Apple’s revisions to its App Store policy around alternative payments, along with an additional potential policy, are unlikely to pose any serious risk to Apple’s bottom line, according to one analyst.
In a note to investors seen by AppleInsider, JPMorgan analyst Samik Chatterjee offered his thoughts on the recent revision of the App Store guidelines, as well as suggestions that Apple could see a similar guideline shift. In both cases, an antitrust agency deemed Apple’s ban on alternative payment methods anticompetitive.
On March 30, Apple revised a guideline to allow “Reader” apps — or content platforms like Spotify and Netflix — to provide an in-app link to a membership site where users can sign up or manage accounts. The change was made to end an investigation by the Japan Fair Trade Commission into Apple’s anti-manipulation policies and other app store rules.
According to Chatterjee, the top 10 reader apps on the App Store account for less than 8% of total revenue in the segment. The top 20 accounted for about 10%, while the top 50 accounted for 13%. Because of this, the long-term effects are likely to be minimal.
“This suggests that in a worst-case scenario where consumers of all reader apps completely circumvent App Store payments (which we believe is highly unlikely), the impact would be limited to 1-2% EPS,” the analyst said. teacher wrote.
The second change to Apple’s App Store focuses on third-party payment systems within Dutch dating apps. The Dutch antitrust watchdog believes Apple violated the country’s antitrust rules by not allowing dating apps to offer alternative payment methods for in-app purchases.
Apple has not made any changes to its app store in the country and has been fined more than 50 million euros for it. Apple claims it is compliant. The Netherlands Authority for Consumers and Markets (ACM) disagrees.
The company’s latest proposal would allow for alternative in-app payments within Dutch dating apps. However, the proposal includes a stipulation that Apple would still take a 27% cut of those purchases.
While the proposal has yet to be approved, Chatterjee believes that if it gets the green light and goes into effect, it won’t have much impact.
“As such, we believe investors should not view this week’s App Store headlines as representing a ‘seismic’ shift in Apple’s strategy, nor do we expect them to have a material impact on App Store usage,” Chatterjee wrote.
Chatterjee maintained his 12-month Apple price target of $210, based on a profit-to-earnings multiple of about 30 and a calendar-year earnings estimate of $6.9.