Apple's Enemies

Dec 2, 2022

Apple is the world's largest company by market cap (~$2.35 trillion). You don't become that without making a few enemies along the way. However, up until now, Apple's monopolies have been fairly untouchable by competitors.

At-scale technology companies all overlap with one another in some fashion — there are just too many adjacent markets to compete in. But Apple is unique that it tends to threaten the core business of other relatively smaller yet larger by any other definition, tech companies.

No single company seems to be able to take on Apple — it’s just too big. But as Apple competes in more areas and creates more enemies, will it ever stretch itself too thin? Can a conglomerate of large tech companies overtake Apple (or convince the government to distribute its power)?

A few of the fronts that Apple competes on:

30% App Store Tax / Payments – (Facebook, Shopify, Spotify, Coinbase, Epic Games). Many consumer apps are mobile-first, and any in-app purchase must go through Apple’s payment systems and pay Apple 30%. Epic Games lost a suit against Apple in 2020 (Epic Games v. Apple) on this issue. Meta assisted Epic in the lawsuit but did not participate. Apps should pay something for Apple’s distribution to millions of customers, but how much is enough?

The line is blurry when it comes to what payments are subject to Apple’s tax — some companies have deals with Apple (Netflix doesn’t pay 30% on users who subscribe through the app). For other companies, they might primarily sell through mobile and still have to pay. Spotify has its anti-Apple campaign at https://timetoplayfair.com/.

Privacy / Apple Ads – (Meta, Snap, Google). I’ve written about this more in Apple’s Ad Positioning, but the gist is that Apple has disadvantaged data collection that powers attribution for the largest mobile advertising companies. At the same time, Apple has started advertising by (1) utilizing data collected outside its rules and (2) in formats unavailable to others on its platform (iOS Settings, special offers, etc.).

Some other verticals that

  • eBooks (Amazon) – United States v. Apple, Inc. (2012) found that Apple was price-fixing eBooks alongside large publishers.
  • Music (Spotify)
  • Maps (Google)
  • Crypto (Coinbase) — Specific rules about what crypto applications are allowed on the platform and how they are taxed (e.g., NFTs follow in-app purchases and have special restrictions)
  • Browser / Device APIs – (Google, Microsoft) All mobile browsers are based on Safari, and Apple doesn’t expose the primitives or APIs to build custom browsers. Not all features are available to other browsers (e.g., Apple Pay).
  • Operating System – (Microsoft, Google)