• Spotify among companies complaining about Apple EU developer terms & conditions.
• Anti-competitive practices make sideloading more expensive.
• Software companies likely to keep working under existing Apple terms & conditions.

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Digital Markets Act: Will latest EU rules herald a new era for Big Tech?

With iOS 17.4 due to be released in the coming week, 30 companies have penned an open letter to the European Commission, media groups, and lobby organizations, stating their concerns about Apple’s terms and conditions, which they claim will still leave the company in contravention of the EU’s Digital Markets Act.

To comply with the DMA, Apple is now allowing third-party app stores and the sideloading of applications downloaded independently. Developers will be given a choice between signing up to Apple’s new terms or sticking with the existing T&Cs, which the group claims is a “false choice.” The new terms, the signatories claim, will “hamper fair competition with potential alternative payment providers.”

“Rotten apples” by fotologic is licensed under CC BY 2.0.

To aid developers in their choice, Apple provides a handy calculator to guide them through the myriad available options. Users in the EU select whether they will qualify for the App Store Small Business Program, what App Store fees they would pay, and the value of in-app purchases they predict users will pay – under new and old terms.

What will surprise absolutely no one is that developers will end up paying more money to Apple if they choose to allow their apps to be sideloaded than they currently pay under existing terms. They will also have the cost of running an app store, a customer support function, and a payment processor. For developers, keeping business as usual under Apple’s existing terms results in greater revenue. The only way to preserve income under Apple’s new terms with apps served from a third-party store is to raise the price that consumers pay.

This puts some of the more hyperbolic language of the open letter to the European Commission into context. It claims that “Apple is rendering the DMA‘s goals of offering more choice and more control to consumers useless.” Consumers will rarely have a choice to sideload an app or download it from a third-party store because no application developers will opt to make less money.

The letter states:

“New app stores are critical to driving competition and choice both for app developers and consumers. Sideloading will give app developers a real choice between the Apple App Store or their own distribution channel and technology. Apple’s new terms do not allow for sideloading and make the installation and use of new app stores difficult, risky and financially unattractive for developers. Rather than creating healthy competition and new choices, Apple’s new terms will erect new barriers and reinforce Apple’s stronghold over the iPhone ecosystem.”

Apple’s new terms do “allow for sideloading” – in this, the letter is incorrect – but its terms are deliberately anti-competitive. The company is indeed “[making] a mockery of the DMA and the considerable efforts by the European Commission and EU institutions to make digital markets competitive.”

Something rotten in the state of Apple? Suuuurely not? “rotten apple” by johnwayne2006 is licensed under CC BY-NC-SA 2.0.

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European hammer of justice to fall on big tech?

It would be naive to believe that the signatories of the letter are beating a drum for consumers’ right to choose where they source their apps from. The motives of Epic Games, Spotify, Uptodown, et al. are as mercenary and cynical as Apple’s. They expected to make more money thanks to the DMA‘s imposition but have been thwarted, at least for now. The ‘Apple Tax’ payed by companies with apps on the App Store is a thorn in the side to shareholders dependent on Apple’s App Store.

For the next few years, European taxpayers will fund the inevitable legal battle they will wage on behalf of the likes of Spotify (2023 Q4 revenue €3.7 billion, €68 million in adjusted operating profits) and Epic Games (valued at $31.5 billion in 2023), so justice can be granted to these stalwart defenders of consumer choice.

Under the Digital Markets Act, violators may be fined up to 10% of worldwide global turnover, which would amount to approximately $38 billion plus change. Likely for Apple, it won’t come to that, but as ever, Cupertino can afford its lawyers’ salaries for a few years until it can find ways to recoup the costs of operating in a competitive market – at least, in the EU. Developers and consumers in the US, UK, and elsewhere can look forward to business as usual.

Track available on both iTunes and Spotify…

The post Spotify, Epic decry Apple terms under EU compliance appeared first on TechHQ.

• The Apple electric car destined never to hit roads.
• In truth, no one ever asked for an Apple electric car, and its projected price-point was absurd.
• Apple will now focus on generative AI.

Anyone remember that Apple electric car idea? One of the company’s most ambitious projects has finally been canned, much to the surprise of some 2000 employees working on it. The effort has been decades long but an internal announcement on Tuesday finally put the project to bed.

Chief operating officer Jeff Williams and vice president in charge of the electric car effort, Kevin Lynch, informed employees – who have remained anonymous given that the information isn’t yet public – that the project will begin winding down and staff shifted to the artificial intelligence division.

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The Apple electric car team was known as the Special Projects Group (SPG). Given the scale of AI hype, it’s no wonder that team is growing under executive John Giannandrea. AI projects are an increasingly key priority at Apple and, let’s face it, there weren’t many people still holding out for an Apple car.

Work on the idea began in 2014, the multi-billion-dollar effort called Project Titan would have catapulted Apple into a whole new industry. At its conception, the Apple electric car would have a limousine-style interior and voice-controlled navigation.

The project was never smooth sailing – at all. The team’s leadership and strategy was changed several times: Lynch and Williams only took the reins a few years ago, following the departure of Doug Field, who’s now a senior executive at Ford.

Publicly, Apple contemplated many designs. You could almost be forgiven for thinking that this was a major issue for the company in realizing its electric vehicle, but self-driving technology was also a concern. Apple began road-testing its system in 2017 with dozens of vehicles on US roads – all inside the interior of a Lexus SUV.

The Apple car system gets tested in an SUV shell. Via the Financial Times.

Just one month ago, it was reported that the Apple electric car project had reached a make-or-break point. More secretive components were tested on a track in Phoenix – the latest internal strategy had been to delay the car’s release until 2028 and reduce its self-driving specifications from Level 4 to Level 2+ technology.

One idea, scrapped earlier than the whole project, was a car with no steering wheel or pedals. Time also went into the development of a remote command center that could take over for a driver. The SPG included employees from across the car industry, with designers from Aston Martin, Lamborghini, BMW and Porsche.

The car had been imagined at a cost of $100,000 but executives worried the vehicle wouldn’t achieve the profit margins Apple typically enjoys on its other products. There were also concerns from the board about spending millions of dollars every year on a project that might never be realized.

The move is a relief to investors, who sent Apple shares up on Tuesday after the news broke. Elon Musk has also celebrated the move – less competition for his Tesla – in typically graceless fashion, by posting a saluting emoji and a cigarette emoji on his platform X. If only there were a good verb for posting to what used to be Twitter.

Oh stop, our sides are splitting…

The move from Apple may just reflect the cooling of the EV market. Sales growth has wavered thanks to high prices and poor charging infrastructure discouraging mainstream buyers. Not that any new Apple product is viable for the mainstream buyer when it’s first released…

Still, the entire EV industry is pivoting, with General Motors and Ford shifting their attention to hybrid vehicles thanks to a lack of EV demand and too many manufacturing bottlenecks. Across the industry, automakers are slashing battery-electric car prices, production targets and – crucially for Apple – profit forecasts.

Apple is still heavily investing in other areas: it has spent $113 billion on research and development over the past five years with an average annual growth rate of 16%. Of course, it also launched the Vision Pro headset, its first new product category in almost a decade, with remarkable – not to say baffling – success.

Ultimately, focusing on AI may be a better bet, Bloomberg Intelligence analysts Anurag Rana and Andrew Girard said in a note. “Apple’s decision to abandon electric cars and shift resources toward generative AI is a good strategic move, we believe, given the long-term profitability potential of AI revenue streams versus cars.”

Ultimately, then, the Apple electric car isn’t a huge loss, but it does prove that the technology industry is increasingly making cuts in other major project areas to keep up with AI development.

The post Apple’s electric car plans driven out by AI appeared first on TechHQ.

• Apple labels PQ3 as “Level 3” security, highlighting its robust properties for iMessage.
• PQ3 adds a post-quantum key to Apple device registration for iMessage.
• PQ3 adds a rekeying mechanism for iMessage, enhancing security.

The imperative for impregnable security measures has reached a crescendo in the ever-accelerating march toward quantum computing dominance. Today, as the quantum supremacy specter looms, the clamor for steadfast cryptographic shields has amplified. So, in a groundbreaking move, Apple has unveiled PQ3, a cutting-edge post-quantum cryptographic protocol tailored for iMessage. Touted by the tech giant as possessing “unparalleled” security features, PQ3 represents a paradigm shift in communication security.

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At the heart of Apple’s embrace of post-quantum cryptography (PQC) lies a deep understanding of the evolving threat landscape. Simply put, as quantum computing advances, traditional cryptographic methods face unprecedented challenges, making the integration of PQC imperative for safeguarding sensitive data and preserving user privacy. 

For context, with their exponential computational power, quantum computers can potentially render existing encryption algorithms obsolete, posing significant risks to data security. Recognizing this, Apple has proactively invested in research and development to pioneer cryptographic solutions capable of withstanding quantum attacks.

That’s where the latest addition to Apple’s cryptographic arsenal, the PQ3 protocol, represents a paradigm shift in communication security. By introducing a new post-quantum encryption key within the iMessage registration process, Apple ensures that data exchanged through its platform remains protected against future quantum threats. PQ3 also incorporates advanced security features, such as a rekeying mechanism within iMessage conversations, designed to mitigate the impact of critical compromises and bolster overall resilience. 

“To our knowledge, PQ3 has the strongest security properties of any at-scale messaging protocol in the world,” Apple’s Security Engineering and Architecture (SEAR) team stated in a blog post a week ago.

PQ3 for iMessage integrates post-quantum key establishment and ongoing self-healing ratchets. Source: Apple

A quantum leap in messaging security

Traditionally, messaging platforms rely on classical public key cryptography like RSA, elliptic curve signatures, and Diffie-Hellman key exchange for secure end-to-end encryption. These algorithms are based on complex mathematical problems deemed computationally intensive for conventional computers, even with Moore’s law in play. But the advent of quantum computing poses a new challenge.

A powerful enough quantum computer could solve these mathematical problems in novel ways, potentially jeopardizing the security of end-to-end encrypted communications. While quantum computers capable of decryption aren’t yet available (as far as we know, supervillains notwithstanding), well-funded attackers can prepare by exploiting cheaper data storage. They accumulate encrypted data now, planning to decrypt it later with future quantum technology—a tactic called “harvest now, decrypt later.”

When iMessage launched in 2011, it became the first widely available messaging app with default end-to-end encryption. Over the years, Apple has continually enhanced its security features. In 2019, the iPhone maker bolstered the cryptographic protocol by transitioning from RSA to elliptic curve cryptography (ECC) and safeguarding encryption keys within the secure enclave, increasing protection against sophisticated attacks. 

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“Additionally, we implemented a periodic rekey mechanism for cryptographic self-healing in case of key compromise. These advancements underwent rigorous formal verification, ensuring the robustness of our security measures,” the blog post reads. So, the cryptographic community has been developing post-quantum cryptography (PQC) to address the threat of future quantum computers. These new public key algorithms can run on today’s classical computers without requiring quantum technology. 

Designing PQ3

Designing PQ3 involved rebuilding the iMessage cryptographic protocol to enhance end-to-end encryption, meeting specific goals:

1. Post-quantum cryptography: PQ3 protects all communication from current and future adversaries by introducing post-quantum cryptography from the start of a conversation.
2. Mitigating key compromises: It limits the impact of critical compromises by restricting the decryption of past and future messages with a single compromised key.
3. Hybrid design: PQ3 combines new post-quantum algorithms with current elliptic curve algorithms, ensuring increased security without compromising protocol safety.
4. Amortized message size: To minimize additional overhead, PQ3 spreads message size evenly, avoiding excessive burdens from added security.
5. Formal verification: PQ3 undergoes standard verification methods to ensure robust security assurances.

According to Apple, PQ3 introduces a new post-quantum encryption key during iMessage registration, using Kyber post-quantum public keys. These keys facilitate the initial critical establishment, enabling sender devices to generate post-quantum encryption keys for the first message, even if the receiver is offline.

PQ3 also implements a periodic post-quantum rekeying mechanism within conversations to self-heal from crucial compromise and protect future messages. This mechanism creates fresh message encryption keys, preventing adversaries from computing them from past keys.

The protocol utilizes a hybrid design, combining elliptic curve cryptography with post-quantum encryption during initial critical establishment and rekeying. Rekeying involves transmitting fresh public key material in line with encrypted messages, with the frequency of rekeying balanced to preserve user experience and server infrastructure capacity.

PQ3 continues to rely on classical cryptographic algorithms for sender authentication and essential verification to thwart potential quantum computer attacks. These attacks require contemporaneous access to a quantum computer and cannot be performed retroactively. However, Apple noted that future assessments will evaluate the need for post-quantum authentication as quantum computing threats evolve.

Apple iPhone 15 series devices are displayed for sale at The Grove Apple retail store on release day in Los Angeles, California, on September 22, 2023. (Photo by Patrick T. Fallon / AFP)

Why PQ3 on iMessage matters for iPhone Users

Integrating PQ3 into iMessage signifies a monumental leap forward in privacy and security for iPhone users. With the exponential growth of data and the looming specter of quantum computing, traditional encryption methods face unprecedented challenges. PQ3 mitigates these risks by providing quantum-resistant protection, ensuring that your conversations remain shielded from future threats. 

In essence, PQ3’s implementation in iMessage demonstrates Apple’s interest in safeguarding user privacy and staying ahead of emerging security threats. Beyond its robust encryption capabilities, PQ3 introduces a host of additional security features designed to enhance the overall integrity of iMessage. These include secure fundamental establishment mechanisms, cryptographic self-healing protocols, and real-time threat detection capabilities. 

By incorporating these advanced security measures, Apple ensures that iMessage remains a bastion of privacy in an increasingly interconnected world.

When can iPhone users expect the update?

Support for PQ3 will begin with the public releases of iOS 17.4, iPadOS 17.4, macOS 14.4, and watchOS 10.4. Already available in developer previews and beta releases, PQ3 will automatically elevate the security of iMessage conversations between devices that support the protocol. As Apple gains operational experience with PQ3 globally, it will gradually replace the existing protocol within all sustained conversations throughout the year.

The post Apple updates iMessage to protect iPhone users from quantum attacks appeared first on TechHQ.

• Brussels regulators investigated Apple following a Spotify complaint, leading to a hefty penalty.
• The EU focused on the rule by Apple preventing app developers from linking to outside subscription sign-up pages.
  
• The battle between Spotify and Apple has been ongoing for years – and Apple is expected to vigoroulsy appeal.

A colossal clash has between two industry behemoths – streaming powerhouse Spotify and tech titan Apple – has been unfolding for months. Spotify has leveled charges of anti-competitive behavior against Apple, contending that the Silicon Valley giant employs its market dominance to throttle competition and hobble rival services. But it’s not just the combatants locked in this struggle; European regulators have also stepped onto the battlefield, poised to challenge Apple’s stronghold over its app store empire. 

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Spotify clashes with Apple but isn’t so angelic itself

Spotify argues that Apple’s strict regulations and steep fees are barriers to competition, stifling creativity and limiting consumer options. The contentious issue of the “Apple tax” looms large – a term coined to describe the substantial commission fees exacted by Apple on in-app purchases. 

For Spotify, this translates to navigating a landscape where every musical note played carries a hefty price tag, jeopardizing its ability to maintain a competitive edge and sustain profitability. Beyond financial concerns, Spotify alleges that Apple’s influence permeates the user experience, with accusations of preferential treatment towards its music streaming service, Apple Music, fueling claims of anti-competitive behavior and igniting industry-wide debate and dissent.

At the forefront of Spotify’s battle is CEO Daniel Ek, who’a spearheading the fight against what he views as Apple’s monopolistic grip on the music streaming sector. In an October 2023 op-ed for the UK’s (avowedly right-wing) Daily Mail, Ek condemned Apple’s imposition of a 30% tax and restrictive regulations on developers, many of whom played pivotal roles in shaping iOS into its current form. Ek also highlighted Apple’s shifting stance towards these developers, now seen as adversaries by the tech giant.

Daniel Ek, Founder & CEO, Spotify, makes progress in his Apple battle. (Photo by Noam Galai/GETTY IMAGES NORTH AMERICA/Getty Images via AFP).

Frustrated by what he sees as Apple’s anti-competitive practices, Ek has not shied away from taking his concerns public. In a bold move, Spotify filed a complaint with the European Commission in December 2023, alleging that Apple’s behavior violates EU competition law. The legal battle has ever since underscored the high stakes involved. Neither Apple not Spotify has shown a willingness to blink first.

For Ek, the fight against Apple is more than just a business dispute – it’s allegedly a matter of principle, inasmuch as such things can be said to apply to big business. Ek claims to envision a future where innovation flourishes in “a fair and open marketplace,” where consumers have genuine choice, and competition breeds excellence. To achieve this vision, Ek remains steadfast in his commitment to holding Apple accountable for its actions and advocating for a level playing field for all players in the music streaming industry.

This of course should not detract from Spotify’s own pitiful remuneration of artists who appear on the streaming platform. There are matters of principle and matters of profit involved in both companies’ operations – and it’s rare that they can be counted on to intersect.

What is the outcome for Apple and Spotify in the EU?

Before the latest complaint filed in December 2023, Spotify lodged an official antitrust grievance with the European Commission nearly four years ago, citing Apple’s anti-competitive practices that impeded innovation and detrimentally affected developers and consumers globally, especially in Europe. Despite the passage of time, the situation remains essentially unchanged, according to the streaming giant.

Spotify noted that the absence of definitive regulatory intervention has encouraged Apple to persist in its questionable conduct. Despite a growing chorus of advocates clamoring for action, regulators have been slow to act decisively, leaving a palpable frustration among stakeholders.

Before the complaint was filed two months ago, Spotify and seven other companies and organizations in sectors including publishing, audio streaming, dating, communications, and marketplaces sent a joint letter in January 2023 to call for meaningful regulatory action against Apple’s long-standing allegedly anti-competitive European practices.

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After much back and forth between regulators and the tech giants, on February 19, 2024, the bloc announced its intention to fine Apple for allegedly breaching EU law concerning access to its music streaming services. This historic penalty marks a pivotal moment in the ongoing battle between regulatory authorities and Silicon Valley giants, underscoring the EU’s commitment to enforcing fair competition practices in the digital realm.

The EU’s decision to impose its first-ever fine on Apple also sends a clear message to the tech industry: compliance with EU regulations is non-negotiable. Reports indicate that this development follows a protracted investigation by EU authorities, drawing on insights from five individuals intimately familiar with the case. Their direct knowledge sheds light on the intricate details of the long-running probe, revealing the meticulous scrutiny of Apple’s business practices.

“In a closed-door meeting between EU officials and Apple in June last year, the tech firm told regulators it had already addressed any possible competition concerns arising from Spotify’s complaint,” a report by Bloomberg reads. For Apple, although accustomed to navigating complex regulatory landscapes, this fine represents a significant setback. 

When contacted for comment, Bloomberg also noted that Apple referred to a previous statement, which said that the “App Store has helped Spotify become the top music streaming service across Europe.” The translation of that terse statement is that Apple is expected to vigorously challenge the fine, using its formidable legal and financial resources to defend its practices. Nevertheless, the EU’s unwavering stance underscores the imperative of upholding fair competition principles to safeguard consumer choice and innovation within the digital ecosystem. 

This decision has broader implications for the tech industry. As the tech landscape continues to evolve, this fine against Apple is a poignant reminder of the regulatory challenges confronting industry titans. With the EU leading the charge in enforcing antitrust laws, the repercussions of this decision will surely reverberate across the global tech industry, shaping the future of digital competition and regulation for years to come.

The post EU fines Apple €500m in Spotify showdown appeared first on TechHQ.

• For Apple, right to repair means losing the monopoly on device repairs.
• Other tech giants have made their peace with the Oregonian bill, but Apple is lobbying against it. 
• Is there more to Apple’s objection that commercial self-interest?

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Six months ago, Apple surprised everyone by supporting a right to repair bill in California. It had spent millions of dollars trying to maintain its monopoly on repair but its landmark move to formally support the legislation made it look like consumers had won.

In California, SB 244 would require manufacturers, including Apple, “to make available, on fair and reasonable terms, to product owners, service and repair facilities, and service dealers, the means, as described, to effect the diagnosis, maintenance, or repair of the product.”

However, the illusion that Apple was relaxing its monopolistic hold on product repairs has been shattered as executives lobbied against a stronger right to repair bill in Oregon. For the first time, Apple had an employee actively outline its stance on the issue at a hearing: an executive from the company testified at a hearing for the bill on Thursday.

Via 404 media.

Apple vs right to repair

It’s clear that the company has no intention of loosening control over its repair ecosystem. What makes Oregon’s bill different from the Californian one Apple supported is that it includes a critical provision that is crucial to Apple maintaining dominance over the repair market: “parts pairing.”

The parts pairing system allows Apple to maintain its monopoly by ensuring replacement parts are linked to a specific device and can only be unlocked by Apple or an authorized Apple repair shop.

Authorized repair providers have to pay to join the program, which limits the types of repair companies can do.

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The Oregonian bill, SB 1597, stipulates:

“An original equipment manufacturer may not use parts pairing to:

(A) Prevent or inhibit an independent repair provider or owner from installing or enabling the function of a replacement part or component of consumer electronic equipment, including a replacement part or component that the original equipment manufacturer has not approved;

(B) Reduce the functionality or performance of consumer electronic equipment; or

(C) Cause consumer electronic equipment to display unnecessary or misleading alerts or warnings about unidentified parts, particularly if the alerts or warnings cannot be dismissed.

As well as preventing aftermarket screens and batteries being used as replacements, part pairing stops even Apple-made parts being swapped across devices. A battery or screen from one iPhone 15 couldn’t be moved onto another because the parts are cryptographically paired using internal hardware and software, all of which is controlled by Apple.

“It is our belief that the bill’s current language around parts pairing will undermine the security, safety, and privacy of Oregonians by forcing device manufacturers to allow the use of parts of unknown origin in consumer devices,” John Perry, Apple’s principal secure repair architect, told the legislature.

He went on to say that “regulation must not compromise consumer protection” and that actually Apple’s parts pairing system isn’t about repair monopoly. It’s really about making “access to repair easier while also making sure that your device and the data stored on it remains secure.”

If the legislation is passed in Oregon, Perry said it would be an “incredible disservice to consumers.” The issue, he says, would be worldwide, “as we have no ability to restrict provisions regionally.”

That means that if the change happens in Orgeon, Apple will be powerless to maintain its monopoly anywhere else, too.

One huge issue with the parts pairing regime is the huge volume of e-waste it creates, something right to repair legislation has sought to fix for years. At the hearing, Juan Muro, executive director of Free Geek, a nonprofit that securely refurbishes donated electronics for low income communities, shared that of 15,000 donated iPhones in the last year, only 300 were refurbished.

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The rest “had to be sent to be shredded and recycled. This is largely in part because of the issue of parts pairing.” The hearing was also told that 4,800 phones are thrown away per day in Oregon.

Despite the direct implications of parts pairing that were laid out, when Apple had been asked how the parts pairing provision of the bill might be revised for easier compliance “the only thing [Apple] said was ‘delete this section,’” State Sen. Jeff Golden revealed.

Perry repeatedly told the court, when asked how Oregon could reword the bill to Apple’s liking, that he isn’t a legislative expert and although he “can kind of speak lawyer” he wouldn’t be comfortable to offer revisions.

Other manufacturers were invited to appraise the bill, and their revisions were made. Most notably, the Oregon bill is backed by Google – a big competitor for Apple.

One lawmaker said “I’m not trying to pit Apple against Google. But the fact of the matter is Google is coming in here and has said that this parts pairing language is not something that bothers it, and that it can manage through the security and issues with safety. Why is Apple different? Why is Apple different than what Google is doing?”

Google turns on “Smug Mode”

Google has formally supported the bill and will lobby for it to be passed.

Tarah Wheeler.

Although she didn’t get the chance to speak at the hearing, Tarah Wheeler – Oregonian, cybersecurity expert and CEO of Red Queen Dynamics – told 404 media “as someone who is a certified mobile device analyst and forensic specialist […] there is no security implication to switching the battery or glass screen out on a phone in meaningful terms.”

“Apple does a good job of making sure people’s data is secure, and it’s done such a good job of this that it’s a little bit stupid to now try to claim that swapping the glass out is going to stop it from being secure.”

With error messages notifying users that a part isn’t genuine and some features refusing to work as a result, Apple ensures that parts pairing keeps the money it its pocket. To Wheeler’s point, if its hardware and software is so superior, Apple devices shouldn’t be so compromised by small repairs with illegitimate equipment.

For now, it remains to be seen whether Oregon’s right of repair bill passes in spite of the insistence that the sky is falling from Apple. Either way, as more people are made aware of Apple’s monopolistic practice, the time it has to keep getting away with them gets shorter – especially given the ecological implications that its insistence on a monopoly has.

Apple has history of appeasing the right to repair.

The post Apple won’t end parts pairing without a fight appeared first on TechHQ.

• Spotify profits from artists but barely pays them.
• The company also fires the minds behind its most successful concepts. 
• New fees introduced by Apple in the US are attacked by Spotify. 

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New transaction fees of up to 27% are being levied by Apple, much to Spotify’s discontent. On Wednesday, Apple announced it would allow app developers to sell products outside of its own store – provided they still pay a commission.

The firm introduced the fees in the US after a long legal battle with Epic Games. The court found in favor of Apple on several issues, but it fell foul of a law by not allowing app developers to tell people about other ways of paying, including through links that bypass Apple’s App Store payment system.

Although in practice using the App Store payment system doesn’t incur a fee for 85% of developers, small developers are meant to pay around 15% and the biggest developers are charged a 30% fee to use the system.

Following the ruling, Apple has introduced a new set of rules (only in the US, for now) allowing people to subscribe to services outside of its system, but it will still charge developers up to a 27% commission to do so.

Spotify said the move is “outrageous” and accused Apple of “stopping at nothing” to protect its profits.

Does Spotify have room for its righteous indignation against Apple? Source: Spotify.

According to court documents filed by Apple, the commission charge is compliant with the court ruling and, the company added, App Store developers benefit from Apple’s services.

“All App Store developers – including those who place buttons or links with calls to action in their apps – benefit from (among other things) Apple’s platform integrity,” it said.

Other benefits to developers that the company listed include “marketing and external advertising, and a safe environment for users to download and purchase apps and in-app content.”

Spotify’s really, really not on board. It says the policy flies in the face of the US court’s attempt to enable competition.

“Once again, Apple has demonstrated that it will stop at nothing to protect the profits it exacts on the backs of developers and consumers under its App Store monopoly,” Spotify said in response to the fee announcement.

This isn’t the first time Spotify has spoken out against the tech giant. In October 2023, it accused Apple of having an “insane” level of control over the internet. Which seems slightly odd coming from a company with a similarly singular hold on the audio-streaming industry.

Why did Spotify attack the fees?

Spotify is the leading audio-streaming platform, with around 600 million users and a 30% market share – double that of its next-largest competitor. Those numbers aren’t set, either: Spotify gets millions of new subscribers every month, and very few of its users cancel.

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It might come as a shock, then, to hear that not even the ubiquitous service has consistently managed to turn a profit from audio streaming; that Spotify profits are almost none.

How to make a profit as a streaming service is a problem the whole industry – audio and video – faces. Spotify lost money in its $1 billion push into podcasting, which is a business that’s been far less lucrative than initial expectations promised.

With a market cap nearing $40 billion, Stockholm-based Spotify is competing with services run by giants like Apple, Amazon and Google, all of which don’t need the profits from streaming audio.

“Spotify has consistently led people to believe it would have a profitable business that would justify its valuation and used capital raised on the back of that valuation to chase rainbows,” said Richard Kramer, founder of tech-focused equity-research firm Arete Research. “None of those rainbows were captured.”

Last year, three rounds of cuts at Spotify led to some 2,300 employees being laid off. CEO Daniel Ek announced the latest round of cuts – which claimed 17% of Spotify’s remaining workforce – after reporting strong user growth in the third quarter, the company’s first quarterly profit since the beginning of 2022.

Spotify CEO Daniel Ek. Source: Getty Images.

Executives say the company has made progress transforming from a music-streaming service to an audio company, and that its recent push into audiobooks, coupled with podcasts and music streaming, will bring sustained profits in 2024.

Last month, Ek said the company is spending too much money, but it’s Spotify’s “willingness to spend money to the point of loss-making [that] has been a key factor” in its dominant market position, said Tim Ingham, a music industry analyst and founder of trade publication Music Business Worldwide.

When it launched in 2008 in Europe and 2011 in the US, Spotify presented a third option for accessing music: instead of paying for CDs or risking piracy, users could rent access to more or less all the world’s music for a monthly fee, or in exchange for listening to ads.

Working on the – correct – assumption that listeners would pay for a better experience powered by a music recommendation engine, Spotify settled for royalty terms that proved to be unfavorable long term.

Spotify profits are low, but don’t feel too sorry

One way that Spotify’s managed to stay ahead of deep-pocketed competition is additional features tailored to premium users. The success of a yearly Spotify Wrapped, with quirky graphics and insight into our listening habits, has kept the service ahead.

It’s most recent made-for-you addition is the Daylist, a playlist updated three times a day with songs in the genre you tend to listen to on, say, Friday afternoons. What makes the Daylist unique?

Why yes, I believe I’m charmingly twee this afternoon.

The algorithmically generated playlist comes with a title: you’ve never thought of it as a “wistful power ballad wednesday morning” (fashionable lack of capital letters included) but hey, you guess you do listen to a lot of Adrienne Lenker to get you over Humpday.

Although the feature was introduced in September 2023, it wasn’t until a recent Instagram story template went viral that the feature got widespread attention. Since then, searches for the feature on Spotify have spiked nearly 20,000%.

The genius of the feature – and the Instagram prompt that says “Don’t tell me your astrology sign; I want you to go into Spotify, search for your Daylist and post the title it gave you” – is positioning Daylists as a form of introspection.

Like astrology, such forms teach users something about themselves and give us an easy shorthand to make that known to others. It isn’t that you’re stubborn; you’re a Taurus! You aren’t dreading going back to work, it’s just a “somber soul crushing monday morning!”

The hyper-personalization of Spotify’s algorithmic features capitalize on the same impulse that the astrology boom has: instead of helping people discover new music, it helps them discover themselves. As the adage puts it, if you’re not paying, you’re the product. Nobody historically has realized quite how keen people would be to buy a definition of themselves.

The success of the Daylist feature probably has its creator enthroned at the top of the Spotify office, smugly assigning a “lonely classic saturday evening” to Wings fans across the globe. Right?

A bad track record

Glenn McDonald, the curator of the expansive musical map and database EveryNoise, worked as a “data alchemist” at Spotify. His comprehensive musical databases are responsible for powering everything from Discover Weekly playlists to Daylists.

Then, when 17% of staff were cut from Spotify in December, McDonald was among them. This isn’t the first time Spotify has proven itself to be in it for something other than the music.

Just after 2023’s Spotify Wrapped went live and users were served sandwiches of their top genres that year, Damon Krukowski of Galaxy 500 fame wrote that “Spotify made £56m profit, but has decided not to pay smaller artists like me.”

A graphic that was shared on social media, replicating the one Spotify served its users’ data to them in.

It’s an issue that some artists have been vocal about for years: Spotify profits are low, but it pays nearly 70 cents of every dollar it earns from music streaming to music labels and other rights holders. Yet, the maximum a musician earns from Spotify royalties is $0.003 per stream.

Shouldn’t it be the other way round?

So: as it struggles to turn its concept into profit, Spotify is accusing Apple of profiteering, all the while underpaying or outright firing the people responsible for its success.

Maybe dry your tears, Spotify, and reward those responsible for the profits you get?

The post Spotify clashes with Apple but isn’t so angelic itself appeared first on TechHQ.

• In 2023, Apple surpassed Samsung to become the world’s largest smartphone manufacturer by volume.
• Apple’s success was driven by consumers opting for higher-end models, prioritizing durability and features over price.
• In the past year, Samsung shifted focus to the mid and high-end markets for greater profitability.

Over the past decade, Apple and Samsung have been locked in a fierce smartphone industry rivalry, constantly vying for dominance. With its iPhone series, Apple has consistently set trends while Samsung focused on delivering various devices to cater to multiple market segments. This intense competition has led to a see-saw battle for market share, with each company striving to outdo the other in design, features, and technological advancements. 

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The race for consumer loyalty and the title of “the world’s top smartphone manufacturer” has fueled a continuous cycle of innovation and product evolution, making their rivalry one of the defining narratives in the ever-evolving landscape of mobile technology.

Then came 2023, when Apple finally outperformed Samsung in global smartphone sales – for the first time since 2010.

The iPhone dethroned Samsung Galaxy to become the best-selling smartphone series globally, marking a notable shift in the industry’s competitive landscape. According to preliminary data from the International Data Corporation (IDC) Worldwide Quarterly Mobile Phone Tracker, the iPhone accounted for a substantial fifth of the global smartphone market, with nearly 235 million shipments in the past year. 

“The last time a company not named Samsung was at the top of the smartphone market was 2010, and for 2023, it is now Apple. A shifting of power at the top of the largest consumer electronics market was driven by Apple’s all-time high market share and a first time at the top,” IDC’s report reads. In other words, the unprecedented market share demonstrates Apple’s ability to capture a significant portion of consumer demand, and solidifies its position as a frontrunner in the highly competitive smartphone industry.

Apple’s dominance during the holiday quarter has been a recurring theme recently. However, its unprecedented lead over Samsung throughout the year indicates that Apple is navigating the challenges of an industrywide slump more effectively than its competitors.

Apple vs Samsung: a decade-defying achievement

While Samsung remains a formidable player in the smartphone market, its shipments experienced a double-digit slump in 2023, totaling 226.6 million. “The overall shift in ranking at the top of the market further highlights the intensity of competition within the smartphone market,” said Ryan Reith, group VP with IDC’s Worldwide Mobility and Consumer Device Trackers. 

The iPhone sold more than Samsung’s devices globally in 2023. Source: Bloomberg.

Reith believes that Apple certainly played a part in Samsung’s drop in rank, but also that the overall Android space is diversifying. “Huawei is back and making inroads quickly within China. Brands like OnePlus, Honor, Google, and others are launching very competitive devices in the lower price range of the high-end foldable, and increased discussions around AI capabilities on the smartphone are gaining traction. Overall, the smartphone space is headed towards an exciting time,” he added.

Apple’s surpassing Samsung in global smartphone sales signifies a crucial moment in the industry rivalry. It highlights the enduring popularity of the iPhone series and Apple’s ability to connect with a diverse global audience – though it’s reasonable to ask why this is the first time in over a decade it’s beaten Samsung to the punch. Consumers can expect more innovations and intense competition between these tech giants as the smartphone landscape evolves.

Global smartphone sales

Apple vs Samsung – the battle continues. Source: IDC Worldwide Quarterly Mobile Phone Tracker, January 15, 2024.

Overall, IDC said the global smartphone market remains challenged, but momentum is moving quickly toward recovery. According to initial findings, 2023 witnessed a 3.2% decline in global smartphone shipments, reaching 1.17 billion units. It is also the lowest full-year volume in a decade, primarily driven by macroeconomic challenges and elevated inventory early in the year.

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The latter half of the year though brought a surge, solidifying expectations for a robust recovery in 2024. IDC noted that the fourth quarter saw 8.5% year-over-year growth and 326.1 million shipments, higher than the forecast of 7.3% growth. “While we saw some strong growth from low-end Android players like Transsion and Xiaomi in the second half of 2023, stemming from rapid growth in emerging markets, the biggest winner is clearly Apple,” said Nabila Popal, research director with IDC’s Worldwide Tracker team. 

“Not only is Apple the only player in the Top 3 to show positive growth annually, but it also bags the number 1 spot annually for the first time. All this despite facing increased regulatory challenges and renewed competition from Huawei in China, its largest market. Apple’s ongoing success and resilience is largely due to the increasing trend of premium devices, which now represent over 20% of the market, fueled by aggressive trade-in offers and interest-free financing plans.”

The post Apple claims top spot, outshining Samsung in 2023 smartphone sales appeared first on TechHQ.

• Apple is facing stiff competition, particularly from Huawei in China, on top of lingering supply chain challenges affecting the availability of its latest iPhone 15 models.
• Huawei and Xiaomi witnessed impressive YoY growth of 66% and 28% during the Singles’ Day.
• Apple encountered a 4% decline in smartphone sales during the same two-week period.

The smartphone market in China is characterized by intense competition among key players such as Huawei, Xiaomi, and Apple. Traditionally, Apple enjoyed undisturbed success, particularly with the iPhone, which eventually became a status symbol within the country’s social circles. However, there have been notable shifts as domestic players like Huawei and Xiaomi returned to prominence in recent months.

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Armed with innovative features, competitive pricing, and diverse product offerings, Huawei and Xiaomi have been reshaping the dynamics of the Chinese smartphone market in recent months, challenging Apple’s longstanding dominance. So much so that Huawei is now grappling with the challenge of meeting unexpectedly high demand.

Xiaomi’s 14 series, launched in late October, has received over one million orders, contributing to the company’s increased market value by around US$20 billion since a low in June. This success poses challenges for Apple, the world’s most valuable company, which has relied on nearly 20% of its revenue coming from greater China in recent quarters.

Smartphone sales in the world’s biggest mobile market surged by 11% compared to the previous year in the opening four weeks of October, marking a noteworthy indication of the market’s rebound from an eight-month decline. Before October, China’s mobile industry had been mired in a prolonged contraction, following an inventory glut built up a year ago amid Covid Zero lockdowns.

China smartphone shipments market data.

Now, domestic brands are coming out and outpacing Apple. According to a report published by Counterpoint Research, Xiaomi, Honor, and Huawei Technologies were the main forces behind the growth in the Chinese smartphone market. Huawei saw sales rise 90% year-on-year (YoY) during the period. The increase in overall demand indicated that China’s smartphone market is close to exiting an extended slum.

Apple has been under pressure to meet demand for its new devices, all while Huawei and Xiaomi released their latest flagship smartphones. “The clear stand-out in October has been Huawei with its turnaround on the back of its Mate 60 series devices,” Counterpoint China analyst Archie Zhang said in the report, referencing the Shenzhen-based company’s latest handsets launched in late August, including the Mate 60 Pro. 

Despite US sanctions intended to stifle access to such technology, that device is equipped with an advanced made-in-China 5G chip. On the other hand, Xiaomi’s latest flagship, the Xiaomi 14, released on October 26, experienced a 33% sales surge in China within four weeks. The company achieved over one million unit sales in under two weeks, as Xiaomi founder and CEO Lei Jun reported on Weibo. 

Despite receiving less media coverage than Huawei’s Mate 60 Pro, the Xiaomi 14 is notable for being the world’s first device powered by Qualcomm’s Snapdragon 8 Gen 3 chipset and running Xiaomi’s new Android-based operating system, HyperOS.

Apple vs. Huawei vs Xiaomi: who did it better for Singles’ Day?

Source: Counterpoint Research Smartphone 360 Weekly Tracker, China. (*2022 spans Oct 31 – Nov 13; 2023 spans Oct 30 – Nov 12.)

During this year’s two-week Singles’ Day sales event, smartphone unit sales in China grew by 5% YoY, indicating a positive fourth quarter, according to Counterpoint’s report. “This is a good start to the rest of the quarter,” says Mengmeng Zhang, senior analyst for China. “Huawei is continuing its strong run along with Xiaomi, which is enjoying a further spike in sales with the launch of its new 14 series devices.”

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Apple appears to be struggling from hiccups regarding supply, Ivan Lam, added senior analyst for manufacturing at Counterpoint, added. He added that Apple is improving compared to last month. “Considering last November’s supply snafu was an anomaly, the YoY numbers could move into positive territory as current supply tightness normalizes,” he concluded.

In total, the number of Apple smartphones sold declined 4% YoY during the two-week sales from October 30 to November 12, the research consultancy said last Thursday. In comparison, the number of units sold by Huawei and Xiaomi grew 66% and 28% YoY, respectively over the same period.

Huawei up, Apple down. Is this the new normal for the CHinese smartphone market?

A Reuters report indicated that the price for Apple’s latest iPhone 15 model starts at 5,999 yuan (US$832), while Huawei’s Mate 60 smartphones start from 5,499 yuan (US$763). Xiaomi’s latest Mi 14 smartphone is priced at 3,999 yuan (US$555). E-commerce giants like Alibaba and JD.com refrained from disclosing Singles’ Day sales figures this year, continuing a practice they adopted last year. 

JD.com did share that the transaction volume for Apple products on its platform exceeded 10 billion yuan (US$1.39 billion). Meanwhile, Xiaomi reported a cumulative gross merchandise value of more than 22.4 billion yuan for the shopping event.

Apple is navigating a fiercely competitive landscape in China’s smartphone market, especially since the launch of the iPhone 15 collection.

Traditionally a dominant player, the tech giant is now contending with challenges posed by formidable domestic rivals, reshaping the dynamics of the world’s largest smartphone market.

The post Huawei and Xiaomi outshine Apple in China’s Singles’ Day sales appeared first on TechHQ.

• Apple is to join the RCS.
• The move will make message comms between Apple and Android phones much smoother.
• Green vs. blue bubble enmity though will remain.

Apple plans to adopt a messaging standard to allow a smoother texting experience between iPhones and Android devices, something that’s long been a point of contention with Google.

For years, Apple actively refused to make its products in any way compatible with devices not designed by itself. The green message bubble is the icon of the battle, to some extent used as an indicator of status (or lack thereof).

Because that’s what status is in 2023. A green bubble or a blue check mark that indicate our “betterness.”

Once upon a time, there was a lonely little green bubble…

Apple will use rich communication services (RCS) starting next year, which could enable read receipts between the operating systems – iMessage will still be exclusive to “i-” devices.

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“Later next year, we will be adding support for RCS Universal Profile, the standard currently published by the GSM Association. We believe RCS Universal Profile will offer a better interoperability experience when compared to SMS or MMS,” Apple said.

Apple has pushed back against opting in to the RCS standard for years, even under pressure from Google and others. Just last year, a reporter whose mother used an Android asked Apple CEO Tim Cook whether the company would improve messaging relations between the two.

“Buy your mom an iPhone,” was his somewhat symptomatic response, adding that he didn’t see Apple users asking for a lot of energy to be put into adopting RCS.

Apple has perpetuated fragmentation in messaging ecosystems, which especially impacts Android users.

RCS is considered an industry standard for messaging. It allows users to send and receive high-quality photos and videos, chat over wifi or cellular data and know when messages were read, among other things.

Currently, exchanging pictures and videos between Androids and iPhones degrades the quality of the media. Messages between iPhones and Androids are also unencrypted, unlike iMessages or WhatsApp messages.

The decision to keep iMessage within Apple’s ecosystem has, by design, deterred many from transitioning to Android phones. This came to light in Apple’s legal battle with Epic Games, which exposed a prolonged internal debate on the iMessage issue.

Android’s campaign against iMessage.

An email sent in 2013 by Craig Federighi, Apple’s chief software executive, reads: “In the absence of a strategy to become the primary messaging service for the bulk of cell phone users, I am concerned the iMessage on Android would simply serve to remove an obstacle to iPhone families giving their kids Android phones.”

Google ran an Android ad campaign last year called “Get the message,” urging Apple to adopt RCS and laying the blame for the dysfunction at Apple’s feet. In response to the announcement from Apple, Google said it was “happy to see Apple take its first step today by coming on board to embrace RCS.”

It further pledged to work with Apple to implement the standard. The website for the #GetTheMessage campaign still reads that “Apple refuses to adopt modern texting standards.”

Phone company Nothing also goaded Apple, announcing the day before Apple’s statement that its Android phones would run iMessage via a new feature. Nothing chief executive Carl Pei declared victory by sharing a quote from Steve Jobs on X. What impact the thrill of the smaller company had on Apple is unclear.

Is Pei taking credit where it isn’t due?

It’s more likely that the u-turn was an effort to get ahead of antitrust legislation.

The Digital Markets Act seemed set to force Apple’s hand on its refusal to adopt RSC – one element of the Act was a requirement for messaging interoperability. The law says it should be possible for a user of one messaging app (like iMessage) to be able to communicate with someone using a different messaging app (like WhatsApp).

The intention behind this wasn’t to stymie Apple as such, but to give a fairer shot to messaging service startups: historically, any new service was met with the issue that no one would use even the best messaging app unless their friends and family also did so.

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Before the deadline for Apple to dispute iMessage being covered by the new law, which was November 16, the company had already argued it shouldn’t be subject to the rules because it doesn’t have enough users in Europe.

Apple. Doesn’t have enough users.

The EU agreed to not include iMessage in the law until the number of users in Europe had been established – an investigation unlikely to go in Apple’s favor, despite buying the company time.

Commentators say the RCS announcement was initially just insurance, but that Apple has decided to go ahead with it anyway. In the event that iMessage is found to be big enough to be covered by the messaging interoperability requirement, Apple can point to the RCS announcement as evidence of its compliance.

When the news was first announced, many were excited by the idea that so-called green bubble stigma would end. Particularly among younger generations in the US, the exclusivity of iMessage leads to ‘bullying’ for messages that show up as a green bubble.

I spoke with Gen Zers who will find a potential date in an app, but then ghost the potential partner upon seeing a green-text message — indicating they have an Android.

This sounds, and is, superficial. Yet there is some merit… pic.twitter.com/2zIYj2BbQs

— Patrick McGee (@PatrickMcGee_) February 21, 2023

Because RCS meessages will be green, arguably very little material change to the smartphone experience will happen. That means that anyone buying an iPhone to be part of the “blue bubble club,” (an idea we can’t help but scoff at) will have to go through with the purchase, despite the news.

Will the Apple decision to join the RCS put an end to bubble-bullying. No, really, it’s a thing. No, really, we don’t understand it either.

The post Green bubble bullies not stopped by Apple’s iMessage announcement appeared first on TechHQ.

• Although worldwide smartphone revenues showed no YoY growth in Q3, Apple took the lead in the market.
• It recorded its highest-ever quarterly revenue and revenue share, driven by solid sales of the iPhone 15 Pro Max.
• During July-September, Apple increased its market share in China.

Last month, Apple CEO Tim Cook made a surprise visit to China. The trip came less than a month after the release of the Apple iPhone 15, the company’s flagship smartphone, which received a relatively tepid response in the company’s third-largest market. According to a Counterpoint Research report released not long before, the iPhone 15 series unit sales for the first 17 days of sales in China were down 4.5% compared with the iPhone 14.

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The reason for the lukewarm reception from the Chinese market is Huawei, which has reclaimed its position as the leading smartphone manufacturer in China, surpassing Apple. Huawei, just weeks before the iPhone 15 launch, surprised the world with its latest 5G-capable Mate 60 smartphone series, which was hailed as a victory amid US sanctions.

Making matters more complicated for Apple was the fact that the iPhone 15 launch coincided with a government directive to expand a ban on using iPhones in government agencies and state companies across China. All these factors took the shine off Apple’s new release during the first few weeks of iPhone 15 sales.

But it didn’t last for long. “In mainland China, we set a quarterly record for the September quarter for iPhone,” Cook told Reuters in an interview recently. “We had four of the top five best-selling smartphones in urban China.” The demand for Apple’s iPhones in China has remained strong.

People line up to purchase newly-launched iPhone 15 mobile phones at an Apple store in Hangzhou, in China’s eastern Zhejiang province on September 22, 2023. (Photo by AFP) / China OUT

For context, Huawei was once the largest smartphone manufacturer in China and a significant competitor to Apple. Due to the challenges it faced from US sanctions, Huawei fell to sixth place in the market, and Apple began to dominate the Chinese market. But to reassure investors, Cook, on a conference call with analysts, said that Apple appeared to have gained market share in China in the July-September period, even if the overall smartphone market may have contracted.

Apple’s sales in China have fallen in three quarters of its 2023 fiscal year, which ended September 30. Some analysts, though, remained optimistic about Apple’s demand outlook in China through the fourth quarter as there were signs that a rebound in the broader smartphone market was gathering pace.

“While the latest iPhone series had underperformed in China in the launch quarter due to a shorter pre-holiday shopping period coupled with supply mismatches on the Pro Max, it could see improvement in the year-ending quarter with a strong 11.11 sales event performance,” research consultancy Counterpoint wrote in a note on Friday.

iPhone 15 pushing Apple to new highs

Counterpoint’s report shows that the Pro Max stood as the best-selling variant of the iPhone 15 series, allowing Apple to achieve its highest-ever Q3 operating profit. The report also highlighted that global smartphone market revenues remained flat year-over-year (YoY) despite growing by 15% QoQ to just over US$100 billion in Q3 2023. 

“Apple led the market with 43% share of global smartphone revenues, its highest-ever for a calendar Q3,” Counterpoint’s senior analyst Harmeet Singh Walia noted. That was despite Apple’s latest iPhone 15 series being available for one less week in the third quarter of 2023 compared to its predecessor in the same period last year. 

“This translated into Apple also clocking its highest-ever share of global smartphone revenue for a September-ending quarter,” he added. Consequently, the global smartphone operating profit also reached an all-time high, signaling how the smartphone market has adjusted to the post-pandemic trend of lower shipments, Walia argued.

China’s OEM eroding Apple’s dominance?

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Despite Apple leading the global smartphone market with record Q3 revenue and revenue share, its global smartphone operating profit share remained flat. Counterpoint attributed that to the resurgence of Huawei and Honor, and an increased focus on profitability by other Chinese OEMs such as Xiaomi and OPPO. 

“Counterpoint Research estimates that the Chinese smartphone market declined about 3% during the quarter. Apple’s China revenues fell 2.5% during the quarter. Considering the increased competition from Huawei 5G devices, this is a good signal for Apple and the iPhone 15 series – especially since the Pro Max and Pro were supply-constrained,” research director Jeff Fieldhack commented.

As for Oppo, its focus on phones with higher ASPs, such as foldables — of which the Oppo Find N2 Flip is the top-selling in China — is helping it achieve profitability. Yet, a slowdown in its expansion outside of China and India has brought about a YoY shipment decline, with Oppo’s smartphone revenue in the first three quarters of 2023 being the lowest since the pandemic, Counterpoint’s data shows.

Apple beats Samsung in revenue share, though falls behind on shipments. Source: Counterpoint Research Market Monitor prelimenary data.

Vivo, while remaining profitable, has faced more significant challenges in its home country, China, where its promotions have been less aggressive than those of Honor and Xiaomi. Vivo’s smartphone revenue fell 12% YoY and is almost half that of Q3 2021, Counterpoint’s data shows. 

Q3 was good for Apple.

Xiaomi is the only top five smartphone brand to see shipment increases both QoQ and YoY in Q3 2023 as it strengthened its positions in key markets such as China and India. Xiaomi also offered more affordable mid-range products at promotional prices to both retailers and consumers on the back of solid sales of the Redmi K and Note series, Counterpoint noted. 

That meant the Chinese OEM achieved both revenue and operating profit growth, both sequentially and annually. Samsung’s ASP, on the other hand, grew 4% YoY due to the successful launch of Fold 5, maintained momentum in S23 series’ sales, and a higher flagship share in major product lineups. 

“Nevertheless, an 8% shipment decline in the same period offset the ASP increase, making Samsung’s revenue decline by 4% annually,” the report reads. The full impact of the iPhone 15 series is yet to be seen, according to Counterpoint. 

“While the latest iPhone series had underperformed in China in the launch quarter due to a shorter pre-holiday shopping period coupled with supply mismatches on the Pro Max, it could see improvement in the year-ending quarter with a strong 11.11 sales event performance, which should also benefit other Chinese smartphone vendors,” Fieldhack added.

Moreover, the elongated festive season in India should boost shipments and revenues in the world’s second-largest smartphone market, where pent-up demand and 5G upgrades will also contribute to growth. Overall, Counterpoint believes the global smartphone market could end the year with cyclical change.

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