On Thursday evening, the US Justice Department, along with over a hundred says, launched a major antitrust case against Apple.
The lawsuit seeks to issue Apple’s position of dominance in the smartphone industry by accusing the tech giant of using anticompetitive tactics, including preventing the entry of new applications and preventing iPhone screen of Android messages.
The shift is a crucial time in the wider US assault on Big Tech conglomerates, as reported by CNN, and has been anticipated for decades due to ongoing concerns over Apple’s stringent App Store policies, exorbitant fees, and its unique technology habitat.
Apple is now accused of monopoly as the most well-known company among the numerous tech companies being scrutinized after decades of sane rules.
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California’s Attorney General Rob Bonta stated at a press conference on Thursday that both businesses and consumers would ultimately benefit from the breakthrough complaint against Apple. ” This is a pro- company motion”, he said.
” When we make sure that the rules of the marketplace are being followed, that no one is acting improperly, abusing their power, acting in a way that’s anti- aggressive or exclusive, it provides an opportunity for the next innovator, the second dreamer, the second visionary, the following startup, the next mom and pop to be able to participate in the marketplace and compete, as opposed to being squashed out and pushed out because of the dominant market force”, Bonta finished.
Apple CEO Tim Cook had been intensifying efforts in China while the DOJ dismissed their suit, including the opening of a new flagship store in Shanghai and strategic meetings with key suppliers.
According to CNN, Cook attempts to counteract a 24 % drop in iPhone sales in the first six weeks of 2024, a significant challenge for the tech giant in the face of fierce competition and market headwinds.
On his third visit to China within a year, Cook opened Apple’s latest store in Shanghai’s Jing’an district, close to a historic temple, positioning it as the largest in China and second only to the Fifth Avenue flagship in New York.
The store opened in an effort to increase its retail presence in a market with a record 17.3 % market share, according to IDC Research. However, recent data from Counterpoint Research indicates a slip in market positioning, with competitors like Vivo, Huawei, and Honor gaining ground.
” China remains a critical market for Apple, particularly in the premium segment above$ 800, where it holds a dominant position”, said Ivan Lam, a senior analyst at Counterpoint.
” With Huawei’s resurgence and other Chinese]phone makers ] gaining traction in offline sales, Apple is proactively strengthening its offline presence, leveraging flagship stores as a key tool to promote high- end smartphones”, he explained.
Cook’s engagements in Shanghai went beyond store openings. In a presentation to executives from BYD, Lens Technology, and Everwin Precision Technology, he even praised Chinese suppliers for their cutting-edge manufacturing capabilities. Cook’s activities included interactions with mobile game developers and visits to a film studio.
Despite these efforts and the appeal of new retail locations, Apple faces challenges from rising nationalist sentiment and calls for brand loyalty to domestic brands.
Apple’s premium pricing strategy has been identified as a contributing factor to the decline in sales due to the recession and consumer spending. The Chinese government’s push against Apple, partly in retaliation for geopolitical moves, also complicates its position.
However, there are some devoted Apple customers in China who have praised the brand’s design over nationalist demands for product boycotts.
Under Tim Cook, Apple has actively engaged in various efforts to promote environmental sustainability, racial equity, and LGBTQ+ rights. Cook has been vocal about how his personal values are in line with Apple’s procedures and policies.
However, those who object to these values and initiatives ‘ acceptance have expressed reservations about their overt political stances or as being incompatible with the company’s commitment to technology and innovation.
According to analyst forecasts reported by Bloomberg, Apple experienced a significant 30 % decline in iPhone sales year- on- year in December, amidst a general market growth. The decline is anticipated to continue into 2024, leading to a similar double-digit decline in iPhone sales.
An analyst at Jeffries, Edison Lee, made the claim that this decline was based on industry checks in a Sunday note to investors. The iPhone’s widespread discounts on various online platforms help to ease Apple’s anticipation of further sales declines in 2024.
These discounts, while reducing the average selling price, are not expected to boost sales volume, according to Jeffries ‘ analysis.
