The European Union’s recent regulatory ruling that opens the iPhone to greater competition, the legal issues that have hit the Apple Watch over its blood-oxygen measurement tech and the release of the Vision Pro have put Apple under pressure it’s not really seen for many years.
The EU and the iPhone
The EU passed the Digital Markets Act as a way of regulating the concentration of power wielded by a relatively small group of technology companies.
In short, Apple will allow the creation of alternate app stores, give access the NFC chip that enables Apple Pay, change the commissions it receives on apps it distributes and add a new ‘choice screen’ that allows users to select their default browser rather than having it preset to Safari.
This will be supported by over 600 new APIs that Apple has created which, it says, will mitigate some of the risks created by the EU’s decision to force it to open up iOS more widely.
These changes will only impact iPhone users in the EU’s 27 member countries from March 2024 with the release of iOS 17.4.
Masimo and the Apple Watch
Apple and Masimo, a company that makes medical grade blood oxygen sensors, entered negotiations for Apple to licence Masimo’s patented technology. Those talks broke down, Apple hired some people from Masimo and created its own sensor.
Masimo alleges Apple breached its patents and is seeking compensation. It’s important to note that Masimo does not compete against Apple in the consumer electronics or health markets.
Apple has been forced to disable the sensor technology and stopped selling its Series 9 and Ultra 2 watches in its online store and US retail outlets, where an import ban (the Apple Watch is manufactured outside the US) is enacted.
Vision Pro
Apple is no stranger to creating new product categories and markets. It did this with the iPod, iPhone and iPad. And, arguably, the Mac was a new type of personal computer.
The Vision Pro is not dissimilar in that it takes a product category that exists but, in its view, is not well serviced. All the products I mentioned before had competition. There were MP3 players, smartphones and tablet computers before. And there are augmented and virtual reality headsets on the market.
But the Vision Pro is being released in a different world. Apple is no longer a challenger. It’s one of the most valuable companies in the world with a loyal base of billions of customers.
So far, the reception for the Vision Pro has been lukewarm warm at best. Complaints about the weight, fit, external battery and a lack of bespoke apps are common. And Apple’s strategy of making iOS and iPadOS apps immediately available for the Vision Pro doesn’t seem to be a winner – even though it used the same strategy with the release of the iPad by making iOS apps immediately available.
Where does this leave Apple?
Perhaps for the first time since Steve Jobs’ return in 1996, Apple is under siege. While the threat is not existential – in 1996 the company was close to filing for bankruptcy while today it has a cash on hand balance in excess of USD$61B – it is facing legal, regulatory and market threats.
It has faced these all before but not simultaneously and at today’s scale. And this is hallowing at a time where there it increased scrutiny and an unparalleled ability for opinions to be published, often msquerading as fact.
The challenges with the EU will not end with the release of iOS 17.4. Already, Apple’s new fee structure is under scrutiny with many saying (with some justification in my view) that Apple’s begrudging compliance will be challenged legally.
The patent dispute with Masimo will eventually be settled. I doubt that Apple will admit fault but it will, ultimately, pay something to Masimo to resolve the matter. At some point, this will become a distraction Tim Cook and his team will simply want gone.
The Vision Pro is the great unknown. Thus far, the Vision Pro looks like a very expensive solution to a problem many people don’t think exists. I think Apple is prepared to play a very long game with the Vision Pro, much as it did with the iPad.
When the iPad was released there was not anything like it in the market. It revolutionised computing as a technology that was usable for everyone – even complete technology novices. The Vision Pro could be the same except that it costs about seven times more than the first generation iPad so it’s unlikely to appeal to a wide audience.
I think the Vision Pro is part of a platform play. The first generation device will show the potential with subsequent, more accessible versions becoming the more widely used. The first version of the iPod was quite a clunky device. I heard a (possibly apocryphal) story that the first iPod to come into Australia broke because the FireWire connector was a touch fragile.
But by the third generation, it was the most popular portable music player on the market. It’s possible the Vision Pro could end up doing the same to market incumbents like the Meta Quest and Oculus Rift.
Apple must sort out its regulatory and legal issues quickly. If it doesn’t, it risks being distracted from what it does best – creating great technology experiences.
Anthony is the founder of Australian Apple News. He is a long-time Apple user and former editor of Australian Macworld. He has contributed to many technology magazines and newspapers as well as appearing regularly on radio and occasionally on TV.