Apple rates v. Pepper and Trump will not solve falling sales of iPhone – Quartz


Apple has a little trouble lately.

When it released its quarterly results earlier this month, the company proposed a lower than expected forecast for the current vacation quarter and announced it would no longer divide the number of units shipped. Wall Street was not satisfied with this news, and Apple's stock market valuation fell below $ 1 trillion even before the call was over, as the company's stock price dropped sharply. about 8%. It has slightly recovered the next day, but rumors that the company's latest smartphone, the iPhone Xr, would not sell as well as hoped, have exacerbated Wall Street's fears of the future. With respect to Apple, its share price having continued to decline over the period. month.

And this week, the US Supreme Court will hear a case, Apple v. Pepper, which could threaten to derail one of its main business sectors.

The company's service activities, which include commissions on application sales, as well as subscriptions and other digital services that it offers, have become a significant and reliable source of revenue in recent years, eclipsing all his other activities (with the exception of the iPhone). and reaching the size of a full-fledged Fortune 100 company. During the last quarter, Apple generated a service revenue of nearly $ 10 billion.

The class action, which has been raging for almost 10 years, concerns the App Store for mobile devices. Apple charges developers a 30% commission on the apps they want to sell on the App Store. These fees are usually passed on to the consumer. The App Store is the only way to download applications to an iPhone, iPad or iPod Touch for most consumers who do not cancel their warranty. The Supreme Court is currently considering whether users can sue Apple for violating the federal antitrust law, considering that the App Store is actually a monopoly on the iPhone app market. Apple claims that only developers, those who set the price of their own applications, could engage in such a lawsuit. If the highest court of the United States decided that the lawsuit could be brought, Apple could possibly be held liable for the huge damages caused by the users, and theoretically be unable to charge its commission and have to let users download applications from 39, other places, in the future.

Apple's woes may not stop there. On November 26th, US President Donald Trump suggested considering a 10% tariff on devices, such as the iPhone and MacBooks, made in China. "I mean, I can earn 10% and people could handle that very easily," Trump told The Wall Street Journal (Paywall). "What I would advise is for [Apple and other manufacturers] to build factories in the United States and to manufacture the product here, and they have many other alternatives. "

The news frightened investors as Apple's share price was opened today (Nov. 27) at about 2% below its close last night. Shares are now trading around $ 174, down about 25% from the peak reached in early October. Its market capitalization now stands at about $ 826 billion, well below the peak of $ 1.1 trillion reached earlier this year.

Trump's comments could help explain why Apple Cook's CEO was in soggy American Idaho with the girl and president of the president, Ivanka Trump, to see how a local school district is "using technology."

However, no outing for joy on a school trip is likely to change the decision of the Supreme Court, nor an erasure of consumers face the rising prices of iPhones.


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