The tragedy of Apple did not begin with the price reduction of the iPhone

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This article is from WeChat official account: Sidecode Story, written by Mr. Liu. The original title: "The tragedy of Apple didn't begin with the price reduction of iPhone to participate in the Double Tenth Festival". The source of the title: Visual China

Article Summary

Apple is gradually transforming into a business giant amidst innovation setbacks, and its tax policies have sparked controversy.

•      Apple's innovation power has declined, and the iPhone's price reduction strategy has become apparent.

•      Tax collection policies have sparked controversy and hindered innovative development.

•      The transfer of traffic entry points and the emergence of super apps as a new ecosystem.

Apple is stepping down from its pedestal.

This is Apple's first official participation in Double Eleven. Just one month after the latest model iPhone 16, the series immediately experienced a major price reduction through official channels across the entire range.

Along with the price reduction, the issue of restarting the iPhone 16 series has become a hot topic. Complaints about random restarts of iPhone 16 have repeatedly made headlines on platforms such as Reddit, MacRumors, and Apple Support Communities.

The car has been nowhere to be seen for a long time, VR thunder and rain are small, and large models are far behind a group of competitors

At this moment, Apple, which has taken away 90% of the profits from the global smartphone industry, is experiencing unprecedented success. But it is also getting farther and farther away from the Apple of January 9, 2007, at the Macworld Conference Center in San Francisco, where Steve Jobs held the first generation iPhone and shouted, 'Today, Apple will re invent the phone.'

The CEO of Apple is no longer the idol who unified the dressing style of global tech entrepreneurs.

Apple's new phone features are no longer the object of imitation for major phone brands.

When did we feel that Apple is no longer like Apple?

Perhaps it didn't start with the release of the ugliest iPhone 16 in history, nor did it start with the death of Steve Jobs.

But with the continuous expansion of its scale, its former advantages have become constraints, and Apple has transformed from a barometer of software and hardware innovation to a maintainer of the ecological wall.

When will Apple no longer be like Apple

Regardless of whether you admit it or not, today's Apple is no longer like Apple, but rather very much like the global CPU giant that has had countless falling out and cooperating with Apple - Intel.

They were all existences that opened an era.

Intel is the founder of the world's earliest large-scale production of chips, the founder of Moore's Law, and the pioneer of the PC era. Even so far, Intel remains the only three companies in the world capable of producing 7nm chips; The only two companies that can mass produce CPUs on a large scale; And the top three giants in semiconductor revenue.

However, the glory of history has long been replaced by new stories belonging to TSMC, Nvidia, and AMD, following the passing of masters like Joyce and Gordon Moore. In the capital market, Qualcomm and Broadcom are planning to acquire Intel; NVIDIA is worth thirty Intel, TSMC is worth nine Intel, and even AMD, which has a much lower market share than Intel, can buy three Intel

What is even sadder than the backwardness in the market is that a technology company inevitably enters old age and becomes the image of Zeng Ruiyi's subversion.

And the traces of apple aging, VR、 Automobiles, even large models, are perceived earlier than mobile phone companies.

Global technology companies have spent a full decade waiting for Apple VR. Until June 6, 2023, at Apple's annual Worldwide Developers Conference, the first MR mixed reality product, Apple Vision Pro, was truly launched.

There is no imagined higher flexibility, no lighter weight, and even no smooth experience and industrial design iteration that Apple has always been good at. There are only high-end toys starting at $3499.

In the process of waiting for Apple, Apple's most loyal supply chain enterprise in China, GoerTek, once relied on years of technological accumulation to become the OEM factory of Oculus, the highest selling Meta brand in the VR field today. Its self-developed VR brand Pico was also acquired by ByteDance, becoming the leading VR player in China.

Not to mention cars. For the sake of Apple's "Titan Automatic Driving Plan", which was established more than ten years ago, Apple once rejected Musk who wanted to sell Tesla to Apple, and slipped around a number of car OEMs in Chinese Mainland, Taiwan, China, and even South Korea. However, Foxconn's self-developed cars have all released two models. The progress of Apple Titan so far is still a autonomous vehicle project that is unwilling to publicly admit its existence.

In the big model industry, when domestic Xiaomi OV has already launched self-developed big models, Apple and OpenAI announced at the press conference that ChatGPT will be integrated into the new generation of iOS, iPadOS, and macOS, becoming Apple's source of intelligence.

Everyone is waiting for Apple to sharpen their sword in ten years, but no one expected that all that Apple has sharpened in ten years is scabbard.

But is Apple a failed enterprise? The answer is negative.

Alongside 'disappointment' is the unprecedented 'success' of Apple's financial side:

After the death of Steve Jobs, Apple's revenue tripled from $108.2 billion to $383.3 billion over the course of twelve years; The profit increased from 25.9 billion US dollars to 97 billion US dollars, an increase of nearly four times.

Undoubtedly, Apple is becoming an increasingly large and profitable empire. The financial expansion, accompanied by user loyalty, is enough to give it countless opportunities to launch the ugliest iPhone but still be trusted, and it is also enough to support it in VR, cars, and large models, losing time and time again.

Because, lying on the golden hill of the iPhone, this empire has come to life as the dream of all businesses - collecting taxes.

The so-called Apple tax refers to the requirement that developers within the Apple ecosystem must conduct transactions through Apple's official payment channels, and Apple charges a 30% discount on the transaction amount.

At first, this clause included a buyout fee for users on the Apple App Store, but after 2016, Apple further expanded the scope of application of the clause: for software within the Apple ecosystem, except for shopping websites such as Pinduoduo or Taobao, all user subscription, tipping, recharging and other payment behaviors will receive a 30% commission from Apple.

Therefore, for the same game props, Apple users' prices will be higher than Android's; For the same amount of live streaming rewards, the amount received by the anchor within the Apple ecosystem is lower than that of Android.

According to statistics, last year alone, Apple's software revenue in the Chinese market reached as high as 40 billion yuan; Even stronger than Google, in order to become Apple's built-in browser application, they have to pay $20 billion in taxes annually.

Although Apple only provides daily maintenance of the App Store for this 30% profit, all app developers have become accustomed to it.

But should it be like this?

Perhaps, when it comes to Apple, the true point of "aging" is actually the moment when a company that started with innovation ultimately becomes a tax resistant obstacle to innovation, but ultimately achieves tremendous success in business.

This is another historical story loop of a young dragon slayer who eventually becomes an evil dragon.

When the dragon slayer boy becomes an evil dragon

In 2021, Cook, who has always appeared in front of the public with his signature "chef style smile," rarely sat in the defendant's seat.

Standing on the prosecution side is Epic, a globally renowned American game development engine. As one of the most prestigious game development teams in the past decade, Epic's engine was once used in the development of popular games such as the "Gears of War" series and "Bullet Storm". Its technological leadership once attracted NASA's cooperation in developing a VR Mars simulator.

In August 2020, Epic Games was taken down from the App Store by Apple in less than half a day simply because of "Fortnite" bypassing the App Store and allowing players to pay directly in the game. After only one hour, Epic filed a lawsuit and took Apple to court.

However, in the face of Epic's accusation of Apple abusing its position to collect taxes, Cook's rebuttal was rare and sharp, summarized as follows:

1. There has never been a monopoly, and Apple faces a lot of competition.

Although Apple alone accounts for over 90% of global smartphone profits.

2. It is necessary for Apple to levy taxes, and the commissions collected from app developers can help provide better security for the App Store.

Although the judicial protection of private lending rates and the classification of high interest loans in various countries are only around 20%.

3. APP developers need to reflect on the conflict between what they want and what consumers want; Apple is innocent and has made contributions. Apple has already reduced the fees of the app store for many developers.

Although 30% is already the highest percentage of commission at that time point.

Then, with a passionate speech, Apple won.

At the same time, Google, which was brought to trial by Epic for the same reason, lost the lawsuit due to its higher market share in search engines.

Apple's victory has randomly sparked even higher levels of accusations worldwide. In addition to the continuous opposition from music streaming apps such as Spotify, as early as 2019, the US Department of Justice also launched an investigation into Apple, which has continued to this day; And in the first half of the year, they joined forces with the attorneys general of 15 states and the District of Columbia to file antitrust lawsuits against Apple Inc.

Outside of the United States, Japan, South Korea, and the Netherlands have also drafted bills to reduce the "Apple tax". Under the mandatory provisions of the law, Apple's fees in South Korea have been reduced from 30% to 26%, and the fees for dating apps in the Netherlands have been reduced to 27%. Third party payments have also been opened up.

The only exception is China.

Not long ago, Bloomberg reported that around June this year, Apple was pressing Tencent and Byte, the two Internet companies with the largest traffic in China, to cooperate in blocking the payment behavior bypassing Apple in WeChat and Tiktok small and medium-sized programs. If they do not cooperate, they will reject important updates of WeChat and Tiktok in the future.

The market has made a more accurate valuation of this containment: ByteDance. It was previously estimated that the market size of just small games will reach 60 billion this year, and this market is still growing at a sustained high speed; Correspondingly, once this tax is levied, Apple's revenue will be an additional 18 billion.

Further conversion, this is approximately equivalent to Xiaomi's net profit for the entire year of 2023.

The constantly crumbling copper and iron walls

Unlike the intense and fruitless protests of Epic and the small talk of the US Department of Justice, the response from WeChat and ByteDance is a rare silence.

Behind this, there is a silent change on the handover of mobile Internet infrastructure worldwide.

Looking back at the development history of the global Internet, to a certain extent, the nature of the change in the role of tax collection is one battle after another for user access.

In the 1990s, the largest or even the only access to the Internet was Windows, which was accompanied by Microsoft becoming the synonym of the world's top technology level, and Bill Gates becoming the richest man in the world.

Subsequently, with the maturity of search engine technology, even though all applications were still deployed on operating systems, more and more functions were launched on web pages, making search engines the closest entry point to users. Google and Baidu rose to become the most powerful technology giants in China and the United States around 2005.

With the wave of mobile devices after 2010, search engines began to be diverted by vertical e-commerce, food delivery, and news and information platforms, which in turn created a large number of ecological empires in the era of smartphones such as Alibaba, Meituan, and ByteDance.

At the same time, mobile phones replaced computers, and global communication operators, as well as mobile phone companies such as Apple, Huawei, and Xiaomi, emerged. With their grasp of user traffic entry, they once relied on app stores to earn a lot of money at the software level.

Until recent years, the gap between different mobile phone brands has been narrowing, and super apps such as WeChat and ByteDance have continued to expand, becoming the platforms with the longest direct contact with users and the most function binding. Corresponding new ecosystems have also grown in super apps, represented by mini programs.

In the transformation of this power structure, the aging of each generation's "entrance" is often accompanied by the growth of users and the continuous deepening of their dominant position; But at the same time, on this basis, new platforms continue to grow, and more and more innovations and user usage time are transferred to the new platform. The distance between the original entrance and users is getting longer and longer.

When the original entrance can no longer bring incremental growth to new mini programs and games, but still relies on its monopoly position to maintain a high tax of 30%, the balance of the game begins to tilt towards new things:

For Apple's precise strike, the US Department of Justice hit the nail on the head, stating that "Apple is destroying innovation". The policy of Apple's App Store is the ecological Great Wall of Apple's continuous financial expansion and the biggest confidence that Apple can miss out on time and time again; But it also limits the competition and innovation of the next generation, becoming an insurmountable barrier for countless innovations.

The Lost Silicon Valley Dream of a Generation of Earthlings

In fact, no one would have thought that 30% of apples grown by wild geese were once synonymous with innovation and ecological vitality.

Before Apple, the distribution of games and mobile applications worldwide was often directly controlled by operators. Due to the absolute control of channel traffic by operators, being able to enter their distribution channels often means a guaranteed sales volume. Therefore, in the vast majority of cases, operators often take a commission of up to 90% on game revenue.

With the rise of Apple and the replacement of traditional SMS subscription downloads by the App Store, it has become easier for developers to publish applications, and the development process has been greatly simplified with the standard development tools provided by Apple. However, the tax standard has been reduced from 90% in the past to 30%.

Just time has changed:

The constantly changing color scheme of iPhone is no longer the compass for global smartphones;

The expanding revenue and the courage to "change everything" are becoming increasingly distant;

The taxed apple is no longer synonymous with innovation

With the shift of discourse power in traffic entry, 30% has become a new tax ceiling, and Apple has transformed from a former dragon slayer to a dragon slayer.

However, Apple has never been an exception.

Taking Apple's success and failure as two sides of the same coin, it reflects the increasingly high housing prices in Silicon Valley over the years, the decreasing geek spirit of entrepreneurs, and the increasing number of algorithms experimenting with the best work efficiency with countless people's flesh and blood.

……

As a result, more and more people and companies are leaving Silicon Valley, and more and more innovation is being stifled by the copper and iron walls woven by traffic in large enterprises.

That was the lost Silicon Valley dream of a generation of Earthlings.

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苹果的悲剧，不是从iPhone降价开始的