As long as Apple has a business presence in the UK, they are subject to the laws the UK imposes on them even if they're vastly overreaching and impose on other government's citizens. Not supporting cloud services wouldn't be sufficient to avoid the compliance requirement, they would have to formerly stop doing business in the UK.
Looking at the market size that might be a decision that Apple is willing to make as it would most likely be a temporary stick. The government can spin it anyway they want, but Apple devices do not work basically at all without the deep integration of their services. A geoblock would effectively mean UK citizens would be left with unusable devices and I can't see the resulting outrage being directed exclusively at Apple.
It'll be interesting to see how this plays out for sure.
Looking at the market size that might be a decision that Apple is willing to make as it would most likely be a temporary stick. The government can spin it anyway they want, but Apple devices do not work basically at all without the deep integration of their services. A geoblock would effectively mean UK citizens would be left with unusable devices and I can't see the resulting outrage being directed exclusively at Apple.
It'll be interesting to see how this plays out for sure.