According to an analyst, Apple’s bottom line is unlikely to be seriously harmed by either a tweak of its App Store policy regarding substitute payments or a further future revision.
Samik Chatterjee, an analyst at JP Morgan, sent a letter to investors that was obtained by AppleInsider, in which he discussed the recent App Store criteria change and an Apple proposal that might see a similar move in guidelines. The prohibition on alternative payment methods by Apple was declared anticompetitive in both cases by an antitrust authority.
Applications like Spotify and Netflix, as well as “reader” apps like iBooks, can now include a link to membership sites where users can join up or manage their memberships.
Apple’s anti-steering regulations and other App Store guidelines were the subject of an inquiry by the Japanese Fair Trade Commission, which led to the adjustment.
More than 8 percent of overall income in the market comes from the top 10 reader applications on the App Store, says Chatterjee. The top 20 and the top 50 make up roughly 10% and 13%, respectively. Thus, the long-term consequences are unlikely to be significant.
App Store payments would only have a 1-2 percent impact on EPS in a worst-case scenario, which we believe is very improbable,” the analyst said.
Dating applications in the Netherlands are the subject of the second adjustment to Apple’s App Store. By not allowing dating applications to offer payment options for in-app purchases, Apple was found to have broken competition laws in the Netherlands.
Apple has piled up more than 50 million euros in penalties because it hasn’t made any improvements to its App Store in the nation. Apple asserts that it is in full compliance with all applicable laws and regulations. According to the ACM, however, the Dutch government is of the opposite opinion.
Alternative in-app purchases for dating apps would be permitted in the Netherlands under the most recent proposal from the firm. However, Apple would still earn a 27 percent share of those purchases under the new proposal.
Despite the fact that the plan has yet to be adopted, Chatterjee believes that even if it is, it will have little impact.
This week’s App Store headlines, according to Chatterjee, “do not reflect a seismic shift in strategy for Apple, nor do we expect them to have a substantial influence on App Store take rates,” he writes.
A profit-to-earnings ratio of 30x and a calendar year earnings forecast of $6.90 underpin Chatterjee’s $210 12-month price target for Apple.