The Spotlight on The International Market (like Hauwei) Just Showed Us That Apple Isn’t a Monopoly
The Global Market is Hardly Dominated by Apple and Why That Matters for Monopoly Labeling
A monopoly is defined as a company that has total domination over the market and is the only seller of a product. In no shape or form does Apple have a total domination of a unique product. Despite this, Apple has come under fire for their App Store, which is currently being sued by a group of developers. There has also been a general call to break them up by politicians.
We live in a global economy. Worldwide, Apple only has 11.8% of the total smartphone market share. To suggest that their App Store is the only kind for developers to sell their mobile software on is false. Apple doesn’t have enough of the smartphone market in order for the App Store to monopolize anything. The Google play store exists, which allows Android users to buy mobile applications. Developers can use Android’s development kit much like they can use Apple’s. Furthermore, Apple’s overall iPhone sales were down 17% in Q2 of 2019 compared to the previous year. The original point of breaking up monopolies were to punish companies that used their sole dominance of the market to price gouge and hurt consumers. If you’re the only shop in town, you can charge pretty much whatever you want. But as Samsung, Google, Hauwei, LG and Vivo have shown, Apple is not alone in the smartphone market. Even from a strictly domestic standpoint, companies like LG, Samsung and Google all compete with Apple’s iPhone and App Store.
On May 15th of 2019, Donald Trump issued an executive order banning companies that could be deemed a security threat. It’s a broad order that doesn’t specifically apply to one company in the text itself. However, the move was made to prevent Hauwei from building out the USA’s 5G infrastructure. The most controversial part is how the USA implemented a flat out ban on Hauwei products so that now Hauwei is completely restricted, even beyond 5G. People are upset because Hauwei encompasses a wide range of products, more than just 5G infrastructure. One of these products are their smartphones.
Apple’s worldwide smartphone market share has taken a significant dip in Q1 of 2019. Their shift from smartphones to services is exemplified by Tim Cook’s decision not to report iPhone sales in quarterly meetings anymore. Apple is trying to diversify their products and services so they aren’t reliant on one revenue stream, particularly because iPhone sales haven’t been in the upswing.
Operating in a global economy, means products overseas can be bought domestically. Likewise businesses that are USA based can sell their products internationally. Despite the executive order, Apple still competes overseas in international markets where Hauwei is selling. The executive order doesn’t prevent other countries from buying Hauwei’s products, although some countries have been on the fence, have restricted or banned Hauwei products. There is no doubt that the USA restrictions will majorly hurt Hauwei, but it still has two thirds of the world’s GDP to sell to and state funds from the Chinese government.
In a sensitive trade-war, American companies like Apple, who do not price gouge customers or have a sole dominance in any market including mobile application stores, would undoubtedly be hurt by restructuring. One historic example of monopoly busting was when Teddy Roosevelt broke up Standard Oil which owned 90% of the USA oil market in the 1900's.
Apple had a challenging first quarter [in 2019] as shipments dropped to 36.4 million units representing a staggering 30.2% decline from last year.- International Data Corporation (IDC)
Apple is not in the same position as Standard Oil. Between Apple’s lack of hurting consumers, their declining smartphone popularity, and the global market, they shouldn’t be viewed as a monopoly or a trust. The press have even been discussing the harder times Apple have had in the smartphone market. Their latest smartphones were seen by many as anything but innovative. Apple currently has its own business challenges ahead trying to survive without a booming smartphone. The compliance costs Apple would have to endure to conform to governments regulations would come to what end? Who would benefit from Apple being broken up? In the end, Apple isn’t hurting consumers. The only entities that would directly benefit are LG, Samsung, Hauwei and Google.