What announcements to expect, what is at stake

Apple is holding its first product launch event of the year on Tuesday.

On Deck: New iPads Pro are expected to be the major new hardware products Apple unveils. While Apple’s iPad business showed moderate growth in the mid-2010s, it has seen a boom in the past year as consumers turned to tablets during the pandemic while working and playing at home.

But aside from the new gadgets, Apple is facing a decade of increasing competition and courtroom battles on numerous fronts from the likes of Facebook, Epic Games, Spotify, and lawmakers and regulators around the world. It may feel like just another iPad event. But a lot of tension is bubbling under the surface at Apple. And much of it 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 the conflicts that come to a head as we head to Tuesday’s Apple event:

Facebook is waging an all-out PR war against Apple over an imminent change to the iPhone software that will allow users to prevent apps from tracking them for targeted ads. Facebook has said the move will harm small businesses that rely on ads to provide free digital services and software. Apple has said the change will give iPhone owners a better understanding of how apps track them and give customers the option to block that tracking.

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

Both companies are working on technology that they believe will usher in the next computer wave after the smartphone, thanks to computer-controlled glasses that use augmented reality. Facebook is expected to release its first AR glasses this year. Apple could launch its first headset in 2022. If the platform takes off, both Facebook and Apple will challenge it to dominate AR, just as Apple fought Microsoft in the PC era and Google and Samsung (Android) in the current smartphone. era.

This battle is far from over. In fact, it has only just begun.

On May 3, Apple and Epic Games, maker of the popular game Fortnite, will find themselves in their dispute over how Apple manages payments through iOS apps. Last fall, Epic Games purposefully changed the iOS version of Fortnite to allow users to pay Epic directly, bypassing Apple’s App Store rules. Apple eventually removed Fortnite from the App Store and Epic had a lawsuit pending.

Epic’s complaint against Apple is in line with what we’ve heard from several iOS app makers over the past decade: Apple generally takes 30% off digital transactions within apps and the sales of paid apps themselves. Developers in Epic’s camp say the so-called “Apple tax” gives Apple too much leverage, since it only allows users to download software from its own store. Apple doesn’t allow alternative app stores like Google does on Android.

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

Apple has said it collects the fees in part to maintain the safety and security of the App Store so customers can have confidence in the software they download. The company recently changed its fee structure so that it only has to save 15% on apps that generate less than $ 1 million in a year.

Apple’s control of the App Store was also the main focus of a Congressional antitrust report last year, which found that Apple is using its control “to create and enforce barriers to competition and to discriminate and exclude rivals, while it prefers its own offer “. Apple denied the report’s findings, saying the fees are in line with other digital software stores.

In addition to legislation in Arizona and North Dakota, regulators in the US are reportedly investigating Apple for a formal antitrust complaint.

Apple’s reliance on China is a vulnerability that rivals can take advantage of. Most of Apple’s products, including the iPhone, are assembled in China before shipping to customers around the world.

Although Apple has a small manufacturing unit in the US, most of it is done in China. Apple’s reliance on supply chains and assembly in the country is something rivals could point to amid mounting geopolitical tensions between the US and China.

And it is already happening.

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

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