Yes, 2021 was a great year for Apple. With an impressive stream of ever innovative products — from redesigned iPhones and refreshed iPads to potent new Macs — and record revenues to boot, the year certainly offered much for Apple to celebrate. But, as is common for any business, the year offered a few challenges, as well, and a few losses accompanied the company’s many wins.
Here are Apple’s three biggest losses of 2021.
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- App Store court decision impacts Apple’s revenue sharing practices
For years Apple received thirty percent of sales from purchases made within applications distributed using its App store. The corresponding revenue proved impressive, totaling tens of billions of dollars annually. Under pressure from developers for years, though, Apple in 2020 lowered its app commission to fifteen percent for programs generating less than one million annually in net sales on Apple platforms. Then, in September 2021, the company lost a federal court verdict, followed by an unfavorable appeals court ruling in December, further reducing its App Store stronghold.
In the September verdict, a federal judge ruled in the revenue-sharing case brought by Epic Games that Apple could no longer prohibit application developers from including links and other communication directly within their application distributed via Apple that direct users away from Apple’s store to make purchases. Therefore, Apple is subsequently unlikely to receive a percentage of the corresponding resulting revenue.
Possibly anticipating the ruling, Apple announced in August that, pending court approval, the company would resolve a class-action lawsuit brought by developers by extending more programmer accommodations, including sharing purchase options outside apps with users and permitting broader price ranges for subscriptions, in-app purchases and paid programs. With annual App Store sales estimated to exceed $60 billion, that’s a decided loss for Apple, which previously prohibited such behavior permitting developers’ customers to make purchases outside its App Store infrastructure.
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2. New self-service program reverses Apple’s intended course
In yet a second shift in another long-held mindset, Apple has historically prohibited users from performing authorized iPhone repairs without voiding the device’s warranty. The company’s new Self Service Repair program, announced in November, will provide users with authorized repair manuals and access to genuine Apple parts to assist users comfortable performing their own hardware repairs. While the program is kicking off with the most common repairs — displays, batteries and cameras — for iPhone 12 and 13 products, the initiative is supposed to soon grow to include Macs powered by Apple’s own M1 chips.
The so-called right-to-repair movement can claim Apple’s Self Service Repair program as a big victory, as the effort marks a significant shift for Apple. Previously the company fought to direct such repairs to its own stores and 2,800 authorized repair providers, which it still states will best serve the repair needs “for the vast majority of [its] customers.”
While unlikely to cost Apple significant revenue moving forward, the fact the company surrendered to repair pressure must be scored as a 2021 loss. The firm closely controls hardware and production in its effort to maintain quality and eliminate compatibility issues that commonly arise when working with disparate hardware components, and although the firm is providing the right-to-repair crowd with a victory, it should help Apple that the Self Service Repair program still requires using genuine Apple components and processes.
SEE: Apple’s 3 biggest wins of 2021 (TechRepublic)
3. Another pandemic WWDC without in-person networking
Apple’s annual in-person events essentially mimic religious revivals for the company’s faithful. Due to the ongoing COVID-19 pandemic, the year marked the second in a row in which developers, administrators, managers and other technical professionals were unable to physically attend Apple’s keynote conference, thereby missing some of the enthusiasm, engagement and fervor the in-person events help create and maintain.
Word came in late March that 2021’s June Worldwide Developers Conference (WWDC) would again be held as an all-online event. While video conferencing, remote collaboration platforms, cloud computing and a variety of other technologies have all helped millions convert to and continue working from home throughout the pandemic, there are still numerous personal interactions, random matchups and in-person presentations and learning sessions for which there remain no true substitutes. It’s such advantages, and the joy of interacting socially with one another, we all largely cheered in early summer when it appeared, incorrectly, that the pandemic might be ending.
Nevertheless, business continues. Now, with Apple announcing in December that it would be providing employees with a thousand dollars to outfit their home offices for continued remote work and delaying its return to its corporate offices at a time that, with the new COVID-19 variant Omicron spreading rapidly, can’t even be predicted, the setback must be counted as a loss. While Apple’s not responsible for the setback, and while the company acted responsibly converting 2021’s WWDC to an all-online format and postponing the planned February 1, 2022, return to its corporate offices, the challenge is a drawback possessing concrete disadvantages that require everyone to work that much harder just to maintain the status quo. And anyone familiar with Apple knows the company is far from satisfied with just average performance.