- The stock price of Apple Inc (NASDAQ: AAPL) fell 3.31% in the previous trading session. This is why it happened.
The stock price of Apple Inc (NASDAQ: AAPL) fell 3.31% in the previous trading session, going from a previous close of $154.07 to $148.97. Investors are responding negatively to a ruling from a judge on Friday. The ruling requires Apple to allow developers to offer alternative payment methods for purchases made in apps downloaded from the Apple App Store.
U.S. District Judge Yvonne Gonzalez Rogers had issued a ruling in favor of Fortnite creator Epic Games. The ruling was a permanent injunction that would require Apple to enable developers for an option to have links to alternative payment methods for apps. Apple’s payment system takes a 30% cut from developers who generate more than $1 million in revenue per year.
According to Sensor Tower data via Barron’s, Apple saw $72.3 billion in overall revenue last year with an estimated $21.7 billion in fees. This makes up about 7% of Apple’s total revenues. Loup Capital managing director Gene Munster estimated that the App Store accounts for about 14% of Apple’s profits and the ruling on Friday has limited risks for the company. Munster believes that most app developers will remain within Apple’s system.
And Evercore ISI analyst Amit Daryanani noted that while this ruling is a setback, the impact will likely be manageable since Apple has many ways to generate revenue from the store like the in-store ad operations. The judge also ruled that the Apple App Store is not an illegal monopoly as pushed by Epic.
In an interview with Barron’s Wedbush analyst Dan Ives said that the worst-case scenario is a 3% to 4% hit on revenues for the company, which is like a “rounding error.”
Disclaimer: This content is intended for informational purposes. Before making any investment, you should do your own analysis.
