It’s a debate as old as the smartphone itself: iPhone or Android? You probably made up your mind a long time ago and never looked back.
Now a landmark antitrust lawsuit wants to change that, arguing that it should be easier to switch between the world’s two biggest mobile operating systems. The suit, filed by the US Department of Justice and 16 state and district attorneys, accuses Apple of locking iPhone users into its ecosystem through monopolistic practices that make it difficult to leave.
The 88-page lawsuit alleges that Apple’s tight control over its software, hardware and app markets makes third-party apps and smartwatches far less attractive to iPhone users, stifling innovation and resulting in less choice for consumers. Above all, the complaint alleges that these rules entrench iPhone users by imposing barriers to switching to Android.
Anyone who owns a smartphone is probably familiar with the green vs. blue bubbles conundrum, which has become an example of the difference between iPhone and Android. While much of the complaint focuses on texting, it extends far beyond that to include allegations related to the App Store, Apple Wallet, and Apple Watch.
That last part is significant because it calls into question Apple’s entire approach to the ecosystem. The App Store has been closely watched by regulators and critics for years, as evidenced by a major legal battle between Apple and Epic Games, the maker of Fortnite. The Justice Department’s antitrust lawsuit goes a step further by pushing the iPhone to become more open and platform-agnostic at a fundamental level.
“Typically you’ll have one-offs, where do they go after the App Store,” said Gene Munster, a longtime Apple watcher and managing partner at Deepwater Asset Management. “But in this case, it goes after keeping the iPhone and the App Store.”
It is impossible to say what the outcome will be and it will probably be years before we know. But the lawsuit raises big questions about how smartphone platforms should work together. The timing coincidentally comes at a time when tech giants are likely laying the groundwork for the next big smartphone shift to AI-based interfaces. The outcome of this lawsuit could affect how these future plans will be realized.
Read more: Google Gemini on the iPhone would be a major artificial intelligence moment
The smartphone as a platform
The plaintiffs accuse Apple of distorting competition in five key areas: super apps, cloud game streaming apps, messaging apps, smartwatches and digital wallets. Although the specifics vary, the allegations generally fall under two themes. First, they claim that Apple is blocking apps that would make the iPhone more platform neutral. And second, they claim that the company makes third-party apps, services and products less attractive by limiting their access to Apple’s technologies or limiting their app distribution.
So-called super apps are an example of the first topic. Super apps may not be familiar to most people in the US, but they are an integral part of Asian culture. As the name implies, super apps are individual apps that include a series of miniature apps within themselves, making it possible to fulfill most daily needs with just one app — from paying for your morning coffee to texting a friend to ordering concert tickets. Tencent’s WeChat is one of the most popular examples.
WeChat is an example of a great app.
Super apps can make switching between smartphone platforms easier since you can simply download the super app and log into it on your new phone. But in the lawsuit, Apple is accused of preventing apps from functioning this way.
“Apple created, strategically expanded, and aggressively enforced its App Store Guidelines to effectively block apps from hosting mini-programs,” the complaint said. “Apple’s conduct has discouraged investment in the development of mini programs and caused American companies to abandon or limit support for the technology in the United States.”
When it comes to the latter category, the lawsuit primarily focuses on Apple’s efforts in the smartwatch and mobile payment industries. It claims that Apple is making third-party smartwatch functionality difficult by imposing restrictions that don’t exist with the Apple Watch. These limitations include not being able to respond to notifications from the watch and maintaining a consistent connection with an iPhone without Bluetooth.
“As a result, iPhone users have a worse experience when they try to use a third-party smartwatch with their iPhone,” the lawsuit says.
And once an iPhone user buys an Apple Watch, it becomes harder for them to switch to Android, the lawsuit claims.
“Apple’s smart watch – the Apple Watch – is only compatible with the iPhone,” the complaint reads. “So if Apple can steer a user toward buying an Apple Watch, it becomes more expensive for that user to buy another type of smartphone because that requires the user to ditch their Apple Watch and buy a new Android-compatible smartwatch.”
Apple Watch Series 9
The complaint also alleges that Apple prevents third parties from creating digital wallets that support touch payments, which also results in iPhone “stickiness.”
“Multi-platform digital wallets would offer an easier, more seamless and potentially more secure way for users to switch from an iPhone to another smartphone,” the document said. “For example, if third-party developers could create cross-platform wallets, users switching from iPhone could continue to use the same wallet, with the same cards, IDs, payment history, peer-to-peer payment contacts and other information, which makes it easy to switch smartphones.”
These are just a few examples; the lawsuit also addresses similar allegations surrounding iMessage and cloud streaming apps. Taken together, the allegations suggest that functions like digital payments, smartwatch support and cloud-based app platforms — technologies that have only gradually gained prominence in the last decade — should be a core part of the smartphone experience. In a sense, the lawsuit seems to be trying to define what the smartphone platform should be in 2024.
Even if Apple is eventually required to make products like iMessage, Apple Watch, and Apple Pay more interoperable, it’s impossible to say what the experience will be like.
For example, Apple says that not all features will work as expected on apps downloaded from external markets in the European Union. The union is requiring Apple to allow alternative iPhone app stores as part of its Digital Markets Act, legislation aimed at maintaining a level playing field among major online companies.
Patrick Moorhead, managing director and chief analyst at Moor Insights & Strategy, believes that the era of so-called “ugly software” — a play on the word “software” intended to refer to inelegant user experiences and interfaces — could result in mandatory changes to Apple’s products.
“How do you force a good experience, for example, how does the court do it?” He said.
The App Store has traditionally been at the center of antitrust concerns about Apple.
Apple said in a statement that it plans to “vigorously defend” the lawsuit, adding that it believes the lawsuit is “wrong of fact and law.”
“This lawsuit threatens who we are and the principles that set Apple products apart in fiercely competitive markets,” the company said in a statement. “If successful, it would impede our ability to create the kind of technology people expect from Apple — where hardware, software and services intersect. It would also set a dangerous precedent, empowering government to take a heavy hand in designing human technology.”
The next phase of the smartphone
These allegations come at a pivotal time in the smartphone industry. Tech giants have woven generative artificial intelligence into their products over the past year thanks to the popularity of ChatGPT, and the technology is starting to play a bigger role in smartphones — potentially defining where they go next.
We’re already seeing this happen in new smartphone software, such as Samsung’s Galaxy S24 series, which includes a suite of AI-powered features based on the company’s own models and in collaboration with Google. Apple’s next operating system update, iOS 18, is also expected to come packed with new AI-powered tools and updates, according to Bloomberg.
The Samsung Galaxy S24 Ultra has an AI-powered feature called Circle to Search. You can circle anything on the screen to learn more about it.
But there’s a chance that generative artificial intelligence could revolutionize the smartphone in more comprehensive ways. Some startups are experimenting with AI-based software that diverges from the traditional app-based interface and instead lets AI do the heavy lifting. If this kind of shift comes to smartphones — and that’s a big if at this point — it could completely change the way we access services on our mobile devices.
In the near future, smartphone interfaces will likely only change incrementally through one-off features like Circle to Search, which lets you launch a Google search for almost anything on the screen just by circling it. But generative AI features like these are already platform-specific; they are currently only available on Android.
It looks like the future of smartphone operating systems may fall into the hands of those with the right AI models to power them, whether that’s Google, OpenAI, or another company entirely. Apple and Google are reportedly already in talks to use the search giant’s Gemini model to power some new iPhone features, according to Bloomberg, The New York Times and The Wall Street Journal.
It’s all telling that the Justice Department is trying to push a more open iPhone as a new battle for platform dominance may be brewing. But that’s also what makes the timing of this lawsuit so significant. The outcome, whatever it is, could have a profound impact on how smartphone platforms evolve in the future.
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