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China Casts a Wary Eye at an iPhone Cash Cow, the App Store

An Apple store in Beijing. Developers have complained that the company’s app policies violate Chinese pricing and antitrust laws.

BEIJING — In China, where Western-owned online services like Facebook and Google have long been blocked, Apple’s app store is a lucrative exception. Apple offers gaming, dining and dating apps in a country where most rivals are locally owned — and where it can reap big fees from iPhone users.

That business is now facing a number of threats.

The latest came this week, when a law firm representing more than two dozen app developers asked the Chinese authorities to investigate whether Apple’s app store policies violated local pricing and antitrust laws.

While it is not clear whether the government will respond, the call follows several other developments that have put a spotlight on the software and content that Apple offers in China. They include tighter regulations from the country’s censors and a high-profile public spat with a powerful and deeply connected Chinese internet giant, Tencent Holdings.

The challenges point to Apple’s difficulties in China, which is a major market for the company. Sales in China have fallen as customers wait for new iPhones and as domestic rivals make bigger and better devices. Apple, in response, has shifted its strategy to become increasingly dependent on services instead of hardware sales, making it more vulnerable to the whims of Chinese regulators.

“Apple has been more successful in China than any Western tech company because their business model — selling devices that integrate software and hardware — couldn’t be copied and couldn’t be blocked,” said Ben Thompson, an analyst who runs the website Stratechery.

“Devices are sold once,” Mr. Thompson added, “but services are delivered over time, which means they can be interrupted or held hostage at any time.”

Apple faces a number of issues with its software businesses in China. Regulators shut down Apple’s iBooks Store and iTunes Movies services here just six months after they were introduced. Apple has also removed a number of apps from its Chinese app store at the request of the government, including VPN software that can help internet users evade censorship, and news apps created by The New York Times.

Apple has made other moves to stay on the good side of Beijing. It invested $1 billion in the Chinese ride-hailing app Didi Chuxing and announced plans last month to open a data center in China to comply with a new…

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