Around the world, Apple products are viewed as luxury items and a symbol of status. Since its inception, Apple has been making products which look and feel ‘different’ than the ones that are normally sold. And Apple is known by many as the company whose smartphones and gadgets are class-apart. However, in recent years, sales of iPhones and other Apple products have been falling at a slow but gradual rate. But that is not the only problem Apple is facing, as there is an entire list of things the company has been dealing with. And recently, it looks like Apple has been fighting battles on more than one fronts.
Apple had many services and products under its name and App Store is one of them. Apple charges app developers a certain amount of money to put their app on its platform. But that’s not all. Apple also charges the companies a certain fee when a user purchases or subscribes to their app. Last year, Netflix subscription cost $11 (approximately Rs 770) to iOS users and Apple pocketed up to $3.30 (approximately Rs 231) out of this money. It’s not news as Apple has been doing it with other companies as well and that might be the reason many companies accuse Apple of unfair marketing.
According to Associated Press, in the later months of 2018, Netflix rebelled against the Cupertino-based technology firm about its fee system. Usually Apple takes about 15% to 30% of the fee paid to the company per customer. However, this year Apple might hike the app cost to up to 50%. And it might be the reason that other companies might also follow Netflix’s lead and rebelling against Apple.
Recently, Apple had been making headlines for working on a number of paid subscription services which includes a Netflix style subscription service for TV shows, a news subscription service, a revamped Apple Music, a video game streaming subscription service etc. However, reports also suggest that many major companies have been rejecting the partnership that Apple is offering for its subscription services. Companies like Netflix, Hulu, New York Times, Washington Post, Spotify have been revolting against Apple because of its high charges and unfair deal in the partnership.
But, Apple’s troubles don’t stop here as we saw a serious decline in the iPhone sales after the release of its 2018 iPhone lineup. In fact, iPhone XS and iPhone XS Max particularly didn’t do in most markets. And that had finally resulted in the falling shares (more than 25%) of the Cupertino based technology firm. According to FactSet, Apple’s shares will drop even further in 2019 by about 15% which could mean serious trouble for the company.
About the app charges, the company had defended that they were ‘reasonable compensation for reviewing the apps ensuring its store remains a safe and secure place for e-commerce.’
Apple’s App Store generates about a third of the company’s services revenue and with the app manufacturers and developers rebelling against the company they too might pull their legs back. And if the major companies remove their apps from Apple’s App store then we can see further decline in the Apple’s shares and profits.