That would be an argument if people were given the independent choice, but the choice is tied to the phone you buy. It's not much of a choice if both of the major platforms are tied to a walled garden and the alternatives are esoteric enough that most people aren't even aware they exist.
And it is regulation keeping them that way. Third parties would sell iPhones modified to add competing app stores if there weren't laws preventing it. To say nothing of the lack of antitrust enforcement as yet -- markets don't work when there is insufficient competition.
> On the other hand, we can boycott and embargo them. Much good that money will do them if nobody will touch it, or if the products developed with it are banned from most well-paying markets.
Then they would reciprocate, oil prices would skyrocket and the dollar would fail as the reserve currency, both because of the oil market and because other countries wouldn't want to accept it if US foreign policy becomes to seize them back from a country where they were used to make trillions in purchases over decades.
You could say "and we could nuke them" with about the same probability of that actually happening.
And what would you even use to justify it, while we continue to do business with China and a dozen other countries with similarly problematic records?
Thus, to prevent them, you will need regulation - which stops at the border. Saudi government will have their own, and you can be sure that it'll be the kind that enables what they want to do.
On the other hand, we can boycott and embargo them. Much good that money will do them if nobody will touch it, or if the products developed with it are banned from most well-paying markets.