Apple shares drop amid market selloff
Apple stock fell 3.1% on Wednesday, closing at $144.12, as the tech sector faced pressure from rising interest rates and regulatory scrutiny. The Nasdaq Composite index, which is heavily weighted by tech stocks, declined 2.8%, while the S&P 500 index lost 1.9%.
Apple was among the worst performers in the Dow Jones Industrial Average, which dropped 0.8%. Other tech giants such as Meta Platforms, Nvidia, and Tesla also suffered losses of more than 3%.
The market selloff was triggered by a surge in bond yields, which reflect investors’ expectations of inflation and economic growth. The yield on the 10-year Treasury note rose to 1.54%, the highest level since June, as traders anticipated that the Federal Reserve would start tapering its bond-buying program soon and possibly raise interest rates next year.
Higher interest rates tend to hurt tech stocks, which are valued based on their future earnings potential. Tech companies also face headwinds from increased regulatory scrutiny, especially in China and Europe, where authorities have imposed fines and restrictions on some of the industry’s biggest players.
Apple faces antitrust probe in Europe
One of the challenges that Apple faces is an antitrust investigation by the European Commission, which accused the company of abusing its dominant position in the music streaming market. The commission said that Apple’s App Store rules unfairly favor its own Apple Music service over rival platforms such as Spotify and Deezer.
The commission also said that Apple’s 30% commission fee on in-app purchases and its “anti-steering provisions” prevent developers from informing users of alternative payment methods outside the App Store. These practices harm competition and reduce consumer choice, according to the commission.
Apple has denied the allegations and said that it competes fairly in the music streaming market. The company also said that its App Store rules provide a level playing field for developers and a secure and trusted platform for users.
If found guilty of violating EU antitrust rules, Apple could face a fine of up to 10% of its annual revenue, which amounted to $274 billion in fiscal year 2020. The company could also be forced to change its business practices to comply with the EU’s demands.
Apple prepares for iPhone 13 launch event
Despite the market turmoil and regulatory challenges, Apple is gearing up for its annual iPhone launch event, which is expected to take place on September 14. The company is widely rumored to unveil four new models of its flagship smartphone, dubbed the iPhone 13 series.
The new iPhones are expected to feature a smaller notch, a faster A15 chip, improved cameras, and a 120Hz refresh rate display for some models. The devices are also likely to support satellite communication technology, which would allow users to make calls and send messages in areas without cellular coverage.
Analysts expect strong demand for the iPhone 13 series, especially in China, where Apple has regained market share from local rivals such as Huawei and Xiaomi. According to a recent survey by Wedbush Securities, about 250 million of Apple’s 975 million iPhone users are in an upgrade window, which could drive a “supercycle” of sales for the new models.
Apple is also expected to announce other products at the event, such as the Apple Watch Series 7, which could feature a larger screen and a new design, and the AirPods 3, which could have a shorter stem and spatial audio support.
