.

tchocky 4y ago
I don't think so. The EU market is pretty huge and financially strong. Maybe they will only allow sideloading and payment freedom for the EU with special iOS builds.
- kmlx 4y ago
  depends on the company really. some might think a bit more about offering their products to eu countries considering (some of) these rules. which imo are quite serious, and some even ridiculous.
  - WastingMyTime89 4y ago
    Which ones do you find ridiculous? They frankly diverge from the current status quo but to me they all go in the right direction.
    - kmlx 4y ago
      i foresee a fiasco in general, but a few stand out: > Share data and metrics with developers and competitors, including marketing and advertising performance data. with competitors? :)) > Allow developers to integrate their apps and digital services directly with those belonging to a gatekeeper. This includes making messaging, voice-calling, and video-calling services interoperable with third-party services upon request. could have been solved easily if they proposed a working group to come up with the next video and messaging standard. right now i foresee the discussions we had back in mid 00s: we use our own video encoder. they use h263. and those other guys use vp9. good luck to the team writing a transcoder that works real time :)) > The Digital Services Act (DSA), which requires platforms to do more to police the internet for illegal content, has also been approved. “think of the children” legislation.
      - WastingMyTime89 4y ago
        I don’t see why you are surprised by the sharing with competitors and the obligation of interoperability. That’s in line with what’s imposed on dominant player in an unbalanced market. Basically Europe is saying to gatekeepers that they can keep their platform but it will come with a lot of caveat from now on.
      - TimPC 4y ago
        Asking for data sharing without specifying exactly which data is included and exactly which data is exempt is ridiculous. The standard for laws need to be far higher. Which metrics? Which data? If the lawmakers mean all data they are going to discover very quickly a lot of that data is subject to privacy standards. You can't for example share the data you use to train a personal assistant without sharing queries people have made of that assistant.
  - hef19898 4y ago
    Considering how far backwards companies bend over to make business in China and some Arabic countries I don't expect a single company with some profitable business in the EU to leave that market.
    - kmlx 4y ago
      for sure. but a newly established company with strong revenues in a part of the world where there are no rules? difficult to answer.
      - hef19898 4y ago
        So what? Nobody is obliged to serve any market, or a markets obliges to open for individual companies. If company A won't, companies B and C propably will.
        kmlx 4y ago
        > So what? if your goal is more protectionism, then it’s great. but if you want to produce market leaders then it’s bad.
        hef19898 4y ago
        If by market leader you mean creating monopolies, or oligopolies, there are rules againstt that in place. So there seems to be some concensus of seeing those outcomes as non desireable. And those rules cover consumer protection and choice, Microsoft has some experience with that when it comes to Internet Explorer.
        kuratkull 4y ago
        Being a monopoly is not against the law. Abusing your monopoly is.
  - bzxcvbn 4y ago
    That's pretty much the point of the regulation. If you're okay with being preyed upon by billion-dollar companies, stay in the US. If you'd like to be protected as a customer, come to the EU. Besides, the DMA has specific exemptions for small companies. Once a company reaches the "gatekeeper" level, they will have had all the necessary time to figure out how to comply with the law.
    - tjmc 4y ago
      Oh please. Are any of these billion-dollar companies going to deliberately issue malware that allows them to record my passwords and empty my bank account? Side-loading will be a huge gift for scammers.
- kmeisthax 4y ago
  This would be very consistent with their prior actions. Apple's "opening move" with prior rulings and laws on in-app payment processing has been to require separate binaries locked to specific jurisdictions. The company genuinely believes that competition is consumer-hostile at best and outright dangerous at worst. The question is, how far will Apple go to keep Americans from turning on "EU mode"? Will it just be the usual country toggle? Will sideloaded apps be geofenced to the EU with Location Services? Or will they start adding bootloader fuses for each jurisdiction so that you can't install the "EU sideloading firmware" on US-purchased iPads? Or all of the above? I hope the EU is ready to litigate whatever hoops Apple makes people jump through - because Apple loves inventing new hoops.
guerrilla 4y ago
That would be a strategic mistake even if it made short-term sense (which it probably doesn't) because it would leave a big hole for to fill that could be leveraged to compete with them later in the US.
TrickyRick 4y ago
Some of that App Store revenue comes from the EU BTW. Probably a quite sizable chunk of it.
KaoruAoiShiho 4y ago
Only if you're confident it's some uniquely EU idea (which it's not, regulators all over the world are thinking about doing this).
amelius 4y ago
Then I wonder what would happen if Taiwan introduced the same legislation.
pavlov 4y ago
Remember that App Store revenue is also generated in the EU. Let's assume that 15% of App Store revenue is from the EU. That would leave an additional $12.7 billion hole in Apple's pocket. Worse, it would mean Apple's third-party developers lose about $30 billion in revenue. (Apple takes a 30% cut, so the total App Store sales volume is about $283B). Those developers would also lose all access to their existing users in those countries. It would be a massive black stain on Apple's reputation. It's the kind of drastic move that you simply can't do as a platform provider unless your hand is absolutely forced by something like international sanctions.
- IshKebab 4y ago
  And more importantly it would further erode their market share. It would be an absolutely insane move. Much more likely they'll go the route of malicious compliance. You can side load apps but you can't add them to your home screen. You can set a third party voice assistant but it can't launch apps. Etc. Will be very interesting to see how this plays out!
  - threeseed 4y ago
    > You can set a third party voice assistant but it can't launch apps Facebook and Google are going to love this. They can build a voice assistant app which will provide them with all of the apps people use the most, people they contact, places they visit, searches they do etc. It's going to be a privacy nightmare.
Hamuko 4y ago
Doesn't Apple route all of their international sales through Ireland, which is in the EU? They'd need to find another tax haven.
- Mindwipe 4y ago
  Not all of them, no. Broadly just the European ones, plus a few others where it's not worth setting up a different regional HQ.
Youden 4y ago
How could it make more financial sense to withdraw? As long as Apple keeps selling iPhones, there's still profit to be made, App Store be damned.
- adventured 4y ago
  It doesn't. The parent premise - that Apple is going to be severely harmed financially by any of this - is something far beyond silly. Apple will barely see a dent from it. Their profit juggernaut will keep rolling on almost exactly the same. The parent comment in question - "and eat pretty heavily into their revenues" - is confusing their personal projected wishful thinking (obviously desperately wanting big tech to falter) with actual reality (the one where Apple has no serious competitive threats in smartphones for what they do, and as such they'll keep marching on just the same).
  - mike_hearn 4y ago
    Apple clearly does have serious competitive threats to what they do, it doesn't even have majority market share in the EU. But it also won't threaten their revenues much. On platforms where users and developers do have a choice from day one (Android), the app store is sufficiently useful that most devs do choose to stick with it. It seems unlikely that Apple can't make the app store competitive on its own terms.
juanani 4y ago
seydor 4y ago
it will be a ~10% drop of their profits maximum . They have nothing to fear, and have been engaging in these shenanigans just because they can
layer8 4y ago
I’m pretty sure Apple would still turn a profit even by just selling the hardware in Europe.

by 988747 4y ago

tchocky 4y ago

I don't think so. The EU market is pretty huge and financially strong. Maybe they will only allow sideloading and payment freedom for the EU with special iOS builds.

kmlx 4y ago
depends on the company really. some might think a bit more about offering their products to eu countries considering (some of) these rules. which imo are quite serious, and some even ridiculous.
- WastingMyTime89 4y ago
  Which ones do you find ridiculous? They frankly diverge from the current status quo but to me they all go in the right direction.
  - kmlx 4y ago
    i foresee a fiasco in general, but a few stand out: > Share data and metrics with developers and competitors, including marketing and advertising performance data. with competitors? :)) > Allow developers to integrate their apps and digital services directly with those belonging to a gatekeeper. This includes making messaging, voice-calling, and video-calling services interoperable with third-party services upon request. could have been solved easily if they proposed a working group to come up with the next video and messaging standard. right now i foresee the discussions we had back in mid 00s: we use our own video encoder. they use h263. and those other guys use vp9. good luck to the team writing a transcoder that works real time :)) > The Digital Services Act (DSA), which requires platforms to do more to police the internet for illegal content, has also been approved. “think of the children” legislation.
    - WastingMyTime89 4y ago
      I don’t see why you are surprised by the sharing with competitors and the obligation of interoperability. That’s in line with what’s imposed on dominant player in an unbalanced market. Basically Europe is saying to gatekeepers that they can keep their platform but it will come with a lot of caveat from now on.
    - TimPC 4y ago
      Asking for data sharing without specifying exactly which data is included and exactly which data is exempt is ridiculous. The standard for laws need to be far higher. Which metrics? Which data? If the lawmakers mean all data they are going to discover very quickly a lot of that data is subject to privacy standards. You can't for example share the data you use to train a personal assistant without sharing queries people have made of that assistant.
- hef19898 4y ago
  Considering how far backwards companies bend over to make business in China and some Arabic countries I don't expect a single company with some profitable business in the EU to leave that market.
  - kmlx 4y ago
    for sure. but a newly established company with strong revenues in a part of the world where there are no rules? difficult to answer.
    - hef19898 4y ago
      So what? Nobody is obliged to serve any market, or a markets obliges to open for individual companies. If company A won't, companies B and C propably will.
      - kmlx 4y ago
        > So what? if your goal is more protectionism, then it’s great. but if you want to produce market leaders then it’s bad.
        hef19898 4y ago
        If by market leader you mean creating monopolies, or oligopolies, there are rules againstt that in place. So there seems to be some concensus of seeing those outcomes as non desireable. And those rules cover consumer protection and choice, Microsoft has some experience with that when it comes to Internet Explorer.
        kuratkull 4y ago
        Being a monopoly is not against the law. Abusing your monopoly is.
- bzxcvbn 4y ago
  That's pretty much the point of the regulation. If you're okay with being preyed upon by billion-dollar companies, stay in the US. If you'd like to be protected as a customer, come to the EU. Besides, the DMA has specific exemptions for small companies. Once a company reaches the "gatekeeper" level, they will have had all the necessary time to figure out how to comply with the law.
  - tjmc 4y ago
    Oh please. Are any of these billion-dollar companies going to deliberately issue malware that allows them to record my passwords and empty my bank account? Side-loading will be a huge gift for scammers.
kmeisthax 4y ago
This would be very consistent with their prior actions. Apple's "opening move" with prior rulings and laws on in-app payment processing has been to require separate binaries locked to specific jurisdictions. The company genuinely believes that competition is consumer-hostile at best and outright dangerous at worst. The question is, how far will Apple go to keep Americans from turning on "EU mode"? Will it just be the usual country toggle? Will sideloaded apps be geofenced to the EU with Location Services? Or will they start adding bootloader fuses for each jurisdiction so that you can't install the "EU sideloading firmware" on US-purchased iPads? Or all of the above? I hope the EU is ready to litigate whatever hoops Apple makes people jump through - because Apple loves inventing new hoops.

guerrilla 4y ago

That would be a strategic mistake even if it made short-term sense (which it probably doesn't) because it would leave a big hole for to fill that could be leveraged to compete with them later in the US.

TrickyRick 4y ago

Some of that App Store revenue comes from the EU BTW. Probably a quite sizable chunk of it.

KaoruAoiShiho 4y ago

Only if you're confident it's some uniquely EU idea (which it's not, regulators all over the world are thinking about doing this).

amelius 4y ago

Then I wonder what would happen if Taiwan introduced the same legislation.

pavlov 4y ago

Remember that App Store revenue is also generated in the EU. Let's assume that 15% of App Store revenue is from the EU. That would leave an additional $12.7 billion hole in Apple's pocket. Worse, it would mean Apple's third-party developers lose about $30 billion in revenue. (Apple takes a 30% cut, so the total App Store sales volume is about $283B). Those developers would also lose all access to their existing users in those countries. It would be a massive black stain on Apple's reputation. It's the kind of drastic move that you simply can't do as a platform provider unless your hand is absolutely forced by something like international sanctions.

IshKebab 4y ago
And more importantly it would further erode their market share. It would be an absolutely insane move. Much more likely they'll go the route of malicious compliance. You can side load apps but you can't add them to your home screen. You can set a third party voice assistant but it can't launch apps. Etc. Will be very interesting to see how this plays out!
- threeseed 4y ago
  > You can set a third party voice assistant but it can't launch apps Facebook and Google are going to love this. They can build a voice assistant app which will provide them with all of the apps people use the most, people they contact, places they visit, searches they do etc. It's going to be a privacy nightmare.

Hamuko 4y ago

Doesn't Apple route all of their international sales through Ireland, which is in the EU? They'd need to find another tax haven.

Mindwipe 4y ago
Not all of them, no. Broadly just the European ones, plus a few others where it's not worth setting up a different regional HQ.

Youden 4y ago

How could it make more financial sense to withdraw? As long as Apple keeps selling iPhones, there's still profit to be made, App Store be damned.

adventured 4y ago
It doesn't. The parent premise - that Apple is going to be severely harmed financially by any of this - is something far beyond silly. Apple will barely see a dent from it. Their profit juggernaut will keep rolling on almost exactly the same. The parent comment in question - "and eat pretty heavily into their revenues" - is confusing their personal projected wishful thinking (obviously desperately wanting big tech to falter) with actual reality (the one where Apple has no serious competitive threats in smartphones for what they do, and as such they'll keep marching on just the same).
- mike_hearn 4y ago
  Apple clearly does have serious competitive threats to what they do, it doesn't even have majority market share in the EU. But it also won't threaten their revenues much. On platforms where users and developers do have a choice from day one (Android), the app store is sufficiently useful that most devs do choose to stick with it. It seems unlikely that Apple can't make the app store competitive on its own terms.

juanani 4y ago

seydor 4y ago

it will be a ~10% drop of their profits maximum . They have nothing to fear, and have been engaging in these shenanigans just because they can

layer8 4y ago

I’m pretty sure Apple would still turn a profit even by just selling the hardware in Europe.