Technology

Apple Boots Competing Hardware From Apple Stores

Beginning in late September, Apple Inc. (NASDAQ: AAPL) began removing third-party products like headphones, earphones and speakers from its online store as the company prepares an announcement of new earphone and speaker products.

According to a report late Monday at Bloomberg, employees at Apple’s brick-and-mortar stores have been told to begin removing headphones and speakers from Bose, along with speakers from Sonos Inc. (NASDAQ: SONOS) and Logitech International S.A. (NASDAQ: LOGI).

Over the next few months, Apple is expected to release new over-the-ear headphones under the “AirPods Studio” brand name. The company is also expected to launch a smaller and cheaper version of its HomePod smart speaker.

Apple has taken this step before when it finally gets around to introducing something that competes with a third-party product it has been selling. Fitbit Inc.’s (NYSE: FIT) health tracker is, perhaps, the best example. Apple withdrew Fitbit products from its stores beginning in late 2014, just ahead of its April launch of the first Apple Watch. By the first quarter of 2017, Apple Watch had surpassed Fitbit in the number of units shipped.

Apple’s current HomePod lists for $299. Logitech’s Ultimate Ears Blast smart speaker carries a list price of $179.99 while the Sonos Play: 1 has a price tag of $189.99. Bose offers a SoundLink Mini II smart speaker for $179.95. All three companies offer more expensive speakers, but Apple does not yet offer a competitor at the low end of the price range.

At a time when big tech companies are under a microscope because of their market power, it seems like tossing down the gauntlet by refusing to carry competing products may be a bad idea. Apple’s dispute with Epic Games over Apple’s royalty demands could result in a tectonic shift in power away from ecosystems like Apple’s toward smaller competitors.

Apple has to defend its ecosystem everywhere it can. Booting competing hardware products from the stores is all about lifting Apple’s own revenues and profits. Challenges to the company’s playbook are sure to multiply if Apple gives an inch.

Apple’s stock traded down about 1.9% Tuesday morning, at $114.30 in a 52-week range of $53.15 to $137.98. The consensus price target on the stock is $119.37.

Sonos traded down about 5.2% to $14.85, in a 52-week range of $6.58 to $17.83 and with a price target of $16.36.

Logitech stock dropped 5.5% to $76.32. The 52-range is $31.37 to $80.87, and the stock’s price target is $76.28.