Apple’s Business Model Getting Hit From All Sides Now
Apple didn’t need any more trouble, but trouble has had a way of finding the iconic tech giant lately. The Justice Department sued Apple on Thursday, accusing the company of monopolistic behavior over the way it runs its iPhone business. “We allege that Apple has employed a strategy that relies on exclusionary, anticompetitive conduct that hurts both consumers and developers," Attorney General Merrick Garland said in announcing the case.
The U.S. lawsuit comes as European authorities are cracking down on key aspects of Apple’s App Store business, and as Apple is losing share in the Chinese market due to growing competition and reports of government disfavor there. Apple is also facing near-term challenges such as another weak iPhone cycle.
The company’s hardware revenue is projected to slip 1% in the current fiscal year ending in September after falling 6% in the prior year. The buildup has weighed on Apple’s stock. Its shares fell 4% on Thursday following the announcement of the Justice Department’s lawsuit and is now down nearly 12% since the start of the year.
That makes it a notable standout among the other trillion-dollar big techs; Microsoft, Nvidia, Amazon and the parent companies of Google and Facebook have averaged a whopping gain of 36% for the year to date. Apple’s 12-month gain of less than 8% even sharply lags behind the Dow and S&P 500 over that time. “When it rains, it pours," wrote JP Morgan analyst Samik Chatterjee in a report Friday.
Read more on livemint.com
