Apple is playing a dangerous game of chicken with Europe
Apple's new AI features, known as Apple Intelligence, along with updates in iOS 18, iPadOS 18, and macOS Sequoia, will seemingly not be available in the EU this year due to regulatory challenges.
Apple is playing a dangerous game of chicken with Europe and has tagged the company as one of the key digital gatekeepers worldwide. Pushing back against regulations that would hinder your business development is nothing new, of course, and is certainly fair game. However, Apple is taking quite a few risks here. Beyond the possibility of antagonizing further EU regulators, Apple may antagonize even more a +450 million customer base with high disposable income, strategically a key target for Apple's paid services.
And until now, the EU hasn't yielded when playing this kind of game...
The risk is also much more strategic than missing sales, frustrating customers, and trying to wrestle the largest and most active regulatory body in tech. It's also, as a network-effect business, taking the risk of fragmenting your platform into different versions, making it less robust, less frictionless, and more prone to disruption.
And that's a critical thing.
Once established, network effects are immensely difficult to displace bit by bit. But remove a huge chunk of your network effect in a very short amount of time, and things will get dicey very fast.
Apple is seemingly now very serious about AI, and even if some of their recent endeavors indicate the company might not be as focused as a few years ago, I suspect that this game of chicken with the EU might only be that Apple is very much not ready to launch their AI transformation at scale. They might just be playing for time and using EU regulations as a talking point.
They might be even more keen on testing the waters with AI on the US market, where they know that if things go sideways with AI hallucinations or horrible outputs, American regulators... well, basically don't exist.
This is where the EU might be recording its major win: US tech giants need to pause and think twice about what they are doing in our market...
[Edit: June 25 ]
It seems that Apple's strategy is now going to go smoothly. Europe is firing back quite aggressively...