ð² The Old Apple is Dead?
Apple's business is going to look a little different now, with new priorities, new laws and new challenges.
Marvel vs DC or India vs Pakistan?Â
Our favourite is Apple vs Android.Â
Yes, we know you've already picked a side. But, let's be neutral here.Â
While Android users can flaunt "better features" for a lower cost, Apple users have:
A better camera
Privacy
For all our Apple readers: you may no longer have the precious advantage of privacy over Android anymore.Â
Thanks to the EU's new Digital Markets Act.Â
What is this new act and why is it needed?
âApple and Google: The Duopoly Play
Apple and Google take a 15-30% commission on all in-app transactions.Â
Now, that's a huge amount. And other apps had no choice but to give in to these giants. Until...
Epic Games dragged them both to court.
Well, courtroom dramas with giants are just that: dramas.Â
Epic Games failed. But not really.Â
It set enough arguments to prompt competition commissions across the world to look into these giants. What did they find?
 "Apple and Google do have an unfair advantage".
So, the EU has launched a new Digital Markets Act to ensure fair competition and give more choice to users. Under this, it wants third-party app stores to be allowed on iOS.Â
And Apple is reportedly going to agree to the EU's proposal. After all, it cannot afford to lose out on its second-biggest market!Â
But this change is not going to be easy.Â
ð§ Brand New Privacy Problems
You may think that all Apple's no-third-party-app-store policy was all for commision. Well, its major concern was user privacy.Â
You see, the Apple App Store is like the friend who vets your date before you turn blind to all their red flags.Â
It vets all apps before listing them on the platform. So, no apps with viruses or trackers.
Now with this policy gone, you can bid goodbye to this guarantee too.Â
Plus, it will also have to open up APIs and hardware features for third-party apps: a time-consuming and expensive affair.
All of this could derail the launch of Apple's next line of devices.Â
So, major trouble for Apple?Â
Well, not really.Â
You see, over the last few years, Apple has been planning a business shift: from selling products to selling services subscriptions.Â
â¡Apple's Services Play
Apple has a ton of services under its brand name:Â
Focusing on these services makes more sense than focusing on just devices.Â
With devices, Apple can only earn once.Â
But by providing services on the same devices, it can unlock recurring revenue!Â
And its services business is already doing great, bringing $86 billion in revenue each year.Â
 It wants to double down on this by launching new services. Next in line: Health Insurance.Â
Yes, Apple wants to sell health insurance.Â
You see, it already gets a huge amount of health data from its Apple Watches. It could easily leverage this data to give personalised health insurances to users.Â
While this service is in the works, Apple wants to focus on two things:Â
Streaming (growing at a CAGR of 11.48%) and Advertising (growing at a CAGR of 10.9%.)
And it's really going all in on advertising.Â
In 2021, Apple decided to hit two birds with one stone.Â
It introduced a new feature: App Tracking Transparency.Â
The feature is simple. It allows users to turn off an app's ability to track their online activity.
Now, this may seem like good news to you but for companies like Meta, this meant a huge loss. How?
You see, Facebook, Instagram and WhatsApp collect our data and use it to show us targeted ads (now you know why those shoes follow you all over the internet!). With this new feature, they cannot show us targeted ads, losing out on ad revenue.Â
On the other side, advertisers can come straight to Apple, who allows them to advertise on its App Store, News app and Stocks app.Â
It may soon add advertisements to other iOS apps as well.Â
A genius move, no?Â
And it worked: Apple's Search Ads volume has grown 4% to 94.8% YoY.Â
And its ad business is set to grow up to $30 billion by 2026.
Now, this business also has some potential problems.Â
ð Watch Out, Apple!
Apple's focus on advertising might ruin user experience.Â
Think about it: if you're paying thousands for a premium product (and the status that comes with it), the last thing you want is to be bombarded with ads!Â
And its streaming arm also faces tough competition from the likes of Disney+ Hotstar, Amazon Prime and Netflix.Â
With a major chunk of commissions revenue from the App Store now gone, will Apple be able to make it big in this competitive space?
We'll have to wait and watch.Â
â¡In a line: Apple is trying to revamp itself while fighting anti-competitive laws, which means it is walking on a really thin line.
ð¡Quick question: What revenue streams do you think Apple should tap into?
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