Tipping Points in Apple, Android, and Others
Many people have suspected that their iPhones are being slowed down with progressive use, but many were unsure if this was just their imagination, or seeing newer versions of the phone being released. Now this belief has been confirmed. In late November of this year, Apple agreed to pay a settlement of $113 million in order to settle an investigation in California and Arizona about unfair battery practices. Consumers were incredibly angry, especially as slowing the battery meant that people were forced to purchase newer iterations.
$113 million may seem like a hefty number, and it is—but it is nothing compared to the $2 trillion valuation for the total company from investors in 2020. Apple was asked to pay less than 0.01% of its evaluation. This unfair practice of course makes consumers distrustful, but even more importantly, Apple could have been asked to pay nearly all of its revenue for the year and still be profitable. The simple reason is because tech giants like Apple can essentially act as monopolies. Apple has created an ecosystem of reliance on its products. Whether it be cross-product functionality (watches, ipads, computers, phones), to cross-network functionality features (imessage, group messaging, airdrop), Apple has far crossed the tipping point necessary for it to completely dominate the smartphone market.
Because in-network effects how much consumers are willing to pay for it depends on how many people are using it, Apple is able to charge however much it wants and put in whatever policies it wants since so many people use it. The price and usage has settled past the first two equilibria of 0 and z, and is likely headed towards (or has already reached) z’. Currently, about 100 million people in the US use iPhones which accounts for 45% of the US market. Since the sales for new iphones have been relatively slow-growing, it signals a settling at the z’ equilibrium.
https://www.cnn.com/2020/11/19/tech/apple-battery-settlement/index.html