Apple (AAPL) ☆

The iOS/iPadOS app storefront and its commission on developer transactions -- the platform toll.

The European Commission's non-compliance decision only makes sense against a channel Apple otherwise controls: under the DMA 'app developers distributing their apps via Apple's App Store should be able to inform customers, free of charge, of alternative offers outside the App Store, steer them to those offers and allow them to make purchases,' and the Commission found Apple failed to comply because 'due to a number of restrictions imposed by Apple, app developers cannot fully benefit from the advantages of alternative distribution channels outside the App Store.'

Downgraded from what it was, on what has actually changed: on 23 April 2025 the Commission fined Apple EUR 500 million for breaching the DMA anti-steering obligation and ordered it to cease the commercial restrictions on steering and to refrain from perpetuating the non-compliant conduct. The toll survives, but it is now set under supervision rather than by Apple alone.

Apple's assistant and generative-AI layer across its devices, whose frontier model capability is licensed.

Unmatched distribution, licensed capability. Apple and Google entered a multi-year deal, announced 12 January 2026, for Google's Gemini models to power a revamped Siri; Google's statement was that 'Apple determined Google's AI technology provides the most capable foundation for Apple Foundation Models.' Financial details were not disclosed.

The report describes Apple as having hit Siri delays and 'a series of setbacks on the AI front after being late to the race,' and choosing Google's technology 'rather than relying solely on its own models.' Apple's position at the applications layer of this graph is therefore that of a buyer of frontier model capability, and the buyer is now the same counterparty that pays it for search placement.

In-house systems-on-chip powering iPhone, iPad, Mac and Vision Pro, with on-die AI acceleration.

Captive silicon, not sold on a merchant market, so no vendor share applies. Scale of the programme instead: Apple announced M6 and M5 Ultra on 25 August 2026, M6 'built using the cutting-edge 2 nm process' with 'a Dual 16-core Neural Engine, providing up to 2x the peak compute over previous generations,' and M5 Ultra with an up-to-80-core GPU 'incorporating a Neural Accelerator in each core.'

A sustained multi-generation design capability on a leading-edge node -- M6 in Mac mini and M5 Ultra in Mac Studio, with M6's GPU carrying 'a Neural Accelerator in each of its 12 cores' for a 'nearly 30 percent increase in peak GPU compute for AI compared to M5.' A device rival cannot buy an equivalent off the shelf, and this is the layer of Apple's advantage no regulator is contesting.

Apple's first in-house cellular modem, replacing a merchant supplier in part of the iPhone line.

Captive component with no merchant share. Apple announced on 19 February 2025 that 'C1 is the first modem designed by Apple and the most power-efficient modem ever on an iPhone, delivering fast and reliable 5G cellular connectivity,' debuting in iPhone 16e.

First-generation and partial. The announcement places C1 in iPhone 16e and claims power efficiency -- 'the most power-efficient modem ever on an iPhone' -- rather than peak-performance leadership, so on this evidence the substitution of a merchant supplier is under way but not proven complete.

macOS laptops and desktops (MacBook Air/Pro, iMac, Mac mini, Mac Studio, Mac Pro); FY2025 net sales $33.7B.

The 10-K states the Company 'has a minority market share in the global... personal computer... market' and gives no rank; FY2025 Mac net sales were $33,708M, +12% year over year -- about 8% of total net sales. A growing challenger position, not a share leadership claim.

The integration argument carries here -- Apple 'designs and develops nearly the entire solution... including the hardware, operating system' -- but the filing also warns competitors have 'broad product lines, low-priced products' and that 'competition has been particularly intense as competitors have aggressively cut prices and lowered product margins.'

Fees earned for making Google the default search engine in Safari across iPhone, iPad and Mac -- reported inside Services.

Not a market with a share -- a placement rent, and after the September 2025 remedies not an exclusive one: 'Google gets to keep paying Apple to be the default (albeit not exclusive) search engine on Safari.' Apple's own 10-K names the arrangement and its legal exposure but never discloses what it is worth, so no figure is asserted here.

There is no Apple-side barrier at all: the revenue rests on a court order that is itself on appeal. The DOJ and multiple states filed a cross-appeal to the D.C. Circuit in early 2026, and as of that report 'it's not yet clear which specific parts of the ruling the DOJ and states will challenge on appeal.' Apple's 10-K adds that a reversal 'could result in imposition of certain remedies initially proposed by the DOJ, such as those prohibiting Google from offering the Company commercial terms for search distribution.'

Advertising, AppleCare, cloud services, digital content and the App Store, and payment services; FY2025 net sales $109.2B at a 75.4% gross margin.

Incumbent supplier on its own platforms; the 10-K discloses no market share for Services, only scale -- FY2025 Services net sales $109,158M, +14%, growth coming 'primarily due to higher net sales from advertising, the App Store and cloud services.'

This is where the margin is and where the pressure is. Services gross margin was 75.4% versus 36.8% on Products, so 26% of net sales produced $82,314M of the $195,201M total gross margin -- but the 10-K's three named growth drivers include the two lines it separately discloses as under legal attack: the App Store commission (a U.S. court order and EU-mandated alternative distribution and payment processing) and search-placement licensing from Google.

Apple Watch, AirPods/Beats, Apple Vision Pro, Apple TV 4K, HomePod and accessories; FY2025 net sales $35.7B.

The 10-K discloses 'a minority market share in the global... wearables market' and no rank. This is the only category that shrank in FY2025: net sales $35,686M, down 4%, 'primarily due to lower net sales of Accessories and Wearables.'

Each device runs an Apple-controlled OS (watchOS, visionOS, tvOS) per the 10-K's product descriptions, which ties them to the same stack -- but the declining net sales sit against a filing that also concedes 'some of the markets in which the Company competes have from time to time experienced little to no growth or contracted overall.'

iPadOS tablet line (iPad Pro, iPad Air, iPad, iPad mini); FY2025 net sales $28.0B.

The 10-K discloses 'a minority market share in the global... tablet... market' and no rank. FY2025 iPad net sales $28,023M, +5%, driven by 'higher net sales of iPad Air, iPad mini and iPad, partially offset by lower net sales of iPad Pro' -- growth carried by the mid and low end.

Same integrated-stack basis as iPhone per the 10-K, but the filing's competition section notes rivals 'imitate the Company's product features and applications within their products' and compete 'primarily through aggressive pricing and very low cost structures.'

Apple's smartphone line on iOS; FY2025 net sales $209.6B, half of total company net sales.

Banded conservatively to what the filing supports. The 10-K discloses no rank and claims only 'a minority market share in the global smartphone... market'; the band rests on the disclosed scale -- iPhone net sales of $209,586M in FY2025, +4% year over year and 50% of the $416,161M total.

The 10-K states the Company 'designs and develops nearly the entire solution for its products, including the hardware, operating system, numerous software applications and related services,' and lists 'a strong third-party software and accessories ecosystem' among the principal competitive factors -- a full-stack position a component assembler cannot replicate.