Tag: smartphone

Apple Seeks Dismissal of US Lawsuit That Accuses iPhone Maker of Monopolising Smartphone Market

Apple said on Tuesday it plans to ask a US judge to dismiss a lawsuit filed by the Justice Department and 15 states in March that alleged the iPhone maker monopolized the smartphone market, hurt smaller rivals and drove up prices.

In a letter to US District Judge Julien X. Neals in New Jersey, Apple said “far from being a monopolist, Apple faces fierce competition from well-established rivals, and the complaint fails to allege that Apple has the ability to charge supra-competitive prices or restrict output in the alleged smartphone markets.”

In the letter to the judge, Apple said the DOJ relies on a new “theory of antitrust liability that no court has recognized.”

The government is expected to respond within seven days to the Apple letter, which the court requires parties to submit, hoping to expedite cases before advancing to a potentially more robust and expensive effort to dismiss a lawsuit.

The Justice Department alleges that Apple uses its market power to get more money from consumers, developers, content creators, artists, publishers, small businesses and merchants. The civil lawsuit accuses Apple of an illegal monopoly on smartphones maintained by imposing contractual restrictions on, and withholding critical access from, developers.

The Justice Department, which did not immediately comment, has previously said Apple charges as much as $1,599 for an iPhone and makes a larger profit than any rival. Officials also said Apple imposes hidden charges on various business partners – from software developers to credit card companies and even rivals such as Alphabet’s Google, in ways that ultimately raise prices for consumers.

Apple rejected the government’s contentions that the iPhone has kept consumers “locked in” to the devices. “Someone unhappy with Apple’s limitations has every incentive to switch to competitor platforms that ostensibly do not have those limitations,” the letter said.

“Consumers should not have to pay higher prices because companies violate the antitrust laws,” Attorney General Merrick Garland said in March. “If left unchallenged, Apple will only continue to strengthen its smartphone monopoly.”

© Thomson Reuters 2024

Apple launched the iPad Pro (2022) and the iPad (2022) alongside the new Apple TV this week. We discuss the company’s latest products, along with our review of the iPhone 14 Pro on Orbital, the Gadgets 360 podcast. Orbital is available on Spotify, Gaana, JioSaavn, Google Podcasts, Apple Podcasts, Amazon Music and wherever you get your podcasts.
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Xiaomi Says EV Plans Running Ahead of Schedule Amid Revenue Drop Report

Chinese smartphone maker Xiaomi reported a 4 percent revenue drop in the second quarter, tracking a shrinkage in China’s handset market, but said its move into making electric vehicles was running ahead of schedule.

Sales dropped to CNY 67.4 billion (nearly Rs. 76,450 crore) from CNY 70.17 billion (nearly Rs. 80,650 crore) in the same quarter a year earlier, but beating analysts’ estimates of CNY 65.13 billion (nearly Rs. 74,860 crore).

Net income rose to CNY 5.14 billion (nearly Rs. 5,830 crore) over the period, an increase of 147 percent from CNY 2.08 billion (nearly Rs. 2,390 crore) a year earlier, also beating expectations. The company put the increase down to cost cutting and efficiency improvements, particularly in its physical stores.

“Despite the macroeconomic headwinds in the global market we continue to expand our footprint,” Xiaomi President Lu Weibing said on an earnings call. 

“Several of our peers already exited from certain areas in this challenging environment, but no matter how hard it will be we will reinforce our presence across regions and markets,” Lu said.

Consumer demand in China’s smartphone market continued to shrink in the second quarter, dropping 5 percent to 64.3 million units, according to Canalys, a consultancy that tracks the smartphone industry.

Xiaomi’s shipments declined by 19 percent to 8.6 million, while in major overseas market India, shipments fell 22 percent to 5.4 million units, Canalys said.

In light of declining handset sales, Xiaomi is planning to move into the manufacture of electric vehicles (EVs) and has received approval from China’s state planner, Reuters reported this month.

The company has pledged a $10 billion (nearly Rs. 82,600 crore) investment over a decade in the automobile business.

Lu said the company’s plans to start mass production of EVs in the first half of 2024 remains unchanged. “Our current progress is ahead of expectations and of the original production schedule,” he said.

© Thomson Reuters 2023

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Apple Said to Hover Above Competition Even as Smartphone Market Stumbles

The global smartphone market may be tumbling, but the iPhone 13 continues to sell well, and Apple is expecting its upcoming iPhone 14 to do even better at launch.

Apple‘s slightly higher expectations for the forthcoming iPhone 14 underscore a growing belief among Wall Street analysts that the Cupertino-based company’s sales are likely to hold up better than the broader smartphone industry if major economies enter a recession.

Apple, which reports its fiscal third quarter earnings on July 28, conveyed its expectations to suppliers in initial forecasts as it carries out trial production of the iPhone 14, sources with direct knowledge of the matter told Reuters.

With Apple sitting at the higher end of the market, analysts believe that inflation in core items like food and fuel have taken a lesser toll on its relatively affluent user base. That comes as industry watchers such as Fubon Securities Investment Services chairman Charles Hsiao believe demand for consumer electronics will slow overall this year and next.

An economic slowdown in China has already taken a huge bite out of the smartphone market, pulling global sales down 10 percent year over year to 96 million units in May, the most recent month for which full figures were available, according to Counterpoint Research. It’s only the second time in nearly a decade that the monthly figure has slipped below 100 million handsets, the firm said.

But two iPhone supply chain sources with direct knowledge of the matter told Reuters that iPhone sales have continued to do well in July despite signs of cooling market demand for other smartphone makers.

“Others are starting to take a hit,” one of the sources said.

The second source said July shipments for the iPhone 13 from one factory were a third higher than July last year. That pattern was especially unusual because sales of current iPhone models tend to slow down in July and August as consumers await new models that Apple traditionally releases in September.

“Judging by shipment, sales of iPhone 13 are fairly good,” the second source said.

The iPhone has continued to sell well late into its cycle in part because “China demand rebounded sharply after lockdowns ended and the iPhone was a beneficiary” of a June shopping holiday in China, Cowen analyst Krish Sankar wrote in a note to clients.

In keeping with its annual schedule, Apple has started trial production of the iPhone 13’s successor with the goal of ramping up mass production in August so the devices can start shipping in the fall. The initial shipment forecasts Apple has given suppliers is “slightly higher” than that of iPhone 13 a year ago, the second source said.

“It’s slightly higher than last year. It’s good, but not explosively good,” the second source said.

For the just-ended fiscal third quarter, some Wall Street analysts are bracing for a slight decline in iPhone 13 shipments even if volumes are higher at some individual factories. But analysts still expect the iPhone to fare better than rivals. Cowen, for example, expects Apple handset shipments to be down about 1 percent for the just-ended quarter, while overall handset shipments could be down as much as 13 percent.

The divergence between Apple and the Android market is rippling through Apple’s supply chain.

“For Samsung‘s display unit, a better-than-expected performance in Q2 is expected due to shipments for iPhones, which is the only smartphone with strong sales,” said Song Myung-sup, analyst at HI Investment & Securities.

Cowen held steady its “outperform” rating on shares of chipmaker Skyworks Solutions, noting that it gets about 55 percent of its revenues from Apple for a radio chip in the iPhone. Skyworks rival Qorvo, by contrast, gets 30 percent of its revenue from Apple and has greater exposure to the Android phone market. Cowen downgraded Qorvo to “market perform.”

“Skyworks’ greater relative exposure to Apple in its mobile business likely insulates the company in the near term from significant impacts associated with… downward demand revisions,” Cowen analyst Matt Ramsay wrote in a note to clients.

© Thomson Reuters 2022

 

 

 

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