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It was very surprising that Apple did not strong-arm the EU by threatening to pull out of the area. The short-term loss of revenue from leaving the EU is nothin

by ukuina 2y ago

It was very surprising that Apple did not strong-arm the EU by threatening to pull out of the area. The short-term loss of revenue from leaving the EU is nothing compared to the long-term decline this is going to cause in Apple's services/subscriptions revenue if the iPhone is commoditized.

cjk2 2y ago
There is no way Apple would consider even suggesting pulling out of the EU. The shareholders would hang the entire CXO class in a nanosecond if they even mentioned it.
da768 2y ago
If Android becomes the only platform with a worldwide reach, no one's going to bother writing apps for iOS anymore.
- rootusrootus 2y ago
  That's a reach. If you want to make money in mobile apps, you target the US first. We could cut out the entirety of the rest of the world and the US market would still be plenty big enough to drive a lot of developers.
- beardyw 2y ago
  Yes and no. iPhone only has about 25% of the world market, but developers are keen to develop for them because users are more willing to pay for apps. Reach isn't the same as value.
  - wetpaws 2y ago
    [dead]
- 4ad 2y ago
  There are plenty iOS-only apps already. Reach is worthless if you can't monetize it. iOS users simply bring in more money.
- robocat 2y ago
  > no one's going to bother writing apps for iOS anymore Bullshit. By that logic there would be no Mac specific software. There was Mac software when Macs were 1% or less of computers. 2022: 74% of computers worldwide run on Windows, according to StatCounter. This dwarfs macOS, which accounts for 15%
pavlov 2y ago
A quarter of Apple’s revenue is from Europe. (This number includes the UK and a few other smaller non-EU markets, but it’s close enough for comparison purposes.) I don’t see what would be “short-term” about pulling out of this market entirely. If they lost 25% of their revenue, they’d have to increase revenue in other markets by 33% to make up for it. Where is that going to come from?
- cydonian_monk 2y ago
  This depends on how high the operating costs are in Europe. If their profits are approaching zero in the market, pulling out of it entirely would have less of an impact. Obviously that isn't the case, but operating costs for the market also aren't zero.
  - layer8 2y ago
    Apple gets 25% of their revenue from Europe, but only 7% of their app store revenue. This means that most of their Europe revenue is from hardware and AppleCare/services. Even if they opened up the app store completely, they would lose much less than when pulling out entirely. The fact that they work so hard at complicated solutions in order to open up the app store as little as possible shows that they think it’s worth it.
    - seanmcdirmid 2y ago
      A lot of the value proposition of owning an Apple device is that it doesn’t get bogged down by rogue software like other phones. So that 25% of revenue that doesn’t involve App Store revenue can still go down if they mess up the App Store too much. But I think as long as rogue apps is something you have to opt into with full knowledge of the consequences, it should be fine.
- aetherson 2y ago
  From Europe, yes, but less is from the EU. They don't break this out in public statements so we can only guess at the numbers, but less than 25%.
deleted 2y ago
[deleted]
jillesvangurp 2y ago
They tried and lost. They can threaten all they want. The EU would let them and good riddance as far as we're concerned. But there is this pesky notion that it's a huge market and Apple earns a lot of money there. So, they really can't walk away from that. For the same reason they play by Chinese rules in China. Because it's a big market and they need to be in on that as well. And if you think the EU is picky, the Chinese are much worse. And of course there's a whole world outside the EU and China that is paying attention as well. Apple's negotiation position simply is not that strong. It has no real leverage. And Apple as a US only company would not be anywhere near it's current size and importance. Share holders would revolt. R&D investment would implode. It has to be an international company for it to justify its share price. So, it has to adjust and can't afford to exit markets. It has no choice.
- rootusrootus 2y ago
  > The EU would let them and good riddance as far as we're concerned. But there is this pesky notion that it's a huge market and Apple earns a lot of money there. So, they really can't walk away from that. Does that not seem contradictory to you? If it's a huge market they make a lot of money in, then there's by definition a lot of people who don't think "good riddance" if they leave. Apple has more leverage than you give them credit for.
  - alangibson 2y ago
    American living in Europe here. in the EU, you can't just apply economic logic to everything like you can in the US. Policymakers will absolutely piss off a huge number of people over some basic principle. Look for instance at Germany's willingness to burn it's industrial base to the ground over Ukraine.
    - geoka9 2y ago
      I would argue it's not (just) over Ukraine that Germany has finally decided to wean itself off the unrealistically cheap natural gas from Russia. In fact, the writing has been on the wall for decades; Russian leadership never made a big secret out of the fact that they considered their gas industry a geopolitical weapon. It took a big scare and popular demand to stop the wholesale selling out of the German political class to Russia.
tebbers 2y ago
I honestly doubt opening up the App Store will cause much of a hit. Maybe 5% of users will download another App Store.
- jncfhnb 2y ago
  And those users will be the whales who are benefiting from lower prices the most.
kranke155 2y ago
Yes they would leave something like 1/3 to 1/5 of the global revenue, sure that sounds brilliant.

by ukuina 2y ago

cjk2 2y ago

There is no way Apple would consider even suggesting pulling out of the EU. The shareholders would hang the entire CXO class in a nanosecond if they even mentioned it.

da768 2y ago

If Android becomes the only platform with a worldwide reach, no one's going to bother writing apps for iOS anymore.

rootusrootus 2y ago
That's a reach. If you want to make money in mobile apps, you target the US first. We could cut out the entirety of the rest of the world and the US market would still be plenty big enough to drive a lot of developers.
beardyw 2y ago
Yes and no. iPhone only has about 25% of the world market, but developers are keen to develop for them because users are more willing to pay for apps. Reach isn't the same as value.
- wetpaws 2y ago
  [dead]
4ad 2y ago
There are plenty iOS-only apps already. Reach is worthless if you can't monetize it. iOS users simply bring in more money.
robocat 2y ago
> no one's going to bother writing apps for iOS anymore Bullshit. By that logic there would be no Mac specific software. There was Mac software when Macs were 1% or less of computers. 2022: 74% of computers worldwide run on Windows, according to StatCounter. This dwarfs macOS, which accounts for 15%

pavlov 2y ago

A quarter of Apple’s revenue is from Europe. (This number includes the UK and a few other smaller non-EU markets, but it’s close enough for comparison purposes.) I don’t see what would be “short-term” about pulling out of this market entirely. If they lost 25% of their revenue, they’d have to increase revenue in other markets by 33% to make up for it. Where is that going to come from?

cydonian_monk 2y ago
This depends on how high the operating costs are in Europe. If their profits are approaching zero in the market, pulling out of it entirely would have less of an impact. Obviously that isn't the case, but operating costs for the market also aren't zero.
- layer8 2y ago
  Apple gets 25% of their revenue from Europe, but only 7% of their app store revenue. This means that most of their Europe revenue is from hardware and AppleCare/services. Even if they opened up the app store completely, they would lose much less than when pulling out entirely. The fact that they work so hard at complicated solutions in order to open up the app store as little as possible shows that they think it’s worth it.
  - seanmcdirmid 2y ago
    A lot of the value proposition of owning an Apple device is that it doesn’t get bogged down by rogue software like other phones. So that 25% of revenue that doesn’t involve App Store revenue can still go down if they mess up the App Store too much. But I think as long as rogue apps is something you have to opt into with full knowledge of the consequences, it should be fine.
aetherson 2y ago
From Europe, yes, but less is from the EU. They don't break this out in public statements so we can only guess at the numbers, but less than 25%.

deleted 2y ago

[deleted]

jillesvangurp 2y ago

They tried and lost. They can threaten all they want. The EU would let them and good riddance as far as we're concerned. But there is this pesky notion that it's a huge market and Apple earns a lot of money there. So, they really can't walk away from that. For the same reason they play by Chinese rules in China. Because it's a big market and they need to be in on that as well. And if you think the EU is picky, the Chinese are much worse. And of course there's a whole world outside the EU and China that is paying attention as well. Apple's negotiation position simply is not that strong. It has no real leverage. And Apple as a US only company would not be anywhere near it's current size and importance. Share holders would revolt. R&D investment would implode. It has to be an international company for it to justify its share price. So, it has to adjust and can't afford to exit markets. It has no choice.

rootusrootus 2y ago
> The EU would let them and good riddance as far as we're concerned. But there is this pesky notion that it's a huge market and Apple earns a lot of money there. So, they really can't walk away from that. Does that not seem contradictory to you? If it's a huge market they make a lot of money in, then there's by definition a lot of people who don't think "good riddance" if they leave. Apple has more leverage than you give them credit for.
- alangibson 2y ago
  American living in Europe here. in the EU, you can't just apply economic logic to everything like you can in the US. Policymakers will absolutely piss off a huge number of people over some basic principle. Look for instance at Germany's willingness to burn it's industrial base to the ground over Ukraine.
  - geoka9 2y ago
    I would argue it's not (just) over Ukraine that Germany has finally decided to wean itself off the unrealistically cheap natural gas from Russia. In fact, the writing has been on the wall for decades; Russian leadership never made a big secret out of the fact that they considered their gas industry a geopolitical weapon. It took a big scare and popular demand to stop the wholesale selling out of the German political class to Russia.

tebbers 2y ago

I honestly doubt opening up the App Store will cause much of a hit. Maybe 5% of users will download another App Store.

jncfhnb 2y ago
And those users will be the whales who are benefiting from lower prices the most.

kranke155 2y ago

Yes they would leave something like 1/3 to 1/5 of the global revenue, sure that sounds brilliant.