Antitrust action the biggest threat to Apple shares, analyst says

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Antitrust and government regulatory action represent some of the biggest risks to Apple, which reports earnings on Tuesday, according to an analyst at D.A. Davidson & Co.

Credit: WikiMedia Commons
Credit: WikiMedia Commons


In a note to investors seen by Reuters, lead analyst Tom Forte said he hopes Apple executives address the regulatory risks on the company's 2 p.m. Pacific Time earnings call with analysts.

The company has shied away from addressing controversy on its earnings calls, however. It isn't likely that Apple CEO Tim Cook or CFO Luca Maestri will address any antitrust issues at length during the hourlong call.

Apple faces increased antitrust scrutiny related to its App Store and services business. Many of those take aim at the company's 30% cut of app and in-app purchases, while others seek to open up the iOS platform. One potential lawsuit levied at Google could also threaten the payments Google makes to Apple for the search engine's default spot on iOS.

In addition to lawsuits from companies like "Fortnite" maker Epic Games, Apple also faces potential legislative risks such as a sweeping antitrust package that could impose tighter restrictions on Silicon Valley companies.

Some analysts, like Wedbush's Daniel Ives, believe that the antitrust scrutiny and lawsuits have "more bark than bite" and suggest that they won't likely result in any major structural changes to the Cupertino tech giant.

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Comments

  • Reply 1 of 5
    red oakred oak Posts: 1,113member
    Let me put out a amorphous note on the day of earnings calling attention to the obvious antitrust issues that have existed for 6 months….Because I want to call attention to myself and try to make myself relevant 
    JanNLArchStanton
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  • Reply 2 of 5
    foregoneconclusionforegoneconclusion Posts: 2,981member
    The lack of success in court for BlueMail's antitrust lawsuit against Apple doesn't bode well for Epic's lawsuit. Part of the ruling involved the judge stating that BlueMail's success on other platforms did not support the idea that iOS was critically important to their business. Since Fortnite did the majority of its sales on console and PC, it's hard to see how Epic's complaint will fare any better than BlueMail's.  

    That said, Congress can pass new trade laws that impact the tech sector regardless of what happens in court per actual antitrust claims.
     0Likes 0Dislikes 0Informatives
  • Reply 3 of 5
    GeorgeBMacgeorgebmac Posts: 11,421member
    All of this antitrust stuff against Apple assumes that Apple sells multiple products:
    That they sell iPhones and that they sell software.
    ....  They don't
    They sell one product:  iPhones that run software.   It is one integrated product that makes the whole greater than the sum of its parts.

    Unlike Microsoft, they have never attempted or claim to be open architecture.

    But, as with so many politicized agendas, once you start with a bad assumption and start heading down the wrong road, you can do a LOT of damage.

    But, like MCI wanting a piece of AT&T's action decades ago, greed prevails and our country, its industries and its people suffer.
    ArchStanton
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  • Reply 4 of 5
    ArchStantonarchstanton Posts: 200member
    red oak said:
    Let me put out a amorphous note on the day of earnings calling attention to the obvious antitrust issues that have existed for 6 months….Because I want to call attention to myself and try to make myself relevant 

    It's earnings time, the best time for supermarket tabloid stories to get bigger play. Happens every earnings. Today we have anti trust (because that's been in the news already), repair shop hell (because repair has already been in the news), we have the NAB thing (because AppleTV+ has been in the news), we have Elon Dogecoin speaking of the App Store (because that has been in the news). A lawsuit announced today? Only a few hours left before earnings folks, come see the show!
     0Likes 0Dislikes 0Informatives
  • Reply 5 of 5
    22july201322july2013 Posts: 3,810member
    This is exactly why Apple needs to pull out of a market that wants more competition within Apple's ecosystem. Because there already is competition (eg, Android), and by forcing Apple out of the market regulators will actually reduce competition. How does that help consumers when competition is eliminated?
    GeorgeBMac
     1Like 0Dislikes 0Informatives
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