What announcements to expect, what is at stake

Apple will hold its first product launch event this year on Tuesday.

On deck: The new iPad Pro is expected to be the main new hardware products launched by Apple. While Apple’s iPad business grew weakly in the mid-2010s, it boomed in the last year, with consumers turning to tablets while working and playing from home during the pandemic.

But beyond the new gadgets, Apple is facing a decade of heightened competition and battles in the courtroom on numerous fronts, such as Facebook, Epic Games, Spotify and lawmakers and regulators around the world. It may feel like another iPad event, but there are plenty of tensions bubbling beneath the surface, many of which could threaten Apple’s next wave of growth as it expands into more digital services and new forms of computing technology. .

Here’s a quick look at how things are ahead of Tuesday’s Apple event:

Facebook has waged a full PR war against Apple for an imminent change in iPhone software, which will give users the option to block apps from tracking them for targeted ads. Facebook said the move will affect small businesses that rely on advertising to provide free digital services and software. Apple said the change will give iPhone owners a better understanding of how apps track them, and will give customers the option to block this tracking.

But the bitterness between the two companies is much deeper than that.

Both companies are working on the technology that I think will introduce the next wave of computing after the smartphone, thanks to computer glasses that use augmented reality. Facebook is expected to launch the first pair of AR glasses as soon as this year. Apple could launch the first headset in 2022. If the platform takes off, you’ll have both Facebook and Apple to lead it to dominate AR, just as Apple fought Microsoft in the PC era and Google and Samsung (Android ) in your current smartphone. It was.

This fight is far from over. In fact, it’s just beginning.

On May 3, Apple and Epic Games, the maker of the popular game Fortnite, go to court over their dispute over how Apple handles payments from iOS apps. Last fall, Epic Games intentionally changed the iOS version of Fortnite to allow users to pay for Epic directly, bypassing the Apple App Store rules. Apple has finally removed Fortnite from the App Store, and Epic has prepared a lawsuit.

Epic’s lawsuit against Apple reflects what we’ve heard from several iOS app makers over the past decade: Apple generally gets a 30% discount on in-app digital transactions and paid app sales. The developers of the Epic camp say that the so-called “Apple tax” offers Apple too much leverage, because it allows users to download software only from their own store. Apple does not allow alternative app stores, as Google does on Android.

Major application manufacturers such as Spotify and the dating company Match Group support the Epic process. Many of these developers have also formed a group called the Coalition for App Fairness, which recently pushed state legislatures in Arizona and North Dakota to pass laws governing Apple’s control over the App Store. If Apple loses the lawsuit or is forced to make concessions to Epic and other app developers, it could slow Apple Apple’s revenue growth. (App Store generated gross sales of approximately $ 64 billion in 2020, up from approximately $ 50 billion in 2019.)

Apple said it partially collects fees to maintain the safety and security of the App Store so that its customers can feel confident in the software they download. The company recently changed its fee structure to reduce only 15% of applications that generate less than $ 1 million in a year.

Apple’s control over the App Store was also the focus of an antitrust report from Congress last year, which found that Apple uses its control “to create and impose barriers to competition and discriminate and exclude rivals, preferring in at the same time their own offers ”. Apple denied the report’s findings and said its fees were consistent with other digital software stores.

In addition to Arizona and North Dakota law, US regulators are investigating Apple for a formal antitrust complaint.

Apple’s dependence on China is a vulnerability that rivals could exploit. Most Apple products, including the iPhone, are assembled in China before being delivered to customers around the world.

While Apple has a low production presence in the US, most of it happens in China. Apple’s dependence on supply and assembly chains in the country is something that rivals could indicate amid rising geopolitical tensions between the US and China.

And it’s already happening.

Earlier this month, Peter Thiel, a billionaire technology investor and board member of Facebook, said Apple is less likely to face China because of its deep ties to the country. (He also had similar criticisms of Google’s efforts in China.)

“Apple is probably the one that is structurally a real problem, because the entire iPhone supply chain is made in China,” Thiel said. “Apple is one that has real synergies with China.”