Apple vs Trump, Russia, China: Will ‘Sideloading’ Save Apple?

Apple’s App Store dominance is under fire like never before, thanks to its own desire for control of its platform, antitrust regulation at home and abroad and the vagaries of an American leader who has signed executive orders faster than any president in history.

Two things in particular are major challenges:

• Donald Trump’s recent executive order on TikTok owner ByteDance and WeChat owner Tencent
• Russia’s new Federal Antimonopoly Service ruling against Apple

Both hit at the heart of Apple’s current competitive advantage: the company’s sole control of the App Store. Each does it in an entirely different way. And Apple can only escape the consequences of theses moves by opening up the iPhone to “sideloading” apps.

Or, in other words, smashing the rule of the App Store.

Russia’s attack is more straightforward, and follows similar reasoning similar to what we’ve seen in both U.S and European questioning of Apple: only Apple can approve apps for consumer use on iPhone via the App Store, and Apple has a history of rejecting apps that conflict with its own apps or goals. For Russia, that’s exemplified by Apple’ rejection of parental control software from Kaspersky, a cybersecurity firm based in — you guessed it — Moscow.

Russia’s antitrust watchdog opened a file on Apple in 2019, and ruled today that Apple abused its position.

Trump’s attack is probably accidental.

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Apple has likely been caught in friendly fire by a recent executive order that President Trump signed banning “any transaction” by “any person” with ByteDance and Tencent. While ByteDance-owned TikTok is a hugely popular app, losing it won’t significantly harm Apple because if it’s banned in the U.S., it will also be banned on other platforms (Google’s Android) and there will be some level of equivalency (although Android does allow side-loading).

But Tencent is another matter entirely.

Tencent is the owner of WeChat, which is basically essential to technologically-enabled life in China. It’s unclear whether allowing a company to offer an app on your platform means engaging in a “transaction” with them, but if so … Apple’s in big trouble. Huge trouble, in fact.

Tech analyst analyst Ming-Chi Kuo puts it this way:

“Because WeChat has become a daily necessity in China, integrating functions such as messaging, payment, e-commerce, social networking, news reading, and productivity, if this is the case, we believe that Apple’s hardware product shipments in the Chinese market will decline significantly. We estimate that the annual ‌iPhone‌ shipments will be revised down by 25–30%, and the annual shipments of other Apple hardware devices, including AirPods, iPad, Apple Watch and Mac, will be revised down by 15–25%.”

In other word, China is essential to Apple’s continued financial health. Losing China — which is exactly what losing WeChat would mean — would be devastating.

Apple can easily escape this two-pronged attack.

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All it has to do is enable the same functionality that we’ve enjoyed for years on our Mac and Windows PCs: the ability to install software from virtually any source at will.

Android already allows this, although Google makes it somewhat challenging. And for good reason: it’s the best way to get harmful apps and malware on your phone. Teens in particular will install just about anything if you tell them they can get free movies and TV shows on it, and opening mobile platforms to sideloading just like we had back in the old days will certainly cause more trouble with viruses, adware, and other nasty, undesirable software.

And that’s not just on a work machine, a PC that you use occasionally or for six hours a day. That’s on the most personal computing platform yet known to humans, which almost never leaves your side, which has access to your most personal messages, your banking details, your location at all times. Essentially: everything about you that might be known digitally.

That mobile computing is not the nasty cesspool of computer viruses and antivirus apps that desktop computing used to be — especially on Windows — is largely due to how Apple created the App Store in the first place.

Plus, of course, Apple culturally loves controlling everything to do with the hardware and software user experience of their devices.

The question now is what’s next.

ByteDance, who’s core TikTok asset is significantly devalued by a 45-day sell or divest order, will likely challenge Trump’s executive order in court. (And that is indeed the fate of many of Trump’s executive orders.) Tencent may well do the same. And Apple itself could, probably with a PR cloaking of “asking clarification” to avoid open conflict with the president of the United States.

Any such court battles are likely to last beyond Trump’s current term of office, so the challenges could go away in November.

But that’s a tough thing to bet on, and while Apple has the cash on hand for a long drawn-out battle, it’s not clear that ByteDance does, especially when the company just recently started monetizing heavily.

One thing that is almost certainly true: Apple will not relinquish its control over the App Store easily or without a fight.

Apple has already appealed Russia’s ruling. Its next step on Trump’s executive order is not yet clear.