Technology

What's Up With Apple: Earnings, Russian Fine and More

After markets close on Wednesday, Apple Inc. (NASDAQ: AAPL) will report results for the March quarter. While no one is projecting another quarter of $100 billion in revenue, the consensus revenue estimate for the quarter is $77.4 billion, a record for any but the December quarter.

Sales growth is expected to be highest in Apple’s various hardware products like iPhones, iPads and Macs, while services revenue takes a back seat on growth. Those sales numbers have gotten a boost from students and workers who have been learning and working from home for the past year.

As an end to the COVID-19 pandemic is in sight, investors worry that demand for high-margin hardware and software products will soften. Perhaps that’s why Apple’s share price has improved by just 1.4% to date in 2021. Last year, Apple’s stock gained more than 80% in the year.

Apple stopped providing guidance last year, citing the uncertainty created by the pandemic. Anything CEO Tim Cook says on the company’s conference call that has a whiff of a forecast about it will be pounced on either as proof that Apple’s growth will continue or that its best days are behind it. The truth, of course, lies somewhere in between.

Russia’s Federal Antimonopoly Service (FAS) has fined Apple more than 900 million rubles (some $12 million) for violating the country’s anti-monopoly regulations. A Russia-based firm, Kaspersky Labs, filed a complaint in March of 2019 claiming that Apple had forced the company to hobble one of its security apps aimed at making web browsing safer for kids.

The FAS ruled that when Apple introduced its own safe browsing feature in iOS 12, the company abused its control of the iPhone ecosystem by rejecting third-party apps from its App Store. According to The Verge, Apple will appeal the fine.

In yet another legal contretemps, this time in Germany, some of the country’s largest media, tech and advertising firms have filed a complaint with Germany’s competition regulator accusing Apple of violating antitrust rules with the introduction of iOS 14.5 and the company’s App Tracking Transparency feature.

Now that iPhone and iPad users will be able to shut off ad trackers, app developers in Germany and elsewhere claim that they will have to begin charging fees for what have been free apps because they will not be making money from advertising. Apple, of course, will take its 30% cut of app sales through the App Store, essentially forcing the app developers to pay Apple more money.

A lawyer for the German firms told the Financial Times, “Consumers will be harmed by higher transaction costs. If the relevance of ads decreases, consumers will have to spend more time searching to find offerings that are relevant to them.” The new complaint is similar to one filed earlier this year in France by an organization representing many French venture capital firms.