US lawsuit against Apple raises questions about the future of iPhone and Android

This is an argument as old as smartphones themselves. iPhone or Android? You probably made up your mind a long time ago and never looked back.

Now, a landmark antitrust case is trying to change that, arguing that it should be easier to switch between the world’s two largest mobile operating systems. The complaint, filed by the U.S. Department of Justice and 16 state and local attorneys general, accuses Apple of using monopolistic practices to lock iPhone users into its ecosystem and make it difficult for them to leave.

The 88-page lawsuit alleges that Apple’s tight grip on its own software, hardware, and app markets has significantly reduced the attractiveness of third-party apps and smartwatches to iPhone users, thereby stifling innovation. , argue that consumers have fewer choices. Among other things, the complaint alleges that these policies create barriers and lock-in for iPhone users switching to Android.

Anyone who owns a smartphone will be familiar with the green and blue bubble conundrum. This is an example of the difference between iPhone and Android. While the bulk of the complaint focuses on messaging, it extends far beyond that to include claims related to the App Store, Apple Wallet, and Apple Watch.

That last part is important because it calls into question Apple’s ecosystem-wide approach. Regulators and critics have scrutinized the App Store for years, as evidenced by the blockbuster legal battle between Apple and Fortnite maker Epic Games. The Justice Department’s antitrust case goes a step further, calling for the iPhone to be more open and platform independent at a fundamental level.

“Typically, their pursuit of the App Store would be a one-time thing,” said Gene Munster, a managing partner at Deepwater Asset Management who has followed Apple for years. “But in this case, we’re after both iPhone retention and the App Store.”

It’s impossible to say what the outcome will be, and it will probably be years before we know. But the lawsuit raises big questions about how smartphone platforms should work together. The timing comes as the tech giant is likely laying the groundwork for the next big transition to AI-based interfaces in smartphones. The outcome of this lawsuit could affect how future plans develop.

read more: Google Gemini on iPhone becomes AI’s mainstream moment

Smartphone as a platform

The plaintiffs accuse Apple of stifling competition in five key areas: super apps, cloud streaming gaming apps, messaging apps, smart watches, and digital wallets. Although the details vary, the allegations generally fall into two themes. First, Apple claims that he blocks apps to make the iPhone platform neutral. And second, it alleges that the company makes third-party apps, services, and products less attractive by restricting access to Apple technology and restricting app distribution.

So-called super apps are an example of the first theme. Super apps may be unfamiliar to most people in the United States, but they’re a staple in Asian culture. As the name suggests, a super app is a single app that contains various miniature apps within it, allowing you to perform everyday tasks from paying for your morning coffee to texting a friend to ordering concert tickets. You can accomplish most of your needs with just his one app. Tencent’s WeChat is one of the most popular examples.

Super App makes it easy to switch between smartphone platforms by simply downloading Super App and logging into your new phone. But the lawsuit accuses Apple of preventing the app from functioning this way.

“Apple created, strategically extended, and aggressively enforced the App Store Guidelines to effectively block apps from hosting Mini-Programs,” the complaint says. “Apple’s actions have discouraged investment in miniprogram development and caused U.S. companies to abandon or limit support for the technology in the United States.”

Regarding the latter category, the lawsuit primarily focuses on Apple’s efforts in the smartwatch and mobile payments industry. Apple claims it is hindering the functionality of third-party smartwatches by imposing restrictions that don’t exist on the Apple Watch. These limitations include the inability to respond to notifications from the watch without Bluetooth and the inability to maintain a consistent connection to your iPhone.

“As a result, iPhone users will have a worse experience when they try to use third-party smartwatches with their iPhone,” the complaint says.

And once an iPhone user buys an Apple Watch, it becomes more difficult to switch to Android, the complaint alleges.

“Apple’s smartwatch, the Apple Watch, is compatible only with the iPhone,” the complaint states. “Thus, if Apple is able to entice a user to buy an Apple Watch, it will be more expensive for that user to buy another type of smartphone. , you’ll need to buy a new smartwatch that’s compatible with Android.”

The complaint also alleges that Apple prevents third parties from creating digital wallets that support tap-to-pay, which also causes the iPhone to be “sticky.”

“A cross-platform digital wallet would provide an easier, more seamless, and potentially more secure way for users to switch from their iPhone to another smartphone,” the document says. . “For example, if a third-party developer could create a cross-platform wallet, users migrating from an iPhone could continue using the same wallet, using the same cards, IDs, payment history, peer-to-peer payment contacts, etc. Yes, it will make it easier to get information and switch smartphones.”

These are just a few examples. The lawsuit also delves into similar allegations regarding iMessage and cloud streaming apps. Taken together, these accusations suggest that features like digital payments, smartwatch support, and cloud-based app platforms—technologies that have gradually gained traction over the past decade—should become core to the smartphone experience. are doing. In some ways, this lawsuit feels like an attempt to define what smartphone platforms should look like in 2024.

Even if Apple is ultimately required to make products like iMessage, Apple Watch, and Apple Pay more interoperable, we don’t know what that experience will be like.

For example, Apple says that not all features may work as expected in apps downloaded from external marketplaces in the European Union. The coalition is asking Apple to allow an alternative app store on the iPhone as part of the Digital Markets Act, a law aimed at maintaining a level playing field among large online companies.

Patrick Moorhead, CEO and chief analyst at Moor Insights & Strategy, said the era of so-called “uglyware” (a play on the word “software” to refer to unsophisticated user experiences and interfaces) I think it could be caused by forced changes. For Apple products.

“How do you enforce a good experience? How do the courts do that?” he said.

Apple said in a statement that it intends to “vigorously defend” the lawsuit, adding that it believes the complaint is “false on the facts and the law.”

“This lawsuit threatens our existence and the principles that make Apple products stand out in a fiercely competitive market,” the company said in a statement. “If successful, it would impede our ability to develop the kind of technology people expect from Apple at the intersection of hardware, software, and services. It would also set a dangerous precedent, allowing governments to control people’s It’s going to give them a lot of power in designing the technology.”

The next phase of smartphones

These allegations come at a pivotal time for the smartphone industry. Thanks to the popularity of ChatGPT, tech giants have been incorporating generative AI into their products over the past year, and the technology is starting to play a bigger role in smartphones, potentially determining the next direction for smartphones. there is.

This is already happening with new smartphone software such as Samsung’s Galaxy S24 series. The software includes a set of features based on the company’s models and powered by AI in collaboration with Google. According to Bloomberg, Apple’s next operating system update, iOS 18, will also be packed with new AI-powered tools and updates.

But in the future, generative AI could transform smartphones in more fundamental ways. Some startups are experimenting with AI-based software that departs from traditional app-based interfaces and instead lets AI do the heavy lifting. This kind of change coming to smartphones, while it’s a big deal right now, could completely change the way you access services on your mobile device.

In the short term, smartphone interfaces will only gradually change with one-off features like Circle to Search, which lets you launch a Google search by circling almost anything on your screen. Sho. But such generative AI capabilities are already platform-specific. Currently available only on Android.

And it looks like the future of smartphone operating systems could be in the hands of the people with the right AI models to power them, whether it’s Google, OpenAI, or another company entirely. Apple and Google are already in talks to use the search giant’s Gemini model to power new features on the iPhone, according to Bloomberg, the New York Times and the Wall Street Journal.

While a new battle for platform supremacy may already have begun, the Justice Department is pushing for a more open iPhone, which is all there is to it. But that’s also what makes the timing of this case so important. Whatever the outcome, it could have a major impact on how smartphone platforms evolve in the future.