EU Cut-Off
While we have mentioned the issues that Apple is facing in the EU in relation to the fact that Apple uses a proprietary charging and data transfer connector/system, the reality is that those issues will likely change the way Apple connects to the outside world globally. With a hard deadline of 12/27/24, Apple will then be required to support the USB-C standard in the EU and considering the additional cost of producing some Apple devices with USB-C and others with Apple’s Lightning connector, we expect the change will be made for all Apple devices. Apple already uses the USB-C connector on its MacBooks and iPads, so the concept is not new to the company, but the iPhone remains the target for the EU, which will have to change its connector by the deadline.
There have been rumors on a regular basis since 2020 that Apple will shift some (premium likely) models to USB-C before the deadline, however there seems to be no rush on Apple’s part to make the change. With Europe overall averaging ~24.1% of Apple’s total revenue, second only to the Americas (46.3%), over the last two years, Apple can ill afford to continue to fight the change, but there is another way Apple can avoid the issue, even after the deadline date. Apple does have the option of going wireless, meaning that both charging and data transfer would be done without a wired connector, and would thus avoid the controversy. This would be a far more radical step and could have implications for those with older iPhones who want to preserve data when transferring to a new iPhone, but it is certainly not out of the realm of possibility for Apple, and would likely be a positive longer-term solution given that the concept of wireless charging has been developing since 2012, and over 1B smartphones(installed base) have wireless capabilities.
As of the end of last year 22% of smartphones in Europe had wireless charging capabilities (21% in North America), and while the elimination of any other means of charging would be a big step, it is not as radical as it might seem. We have no knowledge that Apple is pursuing that path, so we cannot make such an assumption, but we would expect that the general direction would be to eliminate any connector over the long run, if for no other reason than to reduce costs and create space for other hardware features.
There have been rumors on a regular basis since 2020 that Apple will shift some (premium likely) models to USB-C before the deadline, however there seems to be no rush on Apple’s part to make the change. With Europe overall averaging ~24.1% of Apple’s total revenue, second only to the Americas (46.3%), over the last two years, Apple can ill afford to continue to fight the change, but there is another way Apple can avoid the issue, even after the deadline date. Apple does have the option of going wireless, meaning that both charging and data transfer would be done without a wired connector, and would thus avoid the controversy. This would be a far more radical step and could have implications for those with older iPhones who want to preserve data when transferring to a new iPhone, but it is certainly not out of the realm of possibility for Apple, and would likely be a positive longer-term solution given that the concept of wireless charging has been developing since 2012, and over 1B smartphones(installed base) have wireless capabilities.
As of the end of last year 22% of smartphones in Europe had wireless charging capabilities (21% in North America), and while the elimination of any other means of charging would be a big step, it is not as radical as it might seem. We have no knowledge that Apple is pursuing that path, so we cannot make such an assumption, but we would expect that the general direction would be to eliminate any connector over the long run, if for no other reason than to reduce costs and create space for other hardware features.
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