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What Next for Apple in Egypt?

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Dec. 31 2018, Updated 8:56 a.m. ET

Apple has two months to comply

Egypt isn’t happy with certain terms in Apple’s (AAPL) contract agreements with iPhone distributors in the country, according to a Bloomberg report. Egypt accused Apple of putting unfair restrictions on iPhone distributors in the country. As a result, the Egyptian competition regulator plans to take legal action against Apple if the company doesn’t address the unfair restrictions on local iPhone distributors.

The specific legal actions that the regulator plans to take against Apple aren’t clear. Apple could remove the offending iPhone distribution contract terms within two months to avoid legal action or stand its ground, which could result in a courtroom battle.

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iPhone business 

The iPhone is Apple’s largest business, just like advertising is for Alphabet (GOOGL), Facebook (FB), Baidu (BIDU), and Yandex (YNDX). In the fourth quarter, the iPhone business accounted for 60% of the company’s total revenues. For Alphabet and Facebook, advertising sales accounted for 86% and 98.5% of the total revenues, respectively, in the September quarter. For Baidu and Yandex, advertising sales accounted for 81% and 80% of the total revenues, respectively, in the September quarter.

To secure the future, Apple wants to diversify outside the mainly saturated smartphone market. In recent years, Apple has been focused more on growing its service business.

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