In the 1990s, nine out of ten computers operated under microsoft Windows’ operating formula (OS). Microsoft’s flagship formulas like Word and Outlook were a must-have in each and every office. And for the maximum number of people, your browser, Internet Explorer, unique “gateway” to the Internet.
There were few, as Microsoft used its monopoly of operational formula to intimidate its competition and bankrupt it. For example, Microsoft killed the pioneer of Netscape browsers by forcing computer brands to sell Windows with their Internet Explorer copier.
For example, in 1998, the U. S. Department of Justice ordered the dissolution of Microsoft’s monopoly. In the end, Microsoft reached an agreement, but had lost the maximum of its PC software powers.
For the next 15 years, Microsoft inventory has nowhere to do, as you can see below:
As I’ll show you, Apple has used its monopoly on phone operational formula to expand one of its most lucrative businesses, but with app giants like Spotify (SPOT) and Epic jumping into Apple’s throat, the company may soon face a balance sheet. .
Like Microsoft, Apple (AAPL) abuses its near monopoly on phone apps
The iPhone is America’s favorite phone. Almost part of all used phones are iPhones. The challenge is that, unlike any other phone, the iPhone works on what is called a closed operating system.
This means you can’t upload apps to your iPhone anywhere you are. You’ll need to use apple’s App Store. And like Microsoft in the 1990s, Apple is this force to undermine horn-blocking apps with Apple services.
Take apps for parents.
Apple also recently turned down Microsoft’s xCloud game app to sign up for the App Store. Apple’s reason here couldn’t be clearer: last year, it introduced its own game subscription service, Apple Arcade, which clearly competes with xCloud.
And that’s not all.
Like Microsoft, Apple combines the iPhone’s operating formula with its own apps, such as Apple Music or Safari, that limit competitive apps. For example, you cannot update or delete default apps such as Mail or your Safari browser (Internet Explorer and Windows nuances?)
Apple also denounces a so-called “Apple Tax” of 15 to 30% on everything app brands get from Apple customers. It also charges them an annual payment and imposes price regulations, which reduces competition.
In an image, it’s like this:
Like Microsoft, Apple enters the antitrust crosshairs
Apple’s abuse is now in the spotlight.
Last year, the world’s largest music station, Spotify, sued Apple for a payment to reduce it with Apple Music. Soon after, an app branding organization filed a demand for action of elegance opposed to Apple, claiming that Apple “knowingly used its monopoly” to close its activities for app brands.
But last Friday, Apple’s conversations with app manufacturers broke out in a full-blown war. Feeding the wrath of players, Apple pulled Fortnite, the world’s top game, from the App Store.
It happens that its creator, Epic Games, has started charging its users directly Apple’s rates. This tax evasion broke the rules of the App Store and Apple got rid of the app without delay.
After the ban, the $17 billion gaming company filed a lawsuit against Apple, arguing that its fees were illegal. Epic Games has also introduced a well-coordinated social media crusade that opposes Apple’s “app tax,” which has thousands of people.
Apple throws in the towel
It’s hard to say how the developing clash between Apple and app brands will end, but if the story is an indication, Apple will likely give in to app brands to deter lawmakers, just as Microsoft did.
You probably wouldn’t have noticed, but Apple’s already throwing in the towel. Last month, Apple said the next iPhone update would give its users the ability to update Apple’s default apps, such as Safari and Apple Music.
This is a turning point for Apple’s business. For the first time ever, Apple is giving up its closed operating system, which is a great credit to investors.
As I wrote last week in During this time in the MarketsArray . . . , Apple no longer gets the most out of its cash from phones. You can see in the graph below that apps (services) generate maximum profit as much as the entire Apple product line:
So if you buy Apple shares, think about the threat that Apple will lose its monopoly on iPhone apps, which doesn’t mean Apple is doomed to failure. It’s just that you’ll find it much harder to develop your business in the future.
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I have worked as an equity and macro analyst in several monetary houses, adding Mauldin Economics, RiskHedge, Hard Assets Alliance and Garret/Galland.
I have worked as a macroeconomic and equitable analyst in several monetary houses, adding Mauldin Economics, RiskHedge, Hard Assets Alliance and Garret/Galland Research.
I had the opportunity to be informed about how to make an investment by some of the world’s most productive investors, such as new York Times’ most productive seller, John Mauldin and Jared Dillian, former ETF manager for Lehman Brothers.
Today, I am a monetary editor and an active investor looking for past investment opportunities. My research is presented at Yahoo Finance, Newsmax, Valuewalk and other leading monetary publications.