From Top Electric.

Apple is facing an unprecedented crisis, marked by a landmark lawsuit loss against Epic Games, the creators of *Fortnite*. The legal battle, sparked in August 2020 when Epic introduced a direct payment system bypassing Apple’s 30% App Store commission, has cost Apple billions. The court ruled Apple’s restrictions on external payments violated California’s Unfair Competition Law, forcing Apple to allow alternative payment options. However, Apple’s “malicious compliance”—imposing a 27% commission and “scare screens” to deter users—led to further legal backlash, with accusations of perjury and contempt. The ruling has reshaped the App Store, benefiting developers like Spotify and Patreon, and consumers with lower prices, but denting Apple’s revenue. Beyond the courtroom, Apple’s challenges are mounting. Its stock has dropped 20%, losing nearly $1 trillion in market cap, making it the weakest of the “Magnificent Seven” tech giants. Apple’s heavy reliance on China, where 95% of its products are manufactured, is increasingly precarious due to rising labor costs, declining iPhone sales (down 18% in 2024), and U.S.-China trade tariffs reaching 145%. Local competitors like Huawei are eroding Apple’s 15% market share in China. Efforts to shift production to India, which accounts for 14% of iPhone manufacturing, are slow, with full parity years away. Coupled with a botched Apple Intelligence launch and stagnating iPhone upgrades, Apple’s self-inflicted wounds highlight the risks of overreaching, threatening its once-unassailable dominance in the tech world.

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